With the coronavirus COVID-19 spreading rapidly worldwide and the first deaths reported in the United States, the issue of its impact on US stock markets is going viral and more and more people now realize that the new disease could have a serious impact on the outcome of the November presidential elections as well.
Any global pandemic poses three main threats to any country, namely medical, economic and, as a result, political, and the US is certainly not an exception. Is America’s healthcare system ready for such a potential pandemic?
In a WHO analysis of national health care systems, the United States ranks 37th out of 191 countries. Back in mid-February, optimists were confident that the US was better prepared for a possible epidemic than most countries in the world. The high death toll from a spate of natural disasters, starting with Hurricane Katrina, has forced the government to respond with a series of measures to get the national health system ready for “worst-case scenarios,” including the annual allocation of $1 billion to states and individual hospitals as part of emergency response measures.
Still, according to a Politico.com report that came on February 26, the US Centers for Disease Control and Prevention (CDC), responsible, among other things, for combating infectious diseases, was not yet ready to detect whether the coronavirus was spreading across the country because of problems with a test developed by the CDC, potentially slowing the response if the virus starts taking hold, probably because the test lab itself could have been infected. Meanwhile, it wasn’t until very late in February that the White House finally began to realize the magnitude of the problem, if not medical, then, certainly, political.
President Donald Trump’s decision to appoint Vice President Mike Pence to lead a task force to combat the spread of the coronavirus rattled many domestic commentators who were quick torecall Pence’s failures in fighting the HIV outbreak in Indiana during his stint as governor there. In addition, during a February 28 meeting with voters, President Trump dismissed reports about the extent of the spread of coronavirus in the United States as a “hoax” being spread around by the Democrats, comparing it to allegations of his alleged ties to Russia and the impeachment process. It wasn’t until March 2 that Trump finally announced travel restrictions to countries affected by the coronavirus, and announced new screening procedures for people traveling from “high-risk countries.” The list of countries to which flights are canceled is also growing.
On March 2, The Washington Post warned that within the next few weeks the virus could spread across Washington State, which has already become one of the hotspots of undetected spread of the COVID-19 infection. Health and Human Services Secretary Alex Azar II is being blamed for the agency’s slow response to the infection. Moreover, accusations of “incompetence,” “blatant slowness” and unwillingness to listen to critically acclaimed medical experts are now coming from members of the Trump camp itself, who actually stood behind Mr. Azar’s appointment to the head of the HHS. All this is adding to the general atmosphere of bureaucratic confusion. As of early-March 2020, the CDC had only one laboratory capable of providing a set of COVID-19 identification tests, and the provision of commercial test kits is being delayed due to sharp disagreements between officials and private pharmaceutical companies.
On March 3, experts said that the US authorities had “lost six weeks” of preparation time since the discovery of the first patient. This made it impossible to put the whole situation under control early on and, as a result, the risk of a mass spread of the disease among Americans increased exponentially. On March 1, Chris Meekins, a former HHS emergency-preparedness official, said the risk of significant US outbreaks had risen from 33 percent to 75 percent in the previous week alone. Federal health officials have also changed their rhetoric from “containment” of the virus, to measures designed to prevent the worst consequences for the United States. Meanwhile, by March 4, less than ten US states had launched mass-scale COVID-19 test programs, and a mere 12 out of 100 HHS laboratories had necessary equipment in place to confirm a COVID-19 diagnosis.
Meanwhile, lobbyists representing the interests of the US pharmaceutical industry are locking horns in Congress for billions of dollars that the federal government plans to unload to stave off a possible epidemic. The sticking point here is who and how will pay for patients who do not require immediate hospitalization, but are to be quarantined. As a result, a bill on the allocation of $8.3 billion for priority epidemic-prevention measures took almost until mid-March to be finally approved.
The situation is further complicated by the fact that much of the drugs imported by the US come from China. According to the Breitbart portal, we are talking about 97 percent of all antibiotics and 80 percent of the active substances and substances used in the production of medicines. Many basic medicines, as well as protective equipment for the medical personnel also come from abroad. Finally, US pharmaceutical firms no longer produce generic drugs. The past few weeks have seen a notable drop in supply volumes due to the coronavirus epidemic in China. The quality control of drugs and their precursors is a separate issue. The US authorities have thus found themselves hostages to their own policy of encouraging cost-reduction by pharmaceutical companies through shifting production to third countries.
