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Will Asia pioneer the “de-dollarization” process?

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Denmark-based Saxo Bank has released a new batch of “outrageous” predictions for 2020 that it believes could potentially destabilize the entire international system existing today. The bank’s experts predict, among other things, that in the coming year, the Asian Infrastructure Investment Bank (AIIB) may launch “a new reserve asset, called the Asian Drawing Right, or ADR, with 1 ADR equivalent to 2 US dollars, making the ADR the world’s largest currency unit.”

Blockchain technology will give the ADR additional reliability and ensure maximum transparency of payments effectively making it a conventional unit in a basket of leading world currencies and gold, with the Chinese yuan heavily prominent in the mix and the US dollar weighted at below 20 percent. 

According to the Danish bank, this step is clearly aimed at de-dollarizing regional trade. Local economies will multilaterally agree to begin conducting all trade in the region in ADRs only, with major oil exporters Russia and the OPEC nations happy to sign up on their growing reliance on the Asian market.

The ADR will quickly take a sizable chunk of global trade away from the US dollar, leaving the United States ever shorter of the inflows it needs to fund its double-digit deficits. The US dollar will lose 20 percent against the ADR within months and 30 percent against gold.

By the close of the 1990s, Southeast Asian countries had started coming forward as the main competitors for US companies with local political and economic elites getting increasingly wary of the imbalances of the “unipolar model of globalization” where capital continues to accumulate mainly in countries issuing world reserve currencies. It looks like the world’s leading powers now have in mind the scenario of a possible collapse of the modern world order. The policy of sanctions and financial and economic pressure, which has recently been pursued by Washington raises the prospects of a financial system or systems being created that would be independent of the United States. In Asia and Eurasia, new political alliances are emerging, including in the form of region-wide financial institutions.

The processes currently unfolding in the financial and economic life of Asia and elsewhere in the world, are in large part associated with the trade war that has been going on between the United States and China for the past few years, taking in ever new trade and economic sectors and now threatening to spill over into the sphere of finance as well. Still, the scope of this rivalry has not yet reached a Cold War level. In fact, Saxo Bank predicts an escalation of the US-China trade war to a level typical of the Great Depression era. If this is what is going to happen, the US dollar, this symbol of US dominance in the global financial system, may effectively be weaponized to undermine the development potential of any outside rivals, China included, who would no longer be able to make financial settlements, receive and issue loans, and finance their existing obligations. And all this without any immediate threat of the use of military force. One possible way of avoiding this scenario would be to create a regional reserve currency not directly dependent on either the US dollar or the Chinese yuan.

Another major factor in the evolution of the financial architecture of Asia is that China, now the world’s second biggest economy, wants to be able to “better defend its economic interests and influence decision-making processes pertaining to global economic development.” To this end, Beijing “needs to participate in international institutions where its voice will carry decisive weight.” The creation of AIIB in 2014, where half of the bank’s capital currently belongs to Beijing, was just one step in this direction. Many experts believe that China wields an unofficial veto right in the Bank’s key decisions. However, as noted by Professor A. Kuznetsov, official Beijing keeps insisting that “newly created institutions present competition, not an alternative,” to the IMF and the World Bank.

Overall, the Asian reserve currency’s prospects depend on how regional and global financial and economic trends are perceived by the major global economies. Ever since the emergence of the global money concept, there has been only one leading world currency in use: first the Dutch guilder, then the British pound and later the US dollar. Right now, expert opinions relevant to the dynamics of the US dollar’s share in the global currency vary significantly. According to a European Central Bank report released in June 2019, “the US dollar remains the world reserve currency, but its predominance has been significantly shaken.” This trend towards a diversification of reserves and a year-on-year contraction of the US dollar’s share in the world central banks’ reserves is likewise acknowledged by a review of global trends released by the International Monetary Fund. The greenback is gradually being replaced by the euro, the Japanese yen and the Chinese yuan. There are more and more payment mechanisms independent of the United States popping up, with The Economist writing about China working hard to create its own international payment system based on the yuan. There has also been talk about China paying in yuan for its Iranian oil imports.

