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Failing drug wars in northern Myanmar

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Author: John Walsh, RMIT University Vietnam

Long-distance truck drivers, people working on fishing boats or those scavenging jade and gold mines are among those vulnerable to drug dependence in northern Myanmar. In the north of the country, where the reach of the central government is comparatively limited, workers may be partly paid in opium in recognition of the fact that their working lives are so benighted and subject to risk.

A boy runs barefoot as he plays in front of a clinic on Madae island, Kyaukpyu township, Rakhine state, Myanmar, 7 October 2015 (Photo: Reuters/Soe Zeya Tun).

As the demand for drugs is sustained, it is not surprising that the supply of drugs also remains strong. In the hilly areas of Kachin and Shan states, opium is grown as a second crop after rice by subsistence farmers. Those in the drug trade will then come to collect the crops from the farm gate at an agreed rate. This overcomes a significant problem of market access for farmers who lack access to roads as well as irrigation — for them, the prospect of obtaining substitute crops remains out of reach with significant government or NGO-led extension services unavailable in conflict areas. Despite attempts to hold talks that might yield peace, any real breakthrough seems to be far away.

Opium is just one of many narcotics widely available throughout the country. A range of synthetic drugs such as methamphetamines are also manufactured and distributed across Myanmar. These too are associated with conflict regions — heroin is linked with cash-rich mining operations while amphetamines are used by the truck drivers and fishing workers.

These manufactured items tend to be the preserve of organised gangs which the security forces can tackle by various means. Opium, though, remains the drug woven into the fabric of society.

There is no doubt that the Tatmadaw, the Myanmar military force which generally acts for the government in the north of the country, would eliminate the drugs trade as it currently stands, not least because some of the proceeds continue to finance armed attempts at securing autonomy by various ethnic groups. In some cases, that means taking control of the trade — for years, the military has financed its own developmental schemes through drug money among other sources.

Yet even when eradication campaigns have taken place and poppies have been burned in large numbers, the economic case for farmers to return to the crops is difficult to ignore. Private sector enterprises are limited in scope — they are unlikely to marshal the entrepreneurial ability and determination to create sustainable crop substitution strategies.

With the limits of the Myanmar state in its own north so exposed, a role has emerged for neighbouring China to try to stabilise the region. China always wants stable border regions, especially in northern Myanmar where the oil and gas pipelines forming the Kyaukpyu port and special economic zone (SEZ) represent a significant strategic investment.

It is not yet possible for China to show a visible military presence in Myanmar but there are plans to help pacify the region by opening further SEZs in troubled areas where an alternative source of income may persuade some farming families to refrain from drug production. One example is the enclave zone at Jiegao where Chinese merchants purchase locally-mined jade and amber in a cash-dominated sector. This often leads to the creation of a karaoke-style industry that can lead to social disorder.

But there have already been protests by local communities against the intrusion of Chinese projects, including against SEZs and Belt and Road projects intended to knit together places of production and consumption across the continent. Communities welcome this about as much as they welcomed the Myitsone dam, the constant stalling of which is celebrated as a victory for local resistance.

Meanwhile, the prospects for those trapped in addiction are grim. Chinese attempts to manage drug production and usage in northern Myanmar have been heavy-handed and without positive long-term results. Although Myanmar has quite a comprehensive series of harm reduction policies that compare favourably with those in other Southeast Asian countries, these are generally not available in conflict zones where vulnerability to various health risks can be very high. There is next to no support from the national government for any rehabilitation in the northern provinces and only very limited support from provincial governments.

In their place, faith-based organisations — mostly Baptist — have created their own camps and programs. But these approaches lack sophistication — withdrawal is sudden, complete and provides little support for those undergoing it. Their results may be poor, but there are no alternative options.

It is difficult to be optimistic about the foreseeable future of Myanmar’s drug production and trade. Even if a long-term solution were suddenly found, numerous lives would be blighted in the meantime. A successful drugs reduction strategy requires a great deal more than a ‘war on drugs’ approach and zero tolerance.

Yet the government — or at least its Tatmadaw agent — tends to view drug users as enemies of the people and spares no sympathy for them. Alternative approaches for managing supply and demand, reducing stigma and breaking the link between drug use and crime might be possible with new strategies and greater education. But even with peace, these problems will not disappear for a while.

John Walsh is a lecturer in international business at RMIT University Vietnam.



