I imagine myself walking down to the Beirut train station, boarding the 4pm bullet train that will steam off toward Damascus, heading across the great plains to the east to Baghdad. In a day we’ll be in Iran and then at Mashad there is a choice: one could go south through Pakistan to Delhi, or one would take the longer journey to Beijing via Samarkand. This would be the Great Asian Express that links one end of the massive continent to the other.
But it is impossible. War in Syria stops the train before it has even begun. Instability in Iraq intimates that the tracks would be blown up before they can be laid down. Iran is far more stable, which is why it has begun to build a train line that would link Turkey to Turkmenistan through northern Iran. Afghanistan, Pakistan and India are unable to create a modus vivendi that would welcome such a train, or indeed an oil and gas pipeline that might run parallel to it, bringing Iranian fuel to the consumers of the subcontinent. Central Asia oscillates between long periods of calm and bursts of dangerous violence.
A train itinerary such as the one I described sounds like a dream history – impossible even. But it is not so out of our time. The Trans-Asian Railway comes out from the 1960s, a historical artefact, a project of the UN Economic and Social Commission for Asia and the Pacific that was finally brought to the stage of an inter-governmental memorandum of understanding in 2006. This Iron Silk Road is to run from Singapore to Istanbul. The project has no timetable. Parts of it are already present, and parts of it are in the maddening future. But some of it will form part of the China-Iran rail link which is expected to go into production within a decade, and will form part of the Istanbul to Tehran route that is also already in production. Not so far that regional future.
Regionalism rests on the mantle of geography. Attempts to isolate a country for ideological reasons do not always work. The West, since 2003 at least, has attempted to isolate Iran but it cannot do so – Afghanistan, under US occupation, buys half its oil from Iran. It cannot do otherwise. Any other source would be ridiculously overpriced. The US embargo of Iran had to be violated despite the fact that it was US money in Afghan hands that was buying the Iranian oil.
Pressure from the US and the desire of the Indian political and economic elites for a close link with the US befuddled India’s Iran policy between 2003 and 2013. India is the second largest importer, after China, of Iranian oil. In the halls of the Non-Aligned Movement, India is a country that is greatly respected.
Through a nuclear deal – as I detail in my new report on India’s Iran policy, the US was able to push India to vote against Iran twice at the International Atomic Energy Agency (IAEA) meetings in exchange for being brought out of the nuclear winter itself. As the sanctions regime on Iran tightened, India found it hard to buy oil from Iran and coldness between the countries set in as a result of India’s seeming eagerness to toe the US line. But beneath the surface of the IAEA votes and the statements against the buying of Iranian oil, linkages deepened – on oil buying certainly but also on the trade in pharmaceuticals and wheat as well as on the Indo-Iranian construction of a port in south-eastern Iran (at Chabahar). The sanctions regime had certainly throttled Iran, but it could not sunder fully the imperatives of regional trade.
On Sunday, November 24, the P5 (China, France, Russia, the United Kingdom and the United States) + 1 (Germany) signed a deal with Iran to end the siege on the latter. The P5+1 promised to ease the sanctions regime in exchange for Iran’s disavowal of a nuclear weapon.
India welcomed the deal, suggesting that it was along the grain not only of Indian policy but also of the BRICS declaration from 2013 (“We believe there is no alternative to a negotiated settlement to the Iranian nuclear issue. We recognize Iran’s right to peaceful use of nuclear energy consistent with its international obligations, and support resolution of the issues involved through political and diplomatic means and dialogue,” was the wording of the eThekwini Declaration).
India’s oil firms promised to hastily transfer arrears held in Indian banks for oil purchased during the previous years (now totalling $5.3 billion), and to increase orders for Iranian oil. The latter would be facilitated by the end to the pressure on insurance firms who then refused to underwrite oil tankers coming out of Iran.
India’s Foreign Secretary Sujatha Singh met with Iran’s Deputy Prime Minister Ebrahim Rahimpour on Monday, November 25, and agreed that there is “considerable untapped potential to develop economic cooperation between the two countries particularly in the area of energy and transit.” India and Iran have already been at work building the Chabahar port, and India is building a 900 km train track to link the port to the Hajigak region in Afghanistan. Dreams of oil and gas pipelines and train lines remained suspended over the gathering like a huge exclamation mark.
