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12341. Reimagining Regional Governance in Latin America

Author:
Federico Merke, Oliver Stuenkel, and Andreas Feldmann
Publication Date:
06-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Latin America’s existing predicament stems from a complex set of interlinked social, economic, and political crises, which have been magnified by the advent of the coronavirus pandemic and a rising tide of isolationism and “antiglobalism.” These crises range from domestic polarization and economic travails, to ideological divergence, personal rivalries among the region’s leaders and U.S.-Chinese geopolitical competition, and all are hampering regional governance and negatively impacting the prospects of cooperation. Latin American governments urgently need to work together to address the manifold challenges they face as events in recent decades have shown that unless better regional mechanisms can be found, domestic and transnational challenges—from organized crime and environmental degradation to migration and anemic economic growth—will become even more difficult to address, with potentially devastating long-term consequences. Yet, despite the high stakes, traditional regional governance mechanisms seem paralyzed, lacking even the capacity to discuss the current untenable situation, let alone address it. The conventional wisdom is that regional cooperation across Latin America is practically nonexistent because its heads of states have insurmountable ideological differences and because the region’s dominant diplomatic institutions have failed to fulfill their purpose. All is not lost in the realm of regional governance, however. While cooperation is either dysfunctional or nonexistent in many dimensions, in others it persists with surprising resilience and vigor, although it is often overlooked or underappreciated. Existing cooperation is for the most part technical and based on the committed work by government officials who, even during the bleakest moments of the pandemic, have shown adherence to principled norms and driven by a refreshing degree of pragmatism. Effective regional governance and cooperation in Latin America is necessary for a broader conversation on the region’s role in a rapidly changing global order, shaped by technological transformation and genuinely global problems such as climate change, migratory pressures, and increasing security threats. As great power competition continues to shape the global order, Latin America often is regarded as a peripheral player. Yet far from being somehow apart or exempt from today’s rising geopolitical currents, Latin America, for better or for worse, is very much affected by them. Regional governance is a fundamental instrument to help Latin America overcome its numerous daunting challenges. Even when ideological differences make cooperation difficult at the high politics level, it is crucial to find avenues of progress at other levels and in informal or less visible ways.
Topic:
Politics, Regional Cooperation, Governance, Economy, and Ideology
Political Geography:
Latin America

12342. A Difficult Balancing Act: Russia’s Role in the Eastern Mediterranean

Author:
Paul Stronski
Publication Date:
06-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Russia’s assertiveness in the Eastern Mediterranean is part of its broader strategy for undermining the cohesion of the North Atlantic Treaty Organization (NATO) and the European Union (EU) and thus complicating the Western alliance’s ability to operate, plan, and formulate policy. The Kremlin’s interests are geared toward enhancing dependencies on Russian gas and financial flows, cultivating governing elites, and stymieing the ability of NATO and, to a lesser extent, the EU to expand. While Moscow’s efforts in the region after its 2015 intervention in Syria are often described as a means to reassert Russia’s great power status, the Russian leadership more likely sees its actions there as part of a broader standoff with the West that stretches from the Atlantic to the Black Sea and from North Africa to the Arctic. This is certainly the case in Turkey, Greece, and Cyprus—three of the most vulnerable countries to Russian influence operations in the region due to a mix of relative geographic proximity to Russia, common cultural and historic legacies, and elites that have looked to Moscow and beyond to balance their countries’ foreign policies or gain leverage with transatlantic partners. While Europe today is generally thought of as more or less “unified,” this region is anything but. Economic turmoil, border and territorial disputes, migration flows, and a growing disenchantment with the EU and the United States have created numerous fissures within and between these three states, transforming them into receptive targets for Russia. They are also highly dependent on Russian hydrocarbons and keen to attract Russian investment and tourists. Russia uses a narrative of shared cultural and religious heritage, along with existing anti-American or Euroskeptic sentiment to cultivate the region’s populations, albeit not always successfully. Yet, its influence operations over the past decade have led to Turkey, Greece, and Cyprus being labeled as weak links in NATO or the EU, especially on key issues of concern to Moscow: expansion of Western political and security organizations, EU sanctions, and the promotion of democracy and good governance. However, while the behavior of some of these countries at times has proved troubling to Washington and Brussels, the Kremlin’s engagement there has not led any of them to formally break with their Western partners, although tensions between the latter and Turkey continue to grow. Russia has been skillful and successful in seeking opportunities to engage the region, cultivating rising political, economic, religious, or cultural decisionmakers in all three countries. It now has a clear presence in the Eastern Mediterranean that cannot be ignored. Russia has been able to compartmentalize its differences with Turkey to develop a working, albeit often unhappy, accommodation in Syria and the South Caucasus, even as the two countries operate largely as competitors in Libya and Ukraine. Ankara’s purchase of the Russian S-400 missile system exacerbated frictions with Washington, throwing NATO into an internal crisis and leading to Turkey’s expulsion the F-35 and Patriot missile programs. For Russia, the sale was not only a symbolic win for its arms industry; it succeeded in stoking fissures in the Western alliance and complicating its weapons development programs. Nonetheless, while the Russo-Turkish relationship might appear robust, it is neither deep nor wide, and it is largely dependent on the two countries’ authoritarian leaders. Russia’s engagement with Greece has been less successful. Once described as Moscow’s Trojan horse in Europe,1 Athens pivoted back sharply toward its European and NATO partners after the 2018 exposure of Russian attempts to interfere in Greek politics and to upend its rapprochement with North Macedonia. Despite its promises of financial assistance, Moscow lacks the economic clout to help address Greece’s decade-long financial crisis. President Vladimir Putin’s successful cultivation of his Turkish counterpart also unnerves many Greeks. Greece is a clear case of Russian overreach, but Moscow still has tools—hydrocarbons and cultural links—that it can use in the country should future opportunities arise. Like Greece, Cyprus remains wary of Russia’s enhanced security relationship with Turkey, which has opened the door to greater military cooperation with the United States, France, and other Western allies. Nicosia hoped that Moscow could come to the rescue during its 2012–2013 banking crisis, but the latter lacked the financial clout to do so and was not a viable alternative to a harsh EU bailout. As an offshore financial center, Cyprus is dependent on Russian financial flows, not all of them legal, to help prop up its economy, giving Moscow leverage that has paved the way for limited security cooperation, particularly in the form of naval port calls. Russia has increased its cultural outreach to the country, but much of this is geared toward the growing Russian-speaking expatriate community. In sum, Russia’s capabilities in the Eastern Mediterranean are modest, based largely on symbolic diplomacy, energy, financial promises, and the ability to cultivate elites, some of which are quite eager to engage with Moscow for personal or political gain. That approach, however, does not resonate widely beyond the narrow Russia-friendly constituencies in each country. Furthermore, there is not much ballast to these relationships, all of which have proven to be volatile, as the 2015 freeze in Russo-Turkish relations over Turkey’s downing of a Russian fighter or the post-2018 plummet in Greek-Russian relations illustrate. But, if Russia’s main goals are to stoke fissures within the West, to shore up vulnerabilities to NATO on its southern flank, and to be seen as a regional player, it has had success, especially considering its limited economic potential and the challenges it faces in balancing the competing interest of Turkey, Greece, and Cyprus. Russia also wants a seat at the table as a mediator in regional disputes, but that is mainly to preserve its own interests rather than to bring sustainable solutions. Moscow in fact is far more likely to take advantage of those challenges for economic or geopolitical gain than to try to remedy them. To manage Russia’s assertiveness in the Eastern Mediterranean, NATO and the EU should shift away from trying to combat every instance of Russian activity there, not all of which is malign. Instead, they should work to enhance local resilience and to stabilize countries in the wider Mediterranean such as Lebanon, Libya, and Syria. They should also help Turkey, Greece, and Cyprus address their economic, governance, political, and security challenges.
Topic:
Foreign Policy, NATO, European Union, Geopolitics, and Alliance
Political Geography:
Russia, Eurasia, and Mediterranean

