The five current members of the BRICS group increased trade by 56% from 2017 to 2022, reaching some $422 billion worth of turnover last year, Bloomberg reported on Friday.
BRICS currently comprises Brazil, Russia, India, China, and South Africa, but will be joined by Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE this coming January. The decision to accept the new members was made during the group’s August summit in Johannesburg. According to analyst estimates, the expanded group will represent nearly half of global output by 2040, doubling the share of the Group of Seven (G7), which consists of the US, Canada, UK, France, Italy, Germany, and Japan. Earlier this year, Russian President Vladimir Putin claimed that BRICS already outpaced the G7 states in terms of the purchasing power parity (PPP) of their populations. Experts project the combined gross domestic product (GDP) of the expanded BRICS in terms of PPP to amount to roughly $65 trillion. This would push the group’s share of global GDP up from the current 31.5% to 37%. In comparison, the share of the G7 is currently around 29.9%. BRICS was originally ‘BRIC’, a term coined by economists using the first letter of four nations – Brazil, Russia, India, and China – that were seen as having the potential to dominate the world economy in the 21st century. These countries first came together in 2006 and later welcomed South Africa as a new member, adding the letter ‘S’ to the acronym. Originally formed largely for the purpose of highlighting investment opportunities among members, the group has become instrumental in building a new “multipolar” world order that will help give a stronger voice to the Global South. In 2014, the BRICS group launched its own international lender, the New Development Bank (NDB), which was seen as an alternative to US-dominated financial institutions such as the IMF and World Bank. It provides funding for infrastructure and sustainable development projects. The bank formally opened for business in 2015, and was later joined by Bangladesh, the UAE, Egypt, and Uruguay.
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With only 24 world leaders in attendance, compared to the 37 who had attended the last BRI Forum, Xi was keen to showcase that China is open for business at a time when concerns are rising about the health of Chinese economy. Promising to "comprehensively remove restrictions on foreign investment access in the manufacturing sector," the Chinese leader talked of his intent to focus on "cross-border trade and investment in services and market access for digital products."
This was China's first major international event since coming out of around three years of pandemic lockdown in January 2023 and was a celebration of one of Xi's signature projects. Not surprisingly, he was gung-ho about the achievements of BRI as he underlined how his initiative has helped the developing world by making infrastructure and connectivity the centerpiece of emerging global economic discourse. He outlined how China has "endeavored to build a global network of connectivity consisting of economic corridors, international transportation routes and information highway as well as railways, roads, airports, ports, pipelines and power grids," thereby boosting "the flow of goods, capital, technologies and human resources among countries involved and injected fresh vitality into the millennia-old Silk Road in the new era." There is no doubt that BRI has been an innovative idea to energize the next stage of economic globalisation and, for a large part of the world left outside the global economic order, this was a timely initiative which, by mobilising as much as $1 trillion in finance, allowed for new economic possibilities to emerge. But it was the operationalization of the idea that left much to be desired as several nations got saddled with huge debt even as the financial and environmental sustainability of many projects brought to the fore the vulnerabilities of a centralised, top down project. With several infrastructure projects stuck and the Chinese economy slowing down in recent years, this forum was also Xi Jinping's attempt to demonstrate his nation's continued commitment to a project in which he is personally invested and which is as much about geopolitical positioning of China in the emerging global order as it is about geoeconomics. Facing a lot of flak for the performance of BRI, Xi tried to send out a message that he is willing to make some changes with a move to "high-quality" development, focused primarily on the digital economy and sustainable "green development" and underpinned by "the philosophy of open, green and clean cooperation, and the goal of pursuing high-standard, people-centered and sustainable cooperation." Integrity is the new buzzword as Xi talked of establishing "the Integrity and Compliance Evaluation System for companies involved in Belt and Road cooperation" and working "with international organizations to carry out research and training on promoting integrity in Belt and Road cooperation." This was part of his eight-point action plan that also includes supporting an open world economy, promoting green development, advancing scientific and technological innovation, supporting people-to-people exchanges, and strengthening institutional building for international Belt and Road cooperation. In light of the challenges facing the BRI projects worldwide and others launching connectivity alternatives to BRI, it was imperative for Xi Jinping to be seen as making amends. How these changes get reflected on the ground will shape the future of BRI and China's credibility as a provider of global public goods. But for Xi Jinping, this is also about offering an alternative to the US-led global order, and the presence of Russian President Vladimir Putin and a Taliban delegation led by its acting