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Historical aspects of the economic warfare in the interpretation of Christian Harbulot

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Christian Harbulot, director of the Economic Warfare School in Paris, provides an historical reconstruction of the economic balance of power between states. In this study, he demonstrates that the strategies that states put in place in order to increase their economic power – and their impact on the international balance of power – can only be interpreted through the concept of economic warfare.

According to Harbulot, the true goal of these economic clashes has so far been hidden. Therefore, there is no academic discussion or understanding of this topic that is capable of providing an effective reading of international relations. There are many factors that will potentially trigger tensions between states in the future: the crisis of liberal principles promoting a positive view of economic development and globalization as a tool for establishing peace between nations; gradual resource depletion; energy issues; challenges to the Western economic leadership posed by the process of deindustrialization and the development ambitions of emerging economies.

This perspective sheds light on the importance of recognizing the legitimacy of the concept of economic warfare and lay the theoretical foundations to analyze the economic strategies states adopt to increase their power. In Harbulot’s opinion, the principles of economic warfare can be historically retraced in the fight for survival and for the control of resources and territories. The first example of economic warfare in history is the incursions of the nomad populations aimed at raiding the wealth of sedentary populations. In modern times, the economic warfare increased its spatial scope so that maritime and terrestrial commercial routes became the theater of continuous clashes for the control of some specific resources.

At that time, maritime piracy became an effective tool to exert power. In fact, the British pirates – that were attracted by trade routes between Europe, Africa and America, became the ancestors of the British Royal Navy. Both at sea and on the ground, the economic dimension became a key feature in military and diplomatic operations. By the end of the Middle Age, some kings used the economic power in order to support their military actions. An example of this is the war between the French king Louis XI and Charles I of Bourgogne: the French king commanded his fleet to block corn and herrings supplies to the Flanders (in the kingdom of Bourgogne), convinced the bankers to stop funding his rival and encouraged the hosting of fairs in Lyon in order to reduce the money flux to Geneva, which at the time was the trade hub between Bourgogne, Germany, and Italy.

In the 17th century, the newly created states considered the security of their territory (cities and countryside) as a strategic priority. In this time, the Seven United Provinces of the North created the first model of sanctuary area, meaning the securitization of a given territory from any kind of attack from the enemy. A net of fortresses and natural barriers like rivers was meant to protect the Provinces from the attacks coming from Spain. Similarly, Vauban’s France built up fortifications along the frontiers of the newly acquired territories in the north. This defense system led to the concept of “pré-carré” (squared field) that made reference to the geometric shape coming out from the disposition of these fortifications on the map that looked like a garden, divided in different flowerbeds. From then, this term evolved to nowadays’ meaning of “external sphere of influence” from the diplomatic, military and economic point of view.  In order to guarantee their territorial integrity, states also exploited the military capabilities of an allied state in exchange of economic concessions. Portugal, for instance, signed an alliance treaty with the United Kingdom in 1373 in order to get its protection against Spain’s attempt to incorporate it. If at the very beginning this alliance was set up between pairs, later on it became the framework for the establishment of British protectorate over Portugal, so that for centuries the UK offered military protection in return of financial and commercial control over Portugal. Economic warfare has always been a feature of each stage of colonization, from the Roman Empire to the maritime empires established in the 16th century that gradually acquired control of natural resources and trade routes. Human trafficking is the most evident example of how economic interest impacts power relationships. In this regard, the colonization process of North America clearly shows the overlapping of conflicting dynamics of different economic interests.

The exploitation of American settlers in cotton plantations as well as the fiscal policy and the trade restrictions applied, led Great Britain and its colonies to war. Harbulot mentions this historical case to show how the control of trade routes is a key feature of economic clashes between states. In the 16th century, before becoming an Empire built up on its maritime trade power, Great Britain was a poor country with no military power. At that time, Spain and Portugal dominated the sea routes. When the British decided to became a maritime power, they started with piracy actions threatening the superiority of the enemies’ fleets.

Under the reign of Elizabeth I, the British pirates started pillaging Spanish and Portuguese ships carrying precious metals from South America. Afterwards, the British started expanding their trade networks to Turkey, Russia, the Caribbean and Asia. Finally, in 1707 the birth of Great Britain out of the fusion between Reign of Scotland with the Reign of England, led to the creation of one of the greatest free trade area of the time and to the first model of mass consumption in the world. During the 17th century, the British tried to exploit the great trade potential of British territories overseas and established the East India Company that paved the way to the colonization of India.