12343. Grand Illusions: The Impact of Misperceptions About Russia on U.S. Policy

Author:
Eugene Rumer and Richard Sokolsky
Publication Date:
06-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
A critical examination of U.S. policy misfires in dealing with Russia and its intentions and capabilities over the past several decades is long overdue. Three factors largely account for this problem. All of them continue to affect contemporary policymakers’ approach to a deeply troubled relationship with Moscow. By unpacking the analytical assumptions that underlie these misconceptions, President Joe Biden’s administration and other important policy players will be better equipped to ensure that U.S. policy going forward is grounded in the most realistic understanding of the challenge that Russia poses and the right kinds of tools that the United States should use to contend with it. The first factor is the lingering euphoria of the post–Cold War period. For many Western observers, the collapse of the Soviet Union and the implosion of Russian power demonstrated the permanent superiority of the United States. The perception that Russia’s decline was so deep and irreversible that it would no longer be able to resist Western initiatives made it difficult to accept Moscow’s pushback against Western policies. This was a particular problem when the North Atlantic Treaty Organization (NATO) pursued several rounds of enlargement in the 1990s and early 2000s under U.S. leadership. U.S. leaders ignored Russia’s objections and underestimated the lengths to which Russian counterparts were prepared to go to secure the homeland against perceived threats. Second, American policymakers and experts have long paid too little attention to the drivers of Russia’s external behavior. Russian threat perceptions are part of an inheritance heavily shaped by geography and a history of troubled relations with other major European powers. They are compounded by the trauma of the loss of its empire, the lingering ideology of greatness, and a sense of entitlement based on its sacrifice in World War II. President Vladimir Putin stokes all of them for domestic political gain. Third, U.S. policymakers have not fully internalized the lessons of the two biggest crises of the Cold War—the Cuban missile crisis of 1962 and the Euromissile crisis of the early 1980s. In both cases, the Soviet Union went to great lengths to counter what its leaders perceived was a unilateral U.S. threat to the Soviet homeland that could not be tolerated. In 1962 they almost triggered a nuclear war. In 1987, they agreed to eliminate an entire class of intermediate-range nuclear weapons to secure the homeland from U.S. missiles. In both situations, U.S. missiles deployed in Europe would deny the Kremlin the advantage of strategic depth and decision time in a crisis. The lessons of those crises were ignored as anachronisms when NATO embarked on its eastward expansion on the assumption that it would no longer need to worry about, let alone maintain the necessary capabilities for the territorial defense mission. After all, Russia was permanently weakened. When Russia proved otherwise, the alliance was caught by surprise. In another surprise for the United States and its allies, Russian foreign policy has become increasingly assertive, adversarial, and ambitious over the past decade. In the post-Soviet space, the Middle East, Latin America, and parts of Africa, Russia has deployed a diverse tool kit rich in hard, soft, and gray zone power instruments to assert itself as a global power. Russian foreign policy agility and even daring have repeatedly caught the West by surprise and sparked fears of its return as a major threat to Western interests. In reality, Russian gains and tools used to accomplish Moscow’s objectives have not been all that impressive. But Russia has made up for it by capitalizing on mistakes made by the United States and its allies or moving into power vacuums left by them. Still, Russian muscle-flexing and agility in deploying its tool kit, certain to be enriched as new and even more disruptive technologies become available, will remain a top-tier challenge for the president and his senior national security aides. Russia will also remain a serious national security concern for the United States because of its nuclear arsenal and conventional and cyber capabilities—and because of the U.S. commitment to NATO, which is locked in a tense standoff with Russia, in close proximity to its heartland, for the foreseeable future. Getting Russia right—assessing its capabilities and intentions, the long-term drivers of its policy and threat perceptions, as well as its accomplishments—is essential because the alternative of misreading them is a recipe for wasted resources, distorted national priorities, and increased risk of confrontation. In responding to this challenge, it is important to set priorities and differentiate between primary and secondary interests. Europe is the principal theater of the East-West confrontation where Russian actions threaten Western security. Beyond Europe, Russia’s gains have been considerably less than often portrayed and pose a less serious challenge to U.S. interests. The continued tendency to dismiss Russia as a “has been” or declining power whose bark will always be worse than its bite can lead to the United States overextending itself, making unrealistic commitments, and risking a dangerous escalation with the one country that is still its nuclear peer competitor. The push to expand NATO without taking into account the possibility of Russia reemerging as a major military power was an example of such thinking, which is to be avoided in the future. At the same time, the scope and scale of the threat that Russia’s global activism poses to U.S. interests will depend largely on how Washington defines those interests in regions where Russia has expanded its footprint over the past decade. Absent a sober assessment of Russia’s gains and tools for power projection, the United States will position itself to needlessly chase after the specter of Russian expansionism in distant corners of the world where major U.S. interests are not at stake.
Topic:
Foreign Policy, NATO, Power Politics, Geopolitics, Post Cold War, and Expansion
Political Geography:
Russia, Eurasia, North America, and United States of America

12344. Less Than a Full Deck: Russia’s Economic Influence in the Mediterranean

Author:
Joanna Pritchett
Publication Date:
07-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Russia’s intervention in Syria in 2015, and then subsequently in Libya, marked its return as a major actor in the Mediterranean. Much has been made of Russia’s use of all elements of statecraft, including diplomatic, ideological, military, and economic instruments, to advance its interests in this region, a vital shipping and transit corridor. A closer look at Russia’s economic tool kit in this region, however, suggests concerns about Russian economic capabilities are likely overstated. Russia’s most important economic tools in the Mediterranean are its energy resources, arms exports, and ability to launder money through corrupt networks. These tools have complemented Russia’s diplomatic and military activities, particularly in areas where economic systems and rule of law have been weaker. Where Russia has been successful, it has increased a country’s dependence on Russian money, oil and gas, and/or arms, giving it a say in a country’s policymaking, particularly on matters of importance to Russia, and a way to undermine U.S. and the North Atlantic Treaty Organization’s (NATO) influence in the region. In particular, Russia’s unique economic tools have helped it manage its otherwise difficult relationship with Turkey, which depends on Russian oil and gas and is a new customer for Russian nuclear power and weapons systems. Turkey is a unique example in the Mediterranean where Russia already had a substantial trade and investment relationship beyond hydrocarbons, and then used these newer, more subversive tools to build its influence. These same tools have allowed Russia to gain more influence in Egypt, Algeria, and to some degree Cyprus over the last decade. These tools have proved of limited utility elsewhere, however, as they have not been backed by the traditional instruments of economic statecraft: trade in non-energy goods and services, foreign direct investment, and development assistance. Russia has trailed the United States and Europe, and in some cases China, in deploying these fundamental economic elements of foreign policy in the Mediterranean region. Based on economic data available, Russia’s bilateral trade with individual Mediterranean countries is low, its investment levels in most Mediterranean countries are insubstantial, and it is not giving large quantities of development assistance to the poorer countries along the Mediterranean’s eastern and southern rims. The lack of these traditional economic ties is surprising, given Russia’s military and diplomatic efforts to increase its influence in the region. Without them, Russia’s economic diplomacy in the region is highly based on symbolism and the relationships lack sustainability over the long term, which undercuts its geopolitical ambitions in the Mediterranean. If Russia’s ambitions in the Mediterranean region are limited to maintaining access, currying favor with key decisionmakers, and remaining a nuisance to NATO, then its current level of economic ties is likely sufficient. If Russia aims to grow its influence and clout with more countries in the region, however, its current economic tool kit does not appear to be large or sophisticated enough to achieve this. Economic statecraft is an important tool in any country’s foreign policy. Trade and investment deals link countries together in vital ways to improve living standards in each country. They also build relationships between people—politicians, business leaders, students, tourists—that promote mutual understanding and respect for each other’s cultures. The United States and the European Union (EU) have generally excelled in building these types of economic ties in the post–World War II era, and economic data show they continue to be the dominant economic powers in the Mediterranean. Continuing this leadership in the economy will likely ensure that Russian influence in the Mediterranean remains a manageable, if persistent, problem for the West.
Topic:
Foreign Policy, Geopolitics, Economy, Trade, Regional Power, and Energy
Political Geography:
Russia, Eurasia, and Mediterranean