minister of industry and commerce, Nooruddin Aziz, brought this into sharp relief. Putin, of course, was the star at the forum, getting a red carpet welcome from the hosts and applauding the "successes" of "our Chinese friends" in return. Russia has not officially signed on to the BRI but Putin made it a point to attend the forum in person despite not having travelled abroad since launching the Ukraine war. The Moscow-Beijing global alignment is unmistakable as they seek to challenge the West, also reflected in their explicit criticism of Israeli actions while refraining from condemning Hamas. Since the Ukraine crisis, where the West has tried to isolate Russia, China's embrace has become all-encompassing as it has emerged as Russia's most important trade partner, providing critical civilian and military goods that have sustained Russian economy and war operations. The other interesting presence was that of the Taliban, also meant to convey a message to the US that China will continue to move forward with its outreach to a pariah state, if only to scuttle Washington in achieving its objectives. Last month, China became the first country to send an ambassador to Afghanistan though Beijing is yet to give diplomatic recognition to the Taliban. China and Pakistan had also announced earlier this year that the China-Pakistan Economic Corridor would be extended to Afghanistan. Nothing much has come of it yet but China's support gives credibility to the Taliban's claims of being the only credible alternative in Afghanistan. China's celebration of a decade of BRI was more an attempt to showcase its own rising profile as the provider of an alternative to the US-led global order than to provide for the development needs of the Global South. But challenges for the BRI are mounting and Xi's words at the forum were an explicit acknowledgment that changes in Chinese approach would be necessary if the second decade of BRI is to see more accomplishments than the first. American tech companies have for years employed thousands of North Koreans who worked remotely to raise money for leader Kim Jong-un’s weapons program, according to the FBI.
Speaking at a press conference in St. Louis, Missouri, FBI special agent Jay Greenberg explained that Pyongyang supplies these workers with false documents allowing them to travel to countries including China and Russia. Once there, they apply for remote work with American companies, using VPN software to convince their employers that they are based in the US or third countries, and often hiring middlemen in other countries to sign contracts with employers. “This scheme is so prevalent that companies must be vigilant to verify whom they’re hiring,” Greenberg said. “At a minimum, the FBI recommends that employers take additional proactive steps with remote IT workers to make it harder for bad actors to hide their identities.” Greenberg did not reveal the names of any companies that hired these remote workers, but said that any firm hiring freelance IT staff “more than likely” had someone involved in the scam on its payroll. The scheme has been operational since at least 2019, the US State Department, Justice Department, and FBI warned in a report issued last year. In a separate statement on Wednesday, the Justice Department announced the seizure of $1.5 million and 17 domain names as part of an investigation into the scheme. EDITORIAL: China’s Belt and Road Initiative Sets Off Great Power Competition in the Pacific16/10/2023 As China marks the 10th anniversary of its Belt and Road Initiative, also known as the BRI, many are assessing the impact of its global push to promote connectivity and billions of dollars in deals for infrastructure projects. In the Pacific, Beijing’s BRI has set off a race of great power competition with the United States and other countries. Analysts say so far, of the more than 30 projects in the region that China has launched, the results have been mixed, with some serving as "showpieces" instead of contributing to Pacific countries’ development or economic needs. "The BRI in the Pacific is more of a political instrument than a genuine development mechanism," Mihai Sora, a research fellow in the Pacific Islands program at Lowy Institute in Australia, said in an interview. "In Australia, a lot of commentators view BRI projects as a vanguard for the Chinese government to build influence in the Pacific." In the run up to the third Belt and Road Forum for International Cooperation that’ll take place in China this month, with more than 130 countries reportedly expected to attend, Chinese state media have published a series of reports highlighting the BRI’s success stories in the Pacific. Last month, in two separate articles, China’s state-run tabloid, the Global Times, highlighted how "the BRI vision is becoming a reality" in the Pacific Islands noting how China is providing medical services and professional training to local healthcare personnel in the Solomon Islands and how Beijing has helped the country to build a sports stadium for the upcoming Pacific Games. In another report, the Global Times stated that China’s cooperation with Pacific Island countries over the last 10 years focused on areas "such as humanitarian assistance, disaster response, and training. Most of the cooperation is reflected in infrastructure construction, tourism promotion and economic as well as trade issues under the BRI framework." But where Beijing sees progress and success, western think tanks and Pacific experts say the facts on the ground paint a different picture. In the 2023 Asia-Pacific Regional Security Assessment released earlier this year, the International Institute for Strategic Studies, a London-based security think tank, found that BRI has had minimal impact on Pacific Island countries that receive Chinese loans or grants. According to the report, as