The economic losses the US may incur as a result of a possible COVID-19 epidemic remain hard to estimate. Until very recently, healthy economy was a major factor Donald Trump could count on in his bid for a second term in the White House. And with good reason too as the poorest categories of US workers have seen a notable rise in their incomes, and salaries in the private sector continued to grow in February of this year.
Meanwhile, by the close of 2019, many signs were already visible warning about a possible economic decline in the second half of 2020. Even the initial reports about an incidence of COVID-19 infections in the US sent stock indices tumbling down. On February 24, the Dow Jones Industrial Average slid by over 1,000 points and the S&P 500 index tumbled eight percent on February 26. The White House ramped up pressure on the Federal Reserve System to bring down the interest rates. On March 3, two weeks before the official date of the meeting of its Board of Governors, the Federal Reserve cut interest rates by half a percentage point in the first emergency rate move since the depths of the 2008 financial crisis. Bloomberg suggested that the coronavirus could “play into Trump’s hands” on the assumption that the rate cut would bring in new investments and spur the US economy. The next day, however, Wall Street stocks plummeted again.
From a macroeconomic standpoint, the US external debt has kept going up throughout Trump’s presidency, along with the budget deficit. Thus, even before coronavirus, even a GDP growth of almost 2.1 percent could not be enough to reverse the negative trend. And now, the outbreak of the epidemic could be the “spark” that would send America’s “fragile economic balance” up in flames. The US could probably draw some consolation from projections similar to those World Bank experts made in 2006. According to those estimates, based on the 2003 SARS pandemic, in the event of a new global outbreak of the deadly flu, the first-year drop in the US GDP would be the least insignificant around, ranging from just one to three percent. With all that being said, just where things could go from now remains anyone’s guess.
One thing is clear: the effects of the COVID-19 epidemic on the US economy will be long-term and it will take us a few months to get a whole picture of the scale of government measures being taken to offset the negative consequences of the coronavirus. Just in time for the decisive phase of the election race. A number of studies conducted in recent decades by the US academic community show that the state of the national economy, above all its year-to-year dynamics, significantly affects the political preferences of US voters. Even a moderate recession, let alone a full-blown one, that is enough to slow down the economy three to six months before the Election Day.
Not surprisingly, right after the first cases of COVID-19 in the US became evident the issue became a centerpiece of the election campaign. With a deep split running through the US political establishment and society as a whole, playing up the issue of the coronavirus infection could prove an easy way to win votes in the election race. US media is already talking about some anonymous sources spreading information about the coronavirus in social networks to freak out elderly voters to make sure they stay away from the Democratic Party primaries and to reduce the overall voter turnout in the November presidential elections.
Donald Trump’s critics may interpret the urgent rate cut by the Federal Reserve, led by a Trump appointee, as an attempt to increase the president’s chances for reelection. On the other hand, if the dollar sinks too low as a result of the Fed’s actions, it would eat into the US families’ income in the run-up to the November vote. Finally, lower interest rates can reflect badly on the labor market. A sharp slowdown in the employment rate a few months before Election Day 2016 left some voters wondering about a worsening situation in the labor market. As a result, many people did not vote for the candidate of the Democratic Party, whose representative was then in the White House.
Overall, the COVID-19 outbreak offers politicians potential gains while at the same time presenting them with serious risks. On the one hand, it gives one a perfect chance to present oneself as “a protector of the health of citizens.” On the other, panic among the population can negatively impact the approval ratings of the current administration, of state governors, and even of lawmakers on Capitol Hill, all the more so if the measures being taken are seen by people as ineffective.
Washington’s inability to check the spread of the COVID-19 epidemic may sap the Americans’ confidence in the federal government. As a result, the infection could turn from an important factor in the election campaign into a national security problem. The Trump administration’s current anti-coronavirus policy may factor in very significantly in Donald Trump’s chances for re-election. Indeed, if the situation with the coronavirus epidemic gets worse, COVID-19 might determine the outcome of the November vote.