The colonial aspirations of Great Britain led to a military escalation that was necessary to defeat local sovereigns opposing the British hegemony, and to face the rivalry with other European powers. Great Britain went to war with the Netherlands (1652-1784) to win the control of the main trade routes with their colonies, which was threatened by the dominant position of the Dutch company of East India. Again, the necessity of securing maritime routes, led the British Empire to many other wars like Afghanistan (1839 -1842 and 1878 -1880) in light of contrasting Russia’s expansionism in India; the opium war with Chinese Empire (1839-1842 and 1856-1860) in order to force the Qing dynasty to open up to world trade; the occupation of Egypt in order to control the strategic platform in Cairo; the Boer wars (1880-1881 and 1899-1902) to ensure strategic control over Cape Town. After taking into account the British case as an example of how the ability to control sea routes is a key asset in geostrategic clashes, Harbulot analyzes the overlapping between war and economics that became evident for the first time during the revolutionary and Napoleonic wars (1792 – 1815).

William Pitt – British Prime Minister at the time – tried to preserve Great Britain’s predominant position in international trade. His strategy aimed at controlling the sea routes and establishing an indisputable maritime advantage through the Royal Navy – which was the only British force that could compete with France’s military capacity. The British military fleet was therefore empowered with 105 ships, whereas the French one could count on only 70. While Prussia – Great Britain’s ally – was able to contain France and its allies on the continent, the British fleet weakened France’s economic potential through preventing its access to the sea routes. For the first time in history, the economic warfare became global and delineated two blocks: on the one hand, Great Britain put in place a maritime block against France; on the other hand France locked the access to British exports to Europe.

The original feature of these two blocks consisted in the fact that both states wanted to adopt economic retaliation strategies to win the conflict. For example, Russia’s withdrawal from Napoleon’s continental block triggered Napoleon’s Russian campaign, that had disgraceful consequences for the French Emperor. The overlapping between traditional and economic warfare paved the way to some mechanism for economic warfare that were kept in place even in peacetime. By the end of the 18th century, France’s industry resulted to be significantly weakened by the military efforts carried on during the revolutionary wars. Napoleon then chose the scientist Jean-Antoine Chaptal, to reform the French industry and protect it from Great Britain’s trade threats.

In addition, Napoleon instructed the National Industry Encouragement Society to detect the strength and the weaknesses of the British economy: France was willing to do everything in its power in order to fill the twenty-year gap with the British, even smuggling machineries that were illegally purchased or stolen in Great Britain. In the framework of the continental block imposed by France, Napoleon consolidated this system of economic defense through a militarization of the custom check-points (whose officers in 1815 represented 20% administrative personnel of France besides the army). Despite the costs of the wars with France, Great Britain managed to keep its advantages: the industrial revolution that had started long before compared to the rest of the continent made British products more competitive; British colonies ensured a significant supply of raw materials and British naval supremacy allowed the control of the main sea routes.

It was paramount for London to reduce trade barriers in order to export its products to Europe, therefore the British government adopted the first techniques of economic warfare peacetime. In particular, a commission led by the political economist John Bowring was instructed to negotiate with French authorities for the opening up of trade. What Bowring did in reality, was lobbying for the creation of groups supporting British liberal trade in France and using the local press to influence public opinion that was the main tool to reach this goal. It was only with WWI, though, that the principles of economic warfare were formalized.

Already in 1914, in light of the likely long duration of the conflict, the powers involved elaborated the typical practices of the economic warfare: i.e. reducing the availability of materials for the enemy’s army, and raw materials for its industry – with an extremely negative impact on the population –  blocking trade and finance flows that directly hit the enemy’s food supplies. In addition, over the course of the conflict, some specific structures dedicated to the economic warfare were created. In 1915, the French Ministry of War set up a Control Section responsible for collecting necessary information to support economic warfare. Similarly, Great Britain created an independent organization, the War Trade Intelligence Department, attached to the Ministry of Foreign Affairs. In 1916, Italy set up a special office entrusted with collecting and checking economic news, attached to the Ministry of War.

These structures were coordinated by an Inter-allied office located in Paris. During the conflict, economic warfare actions became more and more targeted against international objectives and supported by military operations, which became more sophisticated thanks to the development of aviation technologies. However, in 1918 there was no general consensus between France, Great Britain and the United States about the goals to reach. Paris wanted to use economic warfare to force Germany to surrender and accept international control on its possession of raw materials, so that France could still have the upper hand. Washington was aware of the leverage the economic warfare could play to stop Germany’s economic expansion and get to a peace treaty, however its main interest was to stress the liberal principles and play a dominant role in international trade; London aligned itself with the United States while keeping its focus on its economic interests. As the conflict ended, the structures dedicated to economic warfare were dismissed but were restored after the break out of WWII. In 1939, Great Britain created an actual Ministry for Economic Warfare, with similar tasks of the dismissed War Trade Intelligence Department.

