Economic Highlights
New Delhi, 7 May 2018
Shifting World Market
WHO WINS --TRUMP, MODI, XI?
By Shivaji Sarkar
World politics and
economy is changing. East Asia is becoming the hub of activity and along with
the Indian subcontinent, Asia is becoming the epicenter. The Koreas-- North and
South-- come together after near seven decades. India tries to rub shoulders
with China as Prime Minister Narendra Modi visits Wuhan and holds at least six
meetings with Chinese President Xi Jinping. Nonetheless, US President Donald Trump
fires salvos at India for stealing jobs and does not mind South Korean and
Chinese help to start a dialogue with North Korea.
It is a complex world.
It all happens on one day, this April 28. The same day French President
Emmanuel Macron visits the US and told the Congress of the dangers of narrow
nationalism being based on anger, isolation and fear. Would that make Trump
more liberal?
So is it the
enlargement of the Shanghai Cooperation Organisation (SCO) that China aims at
or is the BRICS intended to be strengthened by Modi? Well, it is happening
simultaneously despite India’s cautious aversion to China’s Belt and Road
Initiative. China’s Foreign Minister Wang Yi says the Chinese dragon and the Indian
elephant “will no longer fight with each other, but dance”. Modi says India and
China can dream together.
Despite not so soft
words by Trump against India on job-snatching his Defence Secretary Jim Mattis
wants the US to separate Russia from India even as the US plans sanctions
against Kremlin.
It is politics laced
with economic juices all around. Everyone -- Xi, Trump, North Korea’s Kim
Jong-un, South Korea’s Moon Jae-in, Macron and Modi – want to have the maximum
of the juices for the survival and sustained growth of each of their countries.
Some more economies are emerging like Vietnam, Myanmar, Bangladesh and Sri
Lanka. Would Maldives and Nepal now also dance with the elephant and the dragon?
There are too many
cross-currents sweeping Asia. Wuhan despite its official “informality”, points
to a lot of preparation. The informal talks were preceded by the visits of External
Affairs Sushma Swaraj, Defence Minister Nirmala Sitharaman and concluded with
high-level delegation meets.
The Koreas coming
together leads to the truce being replaced with treaty, moderation of nuclearisation
of the Korean Peninsula and the possibility of the US-Korean summit soon. Does
it exemplify that nuclear muscle flexing worked in favour of North Korea? Or
was it all stage-managed to give the world a belief that nobody has bowed, given
concessions, to anybody? Is it the gain of South Korea, the North or is it the
masterstroke of the Trump administration? Whatever, a new trade regime begins
with all the three.
It relieves China,
where Kim had gone on a luxury train ride for talks, of a hot spot developing
next door. Despite the trade war with Trump, Xi has won a battle. It shall end
the threat of sanctions against North Korea and that could have hit Chinese
trading not only with North Korea but also with European Union (EU). The EU was
also in the background for easing of the Korean situation. Yes, the EU has
significant gains to make by delving into East Asian economies.
For India, it may be
the beginning of the second Panchsheel, which was started by the first Prime Minister
Jawaharlal Nehru during the 2500th anniversary of Gautam Buddha on
April 29, 1954. Modi gave five new positives -- soch (thought), sampark
(contact), sahyog (cooperation), sankalp (determination) and sapne (dreams) just two days before
Budha Jayanti and a day before signing of the Panchsheel, which has been
relegated to history.
Now a new history is
sought to be written. India and China have done well economically in recent
years. Despite Chinese economy five times larger, India is trying to slowly
catch up though its population is set to overtake China’s shortly. The
advantage, India says, is its young and energetic population. It hopes to
become the beneficiary as this might outdo many economies.
So this might mean
more imports of chicken legs and other consumer goods from China, crash of
prices in India and high Bollywood movie treatment to China. Despite the
anti-China lobby, India is bound to see closer trade but also intends to
increase its exports and close the trade gap. They want to work in the
neighbourhood together, including in Afghanistan. In other areas like Myanmar,
Bangladesh, Nepal and Sri Lanka too will they vie together? In the course of
time the region could become a Sino-India market.
China’s
Communist Party’s official People’s Daily
commented, “There is reason to believe that this Wuhan meeting will increase
mutual trust, manage and control disputes, deepen cooperation and lead to a new
phase in China-India relations.” How that would
shape up may be known after the next meeting when Xi comes to India.
But all the above developments, is a sure
pointer to an increasing role of Asia. The West it would be futile to imagine
would give in so easily. The tussle between EU and the US is also being seen.
The US wants to have a big brotherly relation with China. The EU wants to
continue a tie that would help it boost its economy with China’s cooperation
and also may help EU expanse to other East Asia regions.
India too is eyeing beyond China and Korea to Mongolia for trade
and strategic reasons. It is having arms deals with Russia. With China, it
wants to increase Indian visibility in Afghanistan, where India is pouring
liberal assistance.
Each of the countries has yet to quantify tangible gains. There
is freewheeling to ensure none of them lose the future bus. India has one of
the largest stakes as does have China. They would like to sail together as in
many issues in WTO vie also in competing markets with each other.
Dimension of the world market would definitely change. The UN
and World Bank would have to recalibrate their strategies. It does not mean the
US or EU would collapse but there would be many rearrangements, the currency
market may reflect in a different manner. There would be many expectations and
many changes. The next few years may gradually see opening up new challenges,
provided the new Panchsheel shapes up the way it is intended. A change in the
world order is not unlikely.---INFA
(Copyright, India News & Feature Alliance)
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