From our partner International Affairs
9th Summit of the Americas in Los Angeles: Outcomes in 2022
The 9th Summit of the Americas—delayed for a year by the pandemic—attracted unprecedented scrutiny of Latin American and global media, already at the stage of preparations. It was not only the matter of Washington’s “invitation campaign” and the (predictable) response of Latin American leaders to it. Rather, the White House had been expected to offer new ideas, showcase new approaches, initiate new proposals, which would make it possible to confirm and solidify U.S. leadership in the Western hemisphere, particularly given the growing competition with China in a region of America’s traditional interests. Joe Biden failed to achieve a breakthrough: the final declaration proved to have a far narrower scope than expected, while Latin Americans demonstrated their agency on the global stage once again. The Summit of the Americas never became Joe Biden’s diplomatic triumph, but it would not do to underestimate Washington’s ability to play “a long game”, achieving the goals set in circuitous ways. Recent history knows a number of such instances.
The Forum’s main sensation was the pointed refusal of the leaders of five states (Mexico, Bolivia, Honduras, Guatemala, El Salvador) to attend the event in person. Some did not attend due to objective circumstances, but everyone who declined the invitation to appear at the summit had their own reasons, with the main being the White House’s high-profile decision not to invite the leaders of Cuba, Nicaragua and Venezuela. Traditionally, the hosts of previous summits selected the invitees, and scandals had been known to happen. In 2018, Peru did not invite Nicolas Maduro, and previously, the US traditionally opposed Cuba’s attendance (the country participated in the summit only twice).
Many observers have deemed Joe Biden’s rigid stance on the three states illogical, particularly given Washington’s simultaneous efforts to normalize relations with Havana and Caracas that have recently manifested in the easing of sanctions. It is important to keep in mind, however, that the ideological component has traditionally been of key importance for the U.S. in its relations with the region. Nor could Joe Biden ignore the harsh stance of most American elites; an invitation extended to these three states would have had horrendous domestic political consequences for the current administration. Tellingly, the White House also refused to invite its Venezuelan “protégé” Juan Guaido—Joe Biden only had a telephone conversation with him.
The refusal of several Latin American leaders to attend the Summit in person should be interpreted with care. Frequently, such a decision looked like a desire to trumpet their stance in Washington’s face, creating an opportunity for publicity, especially since most heads of state that ignored the event still sent large delegations, closely following the course of the Summit closely.
Nonetheless, even many of those presidents or heads of government who chose to travel to Los Angeles openly expressed their disagreement with Washington’s approaches, condemning the non-invitation of the three states. Argentina’s President Alberto Fernandez and Belize’s Prime Minister Johnny Briceño were particularly stark in this regard. They were diplomatic, yet open in personally telling Joe Biden their grievances during the first principal session. The two leaders condemned both the sanctions against Cuba and Venezuela and the exclusion of these states from the list of invitees.
In his response, Joe Biden had to make conciliatory statements on the need to search for common language despite existing differences. Many observers viewed Latin Americans’ demarche as a manifestation of the U.S. weakening regional influence and a symbol of new geopolitical realities in the Western hemisphere. In fact, U.S. partners in Latin America traditionally dish direct criticisms or disagreements to U.S. leaders. Suffice it to remember the famous 4th Summit of the Americas in 2005 in Mar del Plata, where three presidents (Lula da Silva, Hugo Chavez, and Nestor Kirchner) “buried” the Free Trade Area of the Americas (FTAA/ALCA) initiative, right in the presence of George W. Bush. Condemnations of anti-Cuban sanctions and of Cuba’s exclusion from forums have also become a tradition with Latin Americans. But when Washington appears to face consolidated Latin American opposition, this has a knack for switching work in many areas into bilateral format where the U.S. has far more opportunities for pushing through its stances and interests. For instance, when the FTAA/ALCA project failed, the U.S. rather focused on bilateral free trade agreements—over the next decade, Washington did conclude them with most of states of the region.
The language of initiatives
Washington’s main drive at the Summit can be defined as an intent to limit the presence of external actors in the traditional area of U.S. interests. China was not in any way involved in the Summit, U.S. officials did not mention Beijing in any of their speeches—yet, it was invisibly present throughout the event. During his main speech at the Forum’s opening on June 6, Joe Biden articulated new suggestions concerning cooperation, stressing that the Western hemisphere has enough resources of its own to handle its principal problems. The U.S. is trying to contain China’s expansion into the LCA, but it has failed to snatch the initiative from China so far. The Americas Partnership for Economic Prosperity, a new Washington-proposed initiative, can be seen as an attempt to offer an alternative to Chinese proposals for Latin America that include the “New Silk Road” project. Proposing strategic initiatives is a traditional form of communication of the United States with Latin America (whether at the time of John F. Kennedy or George H. Bush). The U.S. lost initiative in the region during Donald Trump’s presidency, with Joe Biden now striving to respond to the principal challenges of development: post-pandemic recovery, migration and security, digitization, rebounding investment, the “green” agenda. Many elements in the new initiative are not yet entirely clear. The White House has noticeably been preparing these proposals “in haste,” without elaborating every item in a careful fashion. It is also obvious that the U.S. intends to retain its leadership in such areas as digitization (as a snub against the Electronic Silk Road), military assistance and cooperation, logistics, green technologies.