In June 1940, Prime Minister Winston Churchill set up a new service called Special Operations Executive – that was basically the offensive component of the Ministry of Economic Warfare – and entrusted it to conduct sabotage operations on the continent and fuel uprisings in the territories occupied by the Germans. At this stage, the interaction between war and economy shed light on the problems related to the economic warfare. However, in the second half of the 20th  century, this topic was overshadowed. On the one hand, during the Cold War, Western bloc countries were keen to cover the economic disparities between them and powered their ideological projection against the Soviet bloc. On the other hand, the United States – the new global superpower – elaborated their version of the British strategy of influence and promoted the free trade theories and competition as the main model for the Western world economy.

According to Harbulot, an effective analysis of the economic warfare must consider the evolution of the methods states used to conquer territories, increase their trade and power. Over the 19th  century, states preferred to conquer markets (through economic warfare) rather than territories (through traditional warfare) in order to acquire more influence on the international level. Harbulot identifies the cases of Japan and Germany because of the importance these states gave to the seek for a “vital space”, to be conquered through territorial acquisition and trade influence. In 1854 U.S. commodore Matthew Perry forced Japan to open up its ports to Western powers. However, in 1867 Mutsuhito ascended the throne of Japan and decided to reverse the established balance of power. His modernization policies aimed at filling the gap with major Western economies and hinder their leadership.

The Meiji Restoration – whose slogan was “Enrich the country, strengthen the military” – was framed in a policy aimed at acquiring a comprehensive expertise in many fields, following the example of the leading countries in a given sector. Japan also pursued an expansionistic policy through the annexation of Korea and claimed a trade protection on China – that threatened the United States’ interests in developing business ties with the country. Japan’s main goal was to establish a sphere of regional co-prosperity with East Asia countries, occupied by the imperial army. Therefore, the Japanese empire occupied Manchuria and founded the state of Manchukuo, a classic example of the reproduction of military systems invented by the Portuguese and then imitated by the Dutch and the British. The Japanese combined the model of the Company of India with the one of the American railroads to create the Railroad Company of Manchuria. This latter was in charge of the administration of Manchukuo and of the management of the Japanese occupation troops; it possessed its own police forces, a central bank and even a merchant fleet. The State of Manchukuo was test site for the new approach to increase state power through the economy.

The case of Germany is quite different. Over the course of its history, Germany constantly sought to acquire new territories to guarantee food supplies for its population, as German lands were covered with forests and difficult for farming. By the end of the Middle Ages, German settlers started colonizing the lands of East Bavaria. While acquiring new territories was not always a peaceful process because of the resistance of the local population, the expansion via sea was far easier. The creation of the Hanseatic League allowed Germany to peacefully establish its dominion on the Polish shores between 16th and 17th   centuries. The battles conducted by the Hohenzollern family completed the creation of a sphere of influence at the eastern borders of Germany. The debate around the strategic advantages of territorial versus trade expansion was very popular in the politics of the Second Reich. The unification of Germany pursued by Otto von Bismarck allowed the country to acquire more influence on the world stage. However, the increasing in its power at the end of 19th century was not only boosted by the changes brought by the industrial era, but also by the geostrategic competition with the British and French Empire: the German strategic core consisted in the “Konzern” (associations of both vertically and horizontally integrated enterprises), in banks and insurance companies that challenged their European competitors.

The debate on how to handle a hypothetical geo-economic success gained momentum at the end of WWI. As a result, in 1915 Samuel Herzog published in Germany “German economic warfare plan”, which could be considered as a draft handbook of economic warfare.

In his book, Herzog listed the economic tools that States could oppose to the Reich’s enemies. Some of them are helpful to influence or control the exports during the economic warfare; some others could ensure Germany’s success against the passive resistance of defeated countries. According to the author, in order to preserve Germany’s economic assets, it is necessary for the state to exercise its control over industries that have kept the upper hand against foreign countries. In addition, the state should protect private initiative in a way that it does not conflict with national economic interests.

Harbulot focuses then on the dissimulation of economic warfare: firstly, the economic dimension acquired a great prominence in the balance of power among individuals, groups and states; secondly, he underlined the high interdependence between the economic strength and the political and military power. Nevertheless, the historic phenomenon of economic warfare has always been denied, because the political justifications for economic expansions have always been perceived as aggressive and illegal.

The negative perception of the economic war as a consequence of cupidity is grounded on Saint Augustine and Thomas Aquinas’ just war theory. According to this theory, States are pushed to hide their war plans for economic purposes and to proclaim their intention to spread religions, to stimulate growth of developing countries and, more recently, to promote democracy. This dissimulation attitude causes the distortion of the balance of power.

It is worth noticing that international military organisations, such as NATO, have not developed a proper economic warfare doctrine yet, because of conflicting interests among member states.

Some examples of the dissimulation of economic warfare are the domination strategies implemented by colonial empires, as well as recovery strategies of countries aiming at avoiding colonisation or at increasing their power.

Firstly, domination was dissimulated by the pretext to conquer and impose one’s religion to colonised people. Secondly, the doctrine of liberalism and the idea of increasing power through trade expansion stimulated free trade and the opening of new markets. All these factors became the justification to the foundation of new empires.

