Authors: Ash Narain Roy and Shimone Jaini*
Every utopia sooner or later turns into a dystopia. Why, then, do Latin Americans fancy themselves constructing alternative utopias? What good is utopia? Uruguayan writer Eduardo Galeano seems to have the answer, “it is good for walk.” Latin America hasn’t stopped imagining and dreaming. It may not have captured the imagination of global policy-makers and the chattering classes. But the region has indeed changed, mostly for the better. However, it would be premature to proclaim that Latin America has turned the corner.
Why has Latin America acquired the reputation for its pursuit of endless revolutions or what Marina Sitrin calls ‘Everyday Revolutions’? Peruvian novelist Santiago Roncagliolo provides some insights about such revolutions in his novel, Red April, “there is a feeling in Latin America that good ones were not so good and the bad ones were not so bad.”
Latin America has long been a laboratory of political and social experiments. Sebastian Edwards, author of Left Behind: Latin America and the False Promise of Populism, says that the political and economic history of Latin America has been “marked by great hopes and even greater disappointments”. And yet, some of the political and social experiments continue to catapult the region into the global consciousness and resonate with people across the globe.
Latin America suffers from many frailties. But it refuses to put an end to imaginations. It continues to dream how to construct a world where many worlds could live. Thanks to their endless dreams and imaginations, the region glimpses possibilities of other worlds. There is a lot to learn from Latin America both from its best practices and worst failures.
Deepening democracy and political participation
With the entrenchment of democracy, new paradigms of governance have emerged in Latin America. In recent decades the region has shown a trend to reject traditional political parties and vote for new formations to power. The dominance of the Christian Democrats and Social Democrats is long over. But Political institutions are still quite weak. Rewriting constitutions comes easy to Latin Americans. Dominican Republic is having its 32nd constitution. Venezuela, Haiti and Ecuador have had 32nd, 26th and 20th constitutions respectively. Now Chilean President has agreed to change the 1980 Pinochet constitution.
Does it show Latin America’s growing impatience with the non-performing models? Or are Latin Americans undermining democratic principles in the name of pursuing more radical agendas?
The institutional architecture for democracy has been very diverse in Latin America. For instance, in some countries, the party system has collapsed (e.g., Peru and Venezuela); in other countries, parties have become increasingly detached from civil society (e.g., Chile and Mexico), and, in others, social movements have replaced traditional parties (e.g., Bolivia).
The region has also shown deep contempt for modern democratic politics. It means a different kind of politics, not necessarily the denial or rejection of politics. Maybe what the region is hankering after is not just a politics which delivers but also which uses a new language of politics. It is, in a way, what Andreas Schedlar calls ‘end of politics.’
The same voters who were captivated by new, mostly leftist movements, promising to redistribute wealth, punishing traditional parties and turning political systems on their heads have now begun rejecting them. Across the continent traditional parties have disintegrated though the trend is more pronounced in the Andean region.
It all began with the emergence of a ‘vote of rage’ towards the end of the 1990s and the beginning of the present century. Several governments lost power and the voters made a demand like ‘que se vayantodos’ (they all should go). Elections in Mexico in 2000 ended 70 years of PRI’s domination. In 1999, elections in Venezuela brought an end to 40 years of bipartisan politics. Something similar happened in Uruguay in 2000 when the domination of the Colorados and the Blancos came to an end. Popular movements toppled several governments in Argentina, Bolivia and Ecuador.
Ivan Hinojosa of Catholic University in Lima says that “some parties recuperate but many don’t, and in their place you have all new and unpredictable movements”.
The institutions that promised better outcomes have delivered at best modest results. Much of the frustrations and anger that have given rise to mass protests and democratic discontent across the region are centred on the weaknesses of these institutions.1 Governments have changed, new parties and political formations have captured power and even the rhetoric has changed but meaningful institutional innovations are still a work in progress.
Constitutional changes and innovative schemes have empowered the various indigenous groups. Social policies and constitutional recognition of new citizenship rights have given these groups a new sense of belonging. However, the durability of these measures remains a moot question at a time when Latin America is witnessing end of the commodity boom and electoral setback to left-wing regimes.
New tools to boost political participation
In the areas of women’s empowerment and advancement of gender rights, the region has made notable advance. A study conducted by International IDEA in 18 Latin American countries demonstrates how important it is to have both men and women leaders to promote better participation from women, if the parties want to be democratic and inclusive institutions.
Efforts made by such parties in 11 “institutional spaces” include Statutes and Declarations of Principles, Internal Organization, Financing, Training, Recruiting, Media, etc. For example, the United Nations Convention on the Elimination of All Forms of Discrimination against Women (1979) have been ratified by every Latin American country. Most countries have approved laws promoting gender equality. Moreover, a small yet significant step of using gender-sensitive language to acknowledge women has proven monumental in reversing the predominantly male concepts in political language.