However, many experts exhibit understandable skepticism when it comes to Joe Biden’s proposals. What is striking is the openly small financing Washington proposes, particularly if compared to the aid the U.S. is currently extending to Ukraine. Emphasis on the environmental agenda and respect for democratic norms can be seen as an instrument of future restrictions against those who do not comply with these requirements, at least in the eyes of Washington. Such demands are already a standard feature of trade agreements spearheaded by the U.S. (for instance, USMCA).
Each Summit of the Americas traditionally ends with a thematically expansive final declaration to cover all the problems in social, economic and political development. The current Forum’s organizers were expected to produce something of the sort. However, the attendees only adopted the Los Angeles Declaration on Migration and Protection at the end of the Summit, a document that boils down to Washington’s desire to “share responsibility” for resolving the migration crisis with all the nations of Latin America, both countries of origin and transit states. Certainly, the issue of Latin American migrants is a burning problem for the U.S., Mexico and states of Central America. The situation may be further complicated by the expected food crisis, which is spurred, in the White House’s opinion, by Russia’s special military operation in Ukraine. The declaration includes a large set of measures on ensuring security for migrant flows, on combating the root causes of their exodus, and on bolstering regional coordination and cooperation in this area. The document was signed by 20 states (some abstained), including all the Central American states whose leaders were not present at the Summit.
Recognizing the importance of interactions in the matter of migration, Latin Americans must have been expecting something greater than just a call for “shared responsibility” from the U.S. Initially, the organizers had ambitious plans on a far larger range of issues rather than mere migration. Preliminary discussions focused on environmental issues and environmental protection; however, since Brazil refused to sign such a declaration (under the pretext of Brazil’s relevant legislation being stringent enough already), the document was not submitted for final signing. Washington did preliminary bilateral work with key manufacturers calling upon them to ramp up oil production and exports of agricultural products to counteract the energy and food crisis. In his main speech, Joe Biden said that these crises were mostly caused by the situation in Ukraine and Russia’s actions in particular. Washington possibly planned for the final document to tie condemnation of Russia’s actions with plans for collectively counteracting the mounting crises (if the U.S. had succeeded in getting Latin Americans to support such decisions).
Many observers interpret problems with attendance as well as the openly limited final decisions and documents as Joe Biden’s unequivocal diplomatic defeat and proof of Washington’s weakening stance in Latin America. However, the Summit of the Americas is only the “tip of the iceberg” of the multitude of America’s extremely complicated and multilayered relations with the region. The U.S. remains Latin America’s principal trade and economic partner and a crucial source of technologies and investment. Indeed, there was a certain dip in trading in the 2000s. Recently, however, Washington succeeded at largely regaining its standing despite China’s active expansion into the region. The U.S. is the integral security factor in Latin America, the main recipient of migrants, and it would not do to underestimate the U.S. influence on most regional governments in spite of their growing agency.
Having drawn its conclusions from the Summit’s failures, the White House will continue to “push its agenda through” in bilateral formats as it keeps all of its influence resources. At the final press conference, a journalist asked Antony Blinken on the issue, and the Secretary of State’s response encapsulates this approach. Commenting on the refusal of some to sign the Los Angeles migration declaration, he was confident that all countries will accede to it sooner or later, pursuant to targeted work with each state. Washington has “strategic patience” in spades.
From our partner RIAC
The Canal System and the Development of the Early American Economy
The prosperity and development of the United States that it enjoys today did not come out of thin air. This is especially true in its early days of economic development which has a lot to do with the construction of the transportation system. In the beginning, it was the development of water transportation, then the railway, next followed by the highways. The construction of these major transportation systems supported the early development, prosperity, and rise of the U.S., laying the foundation for it to become a major world power.