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Countering India’s terror blind spot in West Bengal

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Author: Iftekharul Bashar, NTU

In July 2019, India’s State Minister for Home Affairs G Kishan Reddy accused Jama’at-ul-Mujahideen Bangladesh (JMB) of using some madrassas (religious schools) in West Bengal for radicalisation and recruitment activities. The claim came a week after Indian police arrested four members of the pro-Islamic State (IS) faction of JMB in West Bengal.

A student of a madrassa (religious school) writes during an examination in Kolkata, eastern India, 7 March 2006 (Photo: Reuters/Jayanta Shaw).

West Bengal has not yet seen any major terrorist attacks except for an accidental blast at a terrorist safe-house in 2014. Minister Reddy’s comments were met with fiery criticism from his political opponents in West Bengal. But the claims cannot be brushed away, considering the growing trans-border linkages that terrorist groups maintain in the region. The JMB in particular is believed to have supporters in Bangladesh’s northwest. Both of JMB’s pro-Al Qaeda (AQ) and pro-IS factions appear to be gaining traction in West Bengal.

The ethno-linguistic space of Bengal consists of independent Bangladesh in the east and the Indian state of West Bengal in the west. Bangladesh is a Muslim majority country and West Bengal is a Hindu majority state with Muslim majority districts along its border with Bangladesh. This border is long, porous and poorly managed, resulting in trans-border crime and the cross-border movement of terrorists. In several cases, JMB has used cross-border marriages to find shelter in West Bengal.

Extremist publications have been produced by both IS and AQ in Bengali to mobilise Bengali Muslim youth in efforts to ‘liberate Kashmir’, ‘fight Hindutva’ and ‘establish an Islamic Caliphate in Hind’. Such exhortations have been linked to the ‘Ghazwatul Hind’ prophetic narrative which talks of a final battle for the Indian subcontinent.

The prompt release of AQ chief Ayman al-Zawahiri’s latest video message Don’t Forget Kashmir in Bengali is a case in point. As the crisis in Kashmir simmers, India may face an escalated threat of radicalisation and terrorist recruitment.

West Bengal’s state government has not been able to check the spread of radical and extremist ideologies. The incumbent Trinamul Congress (TMC) party has been accused by New Delhi of being soft on extremists because it looks at the Muslim community as a vote bank. New Delhi argues that TMC often turns a blind eye to radicalism committed under the cover of religious activities.

Critics have accused the ruling TMC of being soft on terror since October 2014, when an explosion occurred in a house in the Khagragarh locality of Burdwan, West Bengal. Two suspected Indian terrorists were killed and a third injured. The police seized 55 improvised explosive devices, chemicals and equipment. The building was owned by Nurul Hasan Chowdhury, a TMC leader. The ground floor of the building had been used as a TMC party office and an election office in the past.

However, the state assembly elections in West Bengal are due to be held in 2020. The perception of TMC as soft on Islamist elements may be used by the ruling national Bharatiya Janata Party as a political tool to discredit.

But there is limited access to mainstream education in West Bengal’s Muslim majority districts. This void was filled by madrassas that lacked accountability for and commitment to quality education. TMC has been accused of doing nothing to create access to mainstream education for Muslims. A large segment of the community therefore remains dependent on the madrassas, many of which are outside the oversight of the state.

Islamist militancy in eastern India remains relatively underestimated, especially since JMB launched its India chapter in 2018. JMB originated from the sub-group of a local Salafi movement known as the Ahle Hadis. They have followers in both Bangladesh and West Bengal. In 2018, JMB opened a new wing in India — Jama’atul Mujahideen India (JMI).

The group proclaimed its belief in qital, armed struggle to ‘uproot polytheism and establish Islam’. It also claimed that the Indian subcontinent is a future battlefield to establish the Caliphate as per the Ghazwatul Hind prophecy. The Indian chapter could be used to recruit from the Muslim community in West Bengal and to send them to various parts of India for fundraising and operations.

There are several reasons for JMB’s expansion in West Bengal. In 2006, Bangladesh launched a major campaign against JMB as a response to the group’s country-wide simultaneous bomb attacks in 2005. Some JMB militants crossed the border and took shelter in West Bengal. Through operating across the border, JMB kept in close contact with fellow members on the Bangladeshi side.