What these developments indicate is that the time of US primacy is now over and the time of multipolar regionalism is at hand. From 1991 to the present, the US had attempted to forge strong bilateral ties with its chosen allies and sought to knit those allies into a planetary security web of military bases and inter-operatable armed forces; this was the hub and spoke system that James Baker had written about in 1992. That system meant that regional ties had to be sacrificed for the close linkages to the United States. Latin America, through the Bolivarian dynamic, was the first region to exit from the US strategy and create its own regional architecture (for political, economic and social linkages). An over-extended US military presence in Asia and the collapse of the finance-led economic model in 2008 weakened the US considerably.
The example of Latin America gave confidence for the new India-Brazil-South Africa (IBSA) formation, the antecedent of the BRICS bloc. With the quiet emergence of the BRICS bloc in the context of a weaker West, it was inevitable that the siege of Iran would have to be lifted. China’s Foreign Minister Wang Li uncharacteristically told the Chinese media that his country played a crucial role in concluding the deal. Pressure from Russia and China on the European Union pushed them to bring a wayward France in line. No longer can an imperial foreign policy dominate international policy without challenge. That is the lesson of the Iranian deal.
Vijay Prashad is the Edward Said Chair at the American University of Beirut, Beirut, Lebanon. His most recent book is The Poorer Nations: A Possible History of the Global South.
- India will continue to engage Iran in economic activities (rediff.com)
- Post-deal with world powers, Iran briefs India on moving ahead (thehindu.com)
- PressTV: US extends Iran oil sanctions waivers (jhaines6.wordpress.com)
Brazil is urging a plan to introduce local data storage for Internet giants like Facebook and Google in order to keep the information they get from Brazilian users safe –as part of a complex of measures to oppose US spying.
The new law could impact Google, Facebook, Twitter and other Internet global companies that operate in Brazil, Latin America’s biggest country and one of the world’s largest telecommunications markets.
The country’s president, Dilma Rousseff, is urging lawmakers to vote as early as this week on the law, according to Reuters who have seen the draft of the legislation.
“The government can oblige Internet service companies … to install and use centers for the storage, management and dissemination of data within the national territory,” the draft of the document read.
Rousseff’s calls come after surveillance leaks by the US in Brazil that went as far as tracking the personal phone calls and e-mails of the President herself.
Last month, Brazilian President Dilma Rousseff canceled a scheduled meeting at the White House after leaked documents showed the NSA spied on her country’s state oil company.
“We are not regulating the way information flows, just requiring that data on Brazilians be stored in Brazil so it is subject to the jurisdiction of Brazilian courts,” Rousseff spokesman Thomas Traumann said. “This has nothing to do with global communications.”
However, the companies disagree saying that the legislation will increase costs of services, and damage the economic activity connected with information.
Last week a coalition of business groups representing dozens of Internet companies including Facebook, Google, Microsoft and eBay sent a letter to Brazilian lawmakers.
“In-country data storage requirements would detrimentally impact all economic activity that depends on data flows,” the letter read, Reuters reported.
Many also threatened the law will scare the companies, while others, nevertheless, were of the opinion that the companies would comply if faced with no other options.
This week, Brazil is expected to vote on a cyber-security bill to create a state system to protect the country’s citizens from spying.
When the news on the bill emerged two weeks ago, Brazilian President Dilma Rousseff tweeted the news, stressing the need for greater security “to prevent possible espionage.”
The latest legislation project comes against a backdrop of Brazil set to host a conference next April to debate ways to guard Internet privacy from espionage.
The meeting is to be held by ICAAN, the body that manages web domain names. It is thought to be neutral and includes governments, civil society and industry.
Meanwhile, BRICS companies are working to create a “new Internet”.
In particular, Brazil has been reported to be building a “BRICS cable” that will create an independent link between Brazil, South Africa, India, China and Russia, in order to bypass NSA cables and avoid spying.
The cable is set to go from the Brazilian town of Fortaleza to the Russian town of Vladivostok via Cape Town, Chennai and Shantou.
The length of the fiber-optic cable will be almost 35,000 kilometers, making it one of the most ambitious underwater telecom projects ever attempted.
