Global Development Through China’s New ‘Silk Routes’


Analysis by Kalinga Seneviratne

BANGKOK (IDN) – When China hosted a two-day conference in May to help revive the ancient trade routes from Asia to Europe and Africa it was greeted with scepticism by most of the western media. But in much of Asia the mood was more of optimism and opportunity. Continue reading “Global Development Through China’s New ‘Silk Routes’”


ICTs Between Money-Spinners and SDG Champions

By Kalinga Seneviratne

BANGKOK (IDN) – At the International Telecommunication Union’s (ITU) annual flagship event ITU Telecom World 2016 from November 14 to 17, there was much discussion about the profit-making motives of technology providers and the need to integrate social goals to help achieve the UN’s new catchcry Sustainable Development Goals (SDGs). Continue reading “ICTs Between Money-Spinners and SDG Champions”

China’s Railways Link Asia

Viewpoint by Kalinga Seneviratne

This article is the ninth in a series of joint productions of Lotus News Features and IDN-InDepthNews, flagship of the International Press Syndicate.

BANGKOK (IDN | Lotus News Features) – The leaders of the Association of Southeast Asian Nations (ASEAN) will gather in the Laotian capital Vientiane from September 6-8 for their first summit meeting since the ASEAN Economic Community (AEC) came into being at the beginning of this year. However, one item which is crucial to such community building, the construction of new rail lines linking most of the 10 member nations may not be a major agenda item.

A report by the Lao News Agency (LNA) ahead of the meeting drew attention to this fact, when the ongoing Laos-China railway construction project was described as a game-changer in community-building in the region. The project, a 427 km railway built by China, will have 72 tunnels and 170 bridges and stretch from the Laos-China border in Phongsaly to the Lao capital Vientiane near the Thai border. Continue reading “China’s Railways Link Asia”


By Kalinga Seneviratne | IDN-InDepthNews Analysis 16 January 2016

Shangai SINGAPORE (IDN) – Chinese President Xi Jingping officially launched on January 16 the much anticipated Asian Infrastructure Investment Bank (AIIB) describing it as a “historic moment” while his Finance Minister Lou Jiwei said in an interview that the launch of AIIB marked a milestone in the reform of the global economic governance system.

The $100 billion China-initiated bank took just two years to set up after it was initially proposed by President Xi during his visits to Southeast Asian countries in October 2013. In October 2014, representatives from 22 countries, mainly from Asia and including India, and strong U.S. regional allies – Philippines and Singapore – a signed a Memorandum of Understanding (MOU) to establish the AIIB and Beijing was selected to host Bank headquarters.

Japan and the U.S. immediately began to raise concerns about the proposed bank questioning its commitment to transparency and good governance. But, their attempts were dealt a severe blow when U.S.’s European allies including the UK, began lining up to sign as “founder members” in March 2015.

By December 3q1, 2015 when the list closed, 57 members have signed up to be founder members, among them 28 Asian and Arab countries, 13 European countries including Germany and France plus Russia, Australia and New Zealand.

Upset at UK’s initiative in roping in European allies, in March 2015, the Obama administration even went to the extent of issuing a statement calling upon the UK to “use its voice to push for adoption of a high standard” at the AIIB. In May 2015 Japan even went further by announcing that they would funnel $110 billion over five years via the Manila-based Asian Development Bank (ADB) to fund development projects in Asia, but was vague on how it will be spent.

It is well-known fact that China and most developing countries are unhappy with the U.S.-controlled World Bank (WB) and European-U.S. dominated International Monetary Fund (IMF) and Japan-controlled ADB. While China has been unhappy for sometime with the voting rights regime at the WB and IMF, developing countries have regularly raised concerns about the western powers, U.S. in particular, using these banks for political purposes.

President Xi reflected an upbeat mood in his opening address to the AIIB’s first Board of Governors meeting on January 16. “We are confident that when faced with the task of advancing world peace and development, so long as the international community has the will for consensus building and for win-win progress, we will be able to not only draw the big plan, but also turn it into reality,” he said.

He also said that the new bank would explore new business models and financing tools, and help member states develop more infrastructure projects that are of higher quality and at lower costs. The Chinese leader described the initiative as a Chinese attempt to make the international financial system more just and equitable.

