The hasty withdrawal from Afghanistan is having an almost physical effect on the balance of power in Asia. The vacuum left by the Western alliance is now being filled by other players. Today, our author Michael Radunski takes a look at a lesser-known player that is currently gaining status as a result of US actions: the Shanghai Organization, launched by China. Their membership list reads like a recital of Afghanistan’s neighbors. This makes them particularly affected by the shift in power. But they can also be particularly successful in this crisis – if they play their cards right. And who will benefit the most in terms of foreign policy? Take an educated guess.
China is also proving itself to be particularly actionable in other areas as well. The reforestation of the tree population lost over the centuries is a prestigious project of the communist government. This monumental endeavor has several beneficial effects on the environment. Locally, it reduces droughts and sandstorms. Globally, newly planted trees counteract the greenhouse effect. Again, while not everything is going perfectly – and the project has experienced a learning curve over the decades – the central government’s creative power is clearly working towards a just cause.
Meanwhile, our EU correspondent Amelie Richter is annoyed by the chaotic communication style in Brussels. The Commission was supposed to present its long-awaited Indo-Pacific strategy on Tuesday. Unofficially, it is the answer to China’s sprawling territorial claims in the region. But now it was rescheduled for Thursday. Apparently, the finishing touches are still being applied.
The withdrawal of Western troops has seemingly catapulted Afghanistan back into the past in one fell swoop. As in the years prior to the U.S. invasion in 2001, the radical Islamic Taliban are in power. Does this mean that the terrorist threat is also returning?
This is of particular concern for neighboring countries. One name that keeps coming up in connection with Afghanistan’s future is the Shanghai Cooperation Organization or SCO for short. In a telephone conversation a few weeks ago, China’s President Xi Jinping and his Russian counterpart Vladimir Putin agreed to use the SCO’s potential to bring peace to Afghanistan.
Founded in 2001, the SCO includes China and Russia as well as India, Kazakhstan, Kyrgyzstan, Pakistan, Tajikistan and Uzbekistan. Members have nothing but the highest praise for the organization’s potential. The goals: creating mutual trust and promoting cooperation in every possible field. This means in politics, trade, economics, research, technology, culture, education, energy, transportation, tourism, environmental protection, and so on. The most important tasks are cooperation between member states on security, economic and trade issues, and the promotion of stability in the region.
In its current form, the SCO is primarily a security organization, says Eva Seiwert. “Accordingly, the future of Afghanistan is just the right topic.” SCO meetings are always about the fight against the so-called three evils: terrorism, separatism and extremism. “I am sometimes very critical of the definition and the respective approach. But in the eyes of the member states, the SCO is very effective in these areas,” Seiwert says.
The scientist of the German Friedrich-Alexander-University in Erlangen, however, immediately qualifies: The SCO will certainly not send its own troops to the Hindu Kush. There is a lack of both material and financial resources for this.
Nor is there much political will among SCO member nations for deeper integration. The former Soviet republics broke away from Moscow’s leadership only a few decades ago and gained their sovereignty. And neither in Tashkent nor in Dushanbe are there any efforts to limit this independence again. Rather, Seiwert describes the SCO as a platform used by the member states for mutual cooperation and coordination.
In addition, there are always problems arising behind the scenes; above all, the competition between China and Russia is preventing many more far-reaching projects. Moscow simply wants to prevent Beijing from exerting too much influence in Central Asia. The Kremlin still considered the regions of former Soviet republics as its own backyard, where no other power is tolerated.
Currently, relations between China and Russia are benign, but there is a rift within the Russian government when it comes to the People’s Republic: While the President and the Foreign Ministry welcome the positive development of bilateral relations, the Ministry of Defense and military circles maintain a traditional skepticism about Beijing.
In addition, Beijing’s most important foreign policy dogma is non-interference. Russia, on the other hand, does not want to be restricted in its political actions by such stipulations from the outside – for example in Georgia or in the annexation of Crimea. “In both cases, it was clear to see how discontented SCO states were,” says Seiwert. That’s because, for authoritarian states like SCO members, the principle of non-interference is extremely attractive. Such governments do not like to see human rights violations in their own countries publicly addressed or even criticized. Within the SCO framework, things are different, Seiwert explains. “If anything, there is always praise.”