of the end of 2021, 26 out of 33 projects were completed, but there has been little shift on investment or trade. Last month, China officially handed over the main stadium that it helped the Solomon Islands build for the upcoming Pacific Games to authorities in Honiara, making it the latest addition to the list of completed BRI projects in the Pacific region. "Exports from China to the South Pacific have increased twelvefold in value between 2000 and 2018, though the numbers for exports from Pacific Island countries to China have grown at a much less impressive rate," the study said. "Further major Chinese investment in the form of large-scale physical-infrastructure projects is unlikely given the existing debt burdens and the lack of demand for Chinese loans." Some experts in the Pacific tell that realities in some Pacific countries also contradict China’s success stories. Sandra Tarte, an associate professor in international relations at the University of the South Pacific in Fiji, said some Chinese investments in Fiji have resulted in big towers that were half-built and unfinished for a long period of time. Some tourism projects that were supposed to be supported by China received initial fanfare but never got off the ground. "There was an influx of investment from China at some point in Fiji, but the investors ran out of money," she said. "A lot of things like that have happened here." Power plays in the Pacific To counter China’s growing influence in the Pacific, major Pacific powers such as the U.S., Australia, and Japan have dedicated more resources and efforts to re-engage with Pacific Island countries. Last week, U.S. President Joe Biden hosted a two-day summit with Pacific leaders in Washington, pledging to help countries in the region combat climate change and improve infrastructure with a $200 million package. Since May, the U.S. has signed defense cooperation and maritime agreements with Papua New Guinea and opened an expanded mission in the Pacific region as part of the efforts to compete for influence with Beijing. Apart from the U.S., Australia and Japan have both announced development packages to Pacific Island countries in recent months, with some of the support dedicated to deepening defense and security ties. Sora from the Lowy Institute says China’s push into the security space in the Pacific over the last few years, including the security pact that Beijing signed with the Solomon Islands in 2022, has raised concerns among democratic countries in the region. "Traditional partners like the U.S., Australia, Japan, and New Zealand have activated as quickly as they can to improve the quality of their relationship with the Pacific and to improve their offerings,". "Countries like the U.S. and Australia are trying to reassert the regional security order and make that contribution to international security but also look for ways to improve the economic prosperity of Pacific Island countries," Sora explained. Pacific countries’ collective voice However, western countries’ attempts to sign bilateral security agreements with Pacific countries have faced pushback in recent months. A proposed security treaty between Australia and Papua New Guinea has been delayed for several months due to ongoing domestic debate in Papua New Guinea. In addition, Vanuatu’s new Prime Minister Sato Kilman said in early September that the country needs to rethink its security agreement with Australia. To prevent their interests from being overshadowed by competition between China and the U.S., some analysts say Pacific Island nations have sought to project their collective priorities through multilateral institutions such as the Pacific Islands Forum and the United Nations. "Pacific Island countries will continue to demand that partners strike a balance between development and security assistance, as well as embrace their definition of security, which includes climate change," Parker Novak, a nonresident fellow at Atlantic Council’s Global China Hub, told VOA in a written response. Other analysts say one way for countries in the region to assert their vision is to promote the 2050 Strategy for the Blue Pacific Continent, a development initiative created by Pacific Island countries.
Tarte from Fiji’s University of the South Pacific says that approach could be a way to "reframe the debate" and avoid being dragged into the competing initiatives of the Indo-Pacific strategy and the BRI. Shares in the UK’s Metro Bank were briefly suspended from trading twice on Thursday, after the stock plunged nearly 30% over reports of urgent fundraising efforts to shore up the bank’s balance sheet.
Metro Bank shares have now fallen more than 60% since September 12, when it revealed that UK regulators had failed to approve a plan that would allow Metro to run its mortgage business at a lower cost. The London Stock Exchange confirmed to CNBC that the brief suspensions were triggered by its circuit breaker mechanisms because of Metro Bank’s stock crash. The bank, which was reportedly attempting to raise £600 million ($727 million) in debt and equity, said in a statement on Thursday that it is currently considering “how best to enhance its capital resources.” The options include asking investors to help refinance $424 million worth of debt before it falls due in 2025, as well as raising hundreds of millions of pounds through the sale of debt, shares, or assets. “No decision has been made on whether to proceed with any of these options,” Metro Bank stated. Rating agency Fitch placed Metro on negative watch on Wednesday, citing increased risks to its business model, capital position, and funding. Founded by US billionaire Vernon Hill in 2010, Metro Bank became the UK’s first new high-street bank in more than a century. In 2019, it was hit by a misreporting scandal that led to the exit of its chair and chief executive.
