The World this Week

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CWA # 210, 25 January 2020
The World this Week
World Economic Forum, Wuhan Coronavirus, China-Myanmar MoUs, and a new government in Lebanon

  GP Team

The World This Week, Vol.2, No.4


World Economic Forum: The 50th meeting at Davos 

What happened?

The 50th meeting of the World Economic Forum was held in Davos, Switzerland during 21-24 February, with “Stakeholders for a Cohesive and Sustainable World” as the primary theme. 

Climate change, sustainable development and the role of business in tackling these issues, are the main agenda for the forum. Around 3000 participants representing 120 countries, and heads of governments of more than 50 countries took part. Alongside, key business leaders and CEOs of important business undertakings took part in the summit. 

Important issues such as the Coronavirus, Europe’s Green Deal, digital economy and its taxation methods, gender parity and social mobility, technological development were discussed. 

What is the background?

The World Economic Forum established in 1971, is an international organization, bringing together the members of the industry and governments. There is an emphasis on the fourth industrial revolution, issues concerning the global commons and global security matters. The strategy is to achieve an amalgamation of all the three focus areas, to usher positive growth. 

The previous three forums had themes revolving around ‘Responsive and responsible leadership’ (2017), ‘Creating a shared future in a fractured world’ (2018) and ‘Globalization 4.0: shaping a global architecture in the age of the fourth industrial revolution’ (2019). 

What does it mean?

First, the Forum was all-encompassing, discussing and deliberating upon almost all the crucial issues faced by the world today, apart from those concerning core economics and commerce. Young voices including Greta Thunberg have cornered the governments and industries over inaction on climate change. 

Second, WEF, on the similar lines of other international forums in recent years, emphasized on climate change and sustainable development. Professor Klaus Schwab, the founder and Executive Chairman of WEF remarked that it was the responsibility of the industries and business houses to adhere to the concept of “stakeholder capitalism”, where profit-making is not the only motive, but responding to the interests of the society is an important factor. 

Third, responsibility seems to be the main underlying theme of the meeting- whether it is the launch of the ‘Sustainable Markets Initiative and Council in collaboration with the World Economic Forum’ which helps in finding mechanisms to reduce carbon emissions; or the new internet security principles to protect one billion internet users against cybercrime. The Davos manifesto released on this occasion focused on fairer tax regimes, human rights, reducing corruption and fair competition among in the business community, reiterating the principle of responsibility. 

 

Wuhan Coronavirus: spreads beyond Asia, affecting the Chinese new year travel plans

What happened?

The death toll due to the virus has reached 41 as on 25 January 2020, and over a thousand cases have been confirmed. The virus has been confirmed in various parts of the world with patients exhibiting pneumonia-like symptoms. The virus was first reported to the WHO on 31 December 2019 where the Chinese scientists linked the disease to a family of viruses that include the deadly SARS and Middle East Respiratory Syndrome (MERS). The World Health Organisation held an emergency meeting after the virus was seen fast-spreading during the Lunar New Year season, and revealed that it is still early to declare the virus a public health emergency of International Concern, one- because the international cases are not many and two- China is seen taking appropriate measures to deal with it. 

Major festivities have been cancelled in Beijing and Hong Kong to try and prevent large gatherings. Over 34 cases have known to be cured and released from hospitals. 

What is the background?

2019-nCoV or the coronavirus is thought to have originated at a food-market in the Hubei province of Central China Metropolis. Reports suggest that it may have been from snake-meat. The age range of the cases have been between 50 and 90 largely, the youngest reported death has been about a 39-year-old male. This is the second major outbreak in China after the SARS in 2003. It had seen more than 8000 cases and killed over 800 people in 26 countries. 

Outside China, there have been a series of outbreaks during recent decades. In 2008 and 2009, there was a deadly Cholera outbreak which claimed over 4500 lives in Zimbabwe. This was followed by the 2009 flu pandemic, where the influenza virus claimed over 200,000 lives worldwide. In 2016-2017, a cholera outbreak in Yemen caused over 1700 deaths. There was a Japanese Encephalitis outbreak in 2017 in India, that claimed 64 lives and the Nipah Virus outbreak in India that claimed 17 lives in 2018. There have been deadly meases and ebola outbreaks in the Democratic Republic of Congo in 2019 and 2020, and have seen over 7000 deaths in two years. 

The Chinese response to the virus outbreak has been quick. Alert levels have risen in several provinces in China. The State Council have asked their citizens to report cases on their Online Inspection platform. It has put a check on the transportation and movement of people and has increased the number of active staff working to contain the spread. 

What does it mean?

First, despite the virus outbreak still in small numbers outside China, coronavirus is no longer only Beijing’s problem. 

Second, one can observe that all the major outbreaks in the past two decades have been in the global south, which means there is a clear requirement to increase the quality of healthcare in the world. It is essential for China to seek help and the other nations to offer their expertise in the issue. 