No funding of its own, no troops and no criticism, but mutual praise in abundance – all this makes the SCO seem like a paper dragon at first glance. But Eva Seiwert sees things differently. “Many academics describe the SCO as weak and insufficiently integrated. The EU is often used as a benchmark. But this is wrong,” warns the scientist. What’s more, she says, this Western assessment of the SCO fails to take developments of recent years into account – and this becomes apparent in two aspects: the safeguarding of peace and stability and China’s growing influence.
SCO members consist of nations that had problems with each other in the past, such as India and Pakistan. Their potential for conflict is significantly reduced through cooperation in the SCO. This is a huge step for the region. “The SCO has become an important force in achieving lasting peace and mutual development,” is the verdict of Bolat Nurgaliyev in an interview with Chinese news agency Xinhua. Nurgaliyev served as the SCO’s secretary-general from 2007 to 2009 and now works as chairman of the board of the Foreign Policy Research Institute at Kazakhstan’s Foreign Ministry.
For international politics and the West, however, the second aspect is of even greater importance: China’s growing influence. Even though equality is always propagated within the SCO and neither Moscow nor Beijing have a veto right, there is no doubt about one fact. Just a glance at the name “Shanghai Cooperation Organization” shows who calls the shots in SCO: China. The People’s Republic is the initiator and driving force behind its projects. While not always successful, says Seiwert, China is cleverly using the SCO to expand its influence in Central Asia.
This is reflected in the words of former SCO Secretary-General Nurgaliyev: “I would like to emphasize that the China-proposed ideas of building a community with (a) shared future for mankind and the Belt and Road Initiative (BRI) have stood test within the framework of the SCO.” China simply understands that its own well-being depends on the successful development of its neighbors, Nurgaliyev said. With its huge economic power, attractive sales market and reasonable credits, China is increasingly becoming primus inter pares among equal SCO members.
Zbigniew Brzezinski, in his capacity as security advisor to former US President Barack Obama, once said that control over Eurasia was the key to global dominance – it seems that China and Russia have taken the political scientist’s approach to heart. The Tehran Times wrote as early as 2008 that the SCO should also contain US and NATO activities in Central Asia.
At the SCO summit in Tajikistan beginning on Thursday of this week, Afghanistan will be at the top of the agenda as an integral part of Central Asia’s future. With the withdrawal of Western troops, the SCO has unexpectedly gained influence – and so has China. “Beijing has built up an effective lever of power here in recent years,” assesses Seiwert. And it is far from just regional. “It’s a good platform for China to gain international influence and prestige,” Seiwert explains. Beijing attributes great importance to being the leading power in one of the world’s largest organizations. After all, the SCO currently represents around 40 percent of the world’s population, making it the largest regional organization on the planet.
The resulting consequences have long been visible at the UN level: In votes on human rights violations in Xinjiang, for example, no SCO member thinks of opposing China. And more and more nations are showing an interest in membership: Iran has already expressed its willingness for closer cooperation on several occasions, as have Syria, Saudi Arabia, Bahrain and Egypt. Turkey, too, is already an SCO dialogue partner. These are mostly countries that are dissatisfied with international institutions created by the West – and which are now being offered an alternative. Former SCO secretary-general Zhang Deguang once said that with the SCO, a new and above all fair type of cross-national relations had been established.
When and if a central forum for influencing international affairs could actually be emerging from this – still rather loose alliance- remains a matter of speculation. But the withdrawal of Western troops from Afghanistan could act as an unintended catalyst for the formation of a new power factor throughout Central Asia.
Four years ago, we argued that the rise of electric vehicles (EVs) would upend both the auto industry and the oil market. As with the rapid displacement of horses by automobiles in the United States a century ago, the exponential rise of EVs would lead to their dominance of the global auto market in the early 2040s. Oil would become the new coal and its price would drop to $15 per barrel. The economic and geopolitical consequences would be profound.
Since then, the transportation revolution has only intensified, consistently exceeding most expectations. By 2020, there were more than ten million electric vehicles, following growth of more than 40 percent in recent years. This is in line with the introduction of motor vehicles in the early 20th century, and if this trajectory continues, electric vehicles will account for around 60 percent of the global car market by 2040 and around 90 percent by 2050. These estimates exceed the figures from the International Energy Agency (IEA), which forecasts around 330 million electric vehicles by 2040.