Despite the continued presence of a series of obstacles limiting the political participation of women in the region, such political parties have undertaken innovative and effective initiatives that can be considered “best practices”.
Multiple global crises have led to an increased interest in Latin America in the social and solidarity economy (SSE). In Latin America, the social and solidarity discourse, deployed with increasing intensity since the 1990s, refers to a model of political and economic development based on principles of solidarity, participation, cooperation and reciprocity. The same has also been articulated as ‘social knowledge economy’.
Hotbed of political innovation
A wave of political innovation is sweeping across Latin America as it is creating more participatory and inclusive democratic governments, breaking its shackles from the deep-rooted authoritarianism. It has also become an inspiration for many on how path to democracy is mapped out and advanced.
The Instituto Update, which studies political innovation in Latin America, found in its study that more than 600 initiatives have been put in place which are trying to reduce the gap between citizens and their governments by increasing political participation, improving transparency and accountability, encouraging innovation in government, and doing more to develop independent media.
The study identifies 5 main approaches in Latin America towards creating, developing and practicing new methods and instruments to foster political participation and trust in government. Firstly, citizens themselves are working for social change. The Secundarista movement that spread all over Brazil was led by students protesting for better education reforms in Saõ Paulo’s public high schools.
Another movement in México known as #Yo soy 132 was spearheaded by students who were protesting against political corruption during the 2012 presidential elections. This shows that people are creating new innovative ways to mobilize resources and to persuade elected officials and bureaucrats to pursue public policy changes.
Secondly, there are many feminist movements taking place all over Latin America like-#PrimaveraFeminista, #NiUnaMenos, #Pimp My Carroça, demanding reproductive rights and bringing attention to the issue of domestic abuse. Activists and organisations are also using social media and humor like GregNews, a comedy news show to make citizens aware and interested in public interest issues.
Thirdly, elected officials are trying to make institutions more participatory and inclusive. Measures like DemocracyOS (Argentina) and LinQ (Ecuador) to Brazil’s Internet Bill of Rights have made great progress in giving voice to the people in the policymaking process.
Moreover, to monitor and hold politicians and corporations accountable, civil society organizations are using technology and open data. Groups like Paraguay’s A Quienes Elegimos, Argentina’s Chequeado, and Chile’s Del Dicho al Hecho are using online tools and organising public protests to insist on transparency from the government.
And finally, there’s a recognition that politics across Latin America needs new voices and new people to get involved. Today, movements such as Mexico’s WikiPolítica and Brazil’s Bancada Ativista, as well as new political parties like Chile’s Revolución Democrática and Argentina’s Partido de la Red, are aiming to make politics accessible, cool, and honorable to a new generation of activists.
How protest movements are novel
Culture has long been a tool of propaganda. But culture in Latin America is also a tool of protests. Protesters dancing to the rhythms of cumbia and salsa music and citizens pot-banging from their balconies have grabbed global eyeballs. Brazilians have resorted to ‘panelacos’ (protesting with pots and pans) against President Bolsonaro for denying science on Coronavirus.
Chileans have resorted to social media with their different artistic modes of expression to warrant their movement against the government which decided to privatize public services and raise the price of public transportation. Victor Jara’s 1971 song “Derecho a la paz”(Right to peace) has become a resistance anthem for students and working-class protestors. The song, originally composed during Pinochet’s dictatorship, has now become an inspiration for the demonstrators to take to the streets despite the violent oppression by the police and military national forces.
New slogans, new symbols of power, new empowerment
For hundreds of years the indigenous people remained invisible in a culture dominated by the language and traditions of Europe. They also became victims ofwhat sociologist Eduardo Bonilla-Silva calls ‘Racism without Racists’. Hence, recent gains by the indigenous are credible. Today, they have begun to dream. After all, dreams give vision and vision leads to action. Today, the various indigenous communities refuse to return to the dark valley; they have realized that forgetting could be a key part of learning.
Empowerment is an enabling exercise. It begins with the marginal, the forgotten. The indigenous groups in particular have worked to address the incompleteness of citizenship. In their efforts to rework politics, they have pointed out how for many, citizenship has remained an unfulfilled promise; citizenship is not mere entitlement.
For the indigenous, the body is the site for politics, very much the way it was for Gandhi. It is also a site for struggle. As Shiv Viswanathan argues, “the body prevents politics from straying into the abstractions of ideology or policy. It is a statement of presence, of sensing politics and suffering as part of a sensorium of sounds, smells, touch, taste and memory.” No less importantly, the rise of the indigenous has gone a long way to liberate politics from its behavioral and ideological pomposity.
