Monday, 21 July 2014

As BRICS steps forward, can they reform global power relations?


The latest meeting of the BRICS countries, held in Brazil’s northeastern city of Fortaleza last week, represents the bloc’s most significant step forward towards its agenda of building a new multilateral development framework.

After two years of negotiations, the geoeconomic grouping of emerging markets known as the BRICS – Brazil, China, India, Russia and South Africa – have broken new ground by launching a development bank intended to challenge Western-dominated multilateral lending institutions such as the IMF and World Bank.

The New Development Bank (NDB) will be headquartered in Shanghai and will primarily serve to facilitate sustainable development and large-scale infrastructure modernization within BRICS countries, which will each allocate an equal share of $50 billion startup capital with the aim of reaching $100 billion.

NDB loans would not be exclusively for BRICS governments, but also extended to other low- and middle-income countries that contribute to the capital base, which will finance the construction of mega-projects involving electricity supply grids, telecommunications networks, roads and bridges, power stations, shipping infrastructure and ports, and water treatment facilities.

In addition to the development bank, the BRICS group will also establish a contingency reserve currency pool worth over $100 billion, enabling the bloc to raise liquidity protections and collectively hedge against economic challenges. Though member countries will contribute an equal amount of startup capital to the NDB, China will have a 41 percent stake in financing the currency pool, with other members taking on smaller percentages.

BRICS countries represent 41.6 percent of world’s total population, 19.6 percent of global GDP, and 16.9 percent of total global trade, making the five-member community the world’s largest market. Despite extensive economic clout, the BRICS countries together wield only about 11 percent of the votes at the IMF, an institution that is widely viewed as disproportionately delineating influence to the detriment of the Global South.

The BRICS project is not simply about emerging economic powerhouses striving for a wider international role that traditional Western institutions have thus far denied, but rather, it is an attempt by the Global South to articulate an alternative multilateral global order intended to be more equitable, inclusive, dynamic, and suitable to 21st century realities.

As developed economies find themselves today marred in austerity policies and struggling to tackle unemployment wrought by hallowed-out industrial sectors, trade between economies in the Global South now exceeds trade between emerging and developed economies by some $2.2 trillion, more than one-quarter of global trade. China, Brazil, and India have also begun to displace Western nations as large-scale donors throughout Africa and other low-income countries.
The growing role of developing countries in international institutions signifies how the global political landscape is shifting in favor of a multipolar order. The determination for emerging countries to independently pursue institution building has been brought on by policies of Western financial bodies that attach intrusive conditionalities to loans and deny equal voting rights to developing states.

Countries that borrow from institutions such as the IMF are forced to enact structural adjustment policies that scale back on public and social spending, and pressure countries to hurriedly reduce subsides that would better be phased out gradually. Loan conditionalities have also been known to disproportionately favor the private sector and reduce a country’s ability to hedge against speculative capital.

The bloc’s push toward institution building to advance an alternative development vision has been hastened in recent times by several contentious flashpoints in global politics, primarily between Russia and China on one side, and the United States and European Union on the other.

Relations between Moscow and Washington have reached their lowest point since the end of the Cold War, while the US has spearheaded punitive sanctions against Russia for its purported role in Ukrainian conflict. China has also expressed displeasure with US efforts to refocus its naval presence to the Asia Pacific region, which Beijing views as efforts by the US to interfere in the region’s complex territorial disputes.

The increasing pressure from Western capitals on Moscow and Beijing, who also take joint positions on issues in the UN Security Council, has prompted both countries to deepen their involvement in the multipolar project. Russia and China now intend to more forcefully utilize the BRICS framework to facilitate the exchange of knowledge and technology, and diversify political and trade relations with countries throughout the Global South.

The BRICS group will not be solely an economic community, but due to increasingly tense relations with the West, the five-member bloc is increasingly more disposed to cooperate politically to adopt common positions and coordinate joint efforts toward tackling regional issues at the UN level. In contrast to Western leanings toward interventionism, the core principles of BRICS foreign policy thinking centers on respect for sovereignty and non-interference in the internal affairs of countries.

In a recent interview with news agency ITAR-TASS, Russian President Vladimir Putin articulated his intentions to deepen both economic and political cooperation among the BRICS group, primarily by addressing the bloc’s common position against unilateral military interventions and economic sanctions that violate international law, pledging closer coordination and high‑level consultations between the group’s foreign ministries to jointly forge political and diplomatic settlements.

