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BRI project thriving in Middle East

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Why Middle East is of immense importance for belt and road initiative project?

BRI a developmental approach embraced by China is the revival of ancient silk road project in order to promote interconnectivity and interdependence because of the overwhelming changes in the global economy and geopolitical balances in the world. By implementing this project china has an aim to have access to new markets, securing the global supply chains which in return would help in generating continuous Chinese economic growth and, thereby, contribute to social stability at home. China has increased its engagement in the Middle Eastern Region in the past few years, establishing cordial relations with a variety of states, involving those on different sides of regional divides.

Middle east is considered as one of the most critical region for China because lies at the crossroads of three important continents Europe, Africa and Asia along with them the Mediterranean Sea, the Red Sea, the Arabian Sea, the Caspian Sea, and the Black Sea also converges. All these continents is thought to be connected by Belt and Road Initiative project by China. This region is also situated at the intersections of oil roads which are considered to be of immense importance for China for meeting its increasingly massive energy demands. In short Middle eastern states exhibit the potential source markets for China in terms of resources and a gateway to the other markets in the international world. As a result of which China has started increasing its economic, strategic and diplomatic engagement with this respective region. These investments not just serves China’s interests but also of Middle Eastern states which are dreaming to improve and enhance their economies for supporting the norm of social stability at home. Middle East is also  closest to the four strategic maritime channels of the Bosporus, the Dardanelles, Bab el-Mandeb, and the Hormuz Strait through which most of  Chinese trade passes. This region also plays a key role in the security coordination, economic cooperation and cultural exchanges under the umbrella of BRI project.  Except all this, this critical region accounts for more than 40% of China’s oil imports and is a major provider of the liquefied natural gas.

In order to stimulates its economy china is heavily depending upon the energy imports from this region. More than half of the imports of china’s crude oil originates from middle east. in addition to this about 10-20% of the natural gas imports of china also resides in this region.

Another major reason that enables middle east to be a core part of BRI is the navigation security concern for china. Most of the merchandise goods carrying vessels between Europe and china are passes via several choke points that resides in this region. So it is at the foremost interest of china to secure theses choke points. Apart from this about 1/3rd of the crude oil is also been transported over seas has a journey via the strait of Hormuz ,off the coast of Iran and the United Arab Emirates.

Majority of the Seaborne trade  between China and Europe travels via the strait of  Bab el-Mandeb, off Djibouti and Yemen. This trade route exposes china’s energy imports, and goods to interruptions and disturbances instigated by piracy, regional tensions, and conflict. As a result of which China has the foremost interest in securing these trade routes along with searching for other alternate routes to avoid maritime chokepoints.

China has  improved its relations with the middle eastern states  after the implementation of BRI project , becoming a major import-export partner for countries of the region. Kingdom of Saudi Arabia  today is viewed as one of the most important trading partner in the Middle East and China is the kingdom’s biggest trade partner, with the export of Saudi oil and petrochemicals. It  has been one of the major supplier of majority of china’s crude oil imports, making itself as a country having particular attention in the eyes of china. 

The United Arab Emirates lies on the Strait of Hormuz via which the majority of China’s oil imports transit. Therefore it is in the best interest of china that these routes should be secure for ensuring the smooth passage of vessels transporting oil to ChinaUAE  is China’s second preferred investment location in the middle eastern region. The UAE’s strategic location and high-end infrastructure make it appealing as a hub for Chinese exports. 

Iran is another  very important state that China has wanted to have cordial relations with an  aim of expanding energy suppliers and reducing energy dependence on Saudi Arabia.  Having cooperation with Iran has also been regarded as important for reducing the risk of disruptions to maritime transport through the Strait of Hormuz. Iran has on occasion, including recently, threatened to close the Strait, which would push up oil prices and disrupt energy supplies. Beijing is, therefore, eager to develop cooperative relations with Teheran. In addition, Beijing is hoping that Iranian oil could one day go over land to China, thereby reducing dependence on seaborne shipping and the risks this entails.

The importance of the Suez Canal for shipping Chinese goods to Europe makes Egypt another key state. Although Egypt’s strategic location means that it is central to the MSRI, because of which China is playing a key role in facilitating some of Egypt’s flagship projects launched under President Abdel Fattah El-Sisi.

China has stepped up the development of transport infrastructure in Israel in an attempt to create a route from the Red Sea to the Mediterranean that avoids the Suez Canal. China is, therefore, building a high-speed railway from Eilat on the Gulf of Aqaba to Ashdod Port on the Mediterranean, as well as investing in the expansion of the port. The hope is that goods could be shipped from these ports to the Port Piraeus in Greece that is operated by the China Ocean Shipping Company.

However a diplomatic tool China has adopted that facilitates this “fence-sitting” is the use of partnership diplomacy, rather than alliances. In an alliance, the stronger side fears getting entangled in the weaker side’s conflicts, while the weaker side fears abandonment. Strategic partnerships remove these fears by reducing the commitments. Both sides agree to cooperate on areas of shared interests while managing areas of potential competition. By working on common interests, they are goal-driven rather than threat-driven, and offer paths toward improved relations regarding other issues. China’s use of strategic partnerships has a hierarchal range of relations, from a “friendly cooperative partnership” at the bottom rung to a “comprehensive strategic partnership” at the top.

Hence, china’s developmental strategy of BRI indicates that this emerging economic power aspires a greater influence in the region which is thought as one of the most crucial region of the world. In the new era, the most important interests of china is maintaining great power relations, to enhance its influence. However relations with Saudi Arabia, the United Arab Emirates (UAE), Iran, Egypt, and Israel  are the only ME states with comprehensive strategic partnerships indicates that Beijing perceives them as the most important regional states, and also demonstrates that China’s Middle East policy is more heavily weighted toward the Gulf region.

She has done her graduation in international relations from national defense university, Islamabad. She has a keen interest in media and international relations as a result of which she interned with inter services public relations(ISPR) for three months. Her articles “The East Timor Conflict: When Military Intervention Works” and “Troubled Waters: Revisionist China & The South China Sea Dispute” have been published by paradigm shift in 2020.

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Economy

Sustainable Agriculture in Modern Society

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

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

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

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

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

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

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

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

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

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Economy

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

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

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

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

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

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

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Economy

Is Myanmar an ethical minefield for multinational corporations?

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Business at a crossroads

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

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

Crimes against humanity

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

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

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

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

Call for economic disengagement

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

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

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

Blood money and ethical dilemma

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

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

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

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