By making way for leaders of their choice to gain power and overthrowing several presidents in Bolivia and Ecuador, the newly empowered indigenous groups want to ensure that no despot ascends the throne but a doer, one who heals their wounds, not turn the knife in them. In several countries and more specifically in Bolivia and Ecuador, the traditionally occupied indigenous territories have been recognized and protected and the sustainable development of natural resources located in their land has been guaranteed. Some of the issues like land as an economic base, a space of social reproduction and a condition for survival, recognition of their collective rights, have gained recognition in international forums.
Indigenous and peasant groups have not stopped at mere protests. They have adopted another strategy: protesta con propuesta, whereby positive alternatives have been suggested. The Confederation of Indigenous Nationalities of Ecuador (CONAIE), for example, has formulated its own water reform proposal. Without denying their economic importance, the proposals emphasize the community-based, social, and ecological aspects of water. Also in Peru and Bolivia, platforms of popular alliances and peasant and indigenous organizations have formulated constructive counter-proposals that complement their claims and protests.
The following section analyses some of the institutional innovations and best practices in Latin America that have found acceptance and admiration outside the region.
Mexico’s Oportunidades and Brazil’s Zero Hunger
Progresa, Mexico’s Conditional Cash Transfer (CCT) program,(later known as Oportunidades and now as Prospera), is known for increasing school enrolments and attendance in its initial 18-month randomized evaluation (Parker and Todd 2017). In this program, money is directly given to families if they send children to school, meet nutrition standards and receive regular health check-ups. This has had significant long-term benefits that could reduce intergenerational poverty according to a study published in National Bureau of Economic Research.
A similar CCT program was adopted by Colombia in 2000 known as Familasenaccion which provides money to poor households with children under 18 years old. It targets population that comprises of poor families that have either been displaced by the conflict or are from indigenous communities. Though it is no longer regarded as an emergency response to a short-term crisis, but it has proven efficient as an answer to more structural poverty problems.
Another commendable example towards ensuring food security for everyone was taken up by Brazil in the form of ‘Fome Zero’ or Zero Hunger program. The program launched in 2003 with the goal that all people be able to access enough and the right kinds of foods, to meet basic nutritional needs and support health. Fome Zero is based on a multi-sectoral approach at the public policy level, involving policies and programs around social protection and safety nets, education, food production, health services, drinking water, and sanitation. This can serve as a role model for national commitment to making better nutrition a top priority.
Another best practice, Participatory budgeting (PB), has been the most serious effort to take democracy to the doorsteps of the citizens. The Workers Party and a coalition of civil society organizations of Brazil introduced PB in Porto Alegre in 1989. It soon spread to more than 250 municipalities. Several countries followed suit. PB is a process of democratic decision-making. It is a type of participatory democracy, in which ordinary people decide how to allocate part of a municipal or public budget. It allows citizens to identify, discuss and prioritize public spending projects and gives them the power to make real decisions about how money is spent. The Porto Alegre model is no longer used in the same way in Porto Alegre itself. It has lost its sheen elsewhere in Latin America.
Consulta previa (prior consultation) is another significant legal framework that some countries in Latin America have institutionalized to deepen democracy. It is the right of the indigenous and ethnic groups to be consulted on matters affecting their culture and heritage as established by ILO Convention 169. Its implementation has at best been patchy. While it has been successfully implemented by Peru’s Amazonian communities, progress is much slower as far as the Andean communities are concerned. Much of the natural resources are located in the region inhabited by the indigenous communities, consulta previa has given the people a say in the extraction of raw materials. However, many left-leaning governments have resorted to the so-called “progressive neo-extractism” to ‘fight poverty’. The indigenous groups have sharpened attacks on the Left arguing such model of development, which relies on the rapacious extraction of natural resources, entails environmental destruction and the fragmentation of indigenous territory.
Cuba’s medical internationalism
For nearly 60 years, Cuba has been sending healthcare professionals all over the globe. This is done partly to support those in need but also as a part of concerted campaign of its medical diplomacy and to make some money to help the country survive an ongoing US embargo. Since then, Cuba has established permanent medical missions in a number of countries. Over the last five decades, it has sent between 135,000 to 400,000 doctors abroad.
The tradition of medical internationalism in Cuba goes back to the first years of the Cuban Revolution. The country has dispatched 593 workers to 14 countries in the battle against Covid-19. According to the Cuban health ministry, 179 doctors, 399 nurses and 15 health technologists have been dispatched as part of Henry Reeve initiative. According to Helen Yaffe, free healthcare as a universal human right has been a key tenet now and in the 1959 Cuban Revolution which laid the foundation of medical internationalism thereby enforcing the idea and practice of sending medical teams abroad.