Italian industry and manufacturing, in particular, have been struggling in the past several months due to a lack of new orders as global demand weakened. The Italian industrial economy appears to be trapped in a deep recession with no clear way out,” said Tariq Kamal Chaudhry, an economist at Hamburg Commercial Bank. “New orders, both domestic and international, are shrinking, and even expectations for future output have fallen well below their long-term average.” Although the PMI survey indicated some increase in factory employment, it mainly pointed to a shortage of skilled workers, while the previous report by S&P said Italian factories had started to lay off staff due to a deeper contraction in industrial production.
Economists forecast that the manufacturing recession, which started in the Eurozone’s third-largest economy in the middle of last year, will continue. Manufacturing accounts for around 16% of Italy’s output but its weakness continues to weigh on the Italian economy, dragging it into further contraction. The latest estimates showed that the country’s economy shrank by 0.4% – ahead of the 0.3% that had been predicted – in the second quarter of the year.
Meanwhile, public debt is surging and the budget deficit is widening despite Western aid, according to Azarov.“The best illustration of the catastrophic state of affairs is that the budget of the country at war lacks more than $6 billion to pay the Ukrainian military alone,” he said. Azarov claimed that the families of Polish mercenaries killed during the conflict had not received any compensation despite promises from Kiev. “As a result, the Ukrainian economy increasingly resembles a ‘zombie’ – it shows signs of life only with foreign financial assistance, which it requires more and more,” the former prime minister argued. According to Azarov, Ukraine’s “closest analogues” in terms of economic woes are Afghanistan and Haiti, which are faced with similar problems. He added that the “most daring” forecasts show that Ukraine will need more than 30 years to catch up with the current economic level of Romania or Poland.
President Recep Tayyip Erdogan has asked Tesla CEO Elon Musk to pick Türkiye as the location for his electric vehicle company’s next gigafactory, according to state-owned Turkish news agency Anadolu.
During the meeting on Sunday, Erdogan described Ankara’s “technological breakthroughs as well as the ‘Digital Türkiye’ vision and the National Artificial Intelligence Strategy,” the country’s communications directorate said in a statement cited by Anadolu. Besides urging Musk to establish Tesla’s next factory in Türkiye, Erdogan also described other “opportunities for collaboration with SpaceX may arise through the steps taken and to be taken as part of Türkiye’s space program.” The US entrepreneur has yet to comment on the results of the talks. He was seen entering the Turkish House skyscraper across the street of the UN headquarters on Sunday, carrying his son on Sunday.Tesla currently has six ‘gigafactories’ in the US, Germany, and China, and is building a seventh in Mexico. The automaker could pick a location for its next major production facility by the end of 2023, Musk indicated earlier this year. Last month, the company expressed interest in building a factory in India to produce a low-cost EV model, after Musk pledged significant investment in India following a meeting with Prime Minister Narendra Modi in the US in June. On the sidelines of the G20 Summit at the weekend, the United States and India unveiled proposals for what has been termed the India-Middle East-Europe Economic Corridor (IMEC) with the backing of the United Arab Emirates, Saudi Arabia, Israel, and Jordan, as well as officials from the EU.