Washington’s calls for heavy economic sanctions on Russian industries and sectorial trade have been met with opposition by most EU states, who are largely dependent on Moscow for their energy needs. European states are also weary that sectorial sanctions against Russia will drastically drive up gas prices.

Putin has said that any economic sanctions on Russia will eventually boomerang back to harm US interests, and called on BRICS countries to introduce “a system of measures that would help prevent the harassment of countries that do not agree with some foreign policy decisions made by the United States and their allies, but would promote a civilized dialogue on all points at issue based on mutual respect.”

The primary interest of the BRICS countries is to begin the gradual process of reforming the international monetary and financial system, which remains heavily dependent on US monetary policy. The emerging multipolar alternative being championed by developing states, with varying degrees of antipathy toward Washington, is propelled forward by perceptions that global management on the basis of genuine and equal partnership cannot be realized under current circumstances.

The BRICS countries face an uphill battle and have yet to firmly establish internal decision-making mechanisms, and there are hurdles to address before the bank begins lending in 2016. The NDB can play an important role in channeling capital into industrial assets rather into bubbles and financial markets, thus improving investment confidence, reducing risk, and advancing a productivity-focused development agenda.

The failure of Western-dominated institutions to address their asymmetric influence over global political and economic affairs is the primary factor that has given rise to an alliance of developing countries that intend to correct this imbalance, and one can only hope they work toward bringing about a more equitable and just world order.

This article appeared in the July 22, 2014 print edition of The Malaysian Reserve newspaper. 

Nile Bowie is a columnist with Russia Today, and a research affiliate with the International Movement for a Just World (JUST), an NGO based in Kuala Lumpur, Malaysia. He can be reached at nilebowie@gmail.com.

​The downing of Flight MH17: A plea for objectivity

The appalling attack on Malaysia Airlines flight MH17 marks the most serious escalation of violence in the Ukrainian conflict since authorities in Kiev launched a military operation in the country’s eastern regions earlier this year.

It is difficult to fathom how the situation in Ukraine has transformed from protests over corruption and an economic associate agreement into a major international conflict, and has taken hundreds of lives and led to the worst diplomatic crisis between Moscow and Washington in modern times.

The situation in Ukraine has directly touched the lives of victims and their families from various parts of the world, who never could have imagined that a contentious domestic crisis in a country thousands of miles away from their homelands could so profoundly impact them.

The view from Kuala Lumpur is a distressing one, as the nation struggles to cope with the shock and psychological trauma of yet another massive tragedy in the wake of Malaysia Airlines Flight MH370’s unsolved disappearance just over four months ago.

Malaysian Prime Minister Najib Razak was personally affected by the disaster, as reports confirmed that his step-grandmother was onboard the ill-fated plane. The overwhelming concern of Malaysians is to secure that the remains of passengers are quickly returned to the country for a proper burial.

As the victims mourn their loved ones, their tragic dilemma has become garishly politicized by sensationalist media coverage and political figures who have leapt to conclusions in the absence of any authoritative evidence, and before any international investigation has been carried out.

Read the full story on RT.com

Nile Bowie is a columnist with Russia Today, and a research affiliate with the International Movement for a Just World (JUST), an NGO based in Kuala Lumpur, Malaysia. He can be reached at nilebowie@gmail.com.

Monday, 14 July 2014

Why N. Korea’s olive branch shouldn’t be brushed away

South Korea must seize the opportunity to improve relations with Pyongyang and lay the groundwork for d├ętente between the two sides based on mutual respect and cooperation.

To mark the 20th anniversary of the passing of the country’s founder, Kim Il-sung, North Korea issued a high-level statement last week calling for improved inter-Korean relations and an end to military hostilities with its southern neighbor. 

Pyongyang’s recent proposal has been relatively consistent with demands it has voiced on previous occasions, such as calling for the suspension of US-South Korea joint military drills, for both sides to settle all issues bilaterally, and an end to the exchange of slanderous language. It also called on Seoul to halt cooperation with other countries on the issue of North Korean nuclear weapons.