Even though the Cuban medical support has been helpful and hopeful to all those in desperate need, it also hasn’t been able to keep away from criticism. Some rights groups have accused Havana of exploiting its medical workers who are forced to work in unsafe environments. Others have criticized by calling the program “selectively humanitarian” which makes lower numbers of doctors available to the Cuban population. Many countries have been wary of accepting Cuba’s help due to its poor human rights record. While everyone may not find Cuba’s help genuine, this is perhaps the time to put ideological differences aside and focus on the joint effort against the global war of Coronavirus.
Zapatistas’ enduring legacy
The Zapatista movement was the first post-modern movement and it is still defiant in mountain strongholds. It rose up not just to fight indigenous repression, but also the globalization from above. It was a genuine popular movement striving for justice and for changing the status quo. Scholarly interest in the various indigenous movements in Latin America was shown only after the 1994 Zapatista uprising in Chiapas.The images of the Zapatistas were too striking to be missed—indigenous peasants with wooden rifles declaring war on the Mexican government. With their faces covered by black ski masks or red bandanas, the Zapatistas symbolically became the face of the faceless, the voice of the voiceless.
The Zapatista National Liberation Army had one-third women, some in bare feet. They became instant heroes of the left and an inspiration to indigenous groups and political romantics. There are still areas under their control where they have their own system of education, health, justice and security. They train their own teachers and doctors and some have their own currency. Their slogans have been equally instructive such as “cuando una mujeravanza, no hay hombre que retrocede (when a woman advances, no man is left behind) and “here you can buy or sell anything except indigenous dignity”. The Zapatistas spelt out their key priorities like revitalizing indigenous worldviews, building autonomous, locally focused food system and food sovereignty and gender equity. Mexican sociologist Gonzalez Casanova says that the Zapatistas represent a new way of approaching problems and alternatives beyond the old dilemmas of the left, defending life, water, land and forest. The Zapatista movement offered alternative ways to organize societies, economies and the food systems.
In 1990s, Colombia’s indigenous groups formed the Indigenous Social Alliance. It won a few seats in national parliament a few years later. Nationally visible indigenous parties came up in mid-1990s in Bolivia and Ecuador. In Bolivia, groups like the Assembly for the Sovereignty of the Peoples, Movement towards Socialism and Pachakutic Movement of Plurinational Unity gained traction. The Confederation of Indigenous Nationalities (CONAIE) in Ecuador has tasted electoral success and acquired considerable clout. It initially supported the left but later broke from its tutelage. The indigenous movements have helped in the democratization process. The group has combined indigenous culture and state institutions in innovative ways.
Limits of caudillismo
Latin Americans are masters at creating leaders, prophets and gods. The bane of Latin America is the system of caudillos (strongmen). Hence some are seeking leaderless revolutions. They contend, we don’t need leaders, certainly not big leaders. As Emile Zapata says, “strong leaders make a weak people.”
Populism the bane
Populism continues to be the bane of Latin American polity. Power and authority are still configured in relation to caudillos, not institutions. Parliaments, judiciary, party system and civil society provide little institutional counterweights to political abuses by the political class. The caudillos promise magical solutions and people still fall for them. Ironically, to remain in power, the maximum leader exerts and abuses state force but also propagate the myth that he/she is there by the popular will. The growing polarization has not allowed institutions like the judiciary and the police to become autonomous and independent. Populism has acquired a “new dimension” with decisive leaders pushing nationalism, demonizing opposition and stirring up issues that divide society. Populismhas marginalized the centrist forces and removed their bonding powers resulting in gridlock in parliament and diluting public trust in its efficacy.
Bertrand Russell says that the game of politics is the process by which people choose the man who will get the blame. Latin America has witnessed the masterful play of such blame game. Populist leaders thrive on confrontation and chaos. Bolsonaro is using the pandemic to stir up his base. He has dismissed Coronavirus as “just a little flu”, “we will all die one day”.
Some of the best practices in Latin America have caught the attention of the world. Whether these are replicable or not requires further research and study.The region has been long experimenting with novel political, social and economic initiatives and practices which resonate with people across the globe. Some consider the region to be a land of endless revolutions, but it has launched not only slogans but sustainable alternatives as well. It has maintained the ideal of ‘Protesta con propuesta’(Protest with purpose). However, many have questioned the robustness of these measures when Latin America is witnessing the end of the commodity boom and the defeat of left-wing governments. The historical conflicts, the silhouettes of authoritarianism and past of caudillismo still weigh heavily on the Latin American present.