The early water transport in the U.S. is rather interesting, and it mainly aimed to connect more places in the country by excavating and expanding the canal system. According to incomplete statistics, the total length of canals in the U.S. is 18,000 km. This 18,000 km long canal was of great significance to the early economic development of the country. This well-connected water transportation system has greatly enriched the exchange of commodities, promoted trade, and enabled the convenient transportation of raw materials, salt, whisky, energy coal, and many other products within the country. The domestic market of the U.S. had also expanded, and its national economy transformed from weak to strong.
The longest and the most well-known canal in the U.S. is the Erie Canal. The Erie Canal is named after the lake and starts from the Niagara River which originates from Lake Erie. It spans upstate New York and joins the Hudson River in Albany, the capital city of New York State, with a total length of 574 km. It is not only the longest canal in the U.S. but also the sixth-longest in the world. Back in the early 19th century, before the automobile existed, there was an urgent need for a transportation route from the Atlantic coast to the Appalachian region. A canal was proposed to run from Buffalo on the east shore of Lake Erie through the canyons of the Mohawk Valley to Albany on the upper Hudson River.
In 1817, the New York State Legislature approved the construction of the Erie Canal. After much arduous work, the canal was finally opened on October 25, 1825. Its total length is 584 km (363 miles), The channel was cut 12 m (40 feet) wide and 1.2 m (4 feet) deep. In order to solve the problem of water level drop, a total of 83 locks have been built in the canal, each lock is 27 m by 4.5 m, allowing the navigation of flat-bottomed barges with a maximum displacement of 75 tons (68 tonnes).
The Erie Canal was the first express transportation to provide the east coast and west interior of the U.S. much faster than the animal-pulled carts most commonly used at the time. Not only did it speed up transportation, but it also cut transportation costs along the coast and inland by 95%. Fast canal traffic made western New York more accessible, resulting in rapid population growth in the Midwest. The canal had as much impact on the development of the upper Midwest as it did on the development of New York City. Many pioneers flocked west through the canal, into Michigan, Ohio, and Illinois, Indiana, from where they shipped agricultural products through the canal to be marketed in New York, and the return journey was loaded with industrial goods and supplies to the west. Manufacturing industries emerged on both sides of the canal, supplying a steady stream of products to New York City. From Buffalo to New York, land freight once reached $100 per ton, and it was only $10 by the canal. In nine years, tolls had paid back the cost of the construction of the canal. By the time the toll was abolished in 1882, the revenue from the canal had been used to pay for the construction of several canal spurs, and there was substantial tax payment as well.
The canal has been expanded several times. After its reconstruction in 1909, it has become 544 km long, 45 m wide, and 3.6 m deep. By the 20th century, New York had developed a network of canals connecting Lakes Champlain, Ontario, and Finger, and the Erie Canal remained the central route, capable of navigating barges with a capacity of 2,200 tons. The establishment of the Erie Canal connected the water transport of the Great Lakes with New York Harbor and became the main waterway of the navigable canal system in New York State. The freight from Lake Erie to New York only required the cost of one-tenth of the former, making the city, much smaller than Philadelphia and Boston at that time, rapidly developed into the largest port and city in the country. The construction of the Erie Canal played a major role in promoting the economic development of the eastern United States and New York. The population of New York in 1820 was 123,700, and the population of Philadelphia was 112,000. By 1860, the numbers rose to 1.08 million and 566,000 respectively. Consequently, New York thrived as a port city. In 1800, only about 9% of all foreign goods in the United States entered the United States through New York Harbor, yet by 1860, that percentage jumped to 62%. The strengthening of New York’s status too indirectly led to the gradual establishment of Wall Street’s status. In this regard, the Erie Canal contributed greatly to such progress.
In addition to changing urban patterns and the rise of industry, the Erie Canal had a far-reaching impact on the U.S. economy, gradually transforming it into a consumer-led economy that determined the subsequent U.S. economic landscape. Culturally, the opening of the Erie Canal also boosted the Protestant revival movement known as the Second Awakening. Western New York was one of the main areas of this movement, and a crucial reason for this was the opening of the Erie Canal. In the small towns emerging on both sides of the canal, various sects began to proselyte in places where their churches had yet to be common, and some emerging religious groups took root there and rapidly developed, including the Church of Jesus Christ of Latter-day Saints, commonly known as the Mormons.
