Friday, September 09, 2016

Bumps in The Road

The Bumps Are There. You Just Can't See them Yet

Stephen Aris outlines the incentives for Europe to participate in China's One Belt One Road (OBOR, or "New Silk Road") initiative:
The notion of “connectivity” at the heart of the OBOR vision is primarily about connecting China to Europe, especially via the land-based economic belt. The emphasis on the China-Europe land bridge is evident by the fact that there are already several completed projects in this direction, such as the Chongqing-Duisburg railway line. The aim is to dramatically cut the time it takes by ship to transport goods between China and Europe. Against this back-ground, European countries and the EU are currently seeking to formulate their policy response to OBOR. 
There are significant potential economic benefits to participating in the establishment of such infrastructure links to connect the flows of goods between Europe and China. It would facilitate greater and easier access to a huge market for European producers. Nevertheless, China has yet to make a completely convincing case to its prospective European partners, who ponder how exactly they will benefit from OBOR. This is in part due to the clear disparity in China-European trade. China provides Europe with an array of low-value goods while, in return, Europe sells mainly high-value goods and services to China. This distinction in the type of trade flows is also evident in the traffic between the two markets – currently, the Chongqing-Duisburg train arrives from China packed full with low-value goods, but because European exports to China are not mass-and volume-intensive, it makes the return journey largely empty. Trade coordination is further complicated by the failure to agree a EU-China Free Trade Agreement, with continued tariff barriers mitigating the potential cost-saving advantages of the quicker-speed of the land route. 
Adding to the concerns about trade imbalances, the most viable OBOR land route is geopolitically problematic from an EU perspective. Last year’s joint Russian-Chinese declaration about coordinating the EEU and OBOR increases the likelihood that many routes in the economic belt could go through Russia. This prospect is reinforced by the security situation in many of the states along the alternative southern route that would bypass Russia. With the EU-Russia relationship at an all-time low, and OBOR potentially bringing to the fore the contested question of Ukraine’s role as a transit state between Russia/EEU and the EU, then China-Europe land connectivity begins to look like a geopolitical hazard from the European perspective.

Speaking of which, Edward Cavanaugh outlines one set of obstacles (or opportunities) for OBOR - the increasing instability in Central Asia:
Central Asia is today facing a gathering set of challenges that no region would envy. 
The five regional countries -- Kazakhstan, Uzbekistan, Turkmenistan, Tajikistan and Kyrgyzstan -- are all ruled by strict autocrats with no obvious successors. Three of these countries until last week were led by the same men who ruled during the Soviet era, which ended in 1991. In each country, civil liberties have been oppressed, political oppositions banished, and the largely Muslim populations prohibited to practice their faith: in Tajikistan, even growing a beard is a crime. 
Their economies are floundering. They depend heavily on foreign aid, remittances from expats working in Russia, and are falling into the trap so many resource-rich regions do: an over reliance on commodities to fuel their economy. Dwindling oil prices since 2013 have destroyed already fragile economic prospects. 
Even the effects of climate change are wreaking regional havoc. The tensions over strained shared water resources leaves Central Asia as a not-improbable candidate for the world's first war over water.There is, in short, a gathering perfect storm. The determinants of state failure: popular disenfranchisement, economic hardship, intra-regional tensions, and an overconcentration of power to leaders who, once they fall, expose the charade of the state-stability they have espoused, define the region.

Plus: Elise Hu on the diplomatic battle between North and South Korea in Laos:
So the North Korean-Laos relationship cuts both ways. It allows them to do business together, but it also means that North Korean defectors look at Laos as way to get out, and they know Laos is willing to look the other way. 
And in recent months, South Korea has stepped up efforts to drive a wedge between Laos and North Korea. 
North Korea's nuclear test and missile tests brought a new round of international sanctions this spring. It's also been an opportunity for South Korea to court Laos. 
South Korea has been sending diplomats, increasing communication and signed a new military-to-military agreement. All in hopes Laos will get tougher on its North Korean partner.

Finally, Honolulu Civil Beat urges more transparency in Hawaii's prisons:
In recent weeks, Civil Beat’s Rui Kaneya has uncovered, among other things, the involvement of a questionable subcontractor on the planning and design work for a new Oahu Community Correctional Center. Louis Berger of New Jersey has a history of shady dealings that in recent years have resulted in fines totaling more than $90 million over allegations of fraud and bribery. Architects Hawaii, which brought on Berger, won’t comment on the subcontractor, which stands to earn at least $1.3 million on this job. 
Kaneya also reported in late August on the shocking level of secrecy allowed in legal settlements involving the Corrections Corporation of America, the mainland prison company whose private facilities hold about 1,400 Hawaii prisoners in Arizona at any given time. The state agreed to an indemnity clause in its deal with CCA that neatly removes the legislative oversight brought to bear on legal settlements involving Hawaii prisons and other state offices under the guise that CCA is liable for all litigation costs and attorney fees. 
That sort of secrecy and lack of oversight has unfortunately become a recurring theme for a wing of state government that gets far less attention and scrutiny than it should.

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