Today Trends

Author: Akash Sahu, New Delhi The conversation on AUKUS and Australia’s defence indicates the need for an advanced industrial base in the country, which can sustain not only the development of nuclear-powered submarines but also align capabilities like hypersonic and Artificial Intelligence (AI)-led military systems. Limitations like the lack of capital and human resources drag down Canberra’s ability to develop better weapons. Collaboration with AUKUS partners (the United States and the United Kingdom) is crucial for Canberra to procure, test and commercialise the latest military technologies . At the same time, deeper engagement with Quad partners Japan and India can help ensure a robust supply chain network for Australia’s defence industry sector. Both AUKUS and the Quad are driven by shared motives of stabilising regional security in the Indo-Pacific. The developing geopolitics of the Pacific necessitate credible offensive and defensive capabilities. Mick Ryan from CSIS sugg...

Authors: N Janardhan, Anwar Gargash Diplomatic Academy and Gedaliah Afterman, Reichman University A ‘ flying car ’ built by Chinese company Xpen Aeroht made its first public flight in the United Arab Emirates (UAE) in October 2022. A few months earlier, China’s NWTN — a passenger transport company — announced that it would build an electric vehicle facility in Abu Dhabi. These technological headways show that US efforts to convince Gulf allies to restrict China’s influence have been unsuccessful. Across the UAE’s borders, Huawei and the Saudi Digital Academy agreed in 2022 to advance local technological talent and realise the digital transformation — the use of artificial intelligence, cloud computing, cybersecurity and 5G — envisioned in Saudi Vision 2030, Riyadh’s blueprint for economic diversification. Despite US President Joe Biden explicitly arguing in July 2022 that improving US–Saudi relations is essential to ‘outcompete China’, it will be an uphill task with the intensifi...

Author: June Park, Schmidt Futures The United States has unleashed its arsenal to go ‘full throttle’ in the chip war against China regardless of the potential consequences, including the impact on its allies. On 7 October 2022, the Bureau of Industry and Security (BIS) of the US Department of Commerce laid out high level export controls on supercomputers and semiconductors to China. The market was shaken in September 2022 by restrictions on the sale of graphic processing units by Nvidia and Advanced Micro Devices to China. Companies had already begun to pull their staff out of China in response to new controls prohibiting US citizens from supporting the development and production of chips in Chinese firms. The new license requirements for items destined to a chip fabrication facility in China are blocked subject to a number of thresholds. The new measures are meant to halt Chinese chip companies at their current levels of progression. Ten days after the BIS announced the reinfor...

Author: Htet Aung, Yangon At a special summit in April 2021, Myanmar military junta leader General Min Aung Hlaing and the nine ASEAN leaders agreed to a set of  five initiatives for Myanmar  to return to peace and stability amid the unrest that followed the coup launched in February that year. During the  ASEAN summit  in Phnom Penh in November 2022, leaders reaffirmed this ’five-point consensus’ and affirmed the need for concrete, practical and measurable indicators set within a specific timeframe. Before the Phnom Penh summit, there were predictions that the five-point consensus may be revised, or that Myanmar could be  expelled from ASEAN . Myanmar’s junta  rejected  the ASEAN leaders’ decision to enforce the consensus, but the shadow National Unity Government (NUG)  welcomed  it. The five points include an immediate end to violence in Myanmar, dialogue among all parties to seek a peaceful solution, the appointment and visit of ...

Author: Feisal Khan, Hobart and William Smith Colleges The infelicitous phrase ‘ international basket case ’ might better apply to Pakistan today than when it was applied to Bangladesh in the 1970s — Pakistan’s former eastern half. Bangladesh has surpassed Pakistan economically and in quality of life . There is even talk of Bangladesh graduating to upper middle-income country status. Quite a reversal of fortune as no one talks about Pakistan that way. Pakistani economists lament that Bangladesh overtook Pakistan in just a couple of decades. Pakistan’s remittance earnings are greater than its stagnating export earnings , and both combined can’t pay for its imports . The Pakistani economy is in a precarious state and some are calling for Pakistan to suspend payment on its ever-increasing foreign debt, the largest portion held by China at 30 per cent . An increase in Pakistani tax revenue is good news, but it remains to be seen if Pakistan can improve its tax to GDP ratio , ...

Author: Brad Setser, Council on Foreign Relations The dollar’s strength is placing pressure on economies around the world, including in developing Asia. What makes this bout of dollar strength unique is that the stress is not limited to Asia’s developing economies. Asian economies are diverse and the direct financial impact of dollar strength varies. Some regional economies have significant foreign currency debts and limited foreign currency reserves. Unsurprisingly, these economies are in financial trouble. Sri Lanka defaulted on its bonds earlier in the year and is now trying to restructure its external debt. Pakistan has had to seek an emergency financing package from the International Monetary Fund, backstopped with pledges of additional support from both China and the Gulf. Bangladesh has proactively sought out IMF financing in the face of a terms of trade shock. Laos is, in all probability, relying on the continued forbearance of China’s policy banks to manage its unsustaina...

Author: Editorial Board, ANU It is one of the blessings of old friends, as Ralph Waldo Emerson once wrote, that you can afford to be stupid with them. Stupidity is perhaps a harsh word for the general direction of international economic policy in the age of COVID-19 and the Russian invasion of Ukraine, but it is not wholly inapt, either. The idea — increasingly popular among policymakers, particularly in the West — that international trade and investment should predominantly take place between close geopolitical friends is supposedly a solution to a darkening geopolitical environment, but the economic implications could be as disastrous as the rhetoric is slick. Since we cannot trust all of our trading partners to have our best interests at heart, the argument goes, we should do our best to concentrate our trade and investment where they are unlikely to be threatened by geopolitical manoeuvring. Superficially, there might seem to be something to this idea: China has tried to levera...

Authors: Samuel Hardwick and Adam Triggs In 2018, the United States put Russian aluminium giant Rusal on a blacklist to turn the screws on influential oligarchs. Because of Rusal’s centrality in global alumina, bauxite and aluminium networks, the global repercussions were immediate. The sanctions hit operations as far away as Guinea and Jamaica. Irish ministers held talks with the European Commission in an effort to save jobs at a refinery in Limerick. European car manufacturers that relied on Rusal for hard-to-substitute aluminium parts ultimately lobbied successfully for the sanctions’ reversal within a year. With the invasion of Ukraine, the White House is again weighing up new Rusal sanctions and broader curbs on Russian aluminium. The Rusal saga provides some lessons for economic resilience and underscores the difficulties of so-called ‘onshoring’ and ‘friend-shoring’. Securitisation of trade is not going away quickly. Onshoring or friend-shoring policies are an establishe...

Author: Nitasha Kaul, University of Westminster Throughout its history, Bhutan has often found itself caught between various imperial forces. It has consistently navigated a fraught geopolitical environment, and it has survived and flourished as the most peaceful nation in South Asia. But Bhutan now faces new challenges in a world with growing political tensions that affect trade and economic interdependence. Bhutan finds itself ‘ asymmetrically inbetween ’ two large and resource-hungry neighbours — China and India — who maintain a significant trade relationship with each other in spite of their geopolitical differences. Bhutan has historically been aligned more towards India as a consequence of British imperial policy in the region. Due to the rivalry between India and China , Bhutan cannot take advantage of its location to benefit from both neighbours. Analysis of Bhutan’s foreign relations has typically focussed on three determinants — economic factors, bilateral relations with...