Indian security agencies have established JMB links with bomb blasts in Burdwan, West Bengal in October 2014 and Bodh Gaya, Bihar in January 2018. Bodh Gaya and other iconic Buddhist centres in India were targets intended to express solidarity with Rohingya Muslims. Investigations by Indian authorities have revealed JMB plans to make permanent bases along the India–Bangladesh border and to spread its network in South India.

The spread of terror groups underscores a need for the Indian and the West Bengal state governments to create better educational opportunities for youth and to modernise the madrassa education system. Politicising the issue of radicalisation might further polarise the communities within which extremists are born — both Muslims and Hindus alike.

Iftekharul Bashar is Associate Research Fellow at the International Centre for Political Violence and Terrorism Research, Nanyang Technological University (NTU), Singapore.



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InterPlas Thailand 2020

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Dates: 
Jun 24, 2020Jun 27, 2020

Opening hours: 
10.00-18.00

Venue: 
BITEC (Bangkok International Trade Exhibition Center)

Location address: 
88th Bangna-Trad Road(KM.1), Bangna, Bangkok 10260

Country: 
Thailand

Organizer: 
Reed Tradex Co., Ltd.

Show URL: 
www.interplasthailand.com

Major exhibits: 

Machinery: Injection Molding Machine, Extrusion Machine, Blow Molding Machine & Plastic Packaging, Film Making Machine, Filling Machine, and Recycling Machine. Equipment: Air Compressor, Blade, Chiller, Heat Transfer, Marking and Printing, Nozzle, Pump & Valve, Rolls, Screw & Barrel, and Welding. Auxiliary: Blender. Conveying System, Drying, Dust Collector, Feeder, Granulator, Grinder, Hopper, and Vacuum Technology. Measuring, Control & Testing: Color, Tension, Density, Compression, and Dimension. Plastic Mold: CAD-CAM, Hot Runner Systems, Mold Changer, Mold Treatment & Maintenance, and Parts & Components. Chemical & Raw Materials: Additive, Adhesive & Glues, Bioplastics, Coating Compounds, Composites & High Performance Materials, Elastomer, Fillers, Pigment & Masterbatch, Resin, Semi-Finished Products, and Thermoplastic.

Show banner: 

ASEAN’s Most Comprehensive Exhibition on Technologies for Plastics Manufacturing – 29th Edition

Show Contact
Title: 

Group Project Manager

Name: 
Ms. Kotchasorn Tocharoentanapol

Telephone: 

+66 2686 7299

Fax number: 

+66 2686 7288

E-mail: 

interplas@reedtradex.co.th



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Beijing’s threats push Taiwan further out of reach

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Author: Joel Atkinson, HUFS

In May 2000, former prime minister of Singapore Lee Kuan Yew set forth his views on Taiwan in an article titled ‘The Cruel Game’. After 19 years, it is worth pausing for a moment to see how his perspective holds up.

A video tribute of former prime minister Lee Kuan Yew is played during a Golden Jubilee celebration parade rehearsal in Singapore, 1 August 2015 (Photo: Reuters/Edgar Su). Lee began with a warning: ‘There is a point beyond which no Chinese leader can survive if Taiwan is seen to be drifting away under his watch’. Lee, who understood Beijing better than most, knew that this was about allowing for a pretence of progress as much as anything else. Taipei, he advised, had to ‘leave the door open for a future One China’ and keep the show going for everyone’s benefit, along the way maximising the carrots (and minimising the sticks) that Beijing would direct Taiwan’s way. In short, Taipei was not to reveal itself as too unruly to fit into this picture.

As Lee put it, Taiwan should negotiate with Beijing now. Either the PRC would continue to grow in power until it overwhelmed Taiwan’s resistance or it would collapse allowing Taipei to safely ignore whatever concessions it had made. Lee understood that accommodating Beijing’s preferences would be difficult: ‘The last thing any Taiwanese, even of mainlander descent, desires is to be ruled by China’. Still, Lee argues, it is better to enter into unification negotiations willingly to win the best deal possible. Simultaneously, Taipei should ‘influence China’s evolution’ ensuring that ‘they will change to fit into the world’. Otherwise, if unification came via armed takeover, ‘the eventual adjustment, whether in 20 or 50 years, [will be] that much more painful’.

Problematically for Lee, sovereign polities rarely pre-emptively surrender to avoid violence. Today, the population in Taiwan desiring unification is small — only 1.7 per cent want unification now and 8.7 per cent want it in the future.

