Connect with us

INTERVIEW

Prabhat Patnaik: We are entering a new era of struggle

Published

on

We interviewed Prabhat Patnaik, one of India’s most important Marxist economists and whose works are closely followed in Turkey. Prabhat Patnaik is professor emeritus at the Centre for Economic Studies and Planning at Jawaharlal Nehru University in New Delhi, India and from June 2006 to May 2011, he served as the vice-chairman of the Kerala State Planning Board.

Patnaik answered our questions about the past and present of capitalism; He argued that this mode of production could not survive with its own internal dynamics and could not accumulate capital, and always needed an external stimulus (colonies, pre-capitalist markets, state expenditures, accumulation by encroachment, etc.). 

According to Patnaik, the reproduction schemes developed by Marx in Capital are the product of a theoretical framework in which capitalist production is assumed to be a closed system, and Marx actually rejected this assumption in his writings. The Indian writer draws attention to the fact that the current crisis of neoliberalism is also experienced at a time when external stimuli have disappeared.

Recalling the great peasant resistance in India at the beginning of the year, Patnaik argues that the ground for a worker-peasant alliance is more solid today than in Lenin’s time; because both classes are under attack by globalised financial capital. According to our guest, peasant resistance in India is the first to be a political opposition to neoliberalism; besides, it is a rather long-term struggle, unlike the working class, which is weakened against capital and stays away from long-term actions.

Prabhat Patnaik considers the Russia-Ukraine war to be a symptom of the collapsing neoliberal order. According to him, