Is There a Relationship between Political and Economic Integration?

By Nikola Mirilovic

Economic integration in Asia has progressed further and enjoys broader support than political integration. Whether economic integration requires political integration in order to survive, and the nature of the relationship between interdependence and conflict, remain open questions. That is the case in general as well as in the particular case of key contemporary rising powers: China and India. These questions will play an important role in understanding the prospects for conflict or cooperation in Asia. This Policy Commentary outlines the general debate on these questions and applies it to China and to India.

 The Interdependence Debate

 The main argument linking economic integration and peace is as follows. Increasing trade and international investment facilitates economic efficiency by allowing for economies of scale, and for countries to take advantage of the benefits of specialization and exchange. Once international economic links are established, governments do not want to interrupt them and suffer an economic loss. They consequently pursue stable and peaceful relations with their trading partners.

 The counterargument is that economic integration can increase the likelihood of conflict in two principal ways. First, integration can lead to trade disputes. For example, trade imbalances can lead to complaints by the country that is experiencing a trade deficit. Inflows of foreign investment can lead to concerns about excessive influence by foreigners. Read more of this post

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Asian reactions to Gaddafi’s death

Libyan leader Colonel Moammar Gaddafi’s death last Thursday sparked heated reactions from major powers in Asia. In this post, we highlight the viewpoints coming out of Russia, China and India, many of which are highly critical of NATO’s role in Libya.

RUSSIA

Compared to China and India, reactions from Russia have been the most critical and extensive, including the official response. Foreign Minister Sergei Lavrov said NATO actions preceding the death of Gaddafi should be scrutinized for their compliance with international law, and emphasized “they should not have killed him.”

Commentaries in the press have likewise been negative. A round-up of expert reactions was reported by the Moscow News:

  • Andrei Fedvashin, RIA Novosti political analyst: “No one gave NATO sanction to hunt Gaddafi and bomb the suburbs of Sirte under siege.”
  • Georgy Mirsky of the World Economy and International Relations Institute, however, thought that Russia was to some extent complicit in NATO’s actions in Libya: “If in March, Moscow did not abstain in the UN Security Council vote [that authorized the no-fly zone], then the colonel would still be in power now.”

Views on Libya’s future appear mixed:

  • Sergey Markov, director of the Institute for Political Research: the situation in Libya “will be more or less peaceful.” He expressed confidence that the new Libyan government would be able to unify the different tribal factions, including those who were dominant during Gaddafi’s rule.
  • Evgeny Minchenko, director of the International Institute for Political Enterprise, was less optimistic: “low-intensity civil war…is likely to continue for quite a while, same as…in Iraq and…the AfPak region.” Read more of this post

Do Asians See a Role in Solving the Eurozone Crisis?

The Eurozone’s debt crisis has spurred talk about a possible role for BRIC countries to lend a helping hand through increased financing of the International Monetary Fund (IMF). While discussions are still under way over whether the IMF will even step into the euro crisis, rising powers such as China and Brazil continue to express interest. G20 finance ministers and central bankers met in Paris over the weekend and said they expected the October 23 European Union summit to “decisively address the current challenges through a comprehensive plan“. Today’s blog post highlights the views in China, India, and Russia on this issue:

CHINA

The mixed views in China indicate an interest to help the Eurozone in such a way that is both economically practical and politically beneficial to China-EU relations.

  • Ding Gang, a senior reporter with the People’s Daily, was more blunt about what China should expect in return: It is only “the most basic fair treatment” to ask that the EU recognize China’s market economy status and end the arms sale ban on China.
  • Specific policy recommendations came from a recently organized academic forum at Tongji University. It was reported that Qiao Yide, secretary-general of the Shanghai Development Research Foundation, recommended the following: 1) purchase bonds from multilateral institutions (the European Financial Stability Facility) instead of national bonds; 2) encourage Chinese businesses to expand in Europe; and 3) increase the euro’s weight in the currency basket of the Chinese yuan.