Will the region be able to overcome its non-democratic past and advance with its revitalized worldview? Or will it succumb to the ghosts of the old despotic regimes? There are no easy answers. It has to do with Latin American psychology, “the rejection of what is real and possible.” Latin America also fits in Hannah Arendt’s description how the most radical revolutionary becomes “conservative the day after the revolution”. That of course doesn’t deter Latin Americans from constructing alternative utopias.
*Shimone Jaini is doing Masters from Centre of Spanish, Portuguese, Italian andLatin American Studies, Jawaharlal Nehru University
Possible Directions for U.S. Policies in the Biden Era
Authors: Chan Kung and He Jun
On January 20, 2021, a new page will be turned in the history of the United States when Joe Biden becomes the 46thPresident. What will happen to U.S. domestic and foreign policy as a result of the transition from the “Trump Era” to the “Biden Era”? What will be the impact of this on the U.S., the world, and China? After the tumultuous Trump Era, we believe that this is an issue of great concern to international governments and markets.
The “ANBOUND 100+” high-end discussion platform and the macro team have been continuously tracking the news of the imminent Biden Era and possible policy changes. To this, we have made a number of key predictions. In the historic moment when Joe Biden is about to take office, it is important to review and summarize the relevant research to understand the changes that the new U.S. President will bring.
First, we shall look at the American political landscape in the Biden Era.
An overall judgment is that Democrats are taking control, but “Trumpism” is still unlikely to disappear from U.S. politics any time soon. The ANBOUND team had judged on November 11, 2020, that Donald Trump’s various policies had in fact left Biden with a number of political and diplomatic “legacies”, and that Biden actually had considerable autonomy over whether to “inherit” these “legacies”. Objectively, whether inherited or not, these “legacies” can be used as a bargaining chip for the Biden administration. On the issue of Trump himself, ANBOUND once said on December 20 that Trump will be in trouble because he had “gone too far” and that the future Biden team might carry out a complete reckoning with Trump and his team. Judging by the fact that Trump is facing a second impeachment and the investigation into the storming of the Capitol, such a reckoning is happening. In this regard, ANBOUND has summed up Trump’s influence remains and its trajectory to be: Trump -> Trumpism -> Trumpism without Trump.
In the Biden Era, the two-party political landscape in the U.S. will be unbalanced, with the Democrats dominating U.S. politics and rapidly gaining the upper hand, and the Republicans facing an internal split, as ANBOUND judged on January 10, 2021. On this basis, we believe that there is a clear trend towards “bipartisanship”, with the Democrats becoming the dominant party in this cooperation. In this context, the Biden administration is likely to complete domestic integration faster and turn its focus to foreign policy sooner. It is also possible that with less resistance at home, the Democrats will give more focusat home, and the U.S. society will become more integrated than in the past, with some of the major domestic issues, such as welfare and environmental protection, to likely make significant progress over the next four years.
Then, there are the U.S. economic issues and economic policies in the Biden Era.
The United States faces many problems in the economy, but the core problem lies in the distribution of wealth, which is the cause of many social problems. The research team of ANBOUND pointed out in November 2019 that the wealth of the United States is still in the process of being accumulated in large quantities, and the real problem of American society lies in the distribution of wealth. Part of the backlash against globalization in the U.S. is also related to the distribution of wealth in American society. On this basis, we believe that welfare will be an important aspect of U.S. economic policy that needs to be addressed in the future. On November 22, 2020, we further pointed out that the transition to a welfare state could usher in a new super-boom for the United States. Contrary to the view of many that welfare is a “simple spending” policy, we believe that welfare, if properly used, will create new consumption space. In terms of health insurance, education, and consumption in the United States, we expect that a full-scale welfare transition in the U.S. would create a USD 10 trillion mega-consumer market that would potentially bring the U.S. into a new phase of rapid development while resolving social tensions.
Based on the above analysis, we believe that the core of the so-called “Bidenomics” is about the distribution of wealth and the “welfarization”. From what has been observed so far, the basic logic of “Bidenomics” is to solve the public health crisis, save jobs, reconfigure the industrial chain, overhaul infrastructure, promote an environmental agenda, build a better social security system, and promote social equality. This logic is likely to be the “core” of economic policies in the Biden Era. There were similar signals that emerge before Biden officially took over the presidency. Biden has proposed USD 1.9 trillion stimulus package to deal with the impact of the pandemic on the U.S. economy and society. Biden’s Treasury Secretary nominee Janet Yellen also called on the U.S. Congress to act more aggressively to deliver economic aid without worrying too much about the debt. “Neither the president-elect, nor I, propose this relief package without an appreciation for the country’s debt burden. But right now, with interest rates at historic lows, the smartest thing we can do is act big,” Yellen said. “I believe the benefits will far outweigh the costs, especially if we care about helping people who have been struggling for a very long time,” Yellen added. Yellen also stressed the need to rebuild the U.S. economy “so that it creates more prosperity for more people and ensures that American workers can compete in an increasingly competitive global economy.”