To be fair, Lee was pessimistic that the strengthening of Taiwan’s separate identity would abate. Lee considered Taiwan’s leaders too obtuse and stubborn to reverse course, though he felt that former Taiwanese president Chen Shui-bian — who had just entered office at the time of Lee’s comments — was more pragmatic.

In Lee’s eyes, Taiwan’s fate would ultimately hinge on US intervention. And it was only a matter of time until the United States disappointed Taiwan. Lee weighed the interests of the United States and China and concluded that Beijing’s investment in Taiwan was greater than Washington’s and that this risked leaving the Taiwanese ‘crushed’.

Yet 19 years after Lee’s predictions, signs point to a growing US commitment to compete with China, defend Taiwan and offset Chinese military advances. The rhetorical support of the Trump administration and Congress and the increasing arms sales from the United States to Taiwan are current examples. Significantly, China’s regional rival Japan has also been cautiously increasing its support for Taiwan, even as it takes steps to reduce friction with China amid divided regional security interests.

Should we be surprised? History shows us that states balance against perceived threats, both by enhancing their defences and reaching out to partners. Why expect Taiwan, the United States and Japan to act differently?

The asymmetry that Lee focusses on — that Taiwan is a greater priority to Beijing than it is to Washington — is also offset by a salient asymmetry. It is less costly for the United States to confront China early with Taiwan’s support than it will be later without.

The same logic determines that China won’t receive decisive support from the rest of the region to tip the balance either. Lee raises the spectre of a ‘humiliated, bitter and xenophobic China’ emerging from a successful US defence of Taiwan. But would regional countries prefer the alternative: a triumphant China with capabilities to occupy Taiwan and chase away the United States?

Whatever the economic realities and Beijing’s touchiness dictate, the only thing worse for the region than a powerful China contained by a US coalition at the Taiwan Strait is one that is not. If forced to really make a choice, the United States, Japan and the wider region would much rather see a PRC invasion of Taiwan fail than succeed.

Looking back, Lee’s writing calls to mind a soon-to-be-retired CEO talking up the market, aware of a ticking bomb buried in the balance sheets. Now, as Warren Buffet famously put it, the tide is out and we can see who has been swimming naked.

Beijing’s threat to use force against Taiwan is credible and growing. And that is precisely why it is self-defeating. The greater the threat, the greater the steps Taipei, Washington and the region will take to resist it.

As Joseph Nye warned, China is containing itself. Attempting unification through the threat of violence is unrealistic and risks catastrophic war. To continue to enable the fantasies of Chinese nationalism and pretend otherwise is the real cruel game.

Joel Atkinson is Associate Professor at Hankuk University of Foreign Studies (HUFS), Seoul.



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India decides to Act on wage inequality

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Authors: Nikhila Menon, Yokohama and Xavier Estupiñan, ILO

On 2 August 2019 the Indian parliament passed the Code on Wages Bill. This historic bill, which has received presidential assent and is now an Act, will ensure statutory protection for minimum wages of approximately 500 million workers belonging to both the organised and unorganised sectors.A labourer carries a sack filled with sugar to load it onto a supply truck at a wholesale market, Kolkata, India, 14 November 2018 (Photo: Reuters/Rupak De Chowdhuri).

India’s Ministry of Labour and Employment has proposed four labour codes covering wages, industrial relations, social security and occupational health and safety. These labour codes aim to simplify, rationalise and amalgamate more than 30 labour laws as per the recommendations of the second National Commission on Labour. The Code on Wages will be the first of the four labour codes to become an act in India.

The Act will subsume four major labour legislations and will simplify and standardise the definitions of terms like ‘worker’, ‘wages’ and ‘contract labour’ adopted in these four acts. It is a move towards reducing the amount of litigation that arises from the ambiguity of definitions across these labour acts.

Most notably the Act expands minimum wages to all categories of workers in both organised and unorganised sectors. The minimum wage was previously confined to scheduled employment. By enacting the code, minimum wages become the right of every worker in the country and it is a step towards inclusive growth.

The Act proposes a ‘floor level’ wage that will ensure workers are paid wages that allow for minimum living standards. State governments will need to set minimum wages at par or above the floor wage set by the central government.

The floor wage will be reviewed and revised every five years through tripartite consultation including stakeholders from state governments. But the wage review should ideally be done at least every three years to reflect the cost of living and economic conditions.