Any commercial achievement could lead into an economic warfare, which could represent a coercive instrument to use against countries that try to close their market. As to some examples, the United Kingdom implemented its “gunboat diplomacy”, in order to export its products in the Middle East and East Asia markets and in 1840-41 the Royal Navy closed the Alexandrian harbour. Moreover, during the Opium Wars, the Western countries forced an “independent country” to participate in the drug trade.

With the Opium Wars, the strategy of “economic aggression” became evident. As a result, countries such as Japan were forced to modify their plan and to implement a significant economic penetration policy (represented by the above-mentioned slogan “enrich the country, strengthen the military”) with the aim of reducing disparities with Western countries. When, a century later, at the end of ‘80s, Japan became the world’s second largest economy, the USA and Europe denounced its expansionism, as well as its economic trade’s strategy. The Central Intelligence Agency (CIA) even published a report on the “Japanese propaganda” aiming at hiding the protectionist measures taken by the US against other market economies, in violation of the principles of economic liberalism.

As for the recovery strategies, they focus on basic objectives and are strongly linked to geographic and cultural background. Due to its geographical morphology, Japan developed a solid maritime infrastructure, along with an industrial economy and became a model for South Korea, India, Brazil and China. In particular, South Korea opted for shipbuilding and for the creation of large private industrial conglomerates.

On the contrary, India chose to become a world leader in IT sector and pursued an education reform in order to improve science teaching. Moreover, the city of Bangalore, thanks to its favourable weather conditions, was transformed into a high-tech capital.

Brazil instead based its recovery strategy on the energetic sector, with the aim of becoming the regional leader in this field. Besides, Brazil used its soft power to claim the role of world’s sustainable development power due to its wide-scale production of electric power.

Finally, the Chinese recovery strategy was grounded on market opening, with the creation of special economic zones and the implementation of measures to attract foreign investments.

However China, as Japan did, developed an aggressive plan of foreign markets’ penetration, with the strong opposition of the United States. This triggered a debate around economic warfare in the Western world. In particular, China was deemed to become member of “normative” international organisation only in order to impose its own rules. As a matter of fact, reactions caused to a sceptic attitude against China could be considered as economic conflicts. This is true for protectionist measures on photovoltaic technologies taken by the Obama administration, as well as for the decision of the Australian government to refuse the participation of the Chinese company Minmetal in the Australian firm Oz Metal.

The paradigm of economic warfare changed after the Second World War, when the USA became the world geo-political, military and trade leader. Along with coercive methods of colonial empires, the USA expressed their economic power by pursuing a new strategy. In particular, in order to prevail over an allied country in the economic and cultural field, the United States established themselves as a superpower and managed to hold a stronger position in the hierarchy of the values, rules and arbitrages of market economy. As a result, the US imposed in peacetime to Western countries a “silent practice” of economic warfare.

Nevertheless, the availability of new markets after the collapse of the Soviet Union and the aggressive recovery strategies implemented by emerging economies modified the current stability of international economic relations. Furthermore, a growing competition, stemming from the two above-mentioned factors, pushed the USA to take into account the need of a “real” economic war. Asia’s increasing power and the EU internal market, actually undermined the supremacy that the USA had acquired by the end of WWII.

These changes in the balance of power highlight the new paradigm of the economic warfare: the relationship between ally and enemy is replaced by a direct or indirect conflict between two enemies.

Despite the fact that economic warfare was usually characterised by direct conflicts, globalisation has modified the world economic framework, both for emerging economies and developed countries.

States’ strategic interests diverge and become more and more complex. Therefore, a military or geo-political concern could be in contrast with an economic one, and vice versa. As a result, two countries could conclude a military alliance and fight for economic reasons at the same time.

Therefore, these new balances of power among States, where competition and cooperation co-exist, show that the current economic relationships are weaker than in the past. However, these changes do not reduce conflicts among states. During the ‘90s, the USA, as world leader, implemented a policy of economic security, started in the ‘70s with the introduction of Section 301 of the 1974 Trade Act (that enabled the country to oppose trade barriers penalizing its exports) and Section 301 of the 1988 Omnibus Trade and Competitiveness Act (that enabled the country to denounce unfair practices and protect American companies from intellectual property violations).

With the aim of fighting unfair competition, the USA decided to tighten their position on trade. Despite the objections of several states, these unilateral measures are still in force and are used as leverage against the Dispute Settlement Body of the World Trade Organisation. Torricelli’s (1992), Helms-Burton’s (1996) and D’Amato’s (2001) laws implemented these measures and forbade thee WTO membership to the countries that were hostile to the United States.  Among the countries affected by these provisions (with the exception of Cuba, covered by a US embargo since 1962), Iraq, Libya, Iran and Nigeria were rich in oil reserves. Moreover, the appointment by the Clinton administration of the National Economic Council in 1993, working jointly with the National Security Council, proved the paramount importance of the national economic security.