The project, billed as an alternative to China’s Belt and Road Initiative (BRI), seeks to build a commercial route from India through to Europe via the Arabian Peninsula, Israel, and then the Mediterranean Sea. Unsurprisingly, the project’s significance was inflated by the press as “historic” and a “blindside” challenge to Beijing that would doom China’s own mega-infrastructure project. But such conclusions are misleading, for many reasons. First, not every participant in this new initiative is squarely opposed to China and sees it, as the US does, as a zero-sum game. The Arab countries, including Saudi Arabia, the UAE and Jordan, are not anti-Beijing at all and are part of the BRI themselves. These countries, seeking to diversify their economies from dependency on oil revenue, are seeking new options to consolidate their wealth and thus courting large-scale foreign investments, including from China itself. They want to make themselves the “crossroads” of the world, they do not see such a project through the lens of containment or even geopolitical rivalry, but as creating more benefits for themselves. If Saudi Arabia can get Chinese and Indian cargo going through their country, that’s a double win – it never had to be an “either-or” arrangement for Riyadh.Second, parts of this new route are co-opted from China itself. The Haifa Port in Israel was, until recently, mostly under China’s control (India’s Adani Group acquired 70% of the stake in July), while Piraeus Port in Athens was controlled by Chinese shipping company, Cosco. The railroad infrastructure linking Greece with Central Europe is also part of the BRI. Another Chinese-owned commercial port exists on that same route in the Indian Ocean – Gwadar Port in Pakistan, which is part of the China-Pakistan Economic Corridor (CPEC). This means that China itself can use multiple parts of the proposed transport route, and the IMEC project does not really undercut Beijing to the extent it’s being portrayed – and all of the co-opted countries would be pretty happy for that. Third, this project could end up in the growing graveyard of pledged, and failed, BRI alternatives, which come at a rate of approximately one per year. It wasn’t that long ago that the US and its allies in the G7 were launching Build Back Better W (B3W), or the Global Partnership for Infrastructure Investment, or the Blue Dot Network. None of these projects have the coordinated hierarchical superstructure that the Chinese state does, which allows projects to be cooperated and rolled out at breakneck pace, nor do they have the readily accessible financial resources to take off. If China seeks to build a high-speed railway, for example, the Communist Party can coordinate a bank to fund it, a railway company to build it, and a supply chain to stock it, all in one organized motion. The US does not have the power to do that, unless of course it comes down to military and defense spending, such as the bottomless pit of aid to Ukraine, and therefore is unable to compete. All other spending in Washington is part of the never-ending political battle in the Congress, where every single non-military penny must be fought for, tooth and nail, in a serious process. It’s why its own national infrastructure is increasingly shoddy, and, to use the above example for comparison, American high-speed railways remain underdeveloped by generous definition and non-existent compared to China.Finally, the IMEC is tiny compared to what the BRI aims to achieve. While IMEC wants to connect the Middle East to the Indian subcontinent (which also benefits China), the BRI has been working on not just one, but multiple economic corridors all over the planet. This includes comprehensively connecting the Eurasian landmass through huge railways spanning Russia, Central Asia and Mongolia, making it possible for a train from Shanghai to arrive in London, but also creating a new route to the sea through Pakistan (CPEC), connecting South East Asia by land through new railroads going through Laos and into Thailand, as well as a route which spans West Asia through Turkey and another Indian subcontinent foray with the China-Myanmar Corridor. In conclusion, the US has been desperate to rival the Belt and Road Initiative, but has never been able to produce anything of the same scale or vision, all the while repeatedly ignoring the reality that transcontinental infrastructure routes are not “zero-sum games” because their results ultimately benefit everyone, which in China’s perspective has always been the focus of the BRI itself as a “win-win” initiative. Despite that, each new branded “alternative” comes with the same hype that “this time” China’s project has met its match. No, it really hasn’t, but thanks for creating a new route which Chinese cargo can use in the meantime. US Secretary of State Antony Blinken has claimed that the world is transitioning to a new diplomatic order in which Washington must lead the way in overcoming increasing threats from Russia and China by working with its allies to build trust among nations for whom the old system failed.
“One era is ending, a new one is beginning, and the decisions that we make now will shape the future for decades to come,” Blinken said on Wednesday in a speech at John Hopkins University in Washington. He said the “post-Cold War order” ended as “decades of relative geopolitical stability have given way to an intensifying competition with authoritarian powers.” Namely, those powers are led by Russia and China, Blinken said, adding that “Russia’s war of aggression in Ukraine is the most immediate, the most acute threat to the international order.” China poses the biggest long-term challenge, he claimed, because it aspires to reshape the international order and is developing the economic, diplomatic, military and technological power to do so. “Beijing and Moscow are working together to make the world safe for autocracy through their ‘no limits’ partnership,” Blinken argued. He claimed that Russia and China have framed the existing order as a “Western imposition,” but that system is anchored in universal values and enshrined in international law. Ironically, he also accused the two rivals of believing that big countries can “dictate their choices to others,” a charge that is increasingly made against Washington. “When the Beijings and Moscows of the world try to rewrite – or rip down – the pillars of the multilateral system, when they falsely claim that the order exists merely to advance the interests of the West at the expense of the rest, a growing global chorus of nations and people will stand up to say, ‘No, the system you are trying to change is our system. It serves our interests,’” Blinken claimed. Blinken suggested that the US will lead “from a position of strength” largely because of its “humility.” He added, “We know we will have to earn the trust of a number of countries and citizens for whom the old order failed to deliver on many of its promises.” Alliances will be key to Washington’s success, Blinken said. He claimed that just a few years after the capabilities and relevance of NATO were openly questioned, the Western military block has become “bigger, stronger, more united than ever.” The Russia-Ukraine conflict proved that “an attack on the international order anywhere will hurt people everywhere,” Blinken said. He added that the US aims to ensure that Ukraine defeats Russia and emerges from the conflict as a “vibrant and prosperous democracy.” The diamond conglomerate Alrosa announced on Monday the discovery of the largest diamond in Russia in the past decade. The gem came from a mine in the Anabar district of the Republic of Sakha, also known as Yakutia.