The proposed Code on Wages will also take into account the aspects of skill categories and the geographic differences in costs of living. Owing to the variety of scheduled employment across different states there are more than 2000 minimum wages. The number of minimum wages can be reduced substantially by categorising minimum wages according to skill categories and areas. This will help overcome the implementation issues arising due to the multiplicity of rates.

The regional differences in costs of living and economic development can be reflected at the state level. The Chinese and Russian minimum wage systems have provincial wage rates on a similar pattern. These provincial wage rates are simultaneously situated within the overarching national wage policy and balance the needs of the workers and economic factors depending on geographic locations and economic factors within the country.

India’s new legislation on minimum wages is in tune with the provisions of the International Labor Organization’s (ILO) Minimum Wage Fixing Convention, 1970. The convention encourages countries to establish a system of minimum wages that extends to all groups of wage earners whose terms of employment would be appropriate. The core principle of the Convention is full consultation for setting the minimum wage and a balanced approach is key in determining the appropriate level. In 2012, at the 44th session of the Indian Labour Conference, a broad consensus recommended that all wage workers be covered by the law to help India ratify this ILO Convention.

The adherence to the minimum wage legislation in the organised and unorganised segments will require innovative use of IT-enabled services for digital payments and monitoring of wages. While some aspects of digital payments are envisaged in the Act, generating awareness and punitive measures for non-adherence to the code will be critical in enforcing minimum wages, especially in the unorganised sector.

In 2012, 39 per cent of male casual workers and 56 per cent of female casual workers in rural areas as well as 28 per cent of male casual workers and 59 per cent of female casual workers in urban areas received wages below the national floor-level minimum wage. This reflects the extent of non-compliance of minimum wages in India. Monitoring non-compliance through the use of periodic surveys and the participation of employers and worker representatives to address the problems of enforcement will be crucial in increasing the effectiveness of minimum wage policy.

At the macro level, the Act aims to correct systemic inequalities that emerge in an economy in which a vast majority of workers are in the informal economy. While studies on the impact of minimum wage legislations on employment and inflation are inconclusive, minimum wages will have a lighthouse effect and will act as a benchmark for effective wage bargaining for workers in the informal economy. The Code on Wages could have a remarkable impact on sustenance wages and in reducing wage inequalities in India.

Nikhila Menon is an economist based in Yokohama, Japan, and a former Director at the Ministry of Finance, India.

Xavier Estupiñan is Wage Specialist at the International Labour Organization Decent Work Technical Support Team for South Asia and Country Office for India.

The views expressed in the article are those of the authors and do not reflect the position of the Indian Ministry of Finance or any other organisation.



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How China is using tourists to realise its geopolitical goals

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Author: Anu Anwar, APCSS

Decades of astonishing economic growth have given China new tools for extending its influence abroad and achieving its political goals. Some of these tools are inducements, including Belt and Road Initiative projects and new development financial institutions. But China has demonstrated that it will use its new economic leverage in pursuit of political goals unrelated to economic exchange, swiftly shifting inducements to punishments. One example lies in the field of tourism.

Chinese tourists take photos in front of the Imperial Palace in Tokyo, Japan, 30 April, 2019 (Photo: Reuters/Kim).

Two factors make regulating tourist flows tempting for Chinese policymakers: the size of its international tourism industry and the control China can still exercise over outward tourism. But whether tourism has been an effective political tool is debated.

China has quickly become the largest international tourist sender country in the world. Over the last two decades, the number of Chinese overseas travellers rose by over 25 times from 5.3 million in 1997 to 130 million in 2017. In the latter year, Chinese tourists contributed an estimated US$250 billion to overseas economies, double the figure for US tourists and triple that of Germany.

The Chinese government has a degree of leverage over its tourists that other governments do not enjoy. Many Chinese tourists are new to international tourism and have limited international language abilities. There is still a strong desire for comfort-zone or group tourism — approximately 38 per cent of outbound Chinese tourists are on group tours. China also has licensing and other forms of formal and informal leverage over tour group operators.

The most rudimentary Chinese lever for rewarding other governments with increased Chinese tourist numbers is to grant countries ‘Approved Destination Status’. This allows group tourism to that country and can increase the number of Chinese tourists by an average of 50 per cent.

Since the Chinese government has stronger regulatory power over tour agencies than most governments, it can also seek to influence foreign behaviour by curtailing such tours. China’s three largest licensed tourist agencies by revenue are all state-owned and only 8 per cent of its 25,000 licensed travel agencies are authorised to offer international travel. Foreign agencies are not permitted to provide outward bound travel services for Chinese nationals.

