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German Companies and China’s Marketplace Nightmare

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American values versus German

Americans have faith in that people have the right to individual freedom, which asserts people are free to think, speak and act as long as they do not affront the freedom and rights of others. This is what John Locke said in 16 century, one’s freedom ends when the other’s freedom begins. He moved on and said the government is responsible to protect freedom and property of the individuals if not the government should be ousted.

Self-government, which addresses the right of individuals to evaluate the conduct of the government and how it treats the citizens. As Abraham Lincoln said “Government“ of the people, by the people and for the people, which definitely refers to a democratically elected body to reflect the wish of the people and their wellbeing.

Equality brings up equity, fairness and dignity to all people, although this value is a little bit controversial in the eyes of John Locke. He believed that equal people are not free and free people are not equal. He opposed the notion that all people earn and spend equally, which is not possible in a liberal society. His belief is if we claim the urgency that all people earn equally then freedom is disregarded. If we let the people grasp the essence of freedom, at that point they are no longer equal. Socio-economic philosophers say if we take the dogma of Karl Marx for granted that all people receive equally in order to uphold social justice. Nevertheless, we cannot make people spend equally, because the wishes, needs, requirements and prerequisites of the people are different.

In modern day, equality should state the equal opportunities for education, economic achievement, political contribution and a satisfying life. Last but least, individualism a commitment to advocate and sustain independence, private initiative, and personal economic growth. It proclaims that each individual must be on the driving seat of his/her own life and be in a position to make decision of his/her own irrespective to the guidance of the government or other individual or group of individuals. Come hell or high water in the aftermath of dictatorial and Kleptocratic regime led by Adolf Hitler, Americans in Germany also promoted American values. Germany adopted a new constitution; beginning with Human dignity is inviolable. It is the duty of all state authorities to respect it. The German people are therefore, committed to inviolable and inalienable rights as the basis of every human community, of peace and justice in the world. Admittedly, it in turn let German citizens prosper, be creative and joyful, and attain the crux of free and fair life. Nonetheless, these values require sustainable self-assurance, a readiness to strive and hard work.

American economic classification as opposed to German

Unlike Germany, America have been ignoring the American values both in economic and political arenas, since American economic system is based on free enterprises, which refers to an economic system, where private individuals, who own the factors of production, make the economic decisions. Therefore, such decisions could be sometimes harmful to interests of other fellow individuals living in the country. Reminding John Locke theory, he clearly stated the boundaries of others freedom must not snubbed.

Contrasting John Locke philosophy the American economic system is centered on Adam Smith theory, Smith wrote in his book titled An inquiry into the cause of the wealth of Nations. He explains in it how vast fortunes were being made by entrepreneurs, how the market economy operated, and what the benefits of economies of scale in production were. He also stressed the importance of factors of production. Moreover, he formulated theories about how the state should behave. Like the physiocrats, he believed in laissez-faire. Smith saw the market system acting as invisible hand, which leads people to pursue their own self-interests, and which also unintentionally produces the greatest benefit for the society as a whole in contrast to state intervention as best regulator.

On the contrary, German economic system is grounded on the theory of John Stuart Mill, Mill wrote Principle of Political Economy. He believed in a moderate amount of state intervention to redistribute wealth and a mild version of socialism but he was opposed to Karl Marx’s ideal of a communist state because of the danger to rights and freedom of individuals. To be frank German economic system is derived from Mill’s theory, which is called social market economy. A state ownership coupled with free enterprises, or a mixed economic system including a variety of private freedom combined with centralized economic planning and government regulation, which evolves a tendency towards a free enterprise economy.

In the political arena, the American values are largely disregarded by American themselves                   (politicians, policy drivers and the deep state) their values narrate America First and purely describe the interest of wealthy individuals, who like no limits and only beget money by hock or crock. Hence, the principle of liberty, self-government, equality and individualism are put on hold for decades.

Thus, an Occupy movement came in to being in 2012 with a political slogan we are the 99%.  They spoke of 1% wealthiest American, who hijacked the wealth of the rest 99%, getting richer, and paying zero taxes, which largely reflects the income and wealth inequality in America.

The so-called 1% promote waging war strategies, produce deadliest weaponries, and sell those to the most brutal and barbaric regimes across the world, so that the 99% are paying the price for the blunder of a diminutive minority within the upper class of the American society.

In contrast to America luckily, there is no 1%, who could take over the 99% in Germany, however, many corporates disdain social responsibility and moral accountability.  As far as German economic system converges, free market economy with the notion of social responsibility. According to the German constitution, the underlying principle of German economic policy refers to social market economy, which lays the basis for economic, social security, and a good quality of life in Germany.

Daimler-Benz moves its partial business to China

The changing demands of global market place and the migration of economic center of power and future growth to the Asia-pacific region require involvement of German companies and investment, to be competitive, tangible and viable and meet the demands of buyers’ market.

 Therefore, Daimler-Benz has recently decided to move part of its industry to China, which nevertheless has had backlashes both at home and abroad. The company sacked thousands of its employees, stating their occupations no longer exist, while Daimler wants to invest heavily in E-mobility in order to encounter the requirements of global market place.

The former workforces criticize Daimler for such course of actions, who claim the readiness to be re-trained (umshculung), with the aim of becoming competitive. The experts blame the company for handing over share of its business to China to produce batteries for E-vehicles. The experts compare Daimler with Tesla, who produces batteries themselves. They call it a historic failure committed by Daimler to create jobs oversee (China)and neglect home labor market.

China’s market and work place could be lucrative in term of low labor costs, less bureaucracy and paperwork but it has some implications, while China does not bound to any western values respected in western world. Beijing extensively suppresses the Uygur minorities, massively imprisoning and ghettoing, and stationing them at the arbitrary camps and even sterilize them.

Chinese leadership also tyrannizes the Tibetans, their spiritual leader lives in exile since decades, furthermore, the country’s leadership enormously bottled-up pro-democracy movement in Hong Cong and sentencing a five years imprisonment for the journalist unmasking covid-19 outbreak in China. In accordance with western intelligence, China is getting prepared to invade Taiwan some time in upcoming future. Additionally, at mega events like the 2008 Olympics or the 70th anniversary of People’s Republic last year, Beijing took the clouds from the sky. Now the leadership is announcing a massive expansion of the artificial weather modification program, which will definitely affect the regional countries and will cause drought, famine, displacement of the people due to lack of source of life and even it will cause mass migration to storm Europe. 

Besides, Beijing has been conducting human testing on members of the PLA to develop soldiers with biologically enhanced capabilities reported top US intelligence officials. China has culminated all ethical boundaries, to multiply its political, economic and military power in the world. 

The question raised just before the German companies why China and why now? Since Germans and German corporates are constitutionally required to obey human dignity, peace and freedom worldwide and they are socially responsible and morally accountable and politically adhered to the western values, which have no place in China.

Ajmal Sohail is Co-founder and Co-president of Counter Narco-terrorism Alliance Germany and he is National Security and counter terrorism analyst. He is active member of Christian Democratic Union (CDU)as well.

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Economy

How Bangladesh became Standout Star in South Asia Amidst Covid-19

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Bangladesh, the shining model of development in South Asia, becomes everyone’s economic darling amidst Covid-19. The per capita income of Bangladesh in the fiscal year 2020-21 is higher than that of many neighbouring countries including India and Pakistan. Recently, Bangladesh has agreed to lend $200 million to debt-ridden Sri Lanka to bail out through currency swap. Bangladesh, once one of the most vulnerable economies, has now substantiated itself as the most successful economy of South Asia. How Bangladesh successfully managed Covid-19 and became top performing economy of South Asia?

In March 1971, Sheikh Mujibur Rahman declared their independence from richer and more powerful Pakistan. The country was born through war and famine. Shortly after the independence of Bangladesh, Henry Kissinger, then the U.S. national security advisor, derisively referred to the country as a “Basket Case of Misery.” But after fifty years, recently, Bangladesh’s Cabinet Secretary reported that per capita income has risen to $2,227. Pakistan’s per capita income, meanwhile, is $1,543. In 1971, Pakistan was 70% richer than Bangladesh; today, Bangladesh is 45% richer than Pakistan. Pakistani economist Abid Hasan, former World Bank Adviser, stated that “If Pakistan continues its dismal performance, it is in the realm of possibility that we could be seeking aid from Bangladesh in 2030,”. On the other hand, India, the economic superpower of South Asia, is also lagging behind Bangladesh in terms of per capita income worth of $1,947. This also elucidates that the economic decisions of Bangladesh are better than that of any other South Asian countries.

Bangladesh’s economic growth leans-on three pillars: exports competitiveness, social progress and fiscal prudence. Between 2011 and 2019, Bangladesh’s exports grew at 8.6% every year, compared to the world average of 0.4%. This godsend is substantially due to the country’s hard-hearted focus on products, such as apparel, in which it possesses a comparative advantage.

The variegated investment plans pursued by the Bangladesh government contributes to the escalation of the country’s per capita income. The government has attracted investments in education, health, connectivity and infrastructure both from home and abroad. As a long-term implication, investing in these sectors helped Bangladesh to facilitate space for businesses and created skilled manpower to run them swiftly. Meanwhile, the share of Bangladeshi women in the labor force has consistently grown, unlike in India and Pakistan, where it has decreased. And Bangladesh has maintained a public debt-to-GDP ratio between 30% and 40%. India and Pakistan will both emerge from the pandemic with public debt close to 90% of GDP.

Bangladesh’s economy and industry management strategy during Covid-19 is also worth mentioning here since the country till now has successfully protected its economy from impact of pandemic. At the outset of pandemic, lockdowns and restrictions hampered the country’s overall productivity for a while. To tackle the pandemic effect, Bangladesh introduced improvised monetary policy and fiscal stimuli to bring them under the safety net which lifted the situation from worsening. Government introduced stimulus package which is equivalent to 4.3 percent of total GDP and covers all necessary sectors such as industry, SMEs and agriculture. These packages are not only a one-time deal, new packages are also being announced in course of time. For instance, in January 2021, government announced two new packages for small and medium entrepreneurs and grass roots populations. Apart from economic interventions, the government also chose the path of targeted interventions. The government, after first wave, abandoned widespread lockdown and adopted the policy of targeted intervention which is found to be effective as it allows socio-economic activities to carry on under certain protocols and helps the industries to fight back against the pandemic effect.

Another pivotal key to success was the management of migrant labor force and keeping the domestic production active amidst the pandemic. According to KNOMAD report, amidst the Covid-19, Bangladesh’s remittance grew by 18.4 percent crossing 21 billion per annum inflow where many remittance dependent countries experienced negative growth rate. Because of the massive inflow of remittance, the Forex reserve of Bangladesh reached at 45.1 billion US dollar.

Bangladesh’s success in managing COVID19 and its economy has been reflected in a recent report “Bangladesh Development Update- Moving Forward: Connectivity and Logistics to strengthen Competitiveness,” published by World Bank. Bangladesh’s economy is showing nascent signs of recovery backed by a rebound in exports, strong remittance inflows, and the ongoing vaccination program. Through financial assistance to Sri Lanka and Covid relief aid to India, Bangladesh is showcasing its rise as an emerging superpower in South Asia. That is why Mihir Sharma, Director of Centre for Economy and Growth Programme at the Observer Research Foundation, wrote in an article at Bloomberg that, “Today, the country’s 160 million-plus people, packed into a fertile delta that’s more densely populated than the Vatican City, seem destined to be South Asia’s standout success”. Back in 2017, PwC (PricewaterhouseCoopers) report also predicted the same that Bangladesh will become the largest economy by 2030 and an economic powerhouse in South Asia. And this is how Bangladesh, a development paragon, offers lessons for the other struggling countries of world after 50 years of its independence.

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Build Back Better World: An Alternative to the Belt and Road Initiative?

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The G7 Summit is all the hype on the global diplomatic canvas. While the Biden-Putin talk is another awaited juncture of the Summit, the announcement of an initiative has wowed just as many whilst irked a few. The Group of Seven (G7) partners: the US, France, the UK, Canada, Italy, Japan, and Germany, launched a global infrastructure initiative to meet the colossal infrastructural needs of the low and middle-income countries. The Project – Build Back Better World (B3W) – is aimed to be a partnership between the most developed economies, namely the G7 members, to help narrow the estimated $40 trillion worth of infrastructure needed in the developing world. However, the project seems to be directed as a rival to China’s Belt and Road Initiative (BRI). Amidst sharp criticism posed against the People’s Republic during the Summit, the B3W initiative appears to be an alternative multi-lateral funding program to the BRI. Yet, the developing world is the least of the concerns for the optimistic model challenging the Asian giant.

While the B3W claims to be a highly cohesive initiative, the BRI has expanded beyond comprehension and would be extremely difficult to dethrone, even when some of the most lucrative economies of the world are joining heads to compete over the largely untapped potential of the region. Now let’s be fair and contest that neither the G7 nor China intends the welfare of the region over profiteering. However, China enjoys a headstart. The BRI was unveiled back in 2013 by president Xi Jinping. The initiative was projected as a transcontinental long-term policy and investment program aimed to consolidate infrastructural development and gear economic integration of the developing countries falling along the route of the historic Silk Road. 

The highly sophisticated project is a long-envisioned dream of China’s Communist Party; operating on the premise of dominating the networks between the continents to establish unarguable sovereignty over the regional economic and policy decision-making. Referring to the official outline of the BRI issued by China’s National Development and Reform Commission (NDRC), the BRI drives to: “Promote the connectivity of Asian, European, and African continents and their adjacent seas, establish and strengthen partnerships among the countries along the Belt and Road [Silk Road], set up all-dimensional, multi-tiered and composite connectivity networks and realize diversified, independent, balanced, and sustainable development in these countries”. The excerpt clearly amplifies the thought process and the main agenda of the BRI. On the other hand, the B3W simply stands as a superfluous rival to an already outgrowing program.

Initially known as One Belt One Road (OBOR), the BRI has since expanded in the infrastructural niche of the region, primarily including emerging markets like Pakistan, Bangladesh, and Sri Lanka. The standout feature of the BRI has been the mutually inclusive nature of the projects, that is, the BRI has been commandeering projects in many of the rival countries in the region yet the initiative manages to keep the projects running in parallel without any interference or impediment. With a loose hold on the governance whilst giving a free hand to the political and social realities of each specific country, the BRI program presents a perfect opportunity to jump the bandwagon and obtain funding for development projects without undergoing scrutiny and complications. With such attractive nature of the BRI, the program has significantly grown over the past decade, now hosting 71 countries as partners in the initiative. The BRI currently represents a third of the world’s GDP and approximately two-thirds of the world’s entire population.

Similar to BRI, the B3W aims to congregate cross-national and regional cooperation between the countries involved whilst facilitating the implementation of large-scale projects in the developing world. However, unlike China, the G7 has an array of problems that seem to override the overly optimistic assumption of B3W being the alternate stream to the BRI. 

One major contention in the B3W model is the facile assumption that all 7 democracies have an identical policy with respect to China and would therefore react similarly to China’s policies and actions. While the perspective matches the objective of BRI to promote intergovernmental cooperation, the G7 economies are much more polar than the democracies partnered with China. It is rather simplistic to assume that the US and Japan would have a similar stance towards China’s policies, especially when the US has been in a tense trade war with China recently while Japan enjoyed a healthy economic relation with Xi’s regime. It would be a bold statement to conclude that the US and the UK would be more cohesively adjoined towards the B3W relative to the China-Pakistan cooperation towards the BRI. Even when we disregard the years-long partnership between the Asian duo, the newfound initiative would demand more out of the US than the rest of the countries since each country is aware of the tense relations and the underlying desperation that resulted in the B3W program to shape its way in the Summit.

Moreover, the B3W is timed in an era when Europe has seen its history being botched over the past year. Post-Brexit, Europe is exactly the polar opposite of the unified policy-making glorified in the B3W initiate. The European Union (EU), despite US reservations, recently signed an investment deal with China. A symbolic gesture against the role played by former US President Donald J. Trump to bolster the UK’s exit from the Union. As London tumbles into peril, it would rather join hands with China as opposed to the democrat-regime of the US to prevent isolation in the region. Despite US opposition, Germany – Europe’s largest economy – continues to place China as a key market for its Automobile industry. Such a divided partnership holds no threat to the BRI, especially when the partners are highly dependent on China’s market and couldn’t afford an affront to China’s long envisaged initiative.

Even if we assume a unified plan of action shared between the G7 countries, the B3W would fall short in attracting the key developing countries of the region. The main targets of the initiative would naturally be the most promising economies of Asia, namely India, Pakistan, or Bangladesh. However, the BRI has already encapsulated these countries: China-Pakistan Economic Corridor (CPEC) and Bangladesh-China-India-Myanmar Economic Corridor (BCIMEC) being two of the core 6 developmental corridors of BRI. 

While both the participatory as well as the targeted democracies would be highly cautious in supporting the B3W over BRI, the newfound initiate lacks the basic tenets of a lasting project let alone standing rival to the likes of BRI. The B3W is aimed to be domestically funded through USAID, EXIM, and other similar programs. However, a project of such complex nature involves investments from diverse funding channels. The BRI, for example, tallies a total volume of roughly USD 4 to 8 trillion. However, the BRI is state-funded and therefore enjoys a variety of funding routes including BRI bond flotation. The B3W, however, simply falls short as up until recently, the large domestic firms and banks in the US have been pushed against by the Biden regime. An accurate example is the recent adjustment of the global corporate tax rate to a minimum of 15% to undercut the power of giants like Google and Amazon. Such strategies would make it impossible for the United States and its G7 counterparts to gain multiple channels of funding compared to the highly leveraged state-backed companies in China.

Furthermore, the B3W’s competitiveness dampens when conditionalities are brought into the picture. On paper, the B3W presents humane conditions including Human Rights preservation, Climate Change, Rule of Law, and Corruption prevention. In reality, however, the targeted countries are riddled with problems in all 4 categories. A straightforward question would be that why would the developing countries, already hard-pressed on funds, invest to improve on the 4 conditions posed by the B3W when they could easily continue to seek benefits from a no-strings-attached funding through BRI?