“Experts have yet to study in detail and evaluate the potential and the characteristics of the mined diamond, but without a doubt, this is a record holder both for our company and for the country’s diamond industry,” said Alrosa General Director Pavel Marinychev, calling the find “an excellent finale to the 2023 mining season.” The diamond is 390.7 carats in size and was discovered on September 9 by the Anabar Diamonds company, an Alrosa subsidiary operating the Mayat mine in northeastern Siberia. According to Alrosa, the find happened during the night-time washing of the diamond-bearing sands. A photo posted by Alrosa shows a crystal with an irregular shape and a yellow-brownish halo, which is a very rare combination. The yet-unnamed gem is slightly smaller than the 401-carat diamond found in 2013.Another diamond found in the same batch is a 37.7-carat gem with the classic octahedral shape, Alrosa said. Both have been sent to morphologists for evaluation. Alrosa is the world’s largest diamond producer, accounting for 30% of the $80 billion annual global trade in rough precious stones. It mines the alluvial deposits in Russia’s Arctic, both in Yakutia and Arkhangelsk Region. The work is limited by harsh climate conditions, but accounts for four percent of the world’s production of diamonds in the rough. After the Indian government on Monday informed the Supreme Court that it will evaluate the “carrying capacity” of 13 Himalayan states, the focus is squarely on the northern hill state of Himachal Pradesh (‘Land of Snow’), which this season suffered 72 flash floods and where nearly 400 people (and thousands of animals) died in rain-related incidents. The “carrying capacity” is the maximum population size that an ecosystem can sustain without becoming degraded, according to the GB Pant National Institute of Himalayan Environment. This load-carrying capacity of hill towns and stations has come under critical pressure in recent years. Himachal Pradesh, or HP, has globally-famous hill stations such as Shimla, the Kullu Valley, Manali (most popular with foreign backpackers), and Dharamshala (the base for the Dalai Lama). With natural disasters on the rise – according to the state government, there were ten flash floods in 2020, 16 in 2021, and 75 in 2022 – Chief Minister Sukhvinder Singh Sukhu claimed that his state has suffered damages totaling Rs 12,000 crore ($1.4 billion) this year.No wonder, then, that while every summer HP is usually bustling with tourists, with kilometer-long traffic jams and chock-a-block hotels, the summer of 2023 saw less tourism, no doubt due to the calamities and viral videos of hotels and temples collapsing on the riverside. Heavy rains triggered landslides and flash floods that unleashed havoc, destroying hundreds of roads and damaging property. Experts say the impact of disasters has increased exponentially due to unchecked construction on river floodplains, unsafe construction in ecologically-sensitive areas, and hydropower projects, among other issues. A looming reason is the pressure of tourism. Every year, HP receives more visitors than its own population of nearly 7.8 million. In 2022, tourists numbered 15.1 million (both domestic and foreign). In fact, until the rains, HP had recorded 10.6 million tourists in the first six months of 2023, the highest ever for that time period. About 7 million of those were in May 2023 alone. Compare this to 1991, when tourist arrivals were about 2.38 million, or to the 4.68 million who visited in 2000. This increased to 19.6 million in 2017-18. HP, economically dependent on hydropower projects and tourism, is now planning to target about 50 million annual tourists by 2028. However, the increase poses another set of problems with the pressure on resources. Tourism taking a toll "The recent natural disasters are the result of overburdening and unplanned construction activities in the state,” said Mohinder Seth, president of the HP Tourism Stakeholders Association. “Almost all the hill stations are overburdened with tourists, with mushrooming growth of hotels and homestays… it is a further burden to urban areas.” Visitors come for the scenic locales and religious tourism as the state is home to numerous Hindu temples. However, stakeholders and experts say it is taking a toll on the state’s resources. In fact, the 2019 HP Tourism Policy admitted that the high influx of tourists leads to a disturbance of ecological balance in the fragile Himalayan region and emphasized the need for sustainable tourism. “Despite various benefits, mainstream tourism has negative connotations. The impact of mass-tourism and disregard to carrying capacity in the tourism development trajectory in the IHR (Indian Himalayan Region) have led to serious concerns among policymakers, residents and visitors,” the policy noted. It stated that “global issues of resource depletion and environmental degradation may be seen as important as local ones, including the long-term effects of tourism on climate change and the impact of adaptation and mitigation measures on travel patterns.” “Exploring trends promoting the tourism industry