Is all this enough to predicate the emergence of an alternative payment system though? The US dollar still accounts for a significant share of investment and global trade, including in oil, natural gas and metals. There are at least three factors still preventing the yuan from becoming a world currency: the high cost of “financial transactions associated with the receipt and distribution of information”; “China’s overdependence on Hong Kong as a regional offshore financial center,” and the People’s Republic’s inability “to exert political influence on other world economic centers, mainly  the US and the EU.” There are still four factors testifying to the yuan’s increasing value as a regional currency: the projected “growth of the Asian countries’ incomes” leading to “an increase in demand for Chinese goods”; “the implementation of multilateral projects as part of the “One Belt, One Road” initiative, resulting in increased yuan usage in the countries of Central and Southeast Asia”; “The development of the Asian bond market leading to the standardization of international debt in RMB”; “increased demand for RMB by commercial banks and enterprises as part of the Multilateral Initiative to conduct swap operations between central banks.”  

Finally, the process of the yuan’s “internationalization” is slowed down by the Chinese authorities’ need to maintain short-term growth, while simultaneously countering “adverse external shocks.”

Well, at the end of the day the global financial system may “naturally” break up into several relatively independent currency zones: the dollar, the euro and the yuan (or yen). In future, the world may likewise rest on a similar balance of power. However, these currency zones will inevitably find themselves competing among themselves, which will be a test of strength for all currency macro-regions. At the same time, the countries of the Asia-Pacific region will face a hard choice. As recently as the dawn of this century, uniting around the Japanese yen was seen by most of them as the most logical option. Now that the People’s Republic of China has turned into a regional economic powerhouse and the world’s second economy, the need for closer interaction between the economies of the Asia-Pacific region and the Chinese yuan is becoming increasingly evident. Meanwhile, the low level of mutual trust between a number of leading Asian countries and China may become a hurdle on the way of creating a common reserve currency.

Finally, the past 3-4 years have seen a slowdown in China’s economic growth, which, in turn, could drive down commodity prices worldwide. As a result, raw materials exporters, including Russia and Saudi Arabia, whose budget deficit this year exceeds four percent of GDP, will find themselves on the losing end. Meanwhile, China and Saudi Arabia account for a significant part of the US public debt. Faced with mounting economic woes, Beijing and Riyadh might be forced, together or separately, to start selling US government bonds, “which will inevitably send their value into a tailspin,” with a knock-on effect in the financial markets and the bankruptcy of a number of leading financial institutions. Such a course of events may be fraught with a new financial meltdown.

An “end of the dollar’s dominance” for any other reasons, including a “sudden” emergence of a very strong alternative reserve currency, would  “result, first and foremost, in a large-scale economic crisis in the People’s Republic,” “a collapse of oil prices” and a quick slump in “economic activity around the globe.”. Therefore, China, as a founding member of the AIIB, which Saxo Bank calls the potential issuer of ADR, is hardly interested in a depreciation of the US dollar.

One should also bear in mind the fact that all leading EU countries, including Britain, Germany, Italy and France, happen to be members of the AIIB. Therefore it can be assumed that Europeans, who are intent on strengthening the euro’s global standing, may not be all too happy about  the prospect of a new reserve currency coming along that could challenge  not only the dollar, but the single European currency as well.

Although the emerging economies’ share in global savings is currently close to 50 percent, “this money keeps flowing, via international reservation channels, into the Anglo-Saxon center of the global financial system, with limited possibilities for its productive placement.”

The current model of globalization is losing momentum too. This can somewhat reduce frustration with development imbalances, but per se it will hardly be able to correct the overall structural imbalances of the global economy. Economists warn about the dangers of creating a system of payments alternative to the dollar, which could bring about exchange rate fluctuations and a chaotic “capital spillovers” from one reserve currency to another and back. One thing is clear: the harder Washington tries to destroy the established “rules of the game,” the louder the calls for the creation of global or regional financial systems alternative to the dollar will get. However, the creation of such systems will require large-scale and lengthy political and organizational efforts, while the price tag will be prohibitively high too. Therefore, it is highly unlikely that anyone will venture to predict exactly when this is going to happen.