Foreign countries struggle to retaliate. There are often far more Chinese tourists going to their country than the other way around, a significant change in recent years. Many of the countries that China has used tourist sanctions with are democracies where individuals enjoy robust personal freedoms, including the freedom to travel.

China’s large number of outbound tourists and strong regulatory power make tourism seem like an ideal political tool. Turkey became the first victim of China’s use of tourist sanctions in 2000 when it refused to allow a Soviet-built Ukrainian ship that China had purchased to be the basis of its first aircraft carrier to pass through the Bosphorus. China restricted outbound tourists to the country, pressuring Turkey to relent.

Most recently, the Chinese government is using mainland tourists as a lever against Taiwan’s government. In 2016, restricting tourist flows was one way that Beijing showed its annoyance at Tsai Ing-wen’s foreign and defence policies. In February 2018, Beijing cut hundreds of direct flights to Taiwan at the peak travel time during the Lunar New Year. In July 2019, it barred its citizens from 47 mainland cities from travel to Taiwan except on group tours. This move is widely seen as an effort to dim Tsai’s re-election prospects.

But the utilisation of tourism for geopolitical goals has had varying levels of success. In 2012–13 during a period of increased tensions over the Senkaku/Diaoyu Islands, China attempted to manipulate tourist flows to influence Japan’s behaviour. Despite tourism dropping by 24 per cent, there was no noticeable impact on Japanese policy. Similarly, in 2017 China’s response to the deployment of the THAAD missile defence system in South Korea resulted in cutting Chinese tourist numbers from over 7 million in 2016 to 3 million in 2017. But this did not stop the South Korean government from deploying THAAD.

The manipulation of tourism can cut two ways. The impact abroad can anger the citizens of foreign countries and their tourist industries as a whole, including those who are positively disposed to Beijing. In Japan, South Korea and Taiwan it certainly soured public and governmental attitudes towards China. It may also be welcomed by some of their citizens who chafe at the large number of Chinese tourists coming to their countries.

Tourist sanctions can also be harmful to China’s tourist industry. Sudden changes to travel plans for reasons people do not understand or appreciate present difficulties in squaring such autocratic government controls with emerging middle-class attitudes.

There is a trend of increasing solo travelling, particularly among Chinese millennials. This will only increase as people become more accustomed to travelling abroad. It will become increasingly more difficult for China to pressure and constrain international tourist flows.

Chinese tourist numbers will be affected by fluctuations in the Chinese economy, the ease or lack of ease when it comes to taking funds out of China and Chinese perceptions of whether or not tourists are subject to harassment while travelling to certain countries. It seems though that outright government meddling in pursuit of political goals may decline if it is seen as counterproductive to political goals or domestically unpopular.

Anu Anwar is a Research Fellow at the Asia-Pacific Center for Security Studies (APCSS), Hawaii. He is also an Affiliate Scholar at the East-West Center and a Visiting Scholar at the Institute for Advanced Studies on Asia, the University of Tokyo.



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RCEP must move forward, with or without India

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Authors: Renuka Mahadevan, University of Queensland and Anda Nugroho, Ministry of Finance, Indonesia.

As the international trading system grows increasingly strained under the escalating US–China trade dispute and the paralysis of WTO reform, many have eagerly called for the conclusion of the Regional Comprehensive Economic Partnership (RCEP) by the end of 2019. The ASEAN-led initiative is a mega regional free trade agreement (FTA) that was first launched in November 2012 and to date has seen 27 rounds of negotiations.

India's Prime Minister Narendra Modi speaks with China's Premier Li Keqiang next to Indonesia's President Joko Widodo as they gather for a group photo with ASEAN leaders at the Regional Comprehensive Economic Partnership (RCEP) meeting in Singapore, 14 November 2018 (Photo: Reuters/Edgar Su).

India’s hesitance to comply with RCEP’s tariff requirements is currently stalling the negotiations. RCEP proposes that 92 per cent of India’s traded items must have zero tariffs by the end of a 15-year period. But ASEAN countries are keen to have India as part of the partnership and made India a concessional offer in November 2018 to open up about 83 per cent of its tariff lines instead.

The main point of contention for India is the presence of China, with which it has a massive US$60 billion trade deficit. India is concerned that greater market access for China will bring harm to its key manufacturing sectors like steel and textiles. India is also worried about giving greater market access to other non-FTA partners like Australia and New Zealand.