The USA represented a model for several countries: France, for instance, appointed a Committee for Competitive Economic Security chaired by the Prime Minister in 1995; over the course of his first mandate. President Putin strengthened the role of some State bodies on the protection of the economic resources in Russia. The economic weakness of Western countries and the increasing power of the emerging ones will probably reinvigorate tensions between developing and industrialized countries, which dominate the world economy. While developing countries are eager to increase their power through massively expanding their trades to foreign markets, Western countries tend to separate power strategies based on military and diplomatic means, from those based on economic warfare.

Moreover, the Western policy of deregulation emphasises this paradox. While European advantages decrease, in fact, emerging countries increase their competitiveness with the financial support from bank authorities, which are directly or indirectly controlled by the state.

Therefore, a competitive imbalance – that is usually strengthened by the substantial role the financial sector plays in the functioning of market economies – weakens industrialized economies. Chinese managers, instead, successfully adapted the Communist dictatorship to the rules of market economy and pursued more ambitious targets than purely making profits.

After the collapse of the Soviet Union – caused by the arms race – China elaborated the idea of “war with no limits”, by combining military and economic instruments. The crisis of colonialism and the growing power of emerging countries undermined the Western notion of ethnocentrism, which the foundation of the theory of Western superiority.

Therefore, in the new global contest, Western countries are weakened by a number of contradictions:

Liberalism and Protectionism  

In the United Kingdom and in the United States economic doctrine, liberalism justified the dismantling of protectionist systems in the countries that were their top export destinations. The goal was to an increase their exports and to minimize the impact of the destination countries on international financial markets.

Delocalization vs. National Interest

In the United States there are two conflicting economic trends: one aims at opening the markets and benefiting from delocalisation, the other stresses the importance of protecting American people’s interests.

The European Union’s inability to react to the challenges posed by economic warfare.

In the aftermath of WWII, during negotiations on Marshall Plan, there has been a considerable discussion in France on some U.S. economic needs, such as the obligation to feed animals with American soya and the distribution in the French market of films coming from Hollywood. General De Gaulle, Prime Minister since 1958, pursued an independent policy against the U.S. interests: he created the oil company Elf Aquitaine with the aim of reducing dependency from the seven Anglo-American oil companies; he limited the settlement of American multinational companies; he started casting doubts on the role of dollar as reserve currency. Nevertheless, his vision was defeated by the liberal idea of markets’ openness. Furthermore, the creation of the EU single market marginalised the discussion on the role of the economy in state power strategies. As a result, France dramatically changed some of its economic structures that had previously provided the country with a significant economic power.

In particular, the Commission Permanente de l’Electronique, which in the ‘60s rose awareness on the need of developing the electronics industry, was abolished. At the beginning of 21st  century, Prime Minister Dominique de Villepin re-launched the debate on the “economic patriotism”, fostered by the drawbacks of emerging countries’ recovery policies. Some of them, in fact, evolved in real “fighter economies”, to fill the development gap with the West. Their offensive strategies integrated the range of techniques already implemented by Western countries in the past: collecting information via Internet, stealing patents, dumping measures, counterfeiting, metal smuggling (especially copper, whose world-wide demand is increasing).

While these unfair measures, which undermine the Western economic leadership, represent an issue for concern in the United States, in the EU they are considered as “exception that proves the rule”. Accordingly, the US adopted coercive instruments against these measures, in order to single hostile countries out. On the contrary, the European Union rarely followed this example. In 1984 the EU adopted a retaliatory measure in accordance with Section 301 of The US Trade Act, even though it was only applied six times in ten years.

In the centralized EU system, since the only competences left for Member States are national defence and public order, the United Kingdom, the Netherlands and Germany integrated the economic war paradigm in their modus operandi. France, instead, lobbied for amending the EU Treaties with the aim of improve its room for manoeuvre, but its attempts were not successful. More generally, the EU Member States proved not to be able to set up a shared strategy on this issue. As a result, the EU did not react to Putin’s measures protecting and promoting Russian industries – through state aids, customs duties benefits, and debt cancellation – and not even to the Russian threat of cutting gas supplies to Europe.

In the current international framework, the pacification process favoured by the leadership of the Western countries is weakened by multipolar geo-economic relationships and growing conflicts with emerging countries. As a result, the European Union – that does not consider economic warfare – cannot do much other than following the lead of the United States. Despite its image of cohesion, the EU is fragmented: Germany leads Northern Europe and is engaged both in increasing its power and promoting itself as a peaceful country in open contrast with its past; Southern Europe tries to solve its infrastructural problems, while post-Soviet countries are still under American, German and Russian influence.

To conclude, the economic warfare paradigm shall be taken into account in current international relations. Harbulot imagines a new political economy based on a consistent combination between state power strategies, trade expansion and territorial development. Nevertheless, these dimensions deal with three divergent interests. Therefore, the definition of short, medium and long-term priorities relies in the hands of the political power.