Chinese reactions to U.S. arms sales to Taiwan

Last Wednesday, the Obama Administration announced a $5.85 billion arms sales package to Taiwan, featuring upgrades for 145 of Taiwan’s F-16 A/B fighter jets. In this blog post, we highlight the contrast between China’s official responses to the arms deal, and reactions published in the Chinese media. The differences underscore some of the tensions and competing voices in China’s foreign policy establishment.

OFFICIAL REACTIONS

COMMENTARY IN THE PRESS

Ten years after 9/11: What are key Asian states saying?

This past weekend, the U.S. commemorated the ten year anniversary of the September 11 attacks. Across the globe, other countries also took a moment to reflect on this day.  In this post, we examine views from Russia, India, China and Japan.

RUSSIA

InRussia, commentators asserted thatU.S.unilateralism in the “war on terror” has interfered in the internal affairs of sovereign countries. At the same time, they concede that the Kremlin also lost an opportunity to deepen U.S.-Russian relations in the 9/11 aftermath.

  • The Russian Foreign Ministry stated that although the 9/11 attacks were “provocative and cruel,” they also led to broad international cooperation that has helped to bring global counter-terrorism cooperation to a higher level. The Foreign Ministry emphasized thatRussia supports an international coalition of nations, as opposed to some form of unilateralism, as the best mechanism for battling against the specter of terrorism.

Multiple commentaries described the 9/11 tragedy and subsequent global fight against terrorism as a missed opportunity for the Kremlin to boost ties with the West:

  • The Moscow Times, which tends to express opinion that the Rising Powers Initiative characterizes as Pro-Western Liberal, favoring modernization and integration with the West, noted that although U.S.-Russian cooperation got off to a strong start after 9/11, it quickly fizzled. “Moscow was counting on getting something in return fromWashington…butWashington simply tookMoscow’s assistance for granted, interpreting it as a response that any civilized country would have taken to support a partner hit by a major terrorist attack.”
  • RIA Novosti military commentator Konstantin Bogdanov remarked, “If there’s anything that the ten years of the ‘war on terror’ have demonstrated, it’s that the world leader is incredibly isolated. America is stubbornly and methodically trying to impose its own designs on a desperately recalcitrant world.” As the state news agency, RIA Novosti’s views are close to the current government position and reflect what the Rising Powers Initiative has identified as the Great Power Balancers viewpoint—those that seek great power status in relations with U.S. and China.

INDIA

In India, 9/11 was an occasion to reflect on the country’s own problems with terrorism, in the context ofAmerica’s war on terror over the past ten years.     Read more of this post

Time to invest in Indian-Australian partnership

By Amitabh Mattoo

The decision by the Prime Minister of India, Manmohan Singh, not to attend the Commonwealth Heads of Government Meeting at Perth in October has caused considerable disappointment in Canberra.

The absence of the head of the world’s largest democracy, and the Commonwealth’s largest member, will take the sheen off the forum and postpone an Indian prime ministerial visit to Australia after more than two decades into the uncertain future.

Commentators have been quick to identify the Labor government’s decision not to supply uranium to India as influencing Singh’s travel plans. The reality is more complex. Despite a growing convergence of values and interests, and the efforts of the countries’ two very competent high commissioners, there is still little real conversation between key players in Australia and their counterparts in India. New Delhi and Canberra may know each other, but they still do not have a nuanced understanding of each other. Thus in the absence of a sustained engagement at many levels, even a single issue can derail bilateral ties. This needs to change if the two countries are to work with each other and in the interests of the region.

Take the case of India. At the official level, there are no more than one or two officers in the severely shortstaffed Ministry of External Affairs who pay attention to Australia, and rarely for more than a couple of hours a week. It requires great persistence for Australian officials and diplomats to secure high-level attention from India.This lack of real communication even at the government-to-government level undermines the political relationship.

A recent private poll of the political and civil service elite in India suggests that while Australia may be a preferred tourist destination, and continues to rank quite highly for the quality of its tertiary education, there are few who would rank Canberra high in terms of political or strategic salience even among the countries of the Asia-Pacific region.

And, unfortunately, the Cold War divide, Canberra’s strident response to India’s nuclear tests, and the uranium decision still seem to drive the Indian elite’s “limited” understanding of Australia and its potential as an ally. Read more of this post

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