The Global North is Heading South
EU finances renewable tech sales to Vietnam, China's connected borders, Iran trades north, Thailand and Philippines trade up, the US scrambles for Africa while both the EU and US economies go south
UPDATE: Today, the Long Mekong Daily takes a macro view of geoeconomics and geopolitics from ASEAN to Africa, Beijing to Brussels and South to North. The EU’s global infrastructure initiative is renewing energy in Vietnam. China has the globes most connected borders. Iran is trading with Russia to become a major trading hub. Thailand and the Philippines are pushing ASEAN to new trade heights. The US scrambles for Africa, but hollow symbolism is a certain disaster. And, at the bottom of today’s Long Mekong Daily, the US and EU are now recessionary trade blocs and winter hasn’t set in yet - the Global North is Heading South!
Viet Nam is establishing an Energy Transition Partnership with the EU
The partnership is being promoted to develop an ambitious and reliable long-term legal framework for the green transition of Vietnam’s economy, including through the use of pricing and regulatory instruments; which will include but is not limited to: making improvements to the regulatory framework to facilitate investment into renewable energy and energy efficiency and to strengthen the electricity grid in Viet Nam.
The plan seeks to accelerate the decarbonisation of Viet Nam’s electricity system from the current net-zero planning peak by 2035 of no more than 170 MtCO2e emissions from electricity generation by 2030 enabled by meaningful and strong support from EU partners in terms of finance. An initial amount of at least US$15.5 billion over the next three to five years will be channeled through a combination of financial instruments in accordance with the national framework of public debt and external debt management.
The EU partners will mobilise US$7.75 billion of public sector finance on better than market terms and attempt to mobilise at least another US$7.75 billion in private finance. And, release all technologies needed to scale up the deployment of renewable energy and the management of clean power systems. Once scaled the partners will accelerate the deployment of renewable energy and to develop the technical expertise to support and manage a grid increasingly powered by variable renewable energy, with the aim of enabling Viet Nam to sustain a reliable grid and move beyond the current planned figure of 36% towards at least 47% of electricity generation coming from renewables including wind, solar and hydroelectricity power by 2030. The partners also plan to reduce Viet Nam's project pipeline for coal-fired generation, as well as provide a credible emission reduction pathway to phase out coal-fired power.
An important part of the project is to develop and implement educational, vocational training and re-skilling programmes to develop necessary skills and competencies and support job creation for labour in sectors and regions affected by the transition, as well as other forms of support to ensure better living conditions for workers after the transition.
Also included are plans to foster opportunities for technological innovation and private investment to drive the creation of green and decent jobs as part of a prosperous low emission economy; and develop the renewable energy industry including renewable energy hubs, storage battery and renewable energy equipment manufacturing, and green hydrogen production, developing planning of offshore wind platforms combining with marine aquaculture and fishing logistics.
Download the full statement here.
China’s borderlands in the post-globalization era
China is considered to be the biggest beneficiary of globalization, as evidenced by the growing volume and diversity of people, goods, and information moving across its borders. However, the increase in scholarly attention on China’s borderlands that is warranted by such economic, social, and political activities is absent. This special issue of China Information is committed to new research that addresses mounting challenges facing studies on China’s borderlands, as well as borderland studies in general.
This special issue presents the work of emerging scholars who investigate cross-border migra- tion and the key characteristics of China’s borderlands, focusing on previously under- studied places that were out of the reach of scholars for years. These studies offer a lens through which the socio-economic and politico-institutional changes in China’s bor- derlands can be understood within the broader context of China’s time-compressed global rise.
A cursory glance at the research topics may give the impression that this special issue appears to investigate migratory phenomena in geographically remote places on the per- ipheries of the country. However, we suggest that China’s rise is inseparable from, and critical to, a variety of complex phenomena that should be scrutinized and re-evaluated respectively in each contribution to this special issue. As areas experiencing rapid changes, China’s borderlands are the sites of a multitude of processes embedded in the social transformation which affects the country’s borderlands as much as its coastal regions.
Access the full edition here.
The Iranian Ambassador To Russia Shared Some Details About Those Two’s Strategic Partnership
The Russian-Iranian Strategic Partnership can be described as globally and even historically significant, which is why observers should closely follow it and remain abreast of those two’s latest developments like those that Ambassador Kazem Jalali just shared during his latest press conference.
Iranian Ambassador to Russia Kazem Jalali held a press conference on Wednesday, during which time he shared some details about those two’s strategic partnership that were reported on by TASS. His Excellency revealed that talks on a free trade zonebetween his country and the Russian-led Eurasian Economic Union (EAEU) have been completed and that the document will now be sent to the relevant countries’ parliaments for ratification.
On the topic of economics, he also added that trade turnover rose by 27% over the past year. This part of Ambassador Jalali’s press conference was very important, hence the need to quote him directly:
“We are now trying to buy grain, oilseeds and sunflower oil in Russia. We are also trying to provide Russia with products and food that it needs. We are making efforts to guarantee that our basic needs [are met], and that basic goods are purchased from our northern neighbor.
The main difference between this year and the previous year is that the Iranian export basket to Russia has diversified. This shows that in the field of new technologies, medical equipment, medicines and in general in the field of medicine, as well as in many other areas, we maintain very serious interaction.”
As can be seen, their trade ties have diversified. Furthermore, they’re also considering the joint manufacture of vehicles, expanded energy relations, space co-op, and using the ruble more often.
Read the full article here.