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Economy

Sustainable Agriculture in Modern Society

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Now everybody is seeing the world is changing fast in this 21st century and many industries and modern buildings are also developing all over the world. But the land areas for farming are becoming narrower and narrower. Moreover, the global population is increasing rapidly and the earth becomes a crowded planet. But the younger people who are interested in agriculture are becoming less and less. There might be some young people who even think that they get foods from grocery stores because the younger generation are used to buy many kinds of ready-made foods such as fruits and vegetables easily from supermarkets. Recently, in the developed countries, the average age of many farmers is over 50 years old and the numbers of young farmers are decreasing. The shortage of young farmers can become a crisis in the future of the developed world.

In modern days, most young adults cannot see the difficult lives of farmers beyond the curtain. The farmers have to pass their whole life through a tough living in farming and sell their products at very low profit to many profiteering companies because they don’t have much choices. It is a sad story for farmers but truly happening in these modern days.

Today I would like to point out that we should not forget the role of agriculture which is very fundamental and essential for building a nation. Farming is an age-old profession that supported the settlement of human beings for thousands of years to survive on this planet. Agriculture is very important for the development of a nation because it provides the trading and employment, supply the foods and textiles and that can lead to the rise in gross domestic product (GDP) of a nation. Agriculture plays a crucial role in economy of a developing nation where majority of population is in rural areas and agriculture is the main source of job in many underdeveloped areas. Many families in developing countries live depending on farming for their livelihood. So, it can be even said that developing agriculture is an important step to reduce poverty and hunger in many developing countries. Agriculture support nutrients rich foods that are essential requirements for our healthy life because nutrients rich foods provide energy for our body, essential nutrients for our vital organs such as brain and heart etc, and enhance our immune system. So, agriculture is necessary for a flourishing and joyful life of human being.

Especially let’s see my home country, as data from Food and agriculture organization (FAO) of the United Nations, “The agriculture supports 37.8 % of gross domestic product of Myanmar, contributed to 25-30% of total export earnings and employs 70 % of the labour force”. Humans cannot survive without agriculture. When there is no more agriculture, it will end with starvation and collapse in economy. It will cause a serious failure in modern civilization.

Nowadays, modern farming is largely evolved into industrial agriculture where many kinds of chemical fertilizers are being used to induce massive production. Industrial agriculture is beneficial to economic development because it can cause the crops growing faster than in the traditional agriculture. The industrial agriculture can provide more enough foods for growing population in modern civilization. However, it is not sustainable because it cannot protect the benefits of the society and our green planet in the long run. Chemicals used in agriculture are destroying the soil where is left with damaged soil fertility and this area can’t be reused in the future. This is a huge affect to sustainability of our green environment.

Modern agriculture has many issues related to water scarcity, soil erosion, climate changes and etc. To be sustainable in agriculture, we must focus on solutions of these issues. The sustainable agriculture will focus on three bottom lines that is environmental, economical and social.

The sustainable agriculture involves many practices such as using the organic fertilizers in farming, growing drought resistant crops, breeding biodiversity in farms, modified irrigation systems and others. Sustainable agriculture is more suitable to practice for the future of the green earth than industrial agriculture. It is very important to promote awareness of sustainable agriculture and issues related to environmentally toxic practices in agricultures among local farmers. And I believe that it can cause many advantages for economic development if farmers can work systematically with sustainable practices in their farming and the local authority can provide farmers with more technological skills and lending some funding to practice sustainable ways in agriculture. With the willingness to participate for environmental heath at the enough profit for incomes of daily living life, I hope famers will become socially responsible persons.

And another one more point, in this digitalization era, we should certainly apply digital technologies in sustainable agriculture. By developing digital farming, it will help farmers to get easier access to source of many information related to agricultural practices. Government in developing countries should support to develop digital farming as rapidly as possible for the poor farmers to get proper profits and to work in environmentally friendly practices. Since poor countries already have enough labour force, they just need many financial aid and technology supports to grow into sustainable agriculture.

I believe that it is a responsibility for our humans that we should not forget something that had supported our existence on this earth. We should work out for development of traditional agriculture into modern agriculture with the best sustainable ways. As being a part of this society, we must help each other, we must protect the sustainability of this green earth, Biodiversity and this is also beneficial for long-term existence of our human beings on this earth. Let me end this talk by suggesting everyone to promote sustainable agriculture in your surrounding local farming.