12345. Redefining the U.S.-Turkey Relationship

Author:
Sinan Ülgen
Publication Date:
07-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
At present, the relationship between Turkey and the United States is in a deep crisis. The meeting between U.S. President Joe Biden and Turkish President Recep Tayyip Erdoğan at the margin of the June 2021 North Atlantic Treaty Organization (NATO) Summit in Brussels raised expectations that the U.S.-Turkey relationship can be put back on track. And yet recovery from the present crisis is uncertain, as the underlying factors that previously shaped the relationship have changed. The end of the Cold War and the emergence of a more multipolar system have altered the nature of U.S.-Turkey engagement. In Washington, competition between global powers is now the overriding frame for U.S. foreign policy. Ankara, however, views the world very differently. The rise of Asia and the ascendancy of China are seen more as opportunities than threats. Ankara interprets these trends, as well as Russia’s growing regional activism, as signs of the lasting emergence of a multipolar world order. This understanding now shapes the strategic calculus of Turkish policymakers. Turkish political elites firmly believe that a successful repositioning of their country in this multipolar environment will benefit the nation in the long run. This growing divergence in terms of how Ankara and Washington see the world creates a challenging environment for constructively addressing the range of prevailing bilateral disputes. This paper examines five main areas of disagreement between the two countries and explores how the two sides might overcome these differences. At the top of the list of current disagreements are Turkey’s acquisition of the S-400 air and missile defense system from Russia and ongoing U.S. support for Syria’s Kurdish military and political factions. Also important are the consequences of the erosion of democratic norms in Turkey; the U.S. position on the self-exiled Islamic preacher Fethullah Gülen, who many in the Turkish government believe was the architect of the failed coup attempt in Turkey in July 2016; the possible impact of the Halkbank court case on grounds of past violations of Iran sanctions; and the Biden administration’s decision to use the word “genocide” to refer to the killings and deportations of Ottoman Armenians during World War I. Under these circumstances, it is clear that the Turkey-U.S. relationship is in need of redefinition. The Turkey-U.S. relationship has long been defined as a strategic alliance underwritten by NATO. Today, this definition has become obsolete and does not capture the new reality of this relationship. Turkey undoubtedly will remain a strong NATO ally, but its relationship with the United States will no longer be shaped by the power asymmetry of this military alliance. In other words, the reality of the United States being the main security provider will not be sufficient to override and contain the centrifugal trends that have shaped the relationship since the end of the Cold War and that have gained momentum in the past decade as a result of the growing divergences between Ankara and Washington. Yet differences with Turkey cannot be managed with the same clinical approach reserved for adversaries of the United States. Turkey is not an adversary, and therefore, a categorical separation of areas of agreement and cooperation from areas of disagreement is unrealistic. Unlike in the case of the United States and its true adversaries, the perpetuation of areas of dispute will always hinder the scope of U.S. collaboration with Turkey. The underlying alliance relationship has a built-in expectation of solidarity and mutual trust. Without these values, the bilateral relationship cannot function effectively. Neither will the “grand bargain” approach favored by Ankara be successful. Turkey wants a diplomatic process with the United States that would involve deliberations on all the disputed areas in a flexible manner. These deliberations could then lead to trade-offs that would create the conditions for a mutually beneficial reset. Ankara could also showcase its flexibility provided that Washington demonstrates its willingness for compromise. And yet there is little interest in Washington in undertaking such an enterprise with the Erdoğan government. A scenario of gradual rapprochement as an alternative to the grand bargain championed by Turkey or the principled engagement currently favored by Washington can be promoted. The gradual rapprochement would entail a series of confidence-building actions. Positive areas of engagement could include future negotiations with Iran, the reconstruction of Syria, the normalization of Libya, the stabilization of governance reform in Afghanistan given Turkey’s interest to operate the Kabul airport even after the U.S. and NATO withdrawals, the countering of Russian aggressiveness (especially toward Ukraine), and collaboration in Africa to dampen the influence of China. The Turkey-U.S. relationship may in that sense be in acute need of gradual but concrete steps that over time will set a new tone for a more positive and constructive strategic partnership and reestablish mutual trust.
Topic:
Foreign Policy, NATO, Bilateral Relations, Alliance, Multipolarity, and Military
Political Geography:
Turkey, North America, United States of America, and Mediterranean

12346. Fake Civil Society: The Rise of Pro-Government NGOs in Nigeria

Author:
Matthew T. Page
Publication Date:
07-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Nigeria’s dynamic and expansive civil society is one of its greatest strengths and is crucial to maintaining what democratic space still exists in the country. Yet its independence, outspokenness, and unwavering commitment to democracy, transparency, and human rights have long antagonized the kleptocratic, power-hungry—but also image-conscious—ruling elites. To help protect themselves from domestic pressure and outside scrutiny, Nigeria’s top powerbrokers have cultivated a new generation of pro-government non-governmental organizations (NGOs). Like the fake grassroots groups bankrolled by past military juntas, these surrogate organizations masquerade as authentic civil society groups, singing the praises of top officials and attacking their critics. A symptom of the country’s more fundamental political ills, Nigerian elites’ growing use of civil society surrogates should set off alarm bells both domestically and internationally. It is both corrupting and corruptive, compounding the country’s downward democratic trajectory. Like many countries in Africa—and, for that matter, elsewhere in the world—Nigeria has recently experienced democratic backsliding that threatens its long-term stability and prosperity. The rise of pro-government NGOs is both a cause and a consequence of this backsliding and must be addressed as part of any effort to arrest and reverse it.
Topic:
Civil Society, Government, Democracy, and NGOs
Political Geography:
Africa and Nigeria

12347. A High-Tech Alliance: Challenges and Opportunities for U.S.-Japan Science and Technology Collaboration

Author:
James L. Schoff, Douglas E. Rake, and Joshua Levy
Publication Date:
07-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
In both Japan and the United States, there is a growing recognition that national security and alliance security involve more than just military concerns and extend to new technology areas and their economic effects. Looming over the two allies is a wide-ranging question of how to enable greater science and technology (S&T) research collaboration for commercial and defense purposes, involving such fields as artificial intelligence (AI), quantum information science (QIS), cybersecurity, and space utilization. Competing domestic political and economic considerations in each country make this a particularly complex challenge for policymakers, who can be expected to treat the international sharing or sale of assorted technologies differently. Still, there is little doubt that it is in the mutual interest of Japan and the United States to harmonize their approaches and find acceptable ways to enable deeper and broader S&T collaboration—and to do so expeditiously.
Topic:
Science and Technology, Bilateral Relations, Alliance, and Collaboration
Political Geography:
Japan, Asia, North America, and United States of America