Thailand’s Economy Remains Resilient amid Global Headwinds
Thailand’s economy is projected to recover to its pre-pandemic level in 2022, but the pace of growth will be slower-than-expected in 2023 owing to global headwinds. The economy is projected to expand by 3.4 percent in 2022 and 3.6 percent in 2023. Growth in 2023 has been revised down by 0.7 percentage point compared to June projections reflecting faster-than-expected decline in global demand. Tourism sector recovery and private consumption will remain the major drivers of growth.
The Thailand Economic Monitor for December 2022: Fiscal Policy for a Resilient and Equitable Future, released today, finds that the Thai economy has shown resilience to recent global shocks. Economic growth accelerated to 4.5 percent in the third quarter of this year fueled by resurgent private consumption and strong tourism inflows following economic reopening in May and the authorities’ measures to mitigate cost-of-living pressures. Tourism arrivals reached 45 percent of the pre-pandemic level in September, surpassing those in Indonesia and the Philippines.
Download the full report here.
Strengthening Recovery in the Philippines
Driven by the release of pent-up demand from consumers, the Philippine economy is projected to surge to a 7.2% growth in 2022 before tapering off to an average of 5.7% percent growth in 2023, according to the Philippines Economic Update (PEU) released today by the World Bank.
This year’s forecast rides on the momentum of a 7.7 percent growth in the first three quarters of 2022, buoyed by the removal of remaining restrictions on people’s mobility and business operations and the recovery of incomes and jobs. The reopening has benefitted the services sector, and government spending on infrastructure fueled the growth of construction and industry.
The forecast for 2023 is premised on reduced consumer demand, alongside high inflation and high interest rates that are expected to temper household spending and investments.
Higher interest rates will likely constrain growth of private lending and investments at a time when public spending will likely slow as the country undertakes “fiscal consolidation” or implements measures to rein in government deficits and reduce debt. Also, as global growth is expected to decelerate next year, external demand from advanced economies, which are key buyers of Philippines merchandise exports, will be subdued.
Download the full report here.
Biden’s Africa summit challenge - is it just symbolism and disaster?
Biden hosted African leaders for a three-day summit, but only o The U.S. rivalry with China in Africa mirrors their geostrategic competition in other parts of the world. It’s a race for diplomatic influence and access to markets and resources. But unlike in Asia or the Middle East, the U.S. has a significant disadvantage in Africa because Washington has done less to keep up with Beijing’s efforts in Africa than it has in other regions.
The Biden administration’s agenda for the summit includes initiatives to advance peace and security on the continent, improve food security and help African countries cope with the climate crisis.
Biden’s summit goal of advancing “peace and security” in Africa reflects U.S. geostrategic concerns about China’s growing military footprint in the region. The People’s Liberation Army established a military base in Djibouti in 2017, sparking U.S. Africa Command’s security concerns about its base just a few miles away. Then-Africom chief Gen. Stephen Townsend warned in March that China was eyeing Equatorial Guinea as the site of its second regional base. “We have to talk to our African partners about what we see as dangers of having that type of influence on their soil,” a senior Defense Department official told reporters Thursday. The official required anonymity as a condition of the briefing..
Read the full article here.
US' attempted engagement with Africa to outcompete China will fall flat
Although China is not mentioned even once in the 34-page agenda of the three-day US-Africa Leaders Summit that opened in Washington on Tuesday, no one would be surprised if the host tries to take it as an opportunity to counter China's "clout" in the continent.
It has been eight years since the Barack Obama administration convened the first summit. During that period of time, even the China-bashers in Washington have realized neither the neocolonialism nor the debt-trap theories they have created to smear China in Africa has found true believers on the continent.
China's increasingly close and productive economic and trade ties with Africa have improved the livelihoods of African people by creating jobs, and bringing them technologies, industry parks, schools, hospitals, roads and railways.
Realizing it cannot replace China's role in providing massive infrastructure spending, and few US companies are interested in investing in African countries, the Joe Biden administration has been very careful this time not to present Africans with an us-or-them choice. That was something that the administration previously pinned great hope on.
But when US Secretary of State Antony Blinken unveiled the administration's African strategy during his three-country trip to the continent in August, it met a lukewarm response.
And when the Biden administration announced before the summit that it will provide about $55 billion to Africa to support its economy, public health and security, it was greeted with show-us-the-money skepticism. Although the amount of the check is smaller than those it has signed for global infrastructure, energy and climate change, that does not mean it will be any easier to cash than those multi-trillion-dollar checks that have bounced.
Read full article here.
Recession ? Hawkish pivot by the ECB
While other major central banks have started to prepare for the end of their hiking cycles, the ECB is giving the impression that it has just got started.
The phrase that “interest rates will still have to rise significantly at a steady pace” and that “keeping interest rates at restrictive levels will over time reduce inflation” illustrates that the last doves must have left the ECB building. During the press conference, Lagarde added some flavour by saying that increments of 50bp for a period of time looked about right and that the ECB was “in for a long game” and a steady pace. This implies that if the ECB had to draw its own dot plot chart today, it would probably show the deposit rate at 3.5% by the end of 2023, ie another 150bp of measured rate hikes from today.
Read full article here.
Recession? Fed's Powell says inflation battle not won, more rate hikes coming
The Federal Reserve will deliver more interest rate hikes next year even as the economy slips towards a possible recession, Fed Chair Jerome Powell said on Wednesday, arguing that a higher cost would be paid if the U.S. central bank does not get a firmer grip on inflation.
Recent signs of slowing inflation have not brought any confidence yet that the fight has been won, Powell told reporters after the Fed's policy-setting committee raised its benchmark overnight interest rate by half a percentage point and projected it would continue rising to above 5% in 2023, a level not seen since a steep economic downturn in 2007.
Read full article here.