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Economy

The Blazing Revival of Bitcoin: BITO ETF Debuts as the Second-Highest Traded Fund

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It seems like bitcoin is as resilient as a relentless pandemic: persistent and refusing to stay down. Not long ago, the crypto-giant lost more than half of its valuation in the aftermath of a brutal crackdown by China. Coupled with pessimism reflected by influencers like Elon Musk, the bitcoin plummeted from the all-time high valuation of $64,888.99 to flirt around the $30,000 mark in mere weeks. However, over the course of the last four months, the behemoth of the crypto-market gradually climbed to reclaim its supremacy. Today, weaving through national acceptance to market recognition, bitcoin could be the gateway to normalizing the elusive crypto-world in the traditional global markets: particularly the United States.

The recent bullish development is the launch of the ProShares Bitcoin Strategy ETF – the first Bitcoin-linked exchange-traded fund – on the New York Stock Exchange. Trading under the ticker BITO, the Bitcoin ETF welcomed a robust trading day: rising 4.9% to $41.94. According to the data compiled by Bloomberg, BITO’s debut marked it as the second-highest traded fund, behind BlackRock’s Carbon fund, for the first day of trading. With a turnover of almost $1 billion, the listing of BITO highlighted the demand for reliable investment in bitcoin in the US market. According to estimates on Tuesday, More than 24 million shares changed hands while BITO was one of the most-bought assets on Fidelity’s platform with more than 8,800 buy orders.

The bitcoin continued to rally, cruising over the lucrative launch of BITO. The digital currency rose to $64,309.33 on Tuesday: less than 1% below the all-time high valuation. In hindsight, the recovery seems commendable. The growing acceptance, albeit, has far more consequential attributes. The cardinal benefit is apparent: evidence of gradual acceptance by regulators. “The launch of ProShares’ bitcoin ETF on the NYSE provides the validation that some investors need to consider adding BTC to their portfolio,” stated Hong Fang, CEO of Okcoin. In simpler terms, not only would the listing allow relief to the crypto loyalists (solidifying their belief in the currency), but it would also embolden investors on the sidelines who have long been deterred by regulatory uncertainty. Thus, bringing larger, more rooted institutional investors into the crypto market: along with a surge of capital.

However, the surging acceptance may be diluting the rudimentary phenomenon of bitcoin. While retail investors would continue to participate in the notorious game of speculation via trading bitcoin, the opportunity to gain indirect exposure to bitcoin could divert the risk-averse investors. It means many loyalists could retract and direct towards BITO and other imminent bitcoin-linked ETFs instead of setting up a digital custodianship. Ultimately, it boils down to Bitcoin ETFs being managed by third parties instead of the investor: relenting control to a centralized figure. Moreover, with growing scrutiny under the eye of SECP, the steps vaguely intimate a transition to harness the market instead of liberalizing it: quiet oxymoronic to the entire decentralized model of cryptocurrencies.

Nonetheless, the listing of BITO is an optimistic development that would draw skeptics to at least observe the rampant popularity of the asset class. While the options on BITO are expected to begin trading on the NYSE Arca Options and NYSE American Options exchanges on Wednesday, other futures-based Bitcoin ETFs are on the cards. The surging popularity (and reluctant acceptance) amid tightening regulation could prove a turn of an era for the US capital markets. However, as some critics have cited, BITO is not a spot-based ETF and is instead linked to futures contracts. Thus, the restrain is still present as the regulators do not want a repeat of the financial crisis. Nevertheless, bitcoin has proved its deterrence in the face of skepticism. And if the BITO launch is to be marveled at, then the regulations are bound to adapt to the revolution that is unraveling in the modern financial reality.

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Economy

Is Myanmar an ethical minefield for multinational corporations?

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Business at a crossroads

Political reforms in Myanmar started in November 2010 followed by the release of the opposition leader, Aung San Suu Kyi, and ended by the coup d’état in February 2021. Business empire run by the military generals thanks to the fruitful benefits of democratic transition during the last decade will come to an end with the return of trade and diplomatic sanctions from the western countries – United States (US) and members of European Union (EU).  US and EU align with other major international partners quickly responded and imposed sanctions over the military’s takeover and subsequent repression in Myanmar. These measures targeted not only the conglomerates of the military generals  but also the individuals who have been appointed in the authority positions and supporting the military regime.

However, the generals and their cronies own the majority of economic power both in strategic sectors ranging from telecommunication to oil & gas and in non-strategic commodity sectors such as food and beverages, construction materials, and the list goes on. It is a tall order for the investors to do business by avoiding this lucrative network of the military across the country. After the coup, it raises the most puzzling issue to investors and corporate giants in this natural resource-rich country, “Should I stay or Should I go?”

Crimes against humanity

For most of the people in the country, war crimes and atrocities committed by the military are nothing new. For instances, in 1988, student activists led a political movement and tried to bring an end to the military regime of the general Ne Win. This movement sparked a fire and grew into a nationwide uprising in a very short period but the military used lethal force and slaughtered thousands of civilian protestors including medical doctors, religious figures, student leaders, etc. A few months later, the public had no better options than being silenced under barbaric torture and lawless killings of the regime.