Concerning the foreign policy issues in the Biden Era, as mentioned above, Biden will not completely abandon Trump’s diplomatic “legacies”, rather he would build on it with some kind of “pullback”. In this process, institutionalization and systematization will be the most prominent characteristics of American diplomacy in the future. A top foreign policy priority for the Biden administration will be to rebuild relations with its allies, particularly Europe, restoring stability to the transatlantic alliance and healing the rifts that have emerged over the past few years. We believe that such rapprochement will certainly play a role and the U.S.-EU strategic alliance will not change, but it will be difficult to fully restore to the levels of the past. On many issues, such as economy and trade, market space, security, and digital sovereignty, the EU will have a stronger “sense of autonomy”. As for U.S.-China relations in the Biden era, we have argued that we should not expect the U.S. government to adjust its hardline position on China, but that the Biden administration would be more predictable in its approach to policy games, returning to the character of “the establishment”. In fact, as early as October last year, the ANBOUND’s research team pointed out in its outlook on U.S.-China relations in the Biden era that the Biden administration’s approach to several aspects of domestic and foreign affairs would generally differ from that of the Trump administration, and that while its strategic positioning of China and the policy of inhibiting the rise of China in the long term would remain unchanged, in terms of specific approaches, the Biden administration would seek a certain degree of order and geopolitical discipline to implement and enforce its policies.
In regard to the Korean Peninsula issue, we believe that in the Biden Era, it is possible for the United States and North Korea to reach a phased nuclear abandonment agreement. On Iran, the main concern is still the Iranian nuclear issue. We believe that the United States will amend Trump’s extreme policies on the issue of the Joint Comprehensive Plan of Action (JCPOA), or the Iran nuclear agreement, and some adjustment will take place. However, even if the United States can return to the Iran nuclear agreement, Iran may have to make certain concessions on the 2015 version. One of the key points may be that Iran needs to further restrict its support to the militia in the Middle East on the basis of the original version. This means that Iran’s influence in the Middle East will be significantly reduced. Regarding the issue of returning to Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), we believe that returning to CPTPP is quite attractive to the Biden administration, but it is also quite difficult. Fluctuations in U.S.-China relations will affect the process of the United States returning to CPTPP; the worse the U.S.-China geopolitical relationship gets, the less resistance the United States will have to return to CPTPP.
In addition, ANBOUND’s researchers also believe that looking from the standpoint of historical development, the Biden administration may be a transitional period for the United States to return to “normal” from the Trump Era. From Biden’s personality, age, situation and environment, we tend to think that the Biden administration is likely to be a “presidential accountability system under the leadership of Secretaries”. In such a government, it is the Secretaries of various departments, the Department of State, and the new cooperation pattern of the two parties in Congress that play a key role, rather than relying mainly on the President. In particular, Janet Yellen, the new Treasury Secretary who had served as the Chairperson of the Federal Reserve, could very well have crucial impact on the U.S. economic policy in the Biden Era.
Final analysis conclusion:
With the transfer of executive power, the United States will bid farewell to the “Trump Era” and usher in the “Biden Era”. The United States under Joe Biden will undergo considerable adjustments and changes, which are reflected in many aspects of the United States’ domestic politics, international geopolitics, economy, and foreign policy. The world will watch the new changes in the United States, and China will see a new pattern of U.S.-China relations. Changes in the United States will not only affect the world but also China’s development strategy.
Removed Diplomacy: Why U.S. Sanctions Against Russia Have Gone Stale
Since 2014, Russian and American diplomacy has been defined by economic sanctions. This has become the default, expected option for U.S. policymakers—but Russia has refused to concede, repent and ask for forgiveness. The U.S. had hoped Russia would experience just enough economic hardship that they would revert their course, retract their reunification with Crimea, and end any involvement in Eastern Ukraine. Almost seven years later, there is no evidence to suggest that Russia has any intention of buckling under the pressure and denying its national interests.
What the United States has failed to realize is that sanctions work on highly dependent countries. Russia is an independent country and has become more economically autonomous as a result of U.S. sanctions. The Russian domestic industry has flourished since sanctions were first imposed. Sanctions imposed by the United States are predicated on some combination of the following: either the United States has enough of an economic relationship prior to sanctions, so the loss of the United States as a trade partner alone is hugely detrimental to the target economy, or the United States can influence other countries who share a more extensive economic relationship with the target country to carry out the same policies.