What we have observed in China refutes the original assumption that the introduction of electric vehicles in emerging and developing countries would take many decades longer than in industrialized countries. According to this assumption, the continued high demand for gasoline there should delay a collapse in global oil demand.
In fact, Europe did not overtake China in new electric vehicle registrations until 2020, while China continues to have the largest electric vehicle population at 4.5 million vehicles. Although the Covid 19 pandemic has drastically reduced demand for cars, the electric vehicle market has continued to grow rapidly in many countries, including developing countries.
Emerging markets have proven that they can also be pioneers in the EV industry. The Chinese electric vehicle industry has continued to drive down costs as many brands compete for market dominance. More than 400 companies have entered the EV business in China, reminiscent of the early days of the auto industry in the U.S. when hundreds of companies competed against each other before giants like Chrysler and Ford emerged. The lifetime cost of owning an electric vehicle has steadily declined due to falling battery costs and is already comparable to that of cars.
The cheapest electric vehicle on the market, made by China’s SAIC Motor, is already surpassing Tesla’s Model 3 as the most popular electric vehicle. More importantly, the SAIC model, priced at just a few thousand dollars, is making EVs affordable in many developing countries, just as the Volkswagen Beetle and other models made early cars popular in those countries.
The vitality of the auto industry is reminiscent of its heyday a century ago, andfierce competition for the EV market will continue to drivedown costs, increase quality and advance technology, not only benefiting consumers butalso accelerating the energy transition.The main barriers to the necessary infrastructure, power generation and short ranges are being removed, and we are already seeing more charging stations, the rise of renewables, improved battery performance and continued innovation.
But it is not enough to rely on market forces. New regulations will help accelerate the transition. EU emissions regulations coming into force in 2025 could completely change the market outlook, as cars will have to incorporate expensive technologies that will make them much less competitive. Similarly, after California policymakers mandated stricter emissions standards in their state (the most populous in the U.S.), the auto industry had to follow suit, leading to positive impacts on the rest of the country. Such mandates could be groundbreaking, triggering a virtuous cycle of economies of scale, innovation, and rising demand.
Developing countries joining the EV revolution canreap significant macroeconomic benefits. Refined oil products, especially gasoline, account for the largest share of imports in most African countries, including major oil exporters like Nigeria.Accelerated adoption of EVs, which require less maintenance and spare parts, coupled with a more reliable renewable energy-based power grid wouldsave valuable hard currency resources at a time of rising external debt. The expanding global EV market also offers opportunities to enter newly forming value chains.
Countries that fail to plan adequately, on the other hand, facesignificant risks, potentially being stuck with idle refineries and fleets of obsolete vehicles, and unable to import critical parts should major automakers cease production.
Given the huge costs of global warming,encouraging developing countries to join the EV revolution can only bring huge benefits to the world. Developing countries cannot ignore the emerging energy transition and transport revolution and should see this as an opportunity to create new capabilities and diversify into new sectors.
The additional expenditure required for rapid deployment is tiny compared to the economic and human costs of heatwaves, forest fires, deforestation, pollution, reduced biodiversity and potentially more serious future pandemics. Making our roads cleaner, quieter and less congested would not only improve our quality of life but also their sustainability.
Reda Cherif, Senior Economist beim Internationalen Währungsfonds, ist assoziierte Forscherin am Bennett Institute for Public Policy der University of Cambridge. Fuad Hasanov, Senior Economist beim Internationalen Währungsfonds, ist außerordentlicher Professor für Wirtschaftswissenschaften an der Georgetown University und assoziierter Forscher am Bennett Institute for Public Policy der University of Cambridge. Min Zhu, ein ehemaliger stellvertretender Geschäftsführer des Internationalen Währungsfonds, ist Vorsitzender des National Institute of Financial Research an der Tsinghua University. Aus dem Englischen von Sandra Pontow.
Copyright: Project Syndicate, 2021.
www.project-syndicat.org
The annual Han Kuang exercises have been underway in Taiwan since the weekend. For the 37th time since 1984, the island nation is rehearsing a military emergency. The main aim is to simulate possible war scenarios as realistically as possible. That’s why during the five-day exercises, fighter jets land on roads, and tanks roll through residential areas (like here in the city of Hualien). Han Kuang is primarily directed against the threat posed by the People’s Republic of China.