“While developing countries make the mainstay of the AIIB membership, the institution also attracts a large number of developed members. Such a unique strength makes it a bridge and a bond to facilitate both South-South cooperation and North-South cooperation,” President Xi noted. ”The initiative to establish the AIIB is a constructive move. It will enable China to undertake more international obligations, promote improvement of the current international economic system and provide more international public goods.”

Chen Fengying, research fellow at the China Institute of Contemporary International Relations, told China’s Xinhua news agency that the opening of the AIIB marks China’s “shift from a participant of the global governance system to a contributor to it,” reflecting a shift in the country’s ability to manage global economic issues.

Vietnam has also welcomed the new bank. Tran Viet Thai, deputy director of the Institute for Foreign Policy and Strategic Studies told Xinhua in an interview that as a founding member, Vietnam was actively involved in setting up operational rules of the bank. He added that since implementing opening up policies in the past decades, “this is the first time Vietnam has been directly engaged in setting up a bank which has significant role in the region and the world”.

In an article in the People’s Daily, the official newspaper of the Communist Party of China, the bank’s President Jin Liqun, stressed bridging the digital divide between the regional and global economies would be the bank’s top priority. The bank will focus on digital infrastructure including fixed broadband networks, cross border and undersea fiber optic telecommunication cables, wireless sensor networks, satellite services, new generation mobile telecommunication networks, cloud computing and big data platforms.

“The Board of Governors will formulate policies based on the demand of members to help break down digital barriers and cultivate a new pattern of economic growth,” Mr. Jin noted. Transportation, clean energy, urban infrastructure, agriculture and logistics are some of the other priorities.

Pierre Gramegna, Luxembourg’s finance minister, speaking at the Bank’s opening ceremony said that the AIIB would be a boost to the Asian economy. “I can assure you, President Xi Jinping, that your initiative has received a lot of positive support from many members of the European Union,” he noted.

“The AIIB would enable China to join the international financial system, which would also include its efforts for the Chinese currency Yuan going more international and supporting the Silk Road Economic Belt. It would also enable China to take more global responsibility,” argues Dr. Yang Jin an associate researcher of Institute of Russian, East European and Central Asian Studies, Chinese Academy of Social Sciences.

Suma Chakrabarti, President of the European Bank for Reconstruction and Development (EBRD) who was in the audience during the January 16 launch, said in an interview with Xinhua that the Silk Road project this bank will to develop will reduce time taken for exports between China and Europe.

“If we can get the infrastructure moving this will reduce the costs of imports and exports both ways between China and Europe,” he observed, describing the formation of the AIIB as a “healthy additional international firepower for the international system.”

*Dr Kalinga Seneviratne is ASEAN Correspondent of IDN, the flagship of International Press Syndicate, for Asia-Pacific. He teaches international communications in Singapore.


South Pacific: Little Islands Take On Australian Dominance

By Kalinga Seneviratne


SINGAPORE, Aug 20 2013 (IPS) – A new Pacific islands forum will seek to challenge the dominance of Australia and New Zealand in a regional body. The new grouping’s approach is being billed the ‘Pacific Way’, and also the ‘green and blue’ way for its commitment to environmentally sustainable oceans as well as land.

The new Pacific Islands Development Forum (PIDF) challenges the Pacific Island Forum (PIF), a 16-member inter-governmental organisation which includes 14 Pacific Island countries plus Australia and New Zealand. The PIF is headquartered in Fijian capital Suva. Fiji itself was suspended from the PIF in 2009 after naval commander Frank Bainimarama grabbed power in a coup in 2006 and refused to hold elections.

Bainimarama, now prime minister of Fiji, said at the launch of the PIDF earlier this month that people “have largely been excluded from the decision-making process,” and that the PIDF would do it differently.

“It has been no secret that Commodore Bainimarama has great distaste for the Pacific Islands Forum, especially over the hypocritical way that the Forum has treated Fiji since the military coup,” Prof. David Robbie, director of the Auckland-based Pacific Media Centre, told IPS.

“Attempts by the Forum to destabilise Fiji have backfired. For all the criticisms of the Fiji regime, there are positive moves to ‘open up’ the region for greater development partnerships with Asia.”

Bainimarama is riding resentment among Pacific island nations that the PIF is dominated by highly-paid Australian, New Zealand and other western expatriates, trying to impose developed country solutions on Pacific problems.

“We’re so sheltered away from the rest of society,” Kiribati President Anote Tong said in an interview with Radio Australia. “We’re a club of our own in retreat and away from questions from people demanding answers.”