Venezuela is a country that has been grievously affected by U.S. sanctions, as one would predict, given the country’s dependence on the exportation of crude oil, particularly to the U.S. With oil comprising roughly 95 per cent of exports and their petroleum industry making up 25 per cent of overall GDP, Venezuela is considered very resource dependent when engaging in international trade. Venezuela has also been plagued by Dutch Disease, which has largely prevented its economy from diversifying for the past century. In 2013, the United States brought in 29.5 per cent of Venezuelan exports and delivered 23 per cent of the county’s imports. Strangely, despite the sanctions imposed in 2014, Venezuela has grown more dependent on the United States. By 2018, 39.2 per cent of Venezuelan exports and 52.9 per cent of Venezuelan imports were in trade with the U.S. With this increased dependence on the United States after the implementation of U.S. sanctions. It is no wonder that Venezuela has been increasingly devastated beyond comprehension since sanctions were first imposed in 2013. Venezuela’s trade balance through this period has consistently been in surplus. However, the volume of trade has shrunk USD 101.9 billion, from USD 143.76 billion in 2013 to USD 41.86 billion in 2018. The country has been rocked by astronomical inflation, reaching as high as 344 509 per cent. Is it the same case for Russia? No, which is due, in part, to Russia’s Soviet legacy. The vast territory and harsh climate have also helped the Russians develop a much more diverse and independent economy. Additionally, the United States is simply not one of Russia’s main trade partners.
As illustrated by data from the Observatory of Economic Complexity, Russia and Venezuela couldn’t be more unalike. Russia’s largest trade partners for the past 20 years have been Germany and China. In 2014, when the sanctions were first imposed, Russia’s economy and international trade figures were at an all-time high. In that year, Russia exported USD 454 billion and imported USD 296 billion, a trade surplus of USD 158 billion. This year, the United States only accounted for 5.58 per cent of Russia’s imports and 3.87 per cent of Russia’s exports. In 2018, with even stricter sanctions imposed, Russia exported USD 427 billion and imported USD 231 billion, increasing the trade surplus from USD 158 billion in 2013 to USD 196 billion in 2018. Russia’s trade balance from 2013 to 2018 still experienced a shrink of USD 92 billion. A key difference between Russia and Venezuela is that from 2014 to 2018, Russian trade decreased by just 12 per cent, compared to Venezuela’s loss of 71 per cent. What does Russia have working to its advantage that Venezuela is lacking? Remember, for sanctions to work, they require high economic dependence from either the country issuing the sanctions.
Russia and Germany have an interesting codependency on one another. The Nord Stream project has been a source of tension between the U.S. and Germany; a recent Bloomberg article points out that there is an anticipated clash between newly elected president Biden and German Chancellor Angela Merkel. The German chancellor openly supports the completion of the second pipeline because the project is a means for securing German influence over Western Europe, as they will maintain their status as energy distributors once the pipe project is complete. Merkel also understands that the German economy depends on Russian energy. Nord Stream has become the only option since the Ukrainian pipelines have gone cold. Merkel has received criticism from those close to her, including from Norbert Röttgen, the head of the foreign affairs committee in German parliament. In September of 2020, he is quoted saying, “We need to respond with the only language that Putin understands, the language of natural gas,” Meaning the one thing that Germany has at its disposal is the ability to back out of the Nord Stream deal to pressure the Kremlin into correcting their behaviour to satisfy western leaders. The only problem is that Germany is dependent on Russian natural gas. Germany has been falling behind other European countries in environmental efforts and has grown more dependent on coal power to supplement energy demand when renewable sources fail to meet the needs of the German people.
It’s important to consider is the continuation of oil trade between the Netherlands and Russia. If the West is so concerned about preserving its ideals, why hasn’t this trade been pressured? Likely because Nord Stream 2 is a relatively recent development, but the arrangement between the Dutch and Russia has been around for some time. What is odd, however, are the numbers. Between the Netherlands and Russia, there is hardly a difference in the dollar value of Russian exports in various petroleum products. It has maintained an average of about USD 33 billion for the past decade. This spans time both before and after sanctions. How does the West expect itself to be taken seriously if it is hyper selective about the battles it chooses to fight even when concerning sanctions. What is more comical about this particular deal is that the Netherlands supplies much of Western Europe’s oil. Henceforth, further defending the point of Western Europe’s dependence on Russian energy.