in a sustainable manner becomes dire,” the document added, noting that the “need of the hour, given our fragile ecosystem, is to ensure that this growth continues in a sustainable manner.” Seth explained that hill stations are witnessing tourists more than their carrying capacity, and felt that the state shouldn’t give permission to new hotels or homestays as it will lead to further disasters during natural calamities such as heavy rains or earthquakes. “Instead, the government should focus on strengthening existing facilities and ensuring proper drainage systems as it was one of the factors that increased the intensity of landslides,” he said. Hem Singh Thakur, an environmentalist and lawyer, said the heavy influx of tourist vehicles had led to radical changes in the environment. For instance, Lahaul and Spiti district, which is now open year-round for tourists after the opening of Atal Tunnel (under the Rohtang Pass) at a height of 10,071ft above sea level, is now witnessing heavy rains, a new phenomenon, as the cold desert used to receive snowfall around the year. “The excessive tourists in the region have resulted in huge carbon emissions in the cold desert, which is heating up with the pristine environment of the cold desert and the area is now witnessing heavy rains. This is causing heavy losses, for heavy rains are resulting in washing away of roads and other infrastructure in flash floods,” he said. Himachal Pradesh University professor Devinder Sharma highlighted the havoc in Shimla, a popular tourist destination, during the disasters this year. Shimla, which was developed by the British for a population of 25,000 and was once known as the summer capital of India, is now home to 250,000 people, resulting in heavy pressure on natural resources. "We need to focus on sustainable development as per the soil structure and norms. But call it man’s greed, widespread construction activity is carried out across the state by flouting norms. Hotels or homestays are being constructed on riversides which are against regulations and directions of the National Green Tribunal and other regulatory authorities,” Sharma added. Sharma said the cutting of hills for roads and other infrastructure projects to accommodate increased tourism is done in an unscientific manner, without soil tests or other topographic analysis. He emphasized that the hilly terrain in Himachal is not meant for four-lane roads, and the government should instead focus on constructing parallel roads to ensure stabilization of the hill strata and to minimize damage in heavy rains that are worsening due to climate change. Is sustainable tourism the way ahead? Both Himachal and neighboring Uttarakhand see a heavy tourist influx and are recording pressure on water resources and issues such as waste management. A March 2023 study, ‘The Environmental Impact of Tourism on Mountain States’ by Jia Gunthey, notes that the mountainous regions of India are suffering a great environmental impact due to the increase in tourism. “Himachal, along with Uttarakhand, bears the biggest burden of the environmental damage as a result of tourism,” the study says. Drawing attention towards waste management issues, she noted that in Dharamshala (HP), 200kg of dry waste is segregated daily and 25 tonnes a year. The author noted that “a large percentage of the waste comes from eateries which have grown in number due to increased tourism. There is also increased pressure on the soil, causing soil erosion and natural habitat loss. Additionally, there is a strain on water, and sources of water, which are heavily being used by restaurants, hotel chains and places of accommodation for the incoming tourists.” Thakur sought the promotion of electric vehicles in tourist hotspots. “This should specifically be done in high hill regions to reduce carbon emissions to save the environment. This will also lead to employment generation as locals will buy electric taxis or other small vehicles to ferry visitors across tourist attractions in major hill stations,” he said. Mohinder Seth and Professor Sharma stressed the need to arrest the mushrooming of illegal hotels while calling for proper regulation and monitoring mechanisms. “There should be proper research on the carrying capacity of tourism destinations in HP and the focus should be on sustainable tourism,” Sharma said. HP BJP spokesperson and a high official to former Chief Minister Jai Ram Thakur, Mahender Dharmani, said that though the tourism sector is a major contributor to the state’s GDP, the major hill stations now don’t have the capacity to accommodate a heavy influx of visitors. Hill stations can’t support high-rise buildings, as has been seen in the recent rains. There is a need to seek expert opinion to identify the carrying capacity in the ecologically-fragile Himalayan region and an action plan should accordingly be prepared, he added. For its part, the central government told the Supreme Court on Monday that it had set up a 13-member technical committee to evaluate the carrying capacity as set by the guidelines of the GB Pant National Institute of Himalayan Environment.