12348. Tangled Wires: Preparing India’s Power Sector for the Clean Energy Transition

Author:
Jonathan Kay
Publication Date:
08-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Almost none of the world’s largest polluters have enacted policies compatible with the Paris Agreement’s target of limiting global warming to within 2 degrees Celsius, a threshold past which climate disruption is projected to become even more frequent, severe, and unpredictable. Fortunately, despite the absence of adequate government support, renewable energy has grown at an astonishing pace in recent years thanks to its plummeting cost. India, for example, has more than doubled its stock of wind and solar power in the last five years, driven less by sustainability concerns than by clean energy’s potential for cost-effectively meeting citizens’ pressing development needs. However, the low prices of wind and solar projects disguise the structural costs renewable energy poses for grids when deployed at larger scales. The intermittent, unpredictable nature of the electricity generated by such technologies—in contrast to the stable, on-demand flow of power from traditional fossil fuel generation—requires fundamental changes to how countries invest in and operate their grids. For India, one of the most important steps for coping with the variability of these new sources of energy will be better coordination of the flow of power between the country’s disparate state-run grids. By increasing the volume of energy traded between state utilities, periods of surplus power in one region can compensate for deficits in others, making for a more stable and reliable supply of renewable energy—one that can better displace expensive and polluting fossil fuels. Yet, while such reforms would be difficult under the best of circumstances, they will be particularly challenging given the unique dysfunctions of India’s power sector. With its politically compromised, perennially loss-making electricity distribution companies already struggling to keep the lights on, bolder change appears unlikely. Deeper reforms to India’s power sector are therefore prerequisites to adopting solutions like regional coordination that can ensure the continued growth of renewable energy. The good news is that Prime Minister Narendra Modi’s national popularity and the dominance of his Bharatiya Janata Party (BJP) at the state level offer the country’s leaders an opportunity to reform the power sector where others have failed. But to take advantage of this opening, Modi must go beyond his modus operandi by investing in incremental institutional solutions rather than one-and-done technical fixes and by serving as a coordinator for India’s states rather than legislating by central fiat. Deeper reforms enabling India to maintain its rapid expansion of renewable energy not only would provide clean, low-cost power to its people but also would help the world offset the failings of more laggard countries, perhaps even putting back within reach the Paris Agreement’s more aggressive target of keeping global warming to within 1.5 degrees Celsius. But the hardest part of this ambitious task lies ahead—in ending the vicious cycles that have plagued India’s power sector for decades.
Topic:
Climate Change, Pollution, Fossil Fuels, and Energy
Political Geography:
South Asia and India

12349. What Railway Deals Taught Chinese and Brazilians in the Amazon

Author:
Adriana Erthal Abdenur, Maiara Folly, and Maurício Santoro
Publication Date:
08-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Over the past decade, Chinese investments in Brazil have expanded and diversified considerably, especially ones involving infrastructure. Chinese investors have also diversified geographically. Increasingly, major Brazilian infrastructure projects are being planned or implemented with Chinese backing in environmentally sensitive regions such as the Amazon rain forest and the Cerrado, a large savanna region in Central-West Brazil. Chinese actors have become directly involved in such projects against a backdrop of sharpening debates about sustainability and other consequences of large-scale infrastructure projects. This is especially true in protected areas such as land populated by Indigenous groups and conservation units. A notable example is the Ferrogrão project, a major railway line designed to cross sections of the Amazon and Cerrado to deliver goods to Brazilian ports. This paper examines the diverse ways that Brazilian and Chinese actors have learned from each other as they negotiate the terms of these deals. It also explores how these learning processes have been conditioned by intense domestic political debates over these projects in Brazil. Official documents and secondary sources reveal that, rather than a set Chinese way of doing business or a stock Brazilian response, such projects entail dynamic institutional learning. Such learning is shaped not only by the particulars of the Ferrogrão project but also by Chinese actors’ broader engagement with Brazilian infrastructure projects over the past ten years.
Topic:
Environment, Infrastructure, Investment, and Sustainability
Political Geography:
China, Asia, Brazil, South America, and Amazon Basin

12350. Reassessing Russian Capabilities in the Levant and North Africa

Author:
Frederic M. Wehrey and Andrew S. Weiss
Publication Date:
08-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Russia may be back in the Middle East, but is it a truly strategic player? The picture is decidedly mixed. After abandoning most of its presence in the Levant and North Africa during the late 1980s, the Kremlin has alarmed Western policymakers in recent years by filling power vacuums and exploiting the missteps of the United States and the European states. Moscow panders to the insecurities and ambitions of local regimes, trying to enrich itself along the way. While Russian activism is part of a broader push for great power status, most of its policies are rooted more in opportunism than grand strategy. Yet Russian influence is formidable in many respects. In war-wracked states like Syria and Libya, Moscow has adroitly deployed military forces and engaged with actors that are off-limits to Westerners, thus positioning itself as a significant power broker. In Egypt and Algeria, it has pursued arms deals that are unencumbered by human rights conditions. Russia’s economic footprint is expanding in fields ranging from infrastructure to tourism to energy, contributing, in some instances, to the region’s cronyism and corruption. At the same time, a closer look at Russian activism reveals that its ability to shape events in the Middle East is far more modest than is commonly assumed. Russia has neither the tools nor the willingness to tackle the region’s deep-seated socioeconomic and governance problems. In Syria, the limits of the Kremlin’s military commitment have been exposed amid clashes with other powerful, outside players and a hardening stalemate on the ground. For now, Moscow is simply not in a position to achieve its desired military or political outcomes absent a significant investment of new resources. Russian economic penetration is driven mainly by short-term objectives and a search for outsized financial rewards that sometimes fail to materialize or to make Moscow an attractive partner. Russian inroads are further limited by regional factors like fractured politics and capricious local actors, who, despite being plied with Russian attention and support, do not behave as docile proxies. In many instances, Middle Eastern rulers exert far more power in shaping the extent of Russian influence than conventional narratives suggest. Successive leaders of Egypt, for instance, have perfected the game of soliciting Russia’s attention to gain leverage over other patrons, namely the United States. For their part, Israeli leaders have worked hard to ensure that Russia does not throw major obstacles in the way of Israel’s ongoing campaign against Iranian military encroachment in Syria—yet they surely take note when Moscow does the bare minimum in raising concerns about the situation in Gaza. The limits of Russian influence are similarly noticeable in the heartbreaking economic crisis in Lebanon, where Moscow is little more than a bystander. With these limitations in mind, Washington should avoid viewing the region through a zero-sum, Cold War lens that sees every development as a net gain or loss for Moscow or minimizes the agency of local actors. In the context of multiple policy challenges across the globe and at home, U.S. decisionmakers need to prioritize the areas of Russian influence that necessitate a response. In so doing, they should avoid playing the arms sales game on Moscow’s terms or letting themselves be instrumentalized by autocratic Middle Eastern rulers who point to Russian overtures to seek leniency and support from Washington. U.S. and European policymakers have ample tools at their disposal that can frustrate or slow the more malign forms of Moscow’s inroads. Yet the net impact of such pushback on Russian resolve should not be overstated. Instead, Washington should focus its energies on its biggest comparative advantage vis-à-vis Moscow in the region: namely, its abundant sources of influence and leverage in the economic and security spheres, its still-potent soft power, and its leadership of multilateral diplomacy and the rules-based global order.
Topic:
Foreign Policy, Diplomacy, Geopolitics, Economy, and Strategy
Political Geography:
Russia, Eurasia, Middle East, North America, and Levant