From our partner International Affairs

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Economy

Protectionist headwinds in the US Trade Policy under Trump Administration

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At the end of the First World War, US led internationalism was initiated by the then President Woodrow Wilson. When we look deeper into the origins of the first Great war, it clearly shows signs of deep rooted animosities, triggered by culture, race and delusioned nationalism. Once the war ended, Woodrow Wilson embarked on a utopian idea to make the world truly an international place. The breed of politicians in America and its allies the British Empire and France, supported the idea and laid the foundations of world’s internalist movement, Never in the history of mankind a world sets sails on such an ambitious project to make the world a global stage for commerce where every aspect of human life will governed by a certain set of rules, which will form the basis of rule based order. A journey of rule based system was not smooth and its first test came in the form of a second world war, a war which was again fought on the basis of rogue nationalism and race. The victors at the end world war II was committed to forward the idea of globalism, United States was the only country which rose from the ashes of the world war II with minimal damage, it first supported a war ravaged Europe with a Marshall Plan, and then they together embarked on a path to liberal internationalism. The United States journey in making the world truly a global place is unique and unprecedented, with all the allegations of doublespeak and forwarding its own agenda of undisputed global power, United States global project was indeed a sincere effort to govern the world through supranational democratic institutions, early examples of such bold agenda were United Nations and Bretton Woods institutions.

Journey in and after the cold war

Obama Presidency : At the end of Bush Presidency, the protectionists were bracing for an extreme stance on new winners in the Global economy and especially China, commonly denoted as Frankestien at that time. President Bush in 2001 granted China PNTR a permanent normal trading relation status. Many trade hawks in the US think that this decision was a turning point, which helped China to become so big. President Obama was an overt globalist and He in his presidential campaigns regularly highlighted the importance of globalization, that how and why we need to appreciate new winners in the global economy, he cited computational technology as the main driver behind a dispersed value chain rather than concentrated one. Obama in his presidency supported the Trans pacific partnership TPP deal, and supported the idea of equal opportunity in the global economic system. He repeatedly highlighted the importance of globalization and termed as the force which can never be rolled back.

Trump Presidency and a wave of non stop protectionism

President Trump in an his election campaign termed TPP trade deal as a “rape of America”. When he won election, he issued endless warnings to trade partners and threatened to eliminate NAFTA the North American Free Trade Agreement, NAFTA now USMCA, United States Mexico Canada Agreement was later rescued at last minute negotiations, which took place in several rounds spanning over many months. Trump launched a full blown trade war against China, and its allies in Europe accusing them of using America to their advantage and stripping the US of billions of dollars. He is now pursuing a most hawkish policy in the trade realm to disband the world trade court also known the World Trade Organization. This anti trade policy is aimed at reviving the US industrial base, which according to many experts is a lost cause in the era of global value chains.

References :

Panda, A., 2020. Bush Gave China Permanent Normal Trade Relations Status With The US 15 Years Ago. What Did That Change?. [online] Thediplomat.com. Available at: <https://thediplomat.com/2016/12/bush-gave-china-permanent-normal-trade-relations-status-with-the-us-15-years-ago-what-did-that-change/> [Accessed 4 June 2020].

Nytimes.com. 2020. Trump Says He Plans To Withdraw From Nafta. [online] Available at: <https://www.nytimes.com/2018/12/02/us/politics/trump-withdraw-nafta.html> [Accessed 30 June 2020].

BBC News. 2020. No Way Back From Globalisation – Obama. [online] Available at: <https://www.bbc.com/news/world-europe-38006937> [Accessed 1 July 2020].