Following the 7th RCEP Ministerial Meeting in Bangkok on 8 September 2019, RCEP members have agreed that talks should be wrapped up and that the results of the negotiations should be announced in November. Therefore, the signatories have asked India to make up its mind on whether it still wants to remain in the group.

But India is adamant to protect its domestic industries and on 11 September 2019, the Commerce and Industry Minister Piyush Goyal invited representatives of the RCEP countries to continue the discussions in a bid to push for a better deal for India.

This is despite the fact that since May 2019, China has started pushing for a free trade pact within the ASEAN+3 (China, Japan and South Korea) that excludes India, Australia and New Zealand. This move was potentially to pressure Australia and New Zealand into encouraging India to be more flexible in the RCEP negotiations, as Australia and New Zealand would not want to be excluded from the final deal.

To analyse the effect of concluding RCEP without India, recent research has simulated the effect of the RCEP tariff concessions (it must be acknowledged that the computations in this piece are tied to a conventional Global Trade Analysis Project model which, like any model, has limitations). India is better off joining RCEP as it will face a marginal fall in real GDP growth if it does not join, while it stands to gain at least 0.06 percentage points of growth in 2020 if it does. While the results do not show how the other RCEP countries would be affected if India does not join RCEP, the deal would undoubtedly be more strategically significant if it contained three of the world’s largest economies — China, Japan and India.

Though India fears cheaper imports flooding its market, some key industries have much to gain from lower tariffs under RCEP. India’s textile and garment factories will weather some of the competition from Vietnam and China and register positive growth. The biggest winners will be electronics and competitive areas of manufacturing and agriculture, followed by steel and oil and gas. India is well positioned to increase its share of the soybean export market in particular, as it is currently the 10th largest exporter in the world.

India will also gain in pushing RCEP countries to liberalise service sectors to the benefit of skilled professionals seeking gainful employment. So far, RCEP member countries have only agreed in principle and have not made any concessional offers. To make further progress on this front, India first needs to commit to RCEP. Simulation results also show that India’s trade deficit will become a surplus in due course if India manages to convince RCEP members to liberalise IT services.

India stands to gain from RCEP. But first it needs to acknowledge that opening its economy to international competition will deepen the engagement of its labour-using manufacturing sector and improve its productivity in the long run. India should swallow the bitter pill of ‘pain now, gain later’ as RCEP provides the platform for it to lock in domestic reform priorities for more sustainable long-term growth.

Besides, India cannot afford to retract from RCEP as economic integration with East Asia is its natural path to global economic integration. Asia is not only the largest and most rapidly growing centre of global economic activity, it also plays a major role in global value chains. Now that the Indian elections are over, all eyes are on India and how it will engage with RCEP in its concluding stages.

If India stalls progress in the negotiations, the delayed launch of RCEP will mean giving up real GDP gains that compound over time. This represents a permanent loss. Simulations using a moderate discount factor of 5 per cent show that there will be an unrecoverable loss of US$17.7 billion for the world. RCEP members stand to lose US$19.6 billion if RCEP is launched a year later in 2020.

The conclusion of RCEP will also support the rules-based order as it reflects the commitment and political will of the 16 economies in this trade agreement to willingly work together to agreed rules and norms. As the RCEP covers almost half the world’s population and more than a third of world GDP, this is not only a very positive move in trade liberalisation, it is also a strong signal for the continuation of the rules-based order amidst the US–China trade war.

There is too much at stake if RCEP does not move forward, with or without India. The conclusion of RCEP will serve as an instrument for ASEAN to gain regional influence, with the body seen as having successfully maintained its centrality in driving regional integration in the Asia Pacific. Further stalling in negotiations will weaken ASEAN and undermine the bloc’s ambitions to become a regional strategic force.

Renuka Mahadevan is Associate Professor at the School of Economics, the University of Queensland.

Anda Nugroho is a researcher in the Fiscal Policy Agency at the Ministry of Finance, Indonesia.



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InMac India

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Dates: 
Jun 18, 2020Jun 20, 2020

Opening hours: 
10 am

Venue: 
Bombay Exhibition Centre

Location address: 
Western Express Hwy, NESCO, Goregaon, Mumbai, Maharashtra

Country: 
India

Organizer: 
Worldex India Exhibition and Promotion Pvt Ltd

Show URL: 
www.inmacfair.com

Major exhibits: 

Machinery & Spare parts, Technology & Solutions, Automation & Robotics, Accessories, Software, etc. for Textiles, Apparels, Leather, Shoes and Fashion Jewellery.