Other than the evangelization along the Erie Canal, many new trends of thought also made their appearance there, such as the early feminist movement, the abolition movement, and utopianism, which all found their initial supporters in the emerging towns in that region. Hence, the construction of the Erie Canal played a driving role in the changes of the American cultural pattern.
From the day the Erie Canal was built, the vast area between the Appalachian Mountains and the Mississippi River, especially the Midwest around the Great Lakes, was no longer the frontier of the United States, but was connected to the east coast and became the heartland of the country. The economic and social changes it brought about had put the U.S. on the first step toward becoming a great power. The central and western regions could industrialize swiftly, forming the Great Lakes industrial areas, mining areas, and urban belt. All of these were inseparable from the Erie Canal, therefore it is not unreasonable for many to consider the opening of the Erie Canal as the official beginning of the first industrial revolution in the U.S.
There are numerous canals within the U.S. According to incomplete statistics, the country has built a total of 18,000 km of canals. The entire country has also become an organic whole because of these canals, which not only effectively enhanced the ability to resist droughts and floods, but also greatly developed the American economy and market.
Final analysis conclusion:
The construction of the canal system played an important role in the early transportation improvement, trade flow, market expansion, cultural dissemination, and urban development of the United States. This, in turn, has greatly promoted the development of the American economy and played an important role for it to become a major power.
Aligning values into an interest-based Canadian Indo-Pacific Strategy
Russia’s invasion of Ukraine is an explicit challenge to the post-WW 2 order. This order has brought peace and stability and created the conditions for economic growth in the global north and Global South. It has also brought relative peace and economic integration in the Europe and in the Indo-Pacific.
Today, this order is now being challenged by Russia today but also by China. The consequences could mean that a might-is-right approach and Machiavellian approach to foreign policy will become the new normal for countries like Canada, a self-described middle power.
A Machiavellian order is an order in which larger countries can bully, cajole and pressure, mid and small size countries to do what they are demanded is an explicit challenge to Canadian interests, as well as the interests of like-minded countries such as Japan, Australia, South Korea, European countries and countries in the Global South.
The Trudeau Government has clearly and explicitly criticized the Russian government’s invasion of Ukraine by Russia. Ottawa has coordinated with other middle powers and as we speak through the G-7 Summit in Germany on how to handle Russia’s invasion of the Ukraine.
Unity will be important, especially as energy security becomes more and more critical of an issue for Central and Eastern European countries. The growing food crisis that has manifested as a result of the Russian invasion is also an area that the G-7 will need to coordinate to provide relief to many countries in the Global South.
This message will be further discussed at the NATO summit in Spain. Here, Japan, South Korea, Australia New Zealand will join the NATO members to demonstrate their shared commitment to a rules-based order to pushing back against aggression to change the current order and to find ways to work together to support the Ukraine and resist Russian aggression. Here, Canada has an important role in terms of energy security and food security.
With ample access to energy and food resources, there is a possibility for Canada and other partners such as the U.S. to divert some of its significant grain and energy resources to the Europe to help alleviate some of the stress associated with the invasion of Ukraine.
Coordinated military support as well will be important to ensure that the Ukrainians can resist and eventually take back territory that was taken by force by Russia.
There is an interesting paradox in Canada’s approach. While explicitly criticizing Russia’s might-is-right approach to foreign relations in Eastern Europe and particularly with Ukraine, Canada continues to waver in using the same language in the Indo-Pacific.
The Indo-Pacific region is also facing a might-is-right approach to reshaping the Indo-Pacific order. The use of lawfare, gray-zone operations, military force and belligerent threats all are aimed at reshaping the Indo-Pacific order in such a way that creates a Chinese centric regional order in which China’s neighbors as well as stakeholders that engage in the region will think about China’s interests before their own interests and their interest with Washington.
Canada needs to continue to invest in the Indo-Pacific. A good place to start will be to explicitly state Canada’s concerns about that Machiavellian approach to foreign policy in the region and the efforts by China to reshape the region such that states lose aspects of their autonomy. This will require an Indo-Pacific strategy to be built on a clear objective of how Canada sees the Indo-Pacific Region evolving forward and how Canada would like to contribute to that broader vision of the Indo-Pacific.