Last week, most of the BRICS countries joined talks to hammer out a UN resolution that would condemn “indiscriminate” and “extra-territorial” surveillance, and ensure “independent oversight” of electronic monitoring.
Russian Foreign Minister Sergey Lavrov said that “contacts [between Moscow and Washington] never stop,” when asked if the latest publication of secret files leaked by the former National Security Agency (NSA) contractor would affect relations between Russia and the US.
Also, Lavrov made it clear that the situation surrounding Snowden is irrelevant to Russia.
“We have formulated our position on Snowden and have said everything,” he said.
- China echoes Brazil’s call for cyberspace guidelines (thebricspost.com)
At a Press Conference with his Russian counterpart Vladimir Putin, Egypt´s President Mohammed Morsi stated, that Egypt was committed to finding a peaceful and legal solution to the crisis in Syria. Today, the official Egyptian State Information Service states, that Egypt has said no to a loan from the International Monetary Fond, IMF, because the IMF´s conditions were unacceptable. Earlier this year, prior to a state visit in India, Morsi pronounced that Egypt has aspirations for joining the BRICS.
Since the discontinuation of the Soviet Union, the bilateral relations between Cairo and Moscow have slowly degraded. The main talking points on the agenda at the talks between Morsi and Putin were the revival of trade, commerce and economic cooperation between the two countries as well as the instability that has swept over Northern Africa and the Middle East since 2011.
Earlier this year, prior to a planned state visit to India, Morsi stated, that Egypt has aspirations of becoming a member of the BRICS, leading to speculations, whether Egypt is planning to assume a similar role as it had during the 1950s and 1960s, where the country walked a tightrope between alignment with Moscow and Washington. As a member of the non-aligned movement, Egypt may very well try to reassert its role as a regional power broker.
A closer alignment of Egypt with Moscow would make the country less dependent on US foreign policy and could, at least to a certain degree, counter the strong influence the USA is asserting over the Arab League through Qatar.
The little Gulf Kingdom has since 2007 grown into a veritable regional political superpower, which has stood and is standing behind many of the sweeping changes which have cast northern Africa and the Middle East into turmoil since 2011. Qatar and the USA are the primary powers behind the attempted subversion of Syria.
The question one may ask is, whether Morsi´s statement, that Egypt is committed to finding a peaceful and legal solution to the crisis in Syria is indicative of a more self-confident Egypt, and an Egyptian president who is aware of the fact that an alignment with the USA and Qatar, without playing the Moscow card, makes him as easily disposable as his predecessor Hosni Mubarak.
There are also other signs which indicate that Morsi may be trying to reassert Egypt´s role as regional power and greater independence from Washington. Morsi´s ambitions to have Egypt become the “E” in something that could become the BRICS+E was one indication. Prior to his visit to India, Morsi also stated, that Egypt is planning to increase its relations with eastern and Asian countries.
Today´s rejection of the IMF´s loan, following talks with the Russian President in Sochi, are lending additional credibility to those who are arguing for an Egyptian realignment to the middle, and the recent signals from the BRICS, that it will create a BRICS development bank, are indicative that Morsi may have substance behind the possible dream of a course change.
Asked about the reasons for turning down the IMF, Mosi said, “We seek to carry out clear changes in the government´s economic program to receive the loan and we are keen on the interests of the Egyptian citizens”. On of the greatest points of critique against Morsi, other than oppression of his political opponents were, that Morsi “already sold out Egypt and its people to the IMF and World Bank, before he even was elected”. With backup from Russia and the other BRICS members however, Morsi would be less dependent on Washington´s and the IMF´s economic dictates. With the World Bank and IMF systems, as some analysts have it, close to exploding into an international scandal which could spell the beginning of the end of the Bretton Woods gentleman´s agreement, Morsi may be making a very wise decision.
Morsi showed true statesmanship when he said, that he is “seeking real investments in Egypt” and that “loans don´t solve problems and are just temporary solutions”. During his interview with Al-Jazeera Morsi also reiterated the importance of maintaining the integrity of Egyptian territory, stating, that “Egypt´s lands are not for sale and are prohibited for non-Egyptians”.