The B3W, despite being a highly lucrative and prosperous model, is idealistic if presented as a competition to the BRI. Simply because the G7, majorly the United States, elides the ground realities and averts its gaze from the labyrinth of complex relations shared with China. The only good that could be achieved is if the B3W manages to find its own unique identity in the region, separate from BRI in nature and not rivaling the scale of operation. While Biden has remained vocal to assuage the concerns regarding the B3W’s aim to target the trajectory of the BRI, the leaders have remained silent over the detailed operations of the model in the near future. For now, the B3W would await bipartisan approval in the United States as the remaining partners would develop their plan of action. Safe to say, for now, that the B3W won’t hold a candle to the BRI in the long-run but could create problems for the G7 members if it manages to irk China in the Short-run.

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Economy

COVID-19: New Dynamics to the World’s Politico-Economic Structure

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How ironic it is that a virus invisible from a naked human eye can manage to topple down the world and its dynamics. Breaking out of CoronaVirus, its spread across the globe and the diversity of consequences faced by the individual states all make it evident how the dynamics of the world could be reversed in months. Starting from the blame games regarding coronavirus to its geostrategic implications and the entire enigma between COVID-19 and politics, COVID-19 and economies have shaken the world. Whether it is the acclaimed super power, struggling powers or third world states or even individuals, the pandemic has unveiled the capability and credibility of all, especially in political and economic domains. Wearing masks in public, avoiding hand shake and maintaining distance from one another have emerged as ‘new normal’ in the social world of interaction.

Since the pandemic has locked its eyes upon the globe, world politics has taken an unfortunate drift. From the opportunities for leaders to abuse power during state of emergency (which is imposed in different states to limit the spread of novel Coronavirus) to the likelihood of rise of far-right nationalists to the emergence of ‘travel bubbles’ between states (such as New Zealand and Australia) and the increased chances of regionalism in post-pandemic world to the new terrorist strategies to gain support and many others, all are result of the pandemic’s impact on the political world, one way or the other. Since the end of WWII, the United States has taken the role of global leadership and after the Cold War, it became more prominent as it was the sole superpower of the world. Talking ideally, pandemics are perceived to bring up global cooperation but in the COVID-19 scenario it has started a whole new set of debates, sparkled nativism versus globalization and the sharp divide in global politics has drifted the focus from overcoming the global pandemic through global response to inward looking policies of leaders.

Covid-19 has impacted every sphere of life, be it social, political, health or economic. The pandemic itself being the result of a globalized world has affected globalization badly. It is the best illustration of the interrelation of politics and economics and how the steps in one sector impact the other in this interdependent, globalized world. Political actions such as restricting travel had drastic economic impacts especially to the countries whose economy is largely dependent on tourism, foreign investment etc. Similarly, economic actions such as limiting foreign products’ access had political implications in the form of sudden unemployment and downturn in living standards of people.

For the first time in history, oil prices became negative when its demand suddenly dropped when industries were shut down almost everywhere. Russia and Saudi Arabia’s oil clash which led to increased oil production by Saudi Arabia further complicated the situation. This unprecedented drop in oil demand and consequently its price would only help in the economic recovery of countries. Covid-19 has impacted three sectors badly. First of all, it affected production as global manufacturing has declined due to decrease in demand. Secondly, it has created supply chain and market disruption. Finally, lockdowns affected local businesses everywhere. Bad impact aside, pandemic has led to the change in demand of products. Instead of investment and foreign trade, states having strong medical and textiles industries have got the opportunity of increasing exports. This is because there are requirements of face masks everywhere to avoid contagion. Need for medical instruments have also increased such as ventilators in developing countries specially. 

The only positive impact of Coronavirus is that it fostered environmental cleanliness. It is said that it can avert a climate emergency but the fact is that, as soon as the lockdown will be eased and businesses will begin returning into functioning, economic growth and prosperity will be prioritized over sustainability and we might even witness, more than ever, carbon emissions into the atmosphere.

Novel coronavirus has brought new dynamics to the world’s politico-economic structure. While the world has the opportunity to come close for cooperation and consensus to fight it, we might witness increased regionalism in the post-pandemic world as a cautious measure and alternative where crisis management would be more cooperative and quick. There is a likelihood of the emergence of an international treaty or regime to ban bio-weapons. While the prevalence of political optimism is not assured in the post-pandemic world, we are likely to see the interdependent economic world, as before, to overcome the economic slump and revive the global economy. 

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