12351. China’s Digital Yuan: An Alternative to the Dollar-Dominated Financial System

Author:
Rajesh Bansal and Somya Singh
Publication Date:
08-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Central bank digital currencies (CBDC) are digital tokens issued by central banks. In a way, they are the digital version of cash; their value is guaranteed by a central bank. Unlike money held in credit cards and mobile wallets, CBDCs are not a mere representation of physical money stored elsewhere. Instead, they are a complete replacement for currency notes. While several countries are developing their digital currencies, China is well positioned to take the lead with the digital yuan. This paper highlights ways in which China can use its digital yuan to internationalize the renminbi (RMB) and gradually chip away at the hegemony of the dollar. The first part of the paper focuses on the dollar’s dominance in the global financial system and the privileges the United States accrues as a result of the dollar being the world reserve currency. The United States has a tight grip on the world’s payment rails, especially in the case of cross-border transactions. For example, the Society for Worldwide Interbank Financial Telecommunications (SWIFT)—the largest cross-border payment clearinghouse in the world—has to comply with and implement unilateral U.S. sanctions. These sanctions seriously hinder trade and damage the economies of the countries affected by them, as was the case with Iran, which lost $150 billion worth of revenue as a result of U.S. sanctions.1 Once a country is cut off from SWIFT’s network, it becomes extremely difficult for it to trade with the rest of the world. Thus, via the dollar’s dominance and its geopolitical muscle, the United States is positioned to maintain a tight grip on the world’s financial system. In an increasingly multipolar world, this outdated, decades-old system of the dollar as the apex currency and the United States’ position of power that allows it to pursue its own geopolitical interests has become outdated. The U.S. dollar’s hegemony has been challenged by economies like those of the European Union (EU), Russia, and China. Of all the countries, China finds itself in a dominant position to gain from this transition. In order to challenge the dollar’s hegemony and internationalize its currency, China will have to move away not just from the dollar but also from the payment rails dominated by the dollar. The best way to simultaneously do both would be to introduce a new payment rail like CBDCs. This paper analyses the way the launch of China’s CBDCs could greatly enhance its currency internationalization prospects. Considering China’s growing economy and influence over the world, the paper argues that China’s CBDC launch could bring a period of momentous change in the global financial system. In order to challenge the dollar, China will have to build the payments infrastructure required to facilitate the use of its digital yuan. It will also have to incentivize other countries to adopt its digital currency. China’s ability to successfully promote its currency using CBDCs will depend heavily on the country’s ability to relax capital controls and maintain the world’s trust in its institutions. China’s geopolitics will play a key role here. In the last decade, some of China’s major geopolitical efforts have set the stage for its CBDC launch. As China continues to use its foreign policy and technological capabilities to grow its influence in the global financial system, the launch of the digital yuan could be a significant step forward in this direction. This paper examines the reasons for China’s past efforts at currency dominance and explores ways in which the country can use its CBDC to further internationalize its digital yuan.
Topic:
Foreign Policy, Finance, Economy, Central Bank, and Currency
Political Geography:
China and Asia

12352. Understanding the Encryption Debate in India

Author:
Anirudh Burman and Prateek Jha
Publication Date:
09-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Encryption has become a contentious instrument for protecting the security and confidentiality of online communication. Rapid digitalization in the past decade has led to the proliferation of domestic and foreign online communication services that use encryption and, consequently, pose challenges to national security bodies and law enforcement agencies (LEAs). To address these challenges, the Indian government introduced new regulations in February 2021. These regulations require large social media platforms to enable traceability, or the ability to provide information concerning the originator of online communications. Technology companies and privacy activists have opposed such a move on the grounds that traceability would require the breaking of the end-to-end encryption used by many online communication platforms like WhatsApp and therefore would compromise the security of online communications on such platforms. This traceability requirement, however, is only the latest development in a drawn-out, contentious debate over the use of encryption. The contestation between maintaining higher degrees of online security and issuing new rules to grant technological exceptions for security agencies and LEAs is not specific to India. One of the first serious discussions on the issue took place in the United States in the 1990s, when public opposition warded off an early government attempt to sidestep encryption protections with a court order. In the past decade, the use of encryption has only grown more pronounced. The revelations that the United States’ National Security Agency was collecting vast amounts of communications data led to the introduction and increased adoption of end-to-end encryption for online communications. End-to-end encryption is now used widely by online communication platforms like WhatsApp, Signal, and Threema. Its use presents law enforcement and national security agencies with new challenges. Even though these agencies today have greater and easier access to more information than ever before, the absolute confidentiality provided by encrypted online communication platforms makes it harder for these agencies to engage in real-time surveillance to investigate crimes and identity wrongdoers. While some policymakers from India and other countries argue that encryption must only be weakened to solve specific problems, most experts agree that, as of today, there is no technological solution that would weaken encryption for specific law enforcement and national security purposes, while managing to maintain preexisting levels of security and confidentiality for general use. The introduction of any mechanism for specific access would, it is claimed, introduce both known and unknown vulnerabilities into these communications platforms. Such a mechanism would have a systemic effect on all online communication dependent on encryption for ensuring security and confidentiality. In India, these developments create challenges in specific ways. For example, India reports the highest number of child pornography cases worldwide, and encrypted communications makes it difficult to identify culpable parties. Similarly, as India has digitized rapidly, there has been a surfeit of fake and offensive online news that has, in some cases, led to mob lynchings. In addition, terrorist networks have been found to be using encrypted communication channels while planning and carrying out terrorist attacks in India. Over the years, the Indian government’s approach to encryption has responded to these concerns in a variety of ways. Indian financial regulators mandated the use of encryption for banking and financial services as they realized the security of such transactions was best protected through encryption. At the same time, the Indian government prohibited telecom operators from implementing bulk or mass encryption in telecommunication services. Starting in 2015, the government introduced different regulatory proposals requiring that messaging platforms and other communication service providers provide plaintext copies of communications to Indian government agencies on request. These proposals, however, faced significant opposition and were withdrawn. Earlier in 2021, the Indian government’s new rules requiring traceability have been officially notified. The mechanisms through which they will be implemented are not yet clear. It is also unclear if these rules are the last demands the Indian government will make to weaken encryption, or whether further demands will arise in the future. To weigh the relative benefits and drawbacks of the Indian government’s proposal, analysts should consider relevant factors such as (but not limited to) whether such changes will offer law enforcement officials the access they desire, how the security of encrypted communications will be affected, and how citizens’ civil liberties will be impacted, among others.
Topic:
Security, National Security, Science and Technology, Law Enforcement, Digitalization, and Encryption
Political Geography:
South Asia and India