Foreign Affairs. 2020. Reconsidering Woodrow Wilson: Progressivism, Internationalism, War, And Peace. [online] Available at: <https://www.foreignaffairs.com/reviews/capsule-review/2009-05-01/reconsidering-woodrow-wilson-progressivism-internationalism-war> [Accessed 1 July 2020].

Wrap.warwick.ac.uk. 2020. Globalisation And Ideology In Britain : Neoliberalism, Free Trade And The Global Economy – WRAP: Warwick Research Archive Portal. [online] Available at: <http://wrap.warwick.ac.uk/49332/> [Accessed 1 July 2020].

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Economy

The International North-South Transport Corridor: Shifting Gears in Eurasian Connectivity

Grace Cheema

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As the centre of gravity of the global power play tilts towards its economic underlining,

issues like trade, connectivity and infrastructure have come to warrant greater significance in foreign policies. This holds particularly true in Central Asia where the need for investment coupled with its strategic geographical stretch has drawn increasing attention towards the potential of transport corridors as catalysts of economic integration and connectivity. While China’s colossal Belt and Road Initiative (BRI) has been at the centre of global attention, India, Iran and Russia have mapped out their own plans for a transcontinental transport corridor. The International North-South Transport Corridor (INSTC) is a landmark initiative for Eurasian connectivity. Twice as short as the traditional trade route between India and Russia, the corridor augments economic cooperation and gives sea access to land-locked member states in Central Asia. This paper seeks to advance an understanding of the development of the INSTC and examine its significance in the Asian transportation grid. In doing so, it analyses the geopolitical dynamics that underlie the project’s agenda, examines it in the context of the BRI, explores the stumbling blocks in its developments and comments on its future prospects while highlighting some recommended policy changes.

Bridging the Connectivity Gap

The International North-South Transport Corridor is a 7200 km-long multimodal transportation network that links the Indian Ocean to the Caspian Sea via the Persian Gulf onwards into Russia and Northern Europe. Launched as a joint initiative by India, Iran and Russia in 2000 and ratified by the three in 2002, the corridor has now expanded to include eleven more members, namely, Azerbaijan, Armenia, Kazakhstan, Kyrgyzstan, Tajikistan, Turkey, Ukraine, Syria, Belarus, Oman and Bulgaria (observer status). The 2000 agreement was set in motion with the objectives of simplifying and developing transportation services, enhancing access to global markets and coordinating transit policies while also ameliorating route security. India’s accession to the Shanghai Cooperation Organisation (SCO) in 2017 and the Ashgabat Agreement in 2018 have only increased these connectivity prospects.

Figure 1: The INSTC route and the standard Suez route. Credit: Wikimedia Commons

Although the original agreement envisaged connecting India and Iran to Central Asia and Russia, the potential of the corridor to gradually envelop the Baltic, Nordic and even the Arctic regions is no longer far-fetched. The first or the central branch of the corridor of the INSTC begins from the Mumbai port in the Indian Ocean Region and connects to the Bandar Abbas and Chabahar ports on the Strait of Hormuz and then passing through the Iranian territory via Nowshahr, Amirabad and Bandar-e-Anzali, runs by the Caspian Sea to reach the Olya and Astrakhan Ports in Russia. The second or the western branch connects the railway network of Azerbaijan to that of Iran via the cross-border nodal points of Astara (Azerbaijan) and Astara (Iran) and further to India via sea route. The third or the eastern branch of the corridor connects Russia to India through the Central Asian countries of Kazakhstan, Uzbekistan and Turkmenistan. Notably, the INSTC is multimodal in nature, encompassing sea, road and rail routes in its network to offer the shortest route of connectivity for Eurasian cargo transport. Bereft of the INSTC, cargo between India and Russia moves either through the Netherlands’ port of Rotterdam or China’s Qingdao port which takes over 50 days for transit. The INSTC in its completion cuts this transit time down to about 16-21 days. It also offers a considerably shorter route than the Suez Canal transit passage which, besides being overloaded, is also much more expensive than the former. This was made apparent by the dry run conducted by the Federation of Freight Forwarders’ Association of India (FFFAI) in 2014 with the objective of discerning structural problems and missing links in the corridor. The study demonstrated that the INSTC was 30 percent cheaper and 40 percent shorter than the traditional Suez route, slashing the transit time to an average of 23 days for Europe-bound shipments from the 45-60 days taken by the latter. Although the study identified streamlining and coordination with allied agencies as some of the pitfalls, it ascertained that the corridor did not pose infrastructural or security hurdles in the maiden dry run. The second dry run, reportedly conducted in 2017, generated a similar sense of optimism.[1]