The hasty withdrawal from Afghanistan is having an almost physical effect on the balance of power in Asia. The vacuum left by the Western alliance is now being filled by other players. Today, our author Michael Radunski takes a look at a lesser-known player that is currently gaining status as a result of US actions: the Shanghai Organization, launched by China. Their membership list reads like a recital of Afghanistan’s neighbors. This makes them particularly affected by the shift in power. But they can also be particularly successful in this crisis – if they play their cards right. And who will benefit the most in terms of foreign policy? Take an educated guess.
China is also proving itself to be particularly actionable in other areas as well. The reforestation of the tree population lost over the centuries is a prestigious project of the communist government. This monumental endeavor has several beneficial effects on the environment. Locally, it reduces droughts and sandstorms. Globally, newly planted trees counteract the greenhouse effect. Again, while not everything is going perfectly – and the project has experienced a learning curve over the decades – the central government’s creative power is clearly working towards a just cause.
Meanwhile, our EU correspondent Amelie Richter is annoyed by the chaotic communication style in Brussels. The Commission was supposed to present its long-awaited Indo-Pacific strategy on Tuesday. Unofficially, it is the answer to China’s sprawling territorial claims in the region. But now it was rescheduled for Thursday. Apparently, the finishing touches are still being applied.
The withdrawal of Western troops has seemingly catapulted Afghanistan back into the past in one fell swoop. As in the years prior to the U.S. invasion in 2001, the radical Islamic Taliban are in power. Does this mean that the terrorist threat is also returning?
This is of particular concern for neighboring countries. One name that keeps coming up in connection with Afghanistan’s future is the Shanghai Cooperation Organization or SCO for short. In a telephone conversation a few weeks ago, China’s President Xi Jinping and his Russian counterpart Vladimir Putin agreed to use the SCO’s potential to bring peace to Afghanistan.
Founded in 2001, the SCO includes China and Russia as well as India, Kazakhstan, Kyrgyzstan, Pakistan, Tajikistan and Uzbekistan. Members have nothing but the highest praise for the organization’s potential. The goals: creating mutual trust and promoting cooperation in every possible field. This means in politics, trade, economics, research, technology, culture, education, energy, transportation, tourism, environmental protection, and so on. The most important tasks are cooperation between member states on security, economic and trade issues, and the promotion of stability in the region.
In its current form, the SCO is primarily a security organization, says Eva Seiwert. “Accordingly, the future of Afghanistan is just the right topic.” SCO meetings are always about the fight against the so-called three evils: terrorism, separatism and extremism. “I am sometimes very critical of the definition and the respective approach. But in the eyes of the member states, the SCO is very effective in these areas,” Seiwert says.
The scientist of the German Friedrich-Alexander-University in Erlangen, however, immediately qualifies: The SCO will certainly not send its own troops to the Hindu Kush. There is a lack of both material and financial resources for this.
Nor is there much political will among SCO member nations for deeper integration. The former Soviet republics broke away from Moscow’s leadership only a few decades ago and gained their sovereignty. And neither in Tashkent nor in Dushanbe are there any efforts to limit this independence again. Rather, Seiwert describes the SCO as a platform used by the member states for mutual cooperation and coordination.
In addition, there are always problems arising behind the scenes; above all, the competition between China and Russia is preventing many more far-reaching projects. Moscow simply wants to prevent Beijing from exerting too much influence in Central Asia. The Kremlin still considered the regions of former Soviet republics as its own backyard, where no other power is tolerated.
Currently, relations between China and Russia are benign, but there is a rift within the Russian government when it comes to the People’s Republic: While the President and the Foreign Ministry welcome the positive development of bilateral relations, the Ministry of Defense and military circles maintain a traditional skepticism about Beijing.
In addition, Beijing’s most important foreign policy dogma is non-interference. Russia, on the other hand, does not want to be restricted in its political actions by such stipulations from the outside – for example in Georgia or in the annexation of Crimea. “In both cases, it was clear to see how discontented SCO states were,” says Seiwert. That’s because, for authoritarian states like SCO members, the principle of non-interference is extremely attractive. Such governments do not like to see human rights violations in their own countries publicly addressed or even criticized. Within the SCO framework, things are different, Seiwert explains. “If anything, there is always praise.”