12353. How Syria Changed Turkey’s Foreign Policy

Author:
Francesco Siccardi
Publication Date:
09-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Between August 2016 and the present, Turkey has launched four military operations in northern Syria. Each operation has served specific objectives and was designed to respond to rapidly changing scenarios on the ground. It is possible to identify the key priorities that have informed Turkey’s Syria policy over the years. Boiled down to its core, the Turkish government’s activism in Syria has been driven by domestic politics and has helped Turkish President Recep Tayyip Erdoğan and his Justice and Development Party (AKP) preserve power. Domestically, Ankara has used the Syrian conflict as a pretext to suppress the rights of the Kurds living in Turkey and limit their parliamentary representation to secure a landmark constitutional reform in 2017. In the following years, successive military operations in Syria have helped Erdoğan connect with increasingly nationalistic constituencies and drum up support around key electoral dates. Finally, after the failed coup in July 2016, the Turkish government’s Syria policy played a major role in rebuilding the credibility of the Turkish Armed Forces while redrawing the balance between civilian and military power. In foreign policy terms, Turkey’s military operations in Syria have resulted in increasingly tense relations with the United States. Washington’s support for the Syrian Kurds has alienated Ankara to an extent that U.S. policymakers failed to anticipate. The thorniest topic of the day in the U.S.-Turkey bilateral relation—Ankara’s decision to deploy the Russian S-400 missile system—is also deeply related to the Syrian crisis. This decision was made in the context of a strategic realignment between Turkey and Russia that has helped both countries pursue their respective objectives in Syria: the survival of Syrian leader Bashar al-Assad’s regime for Moscow and the weakening of the Syrian Kurds for Ankara. Finally, Ankara’s involvement in Syria has also given Turkey new leverage over the EU when it comes to the management of refugee flows. Solving the question of Syrian refugees in Turkey has been a priority of the Turkish government since the early stages of the Syrian civil war—and a main driver of Ankara’s policies toward both Syria and the EU. Overall, Ankara’s involvement in Syria has not only been a source of conflict—or rapprochement—with its traditional partners and neighbors across the region. It has also equipped Turkey with new tools for conducting a more aggressive, nationalistic foreign policy. The strategies Turkey has employed in Syria have boosted the country’s image and international role. These operations have secured a seat for Turkey at the negotiating table with Russia and the United States. Ankara has used these tools, these lessons learned, and its new capabilities to inform its revisionist foreign policy posture. Going forward, and with an eye on the country’s 2023 presidential election, Turkey will continue to use these tools to reinforce its position in the international arena.
Topic:
Foreign Policy, European Union, Syrian War, and Military
Political Geography:
Russia, United States, Turkey, Middle East, and Syria

12354. Chinese Mining and Indigenous Resistance in Ecuador

Author:
Cintia Quiliconi and Pablo Rodriguez Vasco
Publication Date:
09-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Chinese mining companies were drawn to Ecuador by a strong interest in diversifying their sources of copper in Latin America. But Chinese mining operations in Ecuador, which could have contributed to Ecuadorian development, soon gained a negative reputation after these activities prompted a great deal of local pushback, especially from affected Indigenous communities. As a result, the major Chinese mining consortium that now controls Ecuador’s two main copper mines has taken adaptive steps to stabilize its mining investment and increase the security of its supply networks, steps that often have not produced the intended results. Working through two subsidiaries, the Chinese mining consortium has responded to this localized criticism with a blend of tactics that includes co-opting select local figures, colluding with national officials to sidestep environmental and sociocultural safeguards, and coercing inhabitants into relocating under the threat of force from accommodating Ecuadorian authorities. By turning Ecuadorian national elites against locals and using divide-and-conquer tactics among Indigenous communities, the Chinese-led mining projects have entrenched existing political cleavages, have undermined community cohesion, and ultimately have harmed Ecuador’s democratic fabric, especially the standing of civil society and Indigenous rights organizations. While Ecuador has welcomed Chinese capital and other sources of international investment, this infusion of financing has increased the risk of political abuses at the national and local levels. This paper explains the adaptive strategies employed by the Chinese consortium and its subsidiaries in charge of the Mirador and San Carlos Panantza mining sites, contrasting the differing results these tactics have produced in each case. Both projects are located in Ecuador’s so-called Copper Belt provinces of Morona Santiago and Zamora Chinchipe, which are part of a mountain range known as the Cordillera del Cóndor. They are embedded in an ecologically and culturally sensitive zone that includes territory of the Indigenous Shuar community in the Ecuadorian Amazon. In the case of Mirador, the Chinese mining consortium’s adaptive response helped its subsidiary overcome local resistance but only by crushing it. In the case of San Carlos Panantza, local resistance so far has not been overcome, so the Chinese consortium has remained unable to proceed with its project. Neither case, even the Mirador site where mining has moved forward, is a sign of success for future relationships between Chinese mining conglomerates and Ecuadorian communities. To understand why the Chinese consortium’s adaptive tactics were somewhat more successful in Mirador, it is important to focus on the differing composition of the inhabitants of the land where the two mines are located. Mirador sits on territory shared by Shuar and non-Shuar settler communities who have different bonds with the land. The non-Shuar settlers emphasize the productive and commercial value of the land over the spiritual and symbolic value that is key for many in the Shuar community. The Canadian-held and later Chinese-controlled companies active in Ecuador’s mining industry understood this difference between Mirador’s inhabitants and adapted accordingly: they managed to displace resistant residents despite widespread opposition through questionable and sometimes arguably illegal purchases of land. In San Carlos Panantza, a second subsidiary of the Chinese consortium chose to respond to local criticism with the same alleged practices of violence, occupation, and displacement used in Mirador. However, although the two projects are geographically near each other, the situation played out differently at the second would-be mine: ongoing opposition has prevented mining operations from beginning at all yet. Again, paying attention to the inhabitants of the land is instructive. San Carlos Panantza is in the heart of Shuar territory in Arutam, a region with few non-Indigenous settlers. The mining incursion by the Chinese-run subsidiary and the Ecuadorian security forces tasked with supporting it were seen as a threat to the area’s Shuar people, who have been strongly protesting and opposing the mining venture since late 2016. This state of affairs is likely to have far-reaching effects for Ecuador too. The apparent collusion between Ecuador’s national government and the Chinese consortium (and its subsidiaries) has crushed those who oppose mining, has upended the country’s policies on resource extraction, and has yielded documented violations of local communities’ human rights. These events have transpired because both the Chinese firms and the Ecuadorian state have tended to see local communities as an obstacle to the development of the country’s extractive industries. As a result, local social and environmental safeguards have been weakened, tenuous consultation processes have eroded, environmental licenses have been granted under dubious circumstances, and local communities have been forcibly displaced. This paper explores the implications of the adaptive tactics chosen by the Chinese mining subsidiaries that run the Mirador and San Carlos Panantza mines. It also addresses how Chinese companies have, in some cases, negotiated with local communities to begin mining exploitation, while also analyzing the ways the Chinese mining consortium has interacted with the Ecuadorian government and other players, such as the Canadian mining company it acquired and other peer companies that set up successful coalitions for mining development in Ecuador. Finally, the paper explores the effects the agreements between the Ecuadorian government and the Chinese consortium have had on local actors.
Topic:
Development, Government, Mining, Indigenous, and Resistance
Political Geography:
China, Asia, South America, and Ecuador