In a reference to the June 15 joint declaration signed by both sides at the first inter-Korean summit in 2000, Pyongyang reaffirmed calls for moving toward a federation with South Korea aimed at the eventual goal of reunification, in a way that benefits both sides and allows for differing ideological and social systems.

Since the beginning of this year, Pyongyang has attempted to call greater attention to its preference for improving relations with South Korea. The National Defense Commission (NDC), the North’s top military body, has made several proposals throughout the year, all of which the government in Seoul has dismissed.

The recent statement is significant in that it was issued directly by the North Korean government after Seoul rejected a special proposal by the NDC issued in late June, stating that the North “keeps making the same irrational claims.” South Korea has, however, accepted Pyongyang’s proposal to send a cheerleading squad to the upcoming Asian Games scheduled to be held in Incheon this September.

While there are certainly some areas of the proposal, such as international cooperation against Pyongyang’s nuclear program, that the South would find inherently problematic, but for the government in Seoul to entirely dismiss as “irrational” the current proposal by the North is a serious misstep.

Read the full story on RT.com

Nile Bowie is a Malaysia-based political analyst and a columnist with Russia Today. He can be reached at nilebowie@gmail.com.

Monday, 7 July 2014

China’s Xi rides the Korean wave

Chinese President Xi Jinping’s first trip to South Korea is being watching closely in several capitals, amid an increasingly right-leaning Japan and American perceptions that Beijing seeks to impose a new security architecture in the region with itself at the center.

The landmark visit has garnered much attention in light of Xi’s break with traditions set by former Chinese leaders, such as Hu Jintao and Jiang Zemin, who prioritized ties with North Korea by visiting Pyongyang before Seoul. Though attempts at high-level dialogue have been made, North Korean leader Kim Jong-un has yet to meet Xi, or any other foreign head of state.

Despite the traditionally close ties between Beijing and Pyongyang, who fought on the same side during the Korean War, Xi’s visit really doesn’t come as much of a surprise. His country’s ever-expanding economic cooperation with Seoul, which covers areas ranging from trade, finance, science, technology and energy, is a pragmatic decision grounded in modern strategic realities.

Xi will be accompanied by a huge business delegation of representatives from over 100 emergent Chinese companies, such as e-commerce giant Alibaba, telecommunication firm Huawei, Internet giant Baidu, and the heads of China Telecom, China Unicom, and China Southern Airlines.

Chinese firms clearly see the vast potential for IT cooperation, especially in areas such e-commerce and internet-related businesses, while the country’s tech enterprises look to companies such as Samsung, LG and Hyundai as attractive and innovative business models.

Since establishing diplomatic relations just over two decades ago, Beijing has become Seoul’s largest trading partner, largest export destination and largest source of imports. Bilateral trade has surpassed $270 billion last year, rising 7 percent per year on average, more than South Korea's trade volume with the United States and Japan combined.

People-to-people relations have also improved dramatically, and studies say that the favorability of China among the South Korean public is currently at its highest point ever. It’s no surprise then that Seoul and Beijing are ironing out a free trade agreement to broaden their economic ties, and more than ten negotiation sessions have already been held.

Xi and his South Korean counterpart President Park Geun-hye will ink more than 10 joint documents to usher in deeper cooperation, including the setup of a won-renminbi currency market as a response to the growing international use of the Chinese renminbi, which was the second-most widely used currency in global trade finance in 2013, behind the US dollar.

The agreement would bypass the dollar and make the renminbi directly exchangeable with the Korean won, with the intention of reducing exchange-rate risks for companies engaged in bilateral trade, and to a lesser extent to curb the appreciation of the won by reducing the US dollar inflow.

If both parties can harmonize their macroeconomic policies as Beijing attempts to internationalize the renminbi, financial analysts also say it could help prepare Seoul prepare for any financial turbulence that may result from the eventual scaling back of US quantitative easing measures.

In the political sphere, there is likewise no shortage of issues to discuss. Xi’s visit comes just as Japanese Prime Minister Shinzo Abe announced his administration’s reinterpretation of his nation’s pacifist constitution, which would allow the Japanese military to engage in conflicts overseas for the first time since the Second World War.

There is unsurprisingly a broad domestic opposition among the public in both China and South Korea; both are nations that have historically bore the heaviest brunt of a particularly ruthless brand of Japanese imperialism and colonialism.