No funding of its own, no troops and no criticism, but mutual praise in abundance – all this makes the SCO seem like a paper dragon at first glance. But Eva Seiwert sees things differently. “Many academics describe the SCO as weak and insufficiently integrated. The EU is often used as a benchmark. But this is wrong,” warns the scientist. What’s more, she says, this Western assessment of the SCO fails to take developments of recent years into account – and this becomes apparent in two aspects: the safeguarding of peace and stability and China’s growing influence.
SCO members consist of nations that had problems with each other in the past, such as India and Pakistan. Their potential for conflict is significantly reduced through cooperation in the SCO. This is a huge step for the region. “The SCO has become an important force in achieving lasting peace and mutual development,” is the verdict of Bolat Nurgaliyev in an interview with Chinese news agency Xinhua. Nurgaliyev served as the SCO’s secretary-general from 2007 to 2009 and now works as chairman of the board of the Foreign Policy Research Institute at Kazakhstan’s Foreign Ministry.
For international politics and the West, however, the second aspect is of even greater importance: China’s growing influence. Even though equality is always propagated within the SCO and neither Moscow nor Beijing have a veto right, there is no doubt about one fact. Just a glance at the name “Shanghai Cooperation Organization” shows who calls the shots in SCO: China. The People’s Republic is the initiator and driving force behind its projects. While not always successful, says Seiwert, China is cleverly using the SCO to expand its influence in Central Asia.
This is reflected in the words of former SCO Secretary-General Nurgaliyev: “I would like to emphasize that the China-proposed ideas of building a community with (a) shared future for mankind and the Belt and Road Initiative (BRI) have stood test within the framework of the SCO.” China simply understands that its own well-being depends on the successful development of its neighbors, Nurgaliyev said. With its huge economic power, attractive sales market and reasonable credits, China is increasingly becoming primus inter pares among equal SCO members.
Zbigniew Brzezinski, in his capacity as security advisor to former US President Barack Obama, once said that control over Eurasia was the key to global dominance – it seems that China and Russia have taken the political scientist’s approach to heart. The Tehran Times wrote as early as 2008 that the SCO should also contain US and NATO activities in Central Asia.
At the SCO summit in Tajikistan beginning on Thursday of this week, Afghanistan will be at the top of the agenda as an integral part of Central Asia’s future. With the withdrawal of Western troops, the SCO has unexpectedly gained influence – and so has China. “Beijing has built up an effective lever of power here in recent years,” assesses Seiwert. And it is far from just regional. “It’s a good platform for China to gain international influence and prestige,” Seiwert explains. Beijing attributes great importance to being the leading power in one of the world’s largest organizations. After all, the SCO currently represents around 40 percent of the world’s population, making it the largest regional organization on the planet.
The resulting consequences have long been visible at the UN level: In votes on human rights violations in Xinjiang, for example, no SCO member thinks of opposing China. And more and more nations are showing an interest in membership: Iran has already expressed its willingness for closer cooperation on several occasions, as have Syria, Saudi Arabia, Bahrain and Egypt. Turkey, too, is already an SCO dialogue partner. These are mostly countries that are dissatisfied with international institutions created by the West – and which are now being offered an alternative. Former SCO secretary-general Zhang Deguang once said that with the SCO, a new and above all fair type of cross-national relations had been established.
When and if a central forum for influencing international affairs could actually be emerging from this – still rather loose alliance- remains a matter of speculation. But the withdrawal of Western troops from Afghanistan could act as an unintended catalyst for the formation of a new power factor throughout Central Asia.
Four years ago, we argued that the rise of electric vehicles (EVs) would upend both the auto industry and the oil market. As with the rapid displacement of horses by automobiles in the United States a century ago, the exponential rise of EVs would lead to their dominance of the global auto market in the early 2040s. Oil would become the new coal and its price would drop to $15 per barrel. The economic and geopolitical consequences would be profound.
Since then, the transportation revolution has only intensified, consistently exceeding most expectations. By 2020, there were more than ten million electric vehicles, following growth of more than 40 percent in recent years. This is in line with the introduction of motor vehicles in the early 20th century, and if this trajectory continues, electric vehicles will account for around 60 percent of the global car market by 2040 and around 90 percent by 2050. These estimates exceed the figures from the International Energy Agency (IEA), which forecasts around 330 million electric vehicles by 2040.