Third, the global movement of people across the world is bound to cause problems. Though Wuhan is the base, the fact that Singapore, Bangkok and Washington have reported victims within weeks would underline the new reality. Epidemics are likely to spread faster across the continents than ever before. Containment would need better preparation and global coordination. 

 

China and Myanmar signs several MoUs and agreements: Just not the BRI

What happened?

On 18 January, Myanmar and China signed 33 memorandum of understanding (MoUs), agreements, protocols and exchange letters, including concession agreement and shareholder’s agreement of Kyaukphyu Special Economic Zone Deep Sea Port Project. This MoUs and agreements were signed during the visit of Chinese President Xi Jinping to Myanmar. He has also promised to give an aid of 4 billion yuan over the next three years to support the development of Myanmar. 

The MOUs signed focuses on fast-tracking negotiation of the framework agreement on the China-Myanmar Ruili-Muse cross-border economic cooperation zone and on establishing local cooperation under the joint implementation framework for the China-Myanmar Economic Corridor (CMEC) between Yunnan and Mandalay. The Exchange letters and protocols covered a new urban development in Yangon, the acceleration of the Mee Laung Gyaing Integrated Liquid Natural Gas power project in Ayeyarwady Region, plant inspection and quarantine requirements for exporting rice from Myanmar to China, health requirements for bovine slaughter for exports from Myanmar to China, and a zero-interest loan to Myanmar for procuring 28 passenger train coaches from China. 

What is the background?

The bilateral relationships have been often described as 'fraternal' or 'Paukphaw’ due to ethnic and geographic linkages. In 2011, the stalling of the Myitsone dam project due to public protest was a setback to the above relationship. Since then, there was also a rise of anti-Chinese sentiments within Myanmar, dampening the relationship. However, this did not hamper the Chinese investments. Neither did it impact the pro-China sentiment of the Myanmarese leadership.

Aung San Suu Kyi’s visits to China, her pragmatic approaches towards the stalled Chinese projects and also China's active role as a mediator in the national reconciliation process helped the two countries to come closer. This assured Beijing's support for the NLD government. Further, Beijing refused to condemn Myanmar, when the rest of the international community criticised the latter for their treatment to the Rohingyas. The Chinese support is also important for Suu Kyi, who has been condemned and eschewed for her inaction and support for the army. Since coming to power, Suu Kyi's Beijing inclination has been evident. 

China, on the other hand, is marred in the trade war with the US and disputes in the South China Sea with countries in Southeast Asia. Contentions in the South China Sea and maritime claims have soured the relationship of China with Malaysia, Indonesia, Vietnam, and the Philippines. The BRI is being questioned and scrutinised by Malaysia and Indonesia. Several South and Southeast Asian countries who have received Chinese investment with open arms in the early 2000s have later realised the carrot and stick approach of China in the name of investment. Hence there is a growing apprehension to China’s investment and debt traps which resultant of it. Xi needs to maintain a stronger rapport with Myanmar.

What does it mean?

First, China’s interest in Myanmar is evident. The strategic location of Myanmar plays a crucial role in China's Belt and Road Initiative. All the MoUs on Kyaukphyu Special Economic Zone Deep Sea Port Project and China-Myanmar Economic Corridor (CMEC) and others are crucial for the BRI. 

Second, for Myanmar, Xi’s visit could also backfire. Myanmar will face a general election by the end of 2020. Sui Kyi cannot take popular support for granted, given the failure of the ethnic reconciliation processes and the lack of support from the ethnic minorities. Xi’s visit may further hamper this as most of the stalled projects are in the peripheries where the ethnic minorities are in a majority. This would also end up increasing the anti-Chinese sentiment within Myanmar. 

Third, anti-China sentiment and protests within Myanmar is the cause that has stalled several projects. Hence addressing the sentiment is pivotal for restarting these projects. This could be a reason that Xi has emphasised on the fraternal nature of the Sino-Myanmar relations and its development especially in the border areas. 

Fourth, Xi’s visit could impact Myanmar’s relationship with its other neighbour. The growing bonhomie between the two has made India wary and according to a top official, they have also cautioned Myanmar. In comparison, Japan, the other big investor, seems to be undeterred by Xi's visit has recently offered the aid of 1 billion US dollars for the development of the country. They have also recently praised Myanmar's for its Independent Commission of Enquiry (ICOE) report on the Rohingya crisis. 

 

Lebanon: A new cabinet assisted by the Hezbollah

What happened?

After three months of political agitation, Lebanon has formed a new cabinet on Tuesday. Hassan Diab, is the new Prime Minister and will be heading a cabinet of 20 specialist officials. The cabinet also has a representation for six women holding some key posts. Zeina Akar heading the defence ministry makes her the first woman in an Arab country to hold the post. She is also the deputy PM.