Seoul and Beijing are on the same page in viewing these changes as a troubling departure from the long-standing postwar security architecture, while Washington has given Tokyo carte blanche to abandon pacifism as it attempts reorder its priorities toward the Asia-Pacific to counter China’s regional clout.

The most high-profile political issue on the table remains the handling of inter-Korean relations, where Beijing is a key stakeholder. There is certainly some truth to perceptions that Chinese officials are frustrated with North Korea, primarily in its insistence on developing nuclear weapons, and its reluctance to follow the advice of Chinese figures that have encouraged Pyongyang to more rapidly reform and open its economy.

China is the target of much Western criticism over its reluctance to economically pressure North Korea by stringently enforcing sanctions and other punitive measures, and many of these analysts remain hopeful that Beijing will come around and put its thumb down on Pyongyang.

This isn’t going to happen. China’s brand of foreign policy philosophy values non-interference in the internal affairs of others, mutual non-aggression, and mutually beneficial economic development. Beijing rejects the use of economic sanctions as a principle, and respects the rights of states to live in their own way.

Both China and South Korea want to see a nuclear-weapons-free Korean peninsula, but the approach taken to achieve that is what sets them apart. Since coming to office early last year, President Park has lacked pragmatism in dealing with Pyongyang, and has showed little interest in a major policy shift away from the antagonism of her predecessor, Lee Myun-bak, who oversaw the worse period of inter-Korean relations in modern times.

Pyongyang, despite the frequent demonstrations of bellicosity and saber rattling, has made several offers and attempts over the past several months geared toward dialogue and diffusing military antagonisms, all of which Seoul has showed scant interest in. China has consistently called for a scaling back of annual US-South Korea military drills that raise inter-Korean tensions to fever pitch.

Beijing believes that North Korea has legitimate security concerns that every state in entitled to, and it undoubtedly does, but the Chinese position remains that the nuclear issue can only be broached through the platform of the six-party-talks, which have been stalled since 2009. China is giving Pyongyang the cold shoulder to some extent, but it continues to promote investment and trade in the country.

The North Koreans are cautiously pursuing reform by opening free-trade zones in provinces throughout the country to experiment with an economic model that works, which if successful, would help improve the livelihoods of average citizens. Normalizing economic relations with regional players would by extension thrust Pyongyang into becoming more accountable, while reducing giving it a greater incentive to normalize political relations.

Seoul can clearly benefit by taking a non-antagonistic position and encouraging a ‘developmental dictatorship’ model, which is the kind of regime that Beijing ultimately wants to see in Pyongyang, which would in any case be far preferable to the status quo.

Xi Jinping is attempting a delicate diplomatic waltz through the complicated geopolitical landscape of Northeast Asia, and though China’s policy towards Pyongyang will not likely yield to Western opposition, the Chinese leader is now attempting to ride the Korean wave back to the six-party talks.

This article appeared in the July 08, 2014 print edition of The Malaysian Reserve newspaper. 

Nile Bowie is a Malaysia-based political analyst and a columnist with Russia Today. He can be reached at nilebowie@gmail.com.

Monday, 30 June 2014

Malaysia’s ‘Allah’ verdict & the rising far right

The recent ruling by Malaysia’s highest court to restrict non-Muslims from using the word ‘Allah’ has triggered a wider national debate deepening polarization among the country’s various ethnic and religious communities.

Malays, the country’s dominant ethnic group, are constitutionally ascribed as Muslims from birth, and their language borrows many terms from Arabic, including ‘Allah’. Malaysia, along with neighboring Brunei, are among the only countries in the world to regulate the use of the word ‘Allah’ and other terms deemed to be exclusive to Islam among its non-Muslim citizens.

A court ruling in 2007 prohibited a Catholic newspaper, the Herald, from using ‘Allah’ to describe the Christian god in the local Malay-language edition of its newspaper. In its attempts to appeal the judgment, the Church has argued that Christians in the Muslim-majority nation have used ‘Allah’ in Malay-language bibles and daily prayers for centuries.

Although the prohibition of the term only applied to the Herald newspaper, religious authorities in the state of Selangor took the unprecedented step of raiding the offices of the Bible Society of Malaysia in January, confiscating 321 Malay-language bibles on the basis that public disorder would ensue unless ‘Allah’remains exclusive to Islam. The Selangor Islamic Religious Council refuses to return the bibles, in defiance of the country’s attorney general.