With an estimated capacity of 20-30 million tons of goods per year, the corridor facilitates transit and bolsters trade connectivity. But besides the more obvious benefits of increased trade, the time and cost savings coupled with access to new markets also translate into increased competitiveness in exports. This holds particularly true for the INSTC because unlike the BRI, the INSTC nations have a level-playing field, allowing for benefits to be distributed more evenly. For India, the corridor also augments its ‘Make in India’ initiative. Access to nations of the Eurasian Economic Union alone can offer it a market of 173 million people. Additionally, the corridor facilitates free trade agreements, opens new opportunities to engage with more regional trading blocs and in harmonising policies while bringing about a more uniform legal climate and enhances regional stability. 

Geopolitical Geometries

The INSTC acts as a gateway for India to reconnect with the resource-rich nations of Central Asia and Eurasia. It makes for one of the most salient aspects of India’s Connect Central Asia policy which was initiated by Indian policy markers in 2012 in a bid to revamp its ties with Central Asia. In a way, the INSTC serves the more proactive stance that the Indian foreign policy has come to adopt in recent years. For a long time, India’s westward connectivity had been disrupted by its contentious relations with Pakistan. In providing a direct link to the Iranian ports of Chabahar and Bandar Abbas, the INSTC allows the nation to bypass the Pakistan hurdle. Furthermore, it presents India with an opportunity to re-engage with Russia which, in the light of India’s increasingly cordial relations with the United States, has been advancing its relations with Pakistan. In 2018, bilateral trade between India and Russia stood at USD $8.2 billion, a dismal amount compared to the envisaged target of US $30 billion in bilateral trade by 2025. The need to re-energize trade coupled with the lack of a coterminous border renders the INSTC imperative for the two.

The INSTC also makes way for India to offset growing Chinese presence in the region. The partly Indian-built port of Chabahar in Iran is not only central to India’s connectivity to Central Asia but also holds significant strategic importance. Located just 72 kilometres west of the Pakistani port of Gwadar which has been developed under the BRI, Chabahar allows India to counter the Chinese strategic foothold in the Indian Ocean Region. The port is also pivotal for land-locked Afghanistan to unlock its trade potential and reduce its dependence on Islamabad. In this context, it is worthwhile to note that, positioned at the crossroads of the North-South and East-West transit corridors, Iran is the lynchpin to the success of the INSTC. Isolation of Iran in the wake of the U.S. sanctions then can inevitably put the actualisation of the INSTC in jeopardy. However, the signing of an MoU between the state-backed Container Corporation of India (Concor) and Russian Railways Logistics Joint Stock Company (RZD) in 2020 to transport cargo via the INSTC despite the threat of U.S. sanctions indicates a promising outlook for the full operationalisation of the corridor.