The cabinet’s make-up is backed and supported by Hezbollah and allies including the Christian Free Patriotic Movement (FPM) founded by the current President Michel Aoun. The new government in place is said to be one which is non-sectarian and technocratic. 

What is the background?

Since October 2019, the nationwide protests indicated the growing resentment among people towards the political parties who have held power since the end of the civil war. 

The protestors held the government responsible for Lebanon’s deteriorating economy. As a result, the Sunni-led government of Saad Hariri was ousted creating a power vacuum. Lebanon’s currency lost about a third of its value against the US dollar, deepening the economic crisis. Owing to the shortage of foreign exchange, banks enforced capital controls that restricted people from withdrawing their earnings and savings. Insufficient funds have led students to discontinue their studies. With a 152 per cent debt to GDP ratio, Lebanon is the third most indebted country in the world, and it imports 80 per cent of its needs. 

The escalation between the US and Iran have complicated the cabinet process formation. It gave Hezbollah some form of autonomy from the Iranian regime in handling issues.

The new government has no participation from Hariri's Future Movement party and others aligned to the West. Saudi Arabia, supposedly the main regional backer of Hariri, has not shown much interest in Lebanon but is cautious about growing Hezbollah’s political interests.

On the other hand, the protesters see the new government to be a part of the same political elite they have been rallying against and has called it "one colour" government aligned to Hezbollah. There were violent demonstrations on the streets outside of parliament in the capital Beirut hours after the cabinet formation was announced.

What does it mean?

First, the nationwide protests are led by the youth. They were unhappy with the previous government efforts and its incompetence in providing jobs and basic services. The scale also shows that the protesters are uniting beyond their sectarian and political affiliations. The Lebanese youth have little faith in the new government and are likely to reject it since it is backed by Hezbollah and its allies. The youth sees little scope of any progress that would either fetch them jobs or allow them to continue their education. 

Second, Lebanon will look for international donors to help to revive its economy. It is heavily dependent on international assistance for imports. Hezbollah is listed as a terrorist group and this has attracted sanctions from the US. Countries who have traditionally provided financial support to Lebanon, especially in the Gulf, are concerned over Hezbollah’s rising influence. This would affect the new cabinet from gaining external economic support.

Third, US-Iran conflict is likely to see more participation from Hezbollah in the region. Despite Hezbollah being listed as a terrorist organisation, it is now involved in the state-building process. Many Lebanese also see Hezbollah as protecting their country against aggression by Israel. Hezbollah emerging as the strongest player in Lebanon is more likely.

 

Also, during this week … 

Brexit on 31 January

On 24 January Boris Johnson signed the Brexit withdrawal agreement that would push Britain out of the European Union. The procedural follow-up comes after presidents of the European Commission and Council signed agreements for Brexit. The Brexit negotiations from 2016 since Former PM May’s reign was followed by Johnson’s attempts to exit the Union. The United Kingdom is formally set to leave the grouping on 31 December after the European Parliament vote.

Greece elects its first female President

On 22 January, Greece elected its first female president, Katerina Sakellaropoulou, a progressive candidate who noted for her stance on the environment and human rights. The 13th President who is to take office later in March this year, served as the head of the top court of Greece. She was elected by a thumping majority of 261 in the 300 member parliament. The Prime minister welcomed this with optimism considering the country’s economic crisis.

Three American fire-fighters killed in Australia

Three firefighters were killed in Australia after their air tanker crashed south of Canberra, a region ridden with dense fires. The firefighters attempted to diffuse the bushfires by spraying fire retardants. Australia has witnessed large scale destruction of wildlife and livelihoods since September, while voluntary efforts have poured in from various communities to help improve the situation. Airports have witnessed incoming groups of firefighters and experts to blaze off fires. Officials hinted the fires in New South Wales could continue till March, beyond summer.

Guaido at the World Economic Forum

This week at the World Economic Forum, Guaido pushed for actions against Maduro’s regime and called for tougher sanctions to cripple the present Venezuelan leadership. Juan Guaido is on a diplomatic spree to garner support for his campaign against President Maduro despite facing a travel ban. The self-declared leader’s activism was also witnessed when he was blocked in his attempts to enter the National Assembly in early January.

 

Rashmi Ramesh is a PhD scholar in the School of Conflict and Security Studies, NIAS. She can be contacted at rashmiramesh5@gmail.com. Harini Madhusudan is a Ph.D. Scholar with the School of Conflict and Security Studies, NIAS. She can be contacted at harinimadhusudan@gmail.com. Aparupa Bhattacherjee is a Ph.D. scholar with School of Conflict and Security Studies, NIAS. She can be contacted at aparupa.bhattacharjee@gmail.com. Sneha Tadkal is a Research Intern with the School of Conflict and Security Studies. She can be contacted at tklsneha001@gmail.com

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