When a lower court ruled in favor of the Church to reverse the government ban in 2009, widespread anger ensued that saw arson attacks and vandalism at churches, temples, and other places of worship. The Court of Appeals reversed the lower court’s decision in 2013, which prompted the Catholic Church to bring their case to the Federal Court, which rejected their challenge in a 4-3 judgment last week.

Read the full story on RT.com

Nile Bowie is a Malaysia-based political analyst and a columnist with Russia Today. He can be reached at nilebowie@gmail.com.

Wednesday, 25 June 2014

Washington cannot absolve itself from ISIS’ rise

The rapid advance of radical Islamist militants across sections of northern and western Iraq has shaken the embattled government of Prime Minister Nuri Kamal al-Maliki to its core. As the country maneuvers to stave off the jihadist surge, the integrity of the Iraqi nation-state hangs in the balance.

Fighters from the Islamic State of Iraq and Syria (ISIS) have deepened their hold over Iraq’s Anbar province and western border crossings, while groups of volunteers are enlisting to defend their communities, following a decree issued by Grand Ayatollah Ali al-Sistani, the country’s highest religious authority.

Iraqi Army units have fled their posts in besieged regions through the country to help reinforce and fortify the capital, Baghdad, and other areas under threat. As Shiite militias respond to Ayatollah Sistani’s call to arms, ISIS militants are attempting to consolidate control over Sunni regions by capitalizing on popular disenchantment with Maliki’s government.

Sectarian bloodletting on a wide scale now seems inevitable, as the United States deploys 300 military advisers and prepares to carry out airstrikes against ISIS positions. The official position in Washington is that Maliki’s Shiite-dominated government, which began overtly sectarian policies following the US withdrawal in 2011, has alienated the Sunnis and created conditions for their rebellion.

On a recent trip to Iraq, US Secretary of State John Kerry made it clear that the Obama administration wants Maliki out, in favor of a more representative leader capable of bridging sectarian differences and uniting the country. Washington, however, is also prepared to take military action against ISIS before any new government is formed.

Read the full story on RT.com

Nile Bowie is a Malaysia-based political analyst and a columnist with Russia Today. He can be reached at nilebowie@gmail.com.

Tuesday, 24 June 2014

Whose chickens are coming home to roost in Iraq?

As Islamist fighters seize swathes of territory and key cities in northwestern Iraq while edging closer to full control of the country’s largest oil refinery in Baiji, the emergence and rise of the Islamic State of Iraq and Greater Syria (ISIS) requires not only a careful assessment of the political landscape in Iraq, but impartial scrutiny of Western and Gulf strategies to bolster opposition forces in neighboring Syria.

There is much evidence to suggest that Iraqi Prime Minister Nuri Kamal al-Maliki and his Shiite-dominated government have politically and economically marginalized the country’s Sunni minority, using punitive measures to violently crackdown on protests and engage in mass arrests. While its true that there exists a broad Sunni opposition to Maliki’s rule, this alone cannot explain the recent developments in Iraq.

The unraveling security situation in the region, as well as the overtly sectarian nature of post-Saddam Iraqi politics, cannot be divorced from legacy of the US occupation of Iraq and policies undertaken since by the Obama administration in Syria, in coordination with partners such as Saudi Arabia. Despite the trillions spent by Washington to fight terrorism, ISIS has emerged as the most efficient, discipline, and well-funded jihadist group in history.

ISIS, the organization now making rapid advances toward Baghdad, formed following the US invasion of Iraq in 2003. The group likens itself as an ideologically superior alternative to al-Qaeda, due in part to its efficiency and gains on the Syrian battlefield. The group’s central purpose is the creation of an Islamic state that encompasses both Syria and Iraq into a borderless caliphate.

ISIS is said to have around 7,000 to 10,000 fighters, many who previously fought with al-Qaeda, and others who are former Ba'athists and soldiers of the Saddam-era army that fought against the US occupation. The organization is known for targeting Shiites, Christians, and other religious minorities, garnering a brutal reputation for carrying out crucifixions, beheadings and amputations.