The geopolitical geometries of the INSTC are complicated not only by tangled relations with extra-regional players but also amongst the members themselves. Azerbaijan’s accession to the INSTC in 2005 spurred the corridor’s spread in the Caucasus and heralded the bridging of missing links like the Qazvin-Rasht-Astara railway line. Anticipating up to seven million tons of cargo transit through its territory in the medium term, Azerbaijan has agreed to finance $500 million for the project. But besides the economic benefits, the corridor also makes for a geopolitical asset for Azerbaijan in offering an opportunity to further isolate Armenia with which the country shares adversarial relations. The INSTC undermines Armenia’s own underfunded regional railroad initiative by providing more suitable economic dividends and linking Iran with Turkey via Georgia’s Black Sea Ports while bypassing those of Armenia with the Baku-Tbilisi-Kars route. Notably, for Armenia, the completion of the Armenia-Iran Railway Concession Project would bring colossal direct benefits for its economy by allowing it to avoid the Turkey and Azerbaijan blockade. However, given the paucity of funds, the Armenian project has remained only on paper. Another case in point is the possibility of friction in Russia-Iran relations in the future if a sanctions-free Iran makes headway in becoming an energy hub and gaining larger shares in the oil and gas markets of Europe which has been striving to reduce its dependence on Russian gas. Moreover, realities of the INSTC’s geopolitical geometries may complicate even further if the corridor expands to include countries from the Baltic and Nordic regions along with other interested states like Japan under its ambit. Nevertheless, given that the main argumentation behind the corridor is to reap commercial benefits, it is unlikely for the geopolitical rationale to override economic reasoning.

The INSTC and BRI: A Harmonious Grid?

The INSTC and China’s BRI are both colossal multi-modal undertakings which enhance economic connectivity and promote infrastructural growth. However, conceived almost a decade before the launch of the BRI,  the INSTC is a much older project. Unlike the BRI where China plays the role of the foreman, it follows a much more multilateral approach with multiple stakeholders participating on a level playing field. INSTC proposals are also devoid of ‘debt-trap’ fears which have often plagued the appeal of the BRI. While this makes the INSTC much more transparent and reliable and thereby increases its tenability in the long run, it also implies more constraints in its development process. The shortage of funds for constructing missing links in the corridor is one such example. As the helmsman of the BRI, China is not only willing to invest large sums into the project but is also willing to risk markedly low returns on its long-term investments. This, however, points to the concern that the entire project is a decisive strategic manoeuvre. For India, this holds particularly true for the CPEC stretch on the BRI whose Gwadar port is seen as a catalyst for China to gain a strategic foothold in the Indian Ocean Region. China’s bid to extend ties into Afghanistan and Iran have stirred these tensions further. Nonetheless, it is important to note that Iran’s growing ties with China need not necessarily come at the cost of India-Iran relations. Besides, the North-South axis of the INSTC can, in fact, complement the East-West axis of the BRI to make for a more cohesive transport grid in Eurasia. Although the INSTC and China’s BRI initiative are often pitted against each other, it must be understood that the two are not entirely incompatible with each other.

Bottlenecks and Constraints

Progress on the INSTC has taken place in fits and starts. Following the progress made in the first few years of its inception, development on the corridor slowed down from 2005 to 2012. Progress picked up the pace again after the sixth meeting of the INSTC members in 2012 and the project has been gradually gaining momentum since. Coincidently, this was the same year in which India launched its ‘Connect Central Asia’ initiative. One reason behind the sluggish pace of progress was the imposition of sanctions on Iran which isolated it on the global stage. The other major stumbling block has been the lack of financial backing. None of the three main participants has pockets deep enough to ensure unwavering funds for a project of this scale. Different stakeholders are funding different sub-projects creating structural and technical problems for the corridor owing to its disjointed nature. One such problem is the break of gauge issue. The standard railway gauge used by Iran, a central transit hub, is different from the broad gauge used by Russia and the Central Asian nations. For instance, the Rasht-Astara rail link requires a change of gauge from the standard one as the line crosses from Iran into Azerbaijan. This necessitates the need for more change of gauge facilities. The presence of multiple stakeholders creates other problems like customs control and documentation issues, lack of harmony in transportation laws and improper insurance coverage.[2] Moreover, the project still lacks an information exchange platform. This points to the absence of adequate digitalisation and private sector participation in the INSTC. Although the corridor has garnered interest from some companies like Deutsche Bahn, private sector involvement in the corridor has largely remained dormant owing to their concerns for steady returns on investment and security fears. The corridor passes through regions with critical security risks — be it instability in the conflict-ridden Caucasus, extremism in Afghanistan, domestic discord or forms of transnational organised crime like drug trafficking. This puts the security of cargo transit into question and few companies are willing to gamble with this risk, putting the project’s economic viability in jeopardy.