Japan, Australia, the United States, Germany, Denmark, and the E.U. have laid out their own Indo-Pacific strategies. They focus on maritime security, a rules-based order, transparency, development and importantly, good governance. We see little rhetoric concerning progressive issues as well as little mention of the core values such as democracy, human rights and freedom of press. This is intentional. These countries and associations understand the heterogeneity within the region.
The-Indo Pacific region is home to soft authoritarian regimes, socialist regimes, democracies and monarchies. Unfortunately, each has very different views about democracy, human rights and progressive issues.
Where they are aligned is in their interests. Their interests are focused on trade, economic integration development, the digital economy, resolving territorial issues through dialogue and consensus-based decision making and not excluding any country region or political entity from the region’s political economy.
Simply, associations and regions like ASEAN, South Asia and the E.U. see inclusivity as a key criterion to the Indo-Pacific peaceful evolution This means any Indo-Pacific strategy that emerges out of these countries does not exclude China or strive to eject non-democratic states.
Rather, their Indo-Pacific strategies focus on inculcating peace and stability in the Indo-Pacific region through development, trade, infrastructure and connectivity, institution building, good governance and deterrence.
In the Canadian case, the broader vision for the Indo-Pacific should echo but not necessarily replicate the Indo-Pacific Visions of the country’s mentioned above. Canada’s priority should be peace, stability, open access, a transparent, rules-based order that ensures Canada can have free access to economies and societies throughout the region.
At the same time, Canada’s interests in the Indo-Pacific should include shaping the region such that traditional security issues such as territory issues in the South China Sea, East China Sea, the Taiwan Straits and the Himalayan plateau do not devolve into kinetic conflict that fundamentally disrupts the region’s development and stability.
Traditional security issues are not the only issue that can affect Canada’s interests in the region. Non-traditional security issues such as climate change, terrorism, transnational diseases, extremism are all potential concerns for Canada as it could create instability in the region, disrupt their economies, destabilize supply chains as well as create problems for trading partners.
As Canada celebrates another Canada Day, it should reflect upon what are the key elements of an Indo-Pacific strategy.
Here a six-fold approach may be a useful approach to creating an Indo-Pacific strategy that helps achieve Canada’s national interests in the Indo-Pacific region. A first pillar of an Indo Pacific strategy should be one of Inclusive Development.
Here, Canada can help build stability, improve governance and contribute to broad inclusive development in the region. Through support for NGOs, investment in infrastructure and connectivity, coordinating with regional stakeholders and ensuring that inclusive development results in sustainable and replicable development in the region. Importantly, inclusive development in the region should de-emphasize the progressive character of inclusivity found in the domestic context of Canada as it is less prioritized in the region. This does not mean that a progressive approach is absent but it is sensitive to the local cultures and societies.
A second pillar should focus on Canada’s comparative advantages, Energy and critical mineral security. Based on improvements in environmental technology and technologies that are used to exploit both energy resources and critical minerals, Canada should make this the second pillar of their Indo-Pacific strategy as an open, reliable source of energy and critical minerals.
Canada could carve a position within the Indo-Pacific region in which it is the key provider of energy and critical minerals to industries that use both products. We’ve seen in the wake of the invasion of Ukraine, that energy security has become timely and we expect that energy security and critical minerals to be subject to weaponization in the future in the build-up to or in a conflict.
Consequently, Canada can contribute energy and critical mineral significantly by making this a key pillar in their strategy.
A third pillar should focus on coordinating and investing in Middle Power Diplomacy. In short, Canada needs to coordinate with other middle powers such as Japan, South Korea, Australia, New Zealand European powers to ensure that the US China Strategic competition does not shape them. Rather, coordination shapes the dynamics of the US China Strategic competition in such a way that it decreases and or attenuates the negative effects on countries we’ve already seen Canada engage in middle power diplomacy with some success.
The 2020 Agreement, in which Canada marshaled middle powers and other countries to join a Declaration Against Arbitrary Detention in State-to-State Relations following the arrest of Michael Kovrig and Michael Spavor in China is a good example. We also saw Canada bring together middle powers and the United States to discuss denuclearization of the Korean Peninsula in January 2018.
More coordination of middle powers in the areas of good governance, transparency, energy cooperation and financial cooperation would be a unique but also important contribution by Canada in the Indo-Pacific.
Here, one could easily imagine Canada working with the Partners in the Blue Pacific (PBP) to provide energy security, health infrastructure, good governance to the Pacific Island nations.