12355. Civil Society and the Global Pandemic: Building Back Different?

Author:
Carnegie Civic Research Network
Publication Date:
09-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Since the coronavirus pandemic began, civic activists around the world have shifted into a higher gear. As Carnegie’s Civic Research Network analyzed last year, the gravity of the health emergency has pushed many civil society organizations (CSOs) to engage in new ways to help alleviate the pandemic’s impact.1 Sometimes they have done this in cooperation with governments, but other times they have acted on their own out of frustration at governments’ sluggish and inadequate responses to the emergency. At the same time, many activists have had to defend themselves as governments have used the pandemic as a pretext for further clamping down on independent civil society voices, under the cover of emergency laws passed to help manage the crisis. As civic activists grapple with the challenges of the pandemic, they are also turning their attention to the long term. It is clear that the pandemic will reshape economics, politics, and international relations, but it is not yet clear how. Many countries are undergoing major economic upheaval and are searching for new economic templates to overcome the damage they have experienced. On the political side, the pandemic has fueled authoritarian actions and damaged the credibility of many democratic governments. Post-pandemic political life will likely entail heightened struggles for democracy and a search for new democratic practices that more effectively meet citizens’ needs. With regard to geopolitics, the pandemic is contributing to still greater tensions between the world’s major powers. Because of these factors, the pandemic is likely to have a long-term impact on the nature of civil society worldwide. Civil society has already adapted to the coronavirus pandemic through the growth of self-help activism. Looking further ahead, civic actors are helping to spark a rethink of economic models. In the political sphere, at least some civic actors are engaging in efforts to revitalize democratic politics, including through new ideas on technology’s role in post-pandemic politics. Finally, civil society is being reshaped by geopolitical competition: some civil society actors are being pulled into the Chinese and Russian orbits, while others are more firmly resisting political encroachment by these powers. In an overarching sense, civic activists are juggling uneasily at present as they focus on the immediate challenges of the pandemic while also trying to fashion new economic, political, and geostrategic agendas for the period after the pandemic.2
Topic:
Civil Society, Politics, Economy, Pandemic, COVID-19, and Activism
Political Geography:
Global Focus

12356. India’s Fog of Misunderstanding Surrounding Nepal–China Relations

Author:
Vijay Gokhale
Publication Date:
10-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
India’s postindependence ties with Nepal were predicated on the intimate cultural and historical links between the two countries. As India’s first prime minister, Jawaharlal Nehru, noted, “though Nepal was an independent country, it was very closely allied to India in culture and tradition and we did not look upon it as a foreign country.” New Delhi also regarded China as an “interloper” in Nepal in 1950 who threatened India’s security and interests in the region, ignoring at least a century of Sino-Nepali history centering around Tibet. This paper argues that New Delhi’s close relationship with Nepal, bound in history and culture, and the misperception about China’s relations with Nepal before 1950 have contributed to a skewed understanding of Sino-Nepali relations. The Working Paper looks at the impact that New Delhi’s misperceptions of Sino-Nepali relations, termed the “fog of misunderstanding,” has had in the context of the triangular relations between China, India, and Nepal. The paper is divided into four sections arranged chronologically. The first section looks at the historical Sino-Nepali relationship from the mid-eighteenth to the mid-twentieth centuries. It establishes that this early relationship was centered on Tibet. While the Gorkha kings of Nepal sought to preserve their trade privileges in the region, the Chinese were concerned about the security of their southwestern frontier. Notably though, Beijing’s concern with security does not appear to have extended into any desire to conquer Nepal. This section also touches upon British India’s policy toward Nepal in the nineteenth century, and the subsequent approach that the government of independent India took in the first few years, without an adequate appreciation of Kathmandu’s history with China. As a consequence, India developed a suspicious attitude toward Beijing’s desire to re-establish ties with Kathmandu after the Chinese Civil War, and shaped its policy toward Nepal with this factor in mind. The second section delves into Indian and Chinese policies toward Nepal in the period from 1955 until the end of the monarchy in 2008. It showcases how, during this long period, the three kings of Nepal sought to leverage their ties with China in order to maintain some semblance of balance and how China, in turn, followed a limited but strategic approach that was centered on the kings. The fog of misunderstanding continued to shroud India’s attitude to Nepal-China relations during this period and, consequently, India’s Nepal policy lacked a working template to manage relations with a smaller neighbor sandwiched between India and China in a way that would preserve New Delhi’s influence in a positive way. In contrast to China’s political approach, New Delhi fluctuated between the monarchy and an assortment of democratic political parties, suggestive of a provincial approach in New Delhi’s dealing with Kathmandu. As a result, China’s approach ensured that its main objective in Nepal, namely the security of its southwestern frontier, was secured with a relatively low-risk and low-cost strategy. The third section deals with the aftermath of the fall of the Nepali monarchy, 2008 to 2016. During this important period, New Delhi had a fresh opportunity to reset ties by providing the support to democratic forces in Nepal, that could have resulted in a transformation of the Indo-Nepali ties. However, India appeared to hew to its traditional policy. China, on the other hand, quickly built new ties with the post-monarchical dispensation. India’s perceived actions as a result of the adoption of the new constitution of Nepal plunged Indo-Nepali ties to a nadir. It seems to have pushed Kathmandu to strengthen its relationship with China. This section of the paper also outlines the changing nature of China’s policy and objectives in Nepal, especially in the second decade of the twenty-first century, and its possible implications on the future course of the triangular relationship, as well as for India-Nepal relations. It postulates that under President Xi Jinping, China’s policy toward Nepal has shifted from protecting its periphery to a broader goal of bringing Nepal under its strategic control. This section highlights the political and economic levers that Beijing is using to build a preeminent position in Nepal. The paper concludes with an assessment of options available to all three countries going forward, and India’s options in Nepal in the face of China’s new policy in the region. It suggests that a decisive reset in policy toward Nepal is required to restore healthy relations that are based on mutual respect and mutual sensitivity. New Delhi may need to re-orient its thinking toward Nepal in the context of triangular relations, including on the boundary issue and the 1950 Treaty of Peace and Friendship that have been long-standing irritants in the India-Nepal relationship. Nepal, for its part, should also reflect carefully on whether its leveraging of China might become counterproductive in the light of changing strategic balance in its vicinity, and the implications of giving up the policy of balance for one that tilts decisively toward Beijing. The paper concludes that there is sufficient scope and opportunity for course correction by India, and that through sustained efforts India may be able to preserve its influence and security in Nepal and counter China’s expanding footprint.
Topic:
Security, Foreign Policy, Bilateral Relations, and Geopolitics
Political Geography:
China, South Asia, India, Asia, and Nepal

12357. China’s Influence in South Asia: Vulnerabilities and Resilience in Four Countries

Author:
Deep Pal
Publication Date:
10-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
China’s economic and political footprint has expanded so quickly that many countries, even those with relatively strong state and civil society institutions, have struggled to grapple with the implications. There has been growing attention to this issue in the United States and the advanced industrial democracies of Japan and Western Europe. But “vulnerable” countries—those where the gap is greatest between the scope and intensity of Chinese activism, on the one hand, and, on the other, local capacity to manage and mitigate political and economic risks—face special challenges. In these countries, the tools and tactics of China’s activism and influence activities remain poorly understood among local experts and elites. Both within and beyond these countries, meanwhile, policy too often transposes Western solutions and is not well adapted to local realities. This is especially notable in two strategic regions: Southeastern, Central, and Eastern Europe; and South Asia. China’s economic and political profile has expanded unusually quickly in these two regions, but many countries lack a deep bench of local experts who can match analysis of the domestic implications of Chinese activism to policy recommendations that reflect domestic political and economic ground truth. To address this gap, the Carnegie Endowment initiated a global project to better understand Chinese activities in eight “pivot” countries in these two strategic regions. The project’s first objective was to enhance local awareness of the scope and nature of Chinese activism in states with (1) weak state institutions, (2) fragile civil societies, or (3) countries where “elite capture” is a feature of the political landscape. Second, the project aimed to strengthen capacity by facilitating a sharing of experiences and best practices across national boundaries. Third, the project sought to develop policy prescriptions for the governments of these countries, as well as the United States and its strategic partners, to mitigate and respond to activities inimical to political independence or well-balanced economic growth and development. To establish a comprehensive picture of China’s activities and their impact, this project dug deeply into Chinese activism in four case countries in each region—eight countries in total. We began by holding workshops, so that influencers across countries could share experiences and compare notes. Invited participants included policymakers, experts, journalists, and others—all with deep local knowledge, steeped in their countries’ politics, economies, and civil societies. In Europe, the four countries were Georgia, Greece, Hungary, and Romania, and in South Asia, Bangladesh, Maldives, Nepal, and Sri Lanka. Cross-national discussions among these regional participants aimed to raise awareness, discuss the implications of China’s growing activism in their countries, and compare notes on the diverse ways in which these various countries had managed the rapid influx of Chinese capital, programs, people, technology, and other sources of influence.
Topic:
International Relations, Foreign Policy, Development, Economy, Engagement, Regionalism, and Resilience
Political Geography:
Bangladesh, China, South Asia, Sri Lanka, Nepal, and Maldives