In conclusion, Russia has proven to be very resilient over the past six years. It shouldn’t be implied that the sanctions have not affected the Russian economy. However, Russians have faced pervasive negative externalities, such as inflation and decreased average national income, despite the sanctions having been designed only to affect a select group of individuals. Even so, the Russian economy is growing and proving to be insulated and resilient against increased trade barriers. At first, the sanctions appeared to have a tremendous effect on the Russian economy, shrinking it by 44 per cent from USD 2.292 trillion in 2013 to USD 1.272 trillion in 2016. Since 2016, however, the GDP has steadily stabilized and gained back 42 per cent of losses from 2013 figures at USD 1.7 trillion as of 2019. It can be surmised that if the U.S. continues to impose sanctions on Russia for years to come, the Russian economy will continue to grow, develop, and become more independent.
From our partner RIAC
The World Should Get Rid of “Trump Inertia”
Authors: He Jun and Chan Kung
A new chapter is about to begin for the politics of the United States as the “Trump Era” will soon give way to the “Biden Era”. As the United States still has major global influence, any shift in the American politics would therefore inevitably change the global geopolitical landscape as well as international investments and the trade environment. After four years of extreme policies in the Trump Era, coupled with the impact of the COVID-19 pandemic, countries around the world hope to see change and a return to relative normalcy.
However, the end of the Trump Era does not spell the end of “Trumpism.” The many marks, characteristics, and ideological trends brought about by Donald Trump will continue to influence the world for some time. However, in the real economic field, countries may need to startridding itself of the environment characterized by unilateralism, America First, and the politicization of economic issues. Researchers at ANBOUND call these remaining Trumpist characteristics and their effects on countries’ behavior “Trump Inertia”.
“Trump Inertia” has many specific manifestations. The deterioration of the relationship between Australia and China is a clear example of this. Australia followed the Trump administration’s side by choosing and adopting many extreme politicization practices against China despite China being Australia’s largest trading partner, largest export destination and largest source of imports. In 2019, Australia-China trade volume totaled approximately US$158 billion; Australia’s trade surplus with China was approximately US$48.83 billion, and its exports to China totaled US$103.90 billion, accounting for 38.2%
During the Trump Era, Australia followed the United States in adopting antagonistic approaches against China, which is understandable. Yet, though the Trump Era is coming to an end, Australia’s attitude towards its largest trading partner is still considerably arrogant and hostile. While it is true that there are differences in ideology and values, such paranoia is still unreasonable and there is a lack of political insight in recent shift of international exchanges.
China too, has retaliated against Australia. On the one hand, it has adopted countermeasures in economic and trade, and imposed trade restrictions on the import of coal and a variety of agricultural products. On the other hand, China has also adopted tit-for-tat approaches against Australia in diplomacy.
With the withdrawal of Trump from the political arena, it is puzzling as to why there are lingering disputes between Australia and China as theirrelationscontinue to deteriorate. Trump might even feel proud if he sees that the two countries are still at odds even after he steps down. For China and Australia, this means that they have fallen into the quagmire of “Trump Inertia”.
Though being a member of the Five Eyes alliance (FVEY) like Australia, New Zealand’s approach is far different. Damien O’Connor, New Zealand Minister of Trade and Export Growth and Minister of Agriculture, stated that strong global demand for dairy products, especially in the Chinese market, will offset the adverse effects of weak dairy prices. It is estimated that in the year ending June 2022, New Zealand’s dairy products export revenue is expected to reach NZ$ 20.1 billion. At the same time, forestry exports are showing a recovery trend. The New Zealand Government’s Situation and Outlook for Primary Industries (SOPI) report predicts that in the year to June 2021, the export revenue of primary industries will exceed NZ$47.5 billion; in the year to June 2022, this figure will reach the NZ$ 49.2 billion record. It is worth noting that New Zealand’s Foreign Minister Nanaia Mahuta also publicly stated that New Zealand is willing to help China and Australia achieve peace talks.
The policies and flexibility shown by New Zealand which differs from Australia’sreflect a normal response of a rational country. This is also something that China should learn from. In the current situation, geopolitical relationship between China and Western countries is tense, and this is seen as the most “successful” part of the Trump administration, all due to “Trump Inertia”. For both Western countries and China, it is necessary to get rid of “Trump Inertia” as soon as possible.
Though the attitudes of other countries cannot be controlled by China, China is able to adjust and change its own actions. As the Biden Era is approaching, all countries need to adjust to the new changes and find new consensus points in terms of diplomacy, trade, multilateral cooperation, and global climate change. China is a major power with huge national interests. For that reason, it should have long-term visions and goals. China will need to adjust certain foreign policies and practices in accordance with the overall national situation and long-term interests to pave the way for its future development.
Final analysis conclusion
The Trump Era is about to end, but Trumpism will still linger for some time to come. In the face of the “political switch” in the United States, China and many Western countries need to adjust their strategies, get rid of “Trump Inertia” as soon as possible, and return their diplomacy to a rational and normal track.
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