At closed-door PIF meetings, leaders usually come dressed in suits, while at the PIDF meeting they were all dressed in the colourful short-sleeve Pacific-style shirts, and all discussions were in open forum.

For the first time in a major Pacific Island forum, business, church and civil society leaders sat alongside national political leaders, and spoke at the same forums. Such interaction is being projected as a ‘Pacific Way’ of consultation.

The PIDF is gaining support, said Robbie. “Bainimarama achieved a coup in successfully getting Timor-Leste Prime Minister Xanana Gusmao to the PIDF in spite of Australian attempts to prevent him going. Having the East Timor leader there was an important bridge for Asia-Pacific relations.”

The launch of the PIDF reflects new realities in the region, where Australia and New Zealand no longer have a stranglehold on aid handouts. In the past decade China and many other Asian countries have begun to give aid to and invest in the region. The PIDF meeting was FUNDED by grants from China, Kuwait and the United Arab Emirates.

The leaders of the Solomon Islands, Kiribati and Nauru attended the meeting along with the deputy prime minister of Vanuatu and the vice-president of Micronesia. Senior ministers from most other Pacific nations and territories also attended.

While Australia and New Zealand sent observers to the meeting, special envoys came from China, Russia and a range of countries such as Chile and Cuba. Government ministers were sent to represent the United Arab Emirates, Kuwait and Qatar.

A clear division between Melanesian and Polynesian nations of the Pacific seems to have opened up, with leaders of Polynesian countries like Samoa, Tahiti and French Polynesia boycotting the meeting.

Polynesians are believed to be a mixture of Malay and Taiwanese who moved into the South Pacific islands more than 3,000 years ago. Melanesians are of Papuan STOCK, and are believed to have moved from parts of Indonesia and Papua New Guinea to other Pacific Islands like Fiji, Solomon Islands and Vanuatu more than 4,000 years ago.

The Polynesian nations have a tendency to side with Australia and New Zealand in regional affairs, but Melanesian nations make up about 90 percent of the Pacific Island population, and the Melanesian Spearhead Group (MSG) is an influential grouping in the region.

Australia blocked Commodore Bainimarama taking over the leadership of the MSG spearhead group within the PIF in 2010 – a decision that seems to have backfired.

“MSG is the real economic powerhouse of the Pacific and is a serious challenge to the old Forum (largely dominated by the Polynesian islands and Australia and New Zealand),” Robbie said. “And now the PIDF is a new threat.”

In an interview with IPS from Suva, executive director of the Pacific Islands Association of Non-Governmental Organisations (PIANGO) Emele Duituturaga said many now expect PIDF to give more value to Pacific expertise and to be founded on Pacific perspectives.

“More importantly the governing and secretariat structures will include all sectors, especially civil society, which the PIF has been overlooking,” she said.

“The new organisation should ensure that the process and structures that are put in place are inclusive,” she added. “It will be a mistake for the governments to just set it up and expect us to go along with it.”

Carbon Trading – Are Financial “Wizards” Cooking Up Another Scam?

Published in Gateway (Malaysia) in February 2010

Carbon TradingBy Kalinga Seneviratne

In the aftermath of the Copenhagen climate change summit fiasco many accusing fingers have been pointed at China, particularly by the western media, for not been conducive to come to the party to save the world from global warming. But, the truth of the matter may be that it is the western powers that are refusing to come to the party and in fact have been plotting to undermine the Kyoto Protocol which set clear targets for them to reduce greenhouse gases, instead they are trying to pass the burden to developing countries, which both China and India sees as part of.

Behind this plot is a scheme to promote a ‘carbon trading’ regime to mitigate global warming which the Malaysia-based Third World Network (TWN) has described in a briefing paper prepared for the Copenhagen summit as “derivate trading” which are “sold as simple futures contracts”.

While today’s carbon markets are small, if the United States succeed in adopting a carbon trading regime as a major plank of the world’s answer to curbing green house markets, within a few years of being launched, the US carbon market could reach US$ 2 trillion, according to the US Commodity Futures Trading Commissioner Bart Chilton.

“As the global financial crisis has shown, derivatives are not well regulated, and regulations are practically non-existent at a global level” noted TWN.