Show banner: 

InMac India 2020 will be showcasing excellence and innovations for the Indian Fashion industry which is evolving from an increasingly important sourcing hub into one of the most attractive consumer markets outside the Western world. The show will facilitate renowned global companies to avail opportunities in the Indian sub-continent for supporting adoption of new technology and automation, enhance investment, and help in capacity building and knowledge sharing. InMac India 2020 will target the niche technological solutions preparing for the industry for next industrial revolution with special focus on Digital Printing, Embroidery, Cutting & Sewing, Automation & Robotics, Lingerie technology, leather machinery and many more on display with the focus on upgrading and taking the industry forward with state-of-the-art but competitively priced products to suit the Indian market.

Show Contact
Title: 

Sr Manager

Name: 
Zahir Merchant

Telephone: 

(91) 9820028359

E-mail: 

contactus@worldexindia.com

Country: 
India



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ASIAN (H)

Intex South Asia in India

intex-south-asia-india.intex-logo.jpg


Dates: 
Jun 18, 2020Jun 20, 2020

Opening hours: 
10 am

Venue: 
Bombay Exhibition Centre

Location address: 
Western Express Hwy, NESCO, Goregaon, Mumbai, Maharashtra

Country: 
India

Organizer: 
Worldex India Exhibition and Promotion Pvt Ltd

Show URL: 
www.intexfair.com/india/

Major exhibits: 

Fibers, Yarns, Fabrics, Denim Fabrics, Clothing Accessories, Dyes & Chemicals, CAD-CAM, ERP Software, Testing Equipments & Solutions and more

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Bringing you the best in contemporary fibres, yarns, apparel fabrics, denims, clothing accessories and allied services from around the world to India – Intex South Asia in India will be held on 18-20 June 2020 at Bombay Exhibition Centre in Mumbai. Intex South Asia in India would prove to be the best meeting point for international suppliers to showcase their textile innovation and trendy product range to the leaders of the Indian textiles and apparel industry. Since its launch in Sri Lanka in 2015, Intex South Asia – The Biggest International Textile Sourcing Show has successfully connected with professional trade buyers and suppliers from more than 30 countries and regions with an excellent growth of 67% international buyer growth and 46% in exhibitor’s year-on year basis making it a renowned brand across South Asia and other international markets. Intex South Asia has been successfully presenting an entire manufacturing and supply chain by bringing together the best international textiles manufacturers and top buyers from South Asia and beyond under one roof. Intex South Asia in India will empower to gain new buyers, launch new products, generate sales leads to increase your market share and expand your business in the region.

Show Contact
Title: 

Sr Manager

Name: 
Zahir Merchant

Telephone: 

(91) 9820028359

E-mail: 

contactus@worldexindia.com

Country: 
India



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ASIAN (H)

InModa India

inmoda-india.inmodalogo.png


Dates: 
Jun 18, 2020Jun 20, 2020

Opening hours: 
10 am

Venue: 
Bombay Exhibition Centre

Location address: 
Western Express Hwy, NESCO, Goregaon, Mumbai, Maharashtra

Country: 
India

Organizer: 
Worldex India Exhibition and Promotion Pvt Ltd

Show URL: 
www.worldexindia.com/inmoda/

Major exhibits: 

Brands, Fashion Labels, Designer Labels, Fashion Accessories & Jewellery, Leather Garments & Accessories, Eyewear & Headwear, Sportswear & Athleisure, Footwear, Bags and Purses and many more.

Show banner: 

InModa India – International Fashion & Accessories Exhibition to be held on 18-19-20 June 2020 at Bombay Exhibition Center in Mumbai – The Retail Capital of India. The show would showcase latest innovation, high quality and trendy products for the entire supply and value-chain of the fashion industry. You must be aware that India’s retail market is the 5th largest in the world and with its dynamic and growing fashion retail & e-commerce industry, there is immense scope for international brands & fashion labels to explore new business opportunities and connect with the leading buyers from all across India (Tier I, Tier II and Tier III cities) and neighboring markets at InModa India exhibition.

Show Contact
Title: 

Sr Manager

Name: 
Rampat Gupta

Telephone: 

(91) 9819567106

E-mail: 

rampatgupta@worldexindia.com

Country: 
India



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