While increased Egyptian self-confidence and increased assertiveness in the Arab League as well as Egypt´s possible influence for finding a political solution to the crisis in Syria may be plausible and welcome, he may still have to tackle internal problems. Consolidating the continuity and stability of the Egyptian government in times of sudden and comprehensive unrest and change may have made sweeping power grabs a tempting solution. As a long-term strategy however, a semi-dictatorial, Muslim Brotherhood influenced Egyptian government is as counter productive to the stability of Egypt´s society and government, as loans are counterproductive as a long-term strategy for economic growth.
During an interview with Al-Jazeera, Morsi also stressed that Egypt is maintaining good relations with Iran and that Egypt´s relations with Iran are not directed against anyone. Morsi reiterated, the importance of Iran´s role with regard to finding a peaceful resolution to the crisis in Syria.
The renewed ties between Cairo and Moscow may also indicate that Russia is planning to play a more active role throughout the Middle East, and that the Russian government is planning to reassert some of the influence Moscow has lost in the region during the last years of the Soviet era and the early 1990s.
A Russian fleet, composed of the anti-submarine destroyer Admiral Panteleyev and the two logistic warships Peresvet and Novelskoy, with a total number of 712 crew have entered the Iranian Army´s first naval zone in Bandar Abbas.
The three vessel´s visit is aiming at consolidating the relations between Iran and Russia and the expansion of interactions between the two countries in the field of naval security. The three Russian warships have left their home port Vladivostok for duty in the world oceans and are visiting Bandar Abbas en route to their operational destinations. The Russian Ministry of Defense has announced, that Russia has begun forming a separate Mediterranean squadron.
The visit of Egypt´s President Morsi to Sochi and the talks with Russian President Putin, Egypt´s interest in joining the BRICS, the rejection of the IMF loan, Morsi´s commitment to finding a peaceful solution to the crisis in Syria while stressing the importance of Iran´s role as part of the solution, and Russian commitment to a stronger naval presence in the Mediterranean indicate that Egypt could be playing a key role in limiting the current US Middle East and Northern Africa Pivot. The rejection of the IMF loan and indications to more commitment to democracy could indicate, that Russian influence also has inspired the Muslim Brotherhood led government to bring its own house in order while considering to assume a greater regional role.
The ‘big five’ of the developing world will discuss creating their own global World Bank as their 5th annual summit kicks off Tuesday in sunny Durban.
The move is linked to the developing world’s disillusionment with the status quo of world financial institutions. The World Bank and IMF continue to favor US and European presidents over BRICS nations, and in 2010, the US failed to ratify a 2010 agreement which would allow more IMF funds to be allocated to developing nations.
“Not long ago we discussed the formation of a developmental bank… Today we are ready to launch it,” South African President Jacob Zuma said on Monday.
The ‘big five’- Brazil, Russia, India, China, and its newest addition, South Africa, will come together for the annual conference this year in Durban, South Africa in hopes of establishing a new development bank which will fund infrastructure and development projects in the five member states, and will pool foreign currencies to fend off any impending financial crisis.
“We will discuss ways to revive global growth and ensure macroeconomic stability, as well as mechanisms and measures to promote investment in infrastructure and sustainable development,” Indian Prime Minister Manmohan Singh said on Monday, before heading to Durban.
The BRICS have called for a reconstruction of the World Bank and IMF, which were created in 1944, and want to put forth their own ‘Bretton Woods’ accord. And they are serious.
“Brics is not a talk show. It is a serious grouping,” Zuma told reporters at the presidential guest house in Pretoria.
The new bank will cater to developing world interests and will symbolize a great economic and political union.
“There’s a shift in power from the traditional to the emerging world. There is a lot of geo-political concern about this shift in the western world,” Martyn Davies, chief executive officer of Johannesburg-based Frontier Advisory, told Bloomberg.
“A future BRICS Investment Bank is seen as a mechanism that would help realize where money should go, agree development strategies and coordinate investment,” explained Georgy Toloraya, the executive director of Russia’s national committee for BRICS studies to SA News.
In its nebulous stage, the new BRICS bank is unanimously supported by all five member states. In Durban, problems will arise on how to govern, fund, and operate the grand venture.