In a policy brief for developing countries released just before the Copenhagen summit, Martin Khor, the Executive Director of the Geneva based South Centre warned that at the two preparatory meetings held in Bangkok in October and Barcelona in November, almost all the developed countries indicated that they have decided to abandon the Kyoto Protocol (KP). They apparently want to join the United States (who refused to sign the KP) to establish a new agreement, which is likely to be a climb down from the legally binding regime that is the KP.

Thirty two industrialised countries who are members of KP have made internationally legally binding commitments under the KP’s first commitment period to cut their emissions by an aggregate of 5.3 percent by 2012 as compared to 1990 levels, and each country has its own targets to meet. Negotiations have been going on since 2005 under KP’s working group to set these targets for the second commitment period starting in 2013. These were to be completed for signing at the Copenhagen summit. Instead in the lead up to it some developed countries have been spreading misinformation in the media that KP expires in 2012.

Led by the US and now joined by the European Union (EU) and other developed countries, they want to negotiate a new agreement which will be a climb down from legally binding agreement to a loose national pledge and review system. The group of developing countries known as Group of 77 and China have made it clear that this will not be acceptable to them.

Developing countries want the developed countries to cut their emissions by 40 percent by 2020, but figures released by the UN Framework Convention on Climatic Change (UNFCCC) in Barcelona in November indicated that when added up, developed country emission cuts have been between 16 to 23 percent, and if the US is included in the statistics it will aggregate to between 11 to 18 percent.

“Developing countries are aghast at such low levels of commitments,” notes Khor. “Even then these national announcements and pledges are over-stated because a significant part of the reductions will not be done domestically by the developed countries, as they plan to have developing countries undertake some of the emission reductions for them through offsets”.

This is where carbon trading comes in, which is a complicated system that allows developed countries which does not want to make emission reduction domestically to trade away these commitments for the promise of emission reductions in other countries, so that the earth achieves an overall balance in its greenhouse gas emissions.

There are 2 types of carbon trading ‘cap and trade’ and ‘offsetting’. The first refers to schemes implemented by government or intergovernmental organizations such as the European Commission, which hands out licences (carbon permits) to major industries. Instead of cleaning up its act, one polluter can then trade these permits with another who might make ‘equivalent’ changes more cheaply. The European Union’s Emission Trading Scheme (EU ETS), which adopts this, was worth US$ 63 billion in 2008 and continues to expand. In the ‘offsetting’ trade, instead of cutting emission at the source, companies, and sometimes international financial institutions, governments and individuals, finance emission-saving project outside their capped area. This may include building hydro-electric dams, paying developing countries not to clear forests or capturing methane from industrial livestock facilities.

Researcher Dan Welch in the book ‘A Buyer’s Guide to Offsets’ says “offsets are an imaginary commodity created by deducting what you hope happens from what you guess would have happened”.

Michelle Chan, a researcher at the Friends of the Earth, US, who authored the TWN briefing paper argues that carbon trading would create windfall profits for Wall Street banks and it also has the potential to create a ‘subprime carbon’ market which will lead us to a similar financial crisis like the ‘subprime mortgage’ scandal.

“As carbon markets grow, Wall Street banks will not simply broker in plain carbon, but they will create complex new financial products based on carbon commodities … ‘financial innovations’ will likely outstrip the ability of regulators to keep up” she warns. “Subprime carbon particularly can become a problem because sellers can make a promises ahead of time to deliver carbon credits before the credits are issued, or even sometimes before greenhouse gas emissions have been verified”.

Marianne Lavelle an investigative reporter for the US-based Centre for Policy Integrity in a recent article noted that by the beginning of 2009 Wall Street bankers had 130 lobbyists on Capitol Hill to influence lawmakers to shape climatic change policy in their favour. “Wall Street interests see themselves as brokers, project developers, financiers and consultants in an emission ‘permit’ market, that one federal regulator estimates could reach $2 trillion in value within five years making carbon the world’s most widely traded commodity” she says.

Tom Goldtooth, Executive Director of the Indigenous Environment Network laments that the potential threat of climatic change has turned into an opportunity for profit making. He views this as a new form of colonialism where developing countries will be targeted for rich countries to make profits in the disguise of assisting “development” in poor countries.

“They (carbon credits) rely upon hypothetical baselines that can be manipulated to produce credits for imaginary reduction” Goldtooth warns, adding, “this shifts the responsibility to act from those who have contributed most to the climate problem to those who have contributed lease”.