12358. China’s Influence in Southeastern, Central, and Eastern Europe: Vulnerabilities and Resilience in Four Countries

Author:
Erik Brattberg, Philippe Le Corre, Paul Stronski, and Thomas de Waal
Publication Date:
10-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
China’s presence has brought socioeconomic opportunities to Georgia, Greece, Hungary, and Romania. Yet it has exacerbated governance shortfalls, undermined elements of political and economic stability, and complicated the European Union’s ability to reach consensus on key issues.
Topic:
Foreign Policy, Governance, European Union, Political stability, Resilience, and Economic Stability
Political Geography:
China, Europe, Greece, Romania, Hungary, Georgia, and United States of America

12359. How Central Asians Pushed Chinese Firms to Localize

Author:
Dirk Van Der Kley and Niva Yau
Publication Date:
10-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
There has been a sea change in China’s economic involvement in Central Asia. Large-scale transport and electricity projects funded by Chinese government loans have dried up. Hydrocarbon exports to China continue, but they are not the focus of most new projects. Instead, there are a growing number of industrial projects that seek to make value-added products that can be exported. These projects are increasingly staffed by Central Asians who receive technical training from Chinese firms. This change has been primarily driven by Central Asian states. The region’s governments have long pushed for industrial capacity building, including the upskilling of local workers. In addition, debt concerns in Kyrgyzstan in particular have made Chinese loans less attractive and less prevalent. This trend has coincided with Chinese policy banks’ embrace of more conservative lending policies globally for infrastructure projects. Chinese firms have begun adapting to these demands. They have steadily increased their proportions of local hires by training Central Asian workers both onsite and in China to address skills shortages. They have tried to engage local communities to earn a social license for their overseas operations. The Chinese government is now following suit. It is developing more formal cooperation agreements on industrialization and upskilling in addition to pre-existing, ad-hoc arrangements by individual companies. So far, the outcomes have been mixed. Many Chinese firms in Central Asia are employing more locals. Yet the more closely integrated these Chinese firms become with the region’s economies, the more they must deal with, or be co-opted by, localized corruption and political fights. Newly available polling data shows that public sentiments toward China are becoming more negative. Chinese companies are flexibly adapting to this environment of heightened expectations in a variety of ways. The views that outside observers in Washington and elsewhere harbor of China’s infrastructure investments through the Belt and Road Initiative (BRI) in Central Asia are outdated and do not reflect how much Chinese firms and eventually the Chinese government have adapted to meet local needs. Any Western-proposed alternative to the BRI needs to take these considerations into account.
Topic:
Economics, Business, Industry, and Job Creation
Political Geography:
China, Central Asia, and Asia

12360. South Korea Beyond Northeast Asia: How Seoul Is Deepening Ties With India and ASEAN

Author:
Kathryn Botto
Publication Date:
10-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Under South Korean President Moon Jae-in and his administration, Seoul has undertaken its first unified diplomatic initiative aimed at advancing ties with India and the Association of Southeast Asian Nations (ASEAN). This initiative is known as the New Southern Policy (NSP). Though Moon’s efforts toward securing inter-Korean peace have received the most publicity, the NSP has arguably sustained more momentum than any of the administration’s other flagship foreign policy initiatives. Looking beyond South Korea’s relationships in Northeast Asia, it is also important to assess the NSP’s progress toward its goal to “elevate [South] Korea’s relations with ASEAN member states and India in the political, economic, social and cultural spheres, among others, to the same level [South] Korea maintains with the four major powers (the United States, China, Japan and Russia).”1 The NSP is an extension of South Korea’s need to diversify its economic and strategic relationships amid the uncertainty posed by competition between its closest ally, the United States, and largest trading partner, China. By elevating ties with India and Southeast Asia, particularly in the economic realm, Seoul hopes to insulate itself from the risks posed by trade and strategic friction between the two great powers. Moreover, it hopes to advance its middle power diplomacy and improve ties with India and Southeast Asia commensurate with their growing economic and strategic importance. Though India and ASEAN countries have strong ties to South Korea and share many of the same values and interests, they have not featured as prominently in Seoul’s diplomacy as major powers around the peninsula in the past. While it has clear logic behind it, the NSP’s implementation and outcomes so far are mixed. Of the policy’s three pillars—prosperity (economic cooperation), people (sociocultural cooperation), and peace (political and strategic cooperation)—the prosperity pillar has received the most emphasis. Under this pillar, South Korea has initiated new negotiations for free trade agreements and launched an official development assistance (ODA) strategy aimed at six NSP partner countries. However, cooperation with India has often lagged while cooperation with Vietnam has outpaced attention to most other ASEAN member states. The peace pillar, by contrast, has been relatively underdeveloped and focused mainly on nontraditional security issues while avoiding sensitive strategic issues confronting the region. This pillar showcases how South Korea’s concerns about Chinese influence both motivate and constrain the policy—though Seoul wants to diversify its economic portfolio and strategic partnerships to mitigate its reliance on China, it also must tread carefully to avoid retaliation from Beijing. Even so, while ASEAN, India, and South Korea share common interests on freedom of navigation in the South China Sea, stability in the Taiwan Strait, and denuclearization by North Korea, South Korea’s main security concerns revolve around Northeast Asia, while those of India and ASEAN do not. Seoul’s hierarchy of priorities in the security realm will continue to differ from that of its NSP partners, posing another obstacle to security cooperation. That said, the policy has made progress in strengthening South Korea’s diplomatic infrastructure and institutional apparatus to devote more attention to NSP partner countries, even in just four short years and after being disrupted by a global pandemic. Considering this short period, many of NSP’s projects will take time to show results. Even so, the broad and far-reaching policy has sometimes struggled to define its goals or unify its wide range of elements under a clear strategy. It would benefit from a more well-branded approach to India and Southeast Asia that highlights core projects under each pillar.2 To that end, the Moon administration should strive to evaluate the outcomes of the NSP in its final year in office. Although it is typically difficult to maintain continuity in foreign policy due to South Korean presidents’ limit to one five-year term, the geopolitical and economic imperatives driving the NSP will remain under a new administration in 2022. Given the staying power of these drivers and the continuously growing importance of India and Southeast Asia, South Korea’s next president will have every reason to keep emphasizing these regional partnerships as well.
Topic:
Foreign Policy, Diplomacy, Regional Integration, and ASEAN
Political Geography:
India, Asia, and South Korea