“When you set up a bank like this it’s not just a question of opening the doors. There are some issues about where it is going to be located, what the capital contributions are going to be, the rules of deploying that investment. These are the sort of details that are in various stages of discussion and negotiation,” said South African Trade Minister Rob Davies, in a statement.
The leaders may not reach a specific agreement in Durban this week, as each country has its own stipulations on its creation. Russia, for example, wants to cap each side’s initial contribution to $10 billion, according to Mikhail Margelov, part of President Putin’s team in South Africa.
Emergency Currency Fund
Pooling currency to deflect a future crisis is also a high priority topic set for the conference.
Once a loose political affiliation, the BRICS bloc is now a serious economic contender in the world economy, representing 40 percent of the world’s population, and accounting for one fifth of global GDP.
Between the five countries, the bloc holds foreign-currency reserves of $4.4 trillion, and needs an institution to safeguard this amassing wealth. The reserve will also protect members from short-term liquidity volatility and balance-of-payment problems.
Presently, it is proposed the member states contribute an equal share to the fund, but there is still dispute over whether to involve IMF management. India has voiced support for IMF involvement, but other BRICS countries may resist.
“A reserve pool, I think, is still some way off, ” said Davies.
In October, Brazilian Finance Minister Guido Mantega suggested the pool be modeled after the Chiang Mai Initiative, which provides a financial safety blanket to south east Asian countries.
Trade within the group swelled to $282 billion last year and could very well reach $500 billion by 2015, according to Brazilian government data.
The conference is a benchmark of many firsts. It is the first time the conference has been held on South African soil.
For China, it is President Xi’s first visit to South Africa, where China is a leading trading partner and investor. In 2012, the trade between the two countries was 201bln ZAR ($21bln), according to the South African Revenue Service.
The conference is also President Vladimir Putin’s first international visit in 2013.
For South Africa, which makes up just 2.5 percent of total gross domestic product in BRICS, the summit is a way to showcase its role as an investment gateway to Africa. South Africa is the newest and smallest member of the BRIC bloc. It has the 28th highest ranked GDP in the world: China is 2nd, Brazil 6th, Russia 9th and India 10th.
- BRICS Nations Plan New Bank to Bypass World Bank, IMF (bloomberg.com)
Indian and Latin American cooperation
THIS year, India has shown a notable interest in increasing its economic relations with Latin American countries. Given the serious crisis in the Eurozone and the deceleration of the U.S. economy, nations south of the Rio Bravo are demonstrating greater macroeconomic stability and represent a major growing market.
For example, Brazil, the principal regional buyer of Indian products and the second-largest supplier to the country, increased imports from the Asian giant by 66.2% on the first seven months of 2012. Mexico, the second largest buyer and fourth Latin American exporter to India, raised its exports to the country by 72.1% in the first half of the year.
Other Latin American nations, essentially exporters of raw materials, also have a secure market in India at a time of financial instability. Indian business executives predict that, by 2014, bi-regional trade will be double that of 2011.
However, the Indian Ministry of Foreign Affairs believes that economic links with Latin America could be more developed, and thus exceed the current trade volume of $25 billion, an insufficient figure and equal to 10% of Chinese economic exchange with the region.
The Indian economy is historically based on manufactured goods and agriculture, being one of the principal world producers of sugar cane, cotton and jute. But in recent decades the country has diversified and developed into sectors such as space and aeronautics research, informatics, telecommunications, electronics, medicine, oil and natural gas.
In fact, India’s dynamic industrial development has caught the attention of companies worldwide, leading to the establishment of subsidiaries in the country, which possess a large qualified workforce.
As a member of the group of emerging economies, BRICS, together with Brazil, Russia, China and South Africa, India contributes half of global economic growth. In 2011, its Gross Domestic Product grew by over 8%.
In June 2012, a ministerial representation from the Community of Latin American and Caribbean Community (CELAC) had a meeting in New Delhi with Indian government officials, during which both sides expressed a mutual interest in extending political relations and economic ones in particular. It was the first time that CELAC, comprising 33 countries in the region, had negotiated abroad as a bloc.
- Latin American Economy Expected to See More Growth in 2013 (hispanicallyspeakingnews.com)