The Path to the Future

While the North-South Corridor holds immense potential, its full realisation is contingent on the resolution of the bottlenecks and constraints impeding its progress. Addressing these challenges requires closer cooperation with government agencies and private enterprises at both regional and international levels. First, it is imperative to understand that the main selling point of the corridor is commercial gain from increased connectivity. To this end, the INSTC members must avail and make practical and effective use of its complementarity with the existing grid of transnational corridors in Eurasia owing to the North-South axis that the corridor operates on. Synergy with other corridors will allow the INSTC to create additional positive economic spill-overs. Synchronisation with corridors of the Trans-European Transport Network such as the North-Sea Baltic corridor, with organisations like the Black Sea Economic Cooperation (BSEC) and other nations like Japan, Myanmar and Thailand can significantly enhance the outreach of the project. Second, the INSTC members must incorporate new digital technologies, launch a web portal for information exchange and build digital nodes along the corridor to turn it into a fully integrated networking system. One way of achieving this is to have India, with its robust IT sector, take the lead in the digitalisation of the corridor. The other is to push for greater participation from the private sector which is significantly more efficient in advanced technologies.[3] Third, infrastructural and technical issues must be resolved. Integration of logistics assets, provision of visa facilities, ease of gradients, aggregation of cargo bound in the return direction and increasing availability of change of gauge facilities are some steps in this direction. Fourth, it is equally important to work towards greater harmonisation of policies. This necessitates the creation of high-level working groups and adept integration of policies and laws. It is, however, important to ensure that changes introduced in the direction of legal harmonisation must not be integrated with local laws unexpectedly in a trice but rather in a step-by-step manner to ascertain a smooth transition. Only once these steps are undertaken and the existing bottlenecks removed, can the INSTC members expand the ambit of the project to include new domains like smart energy, blockchain technology, pipeline connectivity, and consider the prospects of extending the corridor to areas like North Africa and the Arctic region.

Conclusion

The International North-South Transport Corridor was initiated based on the vision of India, Russia and Iran to enhance strategic partnership and economic cooperation by augmenting connectivity through Central Asia. Although the initial progress was slow, the project has expanded dramatically to potentially increase its reach up to Northern Europe. Extending its geographical stretch to such an extent and tapping into its vast potential, however, is bound to be a time taking process. Questions over sanctions on Iran and Russia, the mustering of adequate economic wherewithal and lack of private participation still linger. Nonetheless, it would be unwise to judge the corridor’s capacity to deliver before it becomes fully operationalised. Given that development on the corridor is still underway, it can be easily modified to overcome structural problems. Cargo exchange and private participation are also bound to drum up further as Asia slowly develops into a larger consumer market itself. While this presents a positive outlook for the corridor’s future, its actualisation rests on the ability of the member states to maintain sustained efforts.


[1] Hriday Ch. Sharma, “Turning the International North-South Corridor into a ‘Digital Corridor’”, Comparative Politics Russia, 4 (2018), 125, 10.24411/2221-3279-2018-10008.

[2] “INSTC Conference-India 2015”, 87-94.

[3] Hriday Sharma, “Turning the International North-South Corridor into a ‘Digital Corridor’”, 124-138

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Economy

Pandemic Recovery: White House – Check-In or Check-Out Times

Naseem Javed

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Credit: Diego Rivera

Some 200 nations of the world are in serious economic pains of varying degrees; the images and narratives on social media makes the world appear small and spinning out of control, shrinking mental abilities to Tik-Tok tempo to fit small size screens. In reality, when global dialogues engage some 5000 languages, 2000 cultures, bouncing in 10,000 cities, 11,000 Chamber of Commerce, 100,000 trade associations and some five billion connected alpha dreamers extremely dynamic vibrancy appears. The world is immensely large, as only less than 5% its populace has ever travelled globally while 50% never went outside their own country. On social media, everyone is a certified global expert.

Nevertheless, some 200 nations are trying to change the world toward a better workable plateau, peaceful diversity, tolerance and some sort of balanced trade. The world is hungry seeking out untapped hidden talents of its local citizens, suppressed by the bad local policies. There are continents, oceans, jungles, animals and things, simply, so much, so large, so vast, a mind cannot fathom. Blessed are those who have open minds and souls. The rest self-imprisoned in their own minds, lost in the darkness of their own fears. The borderless world of commerce always needs colorfully smart; open to diversity to bounce in global space with national and global collaborations.  

Such doctrines lost during the last decades as economic disconnectivity blossomed under hologramic economies. Pandemic recovery, today, forces mobilization of the midsize business economy as a bold adventure on quality exportability based on upskilled citizenry. Occupationalism demands small and midsize manufacturing to uplift local grassroots prosperity. In the history of humankind, no other experiment of human endurance has ever been as successful as America; a century old, image supremacy of entrepreneurialism wasted when some 100,000 factories and Middle-Class America disappeared from the heartland. The manufacturing based economy laughed at over ‘information economy’ and hologramic adventuring. Deep study and new global age thinking is a perquisite.

Three types of new challenges

Nations without funding: It is almost a fact most governments from top to bottom are simply broke, and almost a fact most governments have already wasted their funds beyond their means. However, if we focus just on priorities, above programs are primarily not new funding dependent rather they are deployment hungry and execution starved. Any government anywhere in the world in the name of superior efficiencies can easily adopt digitization policy as a survival strategy and make all the processes highly affordable by bringing them on digital formats. The rain of free technologies is flooding the global markets. It is more about upskilling departmental leaderships to adapt to such opportunities, without fear.

Nations without infrastructure: Small percentages of nations have the infrastructure, rest assembling like Lego as they go. The internet connectivity or knowledge plug is almost everywhere. The lack of imagination and upskilling of the gatekeepers is a critical issue.

Nations without digitization: there are a majority of nations where mental attitudes are significant problems, fear of being replaced as redundant or fear of exposing lack of competence preclude any adventure on digitization. No nation will survive on economic progress without national digitization mandates.

Three types of new models: Start with the Marshall Plan thinking, the revolutionary models and national mobilization to catch up the last decade. Start with open debates and honestly frank analysis, no finger pointing. Start with a plastic award night, congratulate failures, and carry on as usual until the next pandemic.

When history becomes nothing, but agreed upon lies, culture as agreed upon fables, truth becomes taboo, dumb down narrative dominates, restless citizenry emerges.

Summary: Within next 50 days, the US Election will make global shock waves, no matter who wins…it will be the battles on acceptance and concession speech, the mail-order selection criteria my linger weeks or months in chaos… the Vaccines races may collide with bad results and delay the process to 2022. The economic recovery shaped W may bring reopening normalcy possibly in 2022. Tough and difficult times demanding critical thinking and mental endurance on all fronts. Study how national mobilization of mid size economy works in digital age.

Plan wisely and select right paths; but open bold and honest discussions, as masked and sealed lips are where most of the problems originally germinated. Move or get moved. 

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Since 2011, Eastern Mediterranean affairs have mainly been marked by instability due to the civil wars in Libya and Syria....

Newsdesk5 hours ago

Two paths before Latin America: Democracy or dictatorship

The Latin American region is at a crossroads, with a choice not between the political left or the right; between...

Tourism7 hours ago

UNWTO Launches Comprehensive Tourism Recovery Tracker

As growing numbers of countries around the world ease restrictions on travel, the World Tourism Organization (UNWTO) has launched a...

South Asia9 hours ago

Pakistan’s War with COVID-19: A Victory for Now

From rethinking health care systems to the redefining of global movement and migration, the coronavirus has undoubtedly changed the world...

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