Germany’s economic output will shrink this year, amid weak demand from abroad, soaring interest rates, and a protracted energy crisis, the latest forecast from the German Economic Institute (IW) revealed.
The economy is in a state of a “shock,” according to the IW, with businesses particularly affected by geopolitical uncertainties arising from the conflict in Ukraine. German companies and industries will “feel the global problems all the harder” this year due to scarcity and surging prices of raw materials and energy, the economists warned. Sluggish global trade and weak demand will result in lower-than-expected gross domestic product for the EU’s largest economy. It’s predicted to slump by almost 0.5% compared to last year, while unemployment will reach 5.5%, the report said. Inflation has remained high since the start of the year and is likely to stay at around 6.5%, weighing on consumer spending. “ The government urgently needs to take action to end this economic downturn,” the head of the macroeconomic and the Business Cycle Research Unit at the IW, Professor Michael Gromling, said. “Lower tax burdens and attractive and un-bureaucratic support for innovation and investment would help companies cope better with the current shocks,” he added. Economic sentiment in Germany has suffered from the effects of fiscal tightening, such as increased production costs and high interest rates. Investments have become less attractive for companies, with the construction sector among the worst-hit, data showed. Investments in home building are expected to fall by 3% this year. Hawkish US Secretary of Commerce Gina Raimondo has recently undertaken an official visit to China. She is the fourth such US official to visit in the past few months, marking a stabilization – but not a breakthrough – in ties between the two powers. Here, she berated China for making its market “uninvestable” for US firms and called “on Beijing to act to reduce the risk of doing business in the country.”
This is ironic for too many reasons to list. The most obvious one is that the Biden administration recently released restrictions on US inbound foreign investment into China’s high-tech industries, including semiconductors, quantum computing, supercomputing and artificial intelligence. Although the measures are considered narrow, they are nonetheless the opposite of confidence-inducing, as Republican critics have already argued they are not enough and have demanded they be widened. This in itself tells a story about America. China isn’t making itself ‘uninvestable’; the US is doing it by deliberately creating a toxic geopolitical environment. The US does not want to see inbound investment into China and – through the stroking of tensions and military uncertainties – is heightening the risks of such investments. This makes Raimondo’s trip to Beijing immensely hypocritical. Washington’s narrative on China, peddled through compliant media, is that Beijing is primarily responsible for scaring foreign investors away due to its increasing centralization under the rule of Xi Jinping. China is being described as isolationist, rigid, unreasonable and ‘in decline’ and accused of ‘unfair’ economic practices. If only Beijing would open up more and let all these investors in, right? Everything would be fine, and the US-China economic relationship would get back on track, wouldn’t it?Possibly, but only if the US had not: 1) Placed hundreds of billions of dollars in tariffs on Chinese exports, which it refuses to remove, even with high levels of inflation; 2) Opportunistically blacklisted products from entire regions of China, such as Xinjiang, on the premise of ‘human rights abuses’; 3) Put Chinese technology companies on the commerce department ‘entity list’ prohibiting US companies from exporting to them, then blacklisted the entirety of China’s semiconductor industry and forced third-party countries to do the same. On top of all the sanctions, the US is deliberately militarizing China’s entire periphery with military bases and stoking up tensions with Taiwan, capitalizing on global uncertainty following the Ukraine war. Last but certainly not least, the mountain of news articles and commentary demonizing, attacking, accusing and doom-mongering about China grows every single day. Can the US honestly say with a straight face amidst all this that it is China who is scaring away investors? Sure, as this global environment has deteriorated, Beijing has tightened its control, and the ruling party engages in harsh regulatory crackdowns against a number of companies, which hardly creates an investment-friendly environment, but that’s a product of the insecurity being driven by tensions. So when officials like Raimondo visit China and complain the conditions are unfavorable for US businesses, the level of hypocrisy borders on extreme, when Washington itself has done more than anyone else to undermine trust in Beijing. But if that is so, why should she even complain about it? The answer is because the US does not want to have an equal economic relationship with China. Washington’s ideal relationship with Beijing is one in which it gets full access to the Chinese market and gets to sell it anything it wants, not where Chinese companies are able to compete fair and square on a global scale. This is the same level of subordination it has long sought to impose on Europe, where, for example, it is casually destroying German industry by forcing its decoupling from Russian resources, selling overpriced gas and then using protectionism through the “inflation reduction act” to disincentivise production. The US wants to economically dominate China; that’s the only “investment” it has in mind and is primarily why visits like Raimondo’s never truly make any headway and are a waste of time. |
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