A decade after Moscow launched a strategic initiative to reorientate its economy toward Asian markets, Dr Richard Connolly, Director of the Eastern Advisory Group consultancy, discusses Russia’s policies and the challenges that Moscow has faced in developing new trade and business ties to promote its underdeveloped eastern regions with Dr Neil Melvin, Director RUSI International Security Studies.
When the United States entered Afghanistan to avenge the terrorist attacks of September 11, 2001, the country was unrivaled on the world stage. America was one decade removed from the collapse of the Soviet Union. There was not a viable strategic competitor in sight. American power was preeminent in virtually every region of the world.
Asia and Europe have taken differing approaches to economic integration, with Asia choosing loose economic cooperation based on bilateral and regional economic agreements, such as on trade, investment, and financial integration, and Europe choosing to strengthen institutionalization. The Association of Southeast Asian Nations is the only regional grouping pursuing integration toward a common market in Asia, while Europe is otherwise integrated through the European Union and its single currency. Economic Integration in Asia and Europe highlights the important economic integration trends and processes in the two regions.
Despite COVID-19, the global consumer class—those who are middle class or rich—is rising fast. In an earlier post, we showed that we are experiencing a truly secular shift in the size of this global consumer class. COVID-19 is a transitory setback of one or two years in this long-term shift. Since 2000, the global consumer class grew by more than 4 percent each year, reaching a new milestone of 4 billion people—for the first time—in 2020 or 2021. At the beginning of this century, the middle class was mostly a Western phenomenon. Consumer companies were selling their goods in OECD countries, especially the USA and Europe. Today, the consumer class is global and increasingly Asian. Spending by the Asian middle class exceeds that in Europe and North America combined.
For many US allies, the end of the conflict in Afghanistan will come as a relief, reassuring them that some clear, rational strategic thinking has taken hold in Washington.
Few had predicted how quickly Kabul would fall and how rapidly the Afghan military forces would collapse. Thursday’s suicide bombings outside Kabul airport, killing thirteen American troops and dozens of Afghans, underscored the tragedy. In some corners of the world, the fall has led to a chorus of commentators lamenting both the Taliban’s success and an apparent undermining of US credibility with allies. Others have called out and argued against what they consider to be “myths,” including that the US presence in Afghanistan was unsustainable, that the rapid collapse was evidence that success in Afghanistan was never possible, and that Afghanistan distracted the United States from its great-power competition—instead drawing attention to a peripheral region.
The United States welcomes competition and does not seek conflict with Beijing – but will speak up on issues like maritime disputes in the South China Sea, Vice President Kamala Harris has declared as she concluded a trip to Southeast Asia.
In visits to Singapore and Vietnam, Harris charged China with bullying its neighbours in the region, triggering sharp rebukes from Beijing, which accused the US of meddling in regional affairs and disrupting the peace.
Jayant Menon, ISEAS-Yusof Ishak Institute
A silver lining amid the unfolding tragedy of the COVID-19 pandemic has been the acceleration of the digital economy. Lockdowns and social distancing measures have hastened the adoption of technologies of the Fourth Industrial Revolution (4IR) that enable work-from-home arrangements, remote learning, telemedicine and other novel forms of service delivery. While this acceleration is generally welcome, there is a concern that it may increase inequality within and between countries. The adoption rate of these technologies favours more developed countries, which threatens to widen the digital divide in Asia.
Adam Triggs, Accenture and ANU
More than US$16 trillion worldwide is currently sitting in government bonds yielding negative real returns. Meanwhile, the world needs at least US$35 trillion of sustainable investment to avoid the 1.5 degree increase in global temperatures that the UN Intergovernmental Panel on Climate Change warns is now imminent.
Ken Heydon, LSE
On 14 July 2021, EU officials announced a plan to phase out production subsidies and free pollution permits that had been issued to selected dirty industries, replacing them with a ‘carbon border adjustment mechanism’ (CBAM). CBAM requires firms to purchase pollution certificates when importing products from countries with perceived lax environmental standards. The mechanism in effect imposes tariffs on exporters of carbon-intensive products from countries without strong carbon mitigation regimes.