According to the Iraqi government, ISIS has looted banks and captured military supplies since taking the northern city of Mosul, and now controls around $2 billion in cash and assets. The jihadist group has also produced professional propaganda videos and a sleek public relations campaign designed to attract private investors and new recruits.

Iraq’s Sunni community has long felt alienated by the Shiite-dominate government in Baghdad, and its true that a wider Sunni revolt against Maliki is taking place, with ISIS serving as the strongest component. Voices from the US political establishment accuse the Obama administration of contributing to the crisis in Iraq by formally withdrawing occupation troops from the country in 2011, under an agreement made during the Bush administration.

These problems are not a product of a hasty withdrawal from Iraq, but rather the results of Washington’s flawed attempt at nation building by the notorious neoconservatives following the toppling of Saddam Hussein. The US occupation that began in 2003 entirely dismantled Iraq’s central government, state institutions, and armed forces. To offset the influence of Sunnis loyal to the Ba’athist establishment, the US empowered the Shiites.

The Bush administration’s nation building efforts fueled sectarian divisions by favoring certain groups and religious sects that were seen to be more advantageous and amenable to US interests, effectively restructuring Iraqi society based on the suggestions of intelligence analysts and think-tanks in Washington. Tribal groups and sects were armed by the US to fight forces that resisted the US occupation. It is essential to note that al-Qaeda didn’t exist in Iraq prior to the fall of Saddam Hussein.

A similar argument being made is that the Obama administration failed to do enough to aid the ‘moderate’ elements of the armed opposition in Syria since the war began in 2011, which empowered radical forces like ISIS. The proponents of this argument clearly overlook the millions spent by the Central Intelligence Agency (CIA) sanctioned by the Obama administration to bolster various rebel groups inside of Syria.

Its no secret that Washington and its allies would prefer to see the toppling of Syrian President Bashar al-Assad, and it is the massive funding of radical groups from US allies such as Saudi Arabia, Turkey, and Qatar that has destabilized Syria, providing the ideal environment for extreme jihadist militias to train and multiply. The Obama administration has looked the other way as its Sunni allies empowered radical groups, primarily because these organizations proved the be the most effective fighters.

Wealthy donors from the Gulf countries have also fuelled the growth of jihadist groups, but the backing from US-aligned Sunni monarchies has been significant enough to warrant warnings against doing so from the Obama administration, which is now somewhat more cognizant of the blowback that such policies incur. The brutal rise of ISIS and the unraveling of Iraq and Syria are principally the result of outside attempts to shape the politics and resources of the region through force and covert operations.

Some disillusioned members of Iraq’s Sunni population, who are a majority in the northwestern regions of Baghdad, view the advance of ISIS as a positive development, but any further advances into the Shiite-dominated south and the semi-autonomous Kurdish regions in the north – where three-quarters of Iraq’s strategic oil fields lay – will be met with stiff resistance by Iraqi security forces and the Kurdish Peshmerga.

In Syria, the black flag of ISIS hangs over the northern provincial capital of Raqqa, from where it has secured several key oilfields in the eastern regions, providing further revenue. The jihadist organization, by attempting to capture the key oil refinery in Baiji, is attempting a similar strategy in Iraq. The fighting has caused oil prices to shoot up to a nine-month high, trading above $114 a barrel. If fighting bleeds further south, oil markets will experience even more radical price volatility, which some analysts suggest will see crude trading at above $120 a barrel.

The ironic miscalculation of US policy in the region is that Damascus and Baghdad look towards Iran for assistance, and in truth, Washington may need to collaborate with Tehran if it intends to contain the spread of ISIS and radical Sunni militias. Iran may provide Baghdad with the kind of training and assistance that allowed the Syrian army to consolidate and make gains against ISIS across large swathes of Syria.

This crisis now unfolding may the be catalyst that forces Maliki and the Shiites to work more closely with the Kurds and nationalist forces, as both the Iranians and Americans have been suggesting. Rather than more overt foreign intervention, all elements of Iraqi society must come together under the banner of a multi-sectarian force to face the menace now attempting to redefine borders and radically reshape the region.

This article appeared in the June 25, 2014 print edition of The Malaysian Reserve newspaper. 

Nile Bowie is a Malaysia-based political analyst and a columnist with Russia Today. He can be reached at nilebowie@gmail.com.