What we have observed in China refutes the original assumption that the introduction of electric vehicles in emerging and developing countries would take many decades longer than in industrialized countries. According to this assumption, the continued high demand for gasoline there should delay a collapse in global oil demand.
In fact, Europe did not overtake China in new electric vehicle registrations until 2020, while China continues to have the largest electric vehicle population at 4.5 million vehicles. Although the Covid 19 pandemic has drastically reduced demand for cars, the electric vehicle market has continued to grow rapidly in many countries, including developing countries.
Emerging markets have proven that they can also be pioneers in the EV industry. The Chinese electric vehicle industry has continued to drive down costs as many brands compete for market dominance. More than 400 companies have entered the EV business in China, reminiscent of the early days of the auto industry in the U.S. when hundreds of companies competed against each other before giants like Chrysler and Ford emerged. The lifetime cost of owning an electric vehicle has steadily declined due to falling battery costs and is already comparable to that of cars.
The cheapest electric vehicle on the market, made by China’s SAIC Motor, is already surpassing Tesla’s Model 3 as the most popular electric vehicle. More importantly, the SAIC model, priced at just a few thousand dollars, is making EVs affordable in many developing countries, just as the Volkswagen Beetle and other models made early cars popular in those countries.
The vitality of the auto industry is reminiscent of its heyday a century ago, andfierce competition for the EV market will continue to drivedown costs, increase quality and advance technology, not only benefiting consumers butalso accelerating the energy transition.The main barriers to the necessary infrastructure, power generation and short ranges are being removed, and we are already seeing more charging stations, the rise of renewables, improved battery performance and continued innovation.
But it is not enough to rely on market forces. New regulations will help accelerate the transition. EU emissions regulations coming into force in 2025 could completely change the market outlook, as cars will have to incorporate expensive technologies that will make them much less competitive. Similarly, after California policymakers mandated stricter emissions standards in their state (the most populous in the U.S.), the auto industry had to follow suit, leading to positive impacts on the rest of the country. Such mandates could be groundbreaking, triggering a virtuous cycle of economies of scale, innovation, and rising demand.
Developing countries joining the EV revolution canreap significant macroeconomic benefits. Refined oil products, especially gasoline, account for the largest share of imports in most African countries, including major oil exporters like Nigeria.Accelerated adoption of EVs, which require less maintenance and spare parts, coupled with a more reliable renewable energy-based power grid wouldsave valuable hard currency resources at a time of rising external debt. The expanding global EV market also offers opportunities to enter newly forming value chains.
Countries that fail to plan adequately, on the other hand, facesignificant risks, potentially being stuck with idle refineries and fleets of obsolete vehicles, and unable to import critical parts should major automakers cease production.
Given the huge costs of global warming,encouraging developing countries to join the EV revolution can only bring huge benefits to the world. Developing countries cannot ignore the emerging energy transition and transport revolution and should see this as an opportunity to create new capabilities and diversify into new sectors.
The additional expenditure required for rapid deployment is tiny compared to the economic and human costs of heatwaves, forest fires, deforestation, pollution, reduced biodiversity and potentially more serious future pandemics. Making our roads cleaner, quieter and less congested would not only improve our quality of life but also their sustainability.
Reda Cherif, Senior Economist beim Internationalen Währungsfonds, ist assoziierte Forscherin am Bennett Institute for Public Policy der University of Cambridge. Fuad Hasanov, Senior Economist beim Internationalen Währungsfonds, ist außerordentlicher Professor für Wirtschaftswissenschaften an der Georgetown University und assoziierter Forscher am Bennett Institute for Public Policy der University of Cambridge. Min Zhu, ein ehemaliger stellvertretender Geschäftsführer des Internationalen Währungsfonds, ist Vorsitzender des National Institute of Financial Research an der Tsinghua University. Aus dem Englischen von Sandra Pontow.
Copyright: Project Syndicate, 2021.
www.project-syndicat.org
The annual Han Kuang exercises have been underway in Taiwan since the weekend. For the 37th time since 1984, the island nation is rehearsing a military emergency. The main aim is to simulate possible war scenarios as realistically as possible. That’s why during the five-day exercises, fighter jets land on roads, and tanks roll through residential areas (like here in the city of Hualien). Han Kuang is primarily directed against the threat posed by the People’s Republic of China.