In 2007, there was another major protest called ‘Saffron Uprising’ against the military regime led by the Buddhist monks. It was actually the biggest pro-democracy movement since 1988 and the atmosphere of the demonstration was rather peaceful and non-violent before the military opened live ammunitions towards the crowd full of monks. Everything was in chaos for a couple of months but it ended as usual.

In 2017, the entire world witnessed one of the most tragic events in Myanmar – Again!. The reports published by the UN stated that hundreds of civilians were killed, dozens of villages were burnt down, and over 700,000 people including the majority of Rohingya were displaced to neighboring countries because of the atrocities committed by the military in the western border of the country. After four years passed, the repatriation process and the safety return of these refugees to their places of origin are yet unknown. Most importantly, there is no legal punishment for those who committed and there is no transitional justice for those who suffered in the aforementioned examples of brutalities.

The vicious circle repeated in 2021. With the economy in free fall and the deadliest virus at doorsteps, the people are still unbowed by the oppression of the junta and continue demanding the restoration of democracy and justice. To date, Assistant Association for Political Prisoner (AAPP) reported that due to practicing the rights to expression, 1178 civilians were killed and 7355 were arrested, charged or sentenced by the military junta. Unfortunately, the numbers are still increasing.

Call for economic disengagement

In 2019, the economic interests of the military were disclosed by the report of UN Fact-Finding Mission in which Myanmar Economic Corporation (MEC) and Myanmar Economic Holding Limited (MEHL) were described as the prominent entities controlled by the military profitable through the almost-monopoly market in real estate, insurance, health care, manufacturing, extractive industry and telecommunication. It also mentioned the list of foreign businesses in partnership with the military-linked activities which includes Adani (India), Kirin Holdings (Japan), Posco Steel (South Korea), Infosys (India) and Universal Apparel (Hong Kong).

Moreover, Justice for Myanmar, a non-profit watchdog organization, revealed the specific facts and figures on how the billions of revenues has been pouring into the pockets of the high-ranked officers in the military in 2021. Myanmar Oil & Gas Enterprise (MOGE), an another military-controlled authority body, is the key player handling the financial transactions, profit sharing, and contractual agreements with the international counterparts including Total (France), Chevron (US), PTTEP (Thailand), Petronas (Malaysia), and Posco (South Korea) in natural gas projects. It is also estimated that the military will enjoy 1.5 billion USD from these energy giants in 2022.

Additionally, data shows that the corporate businesses currently operating in Myanmar has been enriching the conglomerates of the generals and their cronies as a proof to the ongoing debate among the public and scholars, “Do sanctions actually work?” Some critics stressed that sanctions alone might be difficult to pressure the junta without any collaborative actions from Moscow and Beijing, the longstanding allies of the military. Recent bilateral visits and arm deals between Nay Pyi Taw and Moscow dimmed the hope of the people in Myanmar. It is now crystal clear that the Burmese military never had an intention to use the money from multinational corporations for benefits of its citizens, but instead for buying weapons, building up military academies, and sending scholars to Russia to learn about military technology. In March 2021, the International Fact Finding Mission to Myanmar reiterated its recommendation for the complete economic disengagement as a response to the coup, “No business enterprise active in Myanmar or trading with or investing in businesses in Myanmar should enter into an economic or financial relationship with the security forces of Myanmar, in particular the Tatmadaw [the military], or any enterprise owned or controlled by them or their individual members…”

Blood money and ethical dilemma

In the previous military regime until 2009, the US, UK and other democratic champion countries imposed strict economic and diplomatic sanctions on Myanmar while maintaining ‘carrot and stick’ approach against the geopolitical dominance of China. Even so, energy giants such as Total (France) and Chevron (US), and other ‘low-profile’ companies from ASEAN succeeded in running their operations in Myanmar, let alone the nakedly abuses of its natural resources by China. Doing business in this country at the time of injustice is an ethical question to corporate businesses but most of them seems to prefer maximizing the wealth of their shareholders to the freedom of its bottom millions in poverty.

But there are also companies not hesitating to do something right by showing their willingness not to be a part of human right violations of the regime. For example, Australian mining company, Woodside, decided not to proceed further operations, and ‘get off the fence’ on Myanmar by mentioning that the possibility of complete economical disengagement has been under review. A breaking news in July, 2021  that surprised everyone was the exit of Telenor Myanmar – one of four current telecom operators in the country. The CEO of the Norwegian company announced that the business had been sold to M1 Group, a Lebanese investment firm, due to the declining sales and ongoing political situations compromising its basic principles of human rights and workplace safety.

In fact, cutting off the economic ties with the junta and introducing a unified, complete economic disengagement become a matter of necessity to end the consistent suffering of the people of Myanmar. Otherwise, no one can blame the people for presuming that international community is just taking a moral high ground without any genuine desire to support the fight for freedom and pro-democracy movement.

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