We could also see Canada contribute to the Indo-Pacific Economic Framework by marshalling middle powers to support this standard setting agreement that will shape how we think about trade. The standards that we use to negotiate new technologies ,the internet, cyber as well as AI.
A fourth pillar should be supporting Economic security, infrastructure and connectivity. Here Canada needs to find ways to consolidate its own economic security so that is more resilient against economic shocls, outside Canada, as well as inside Canada.
The COVID 19 pandemic is a good example of an external shock to the Canadian economy. We had challenges in terms of acquiring personal protective equipment and other goods as China shut down their country to manage the initial Covid-19 outbreak.
The current COVID-19 policies in Shanghai and Beijing further consolidates the logic that Canada needs to build resilience into its economy, to invest and protect its own economic security.
Internally, the floods in the fall of 2021 in British Colombia also disrupted Canadian exports abroad.
Economic security, resilience and infrastructure and connectivity can help ensure that Canada’s economy remains online and integrated into the global economy and resilient against external and internal shocks. This will require bolstering infrastructure and connectivity at home so that we have world class infrastructure that is resilient against internal shocks.
Also, Canada has a role in contributing to infrastructure and connect to the within the Indo-Pacific region. While we have limited capacities, we have capabilities that can piggyback onto existing infrastructure connectivity programs that are associated with the Quadrilateral Security Dialogue. The Japan-India-Australia resilient supply chain initiative and bilateral and other multilateral infrastructure and connectivity initiatives that have come online over the past three or four years. All of this will be important for Canada’s Indo-Pacific strategy in ensuring that Canada’s economic security is based on a resilient economy that is bolstered by infrastructure connectivity at home and abroad.
A fifth pillar for Canada will continue to be focused on security and in particular, Maritime Security in the Indo-Pacific region. With sea lines of communication in the Indo-Pacific responsible for about $5.5 trillion in trade every year and energy resources being transported through the key arteries located in the Indian Ocean, Malacca Straits South China Sea, Taiwan Straits as well as East China Sea, Canada has an interest in ensuring that the sea lines of communication remain open, governed by international law and free from coercion.
Cooperation in sea lines of communication will need to take place within existing frameworks or new frameworks. Quad plus arrangements have already taken place in January 2021 Canada participated in the Sea Dragon 21 exercises to provide an opportunity for Canada to monitor and observe Quad exercises.
We also see Canada engage in sanctions monitoring in the East China Sea in an effort to prevent sanctions invasions by North Korea. These activities continue to need to be expanded by working with like-minded countries within the region focused on maritime domain awareness search and rescue, humanitarian relief and disaster assistance and dealing with non-traditional security challenges such as illegal fishing, piracy and others.
While this is not an easy task, this pillar of a Canadian Indo-Pacific strategy is important to contributing to the region’s peace and stability as well it is important for protecting Canadian imports and exports to the region. In 2021, more than $21 billion of Canadian goods went through the region this sum continues to increase as Indo-Pacific nations look to Canada to secure energy as well as agricultural products. Ensuring that sea lines of communication remain open, stable and peaceful will continue to be a critical part of any Canadian Indo-Pacific strategy.
Lastly, a sixth pillar of a Canadian Indo-Pacific Strategy should focus on Climate Change.
The Indo-Pacific region is hosts the three most populated countries, Indonesia, India and China. It is also home to ASEAN. Collectively, the population of the Indo-Pacific region is at least 3.5 billion and the current development patterns suggest that they will have severe water and food security issues as their environment degrades do to climate change and global warming.
More extreme weather systems, the salination of the Mekong and Bangladeshi delta’s as sea levels rise will change the ecology of these critical production areas that that will create social instability, economic stress and likely political instability associated with economic refugees moving to find safer, more predictable geographic locations to leave and work.
We will also see tropical diseases and insects push north and southward disrupting agricultural and social systems.
Canada has a clear interest in investing in climate change mitigation, promoting environmentally friendly governance and business systems and technology transfer that lessen the negative impact of climate change. The scale of the problem will require Canada to pursue this sixth pillar through regional and global coordination.
With a pragmatic and realistic approach that is based on understanding the heterogeneity of the Indo-Pacific region, a Canadian Indo-Pacific Strategy should include but not be exclusive to: Inclusive development, Trade and Economic Residence, Climate Change, Maritime Security, Energy and Critical Mineral Security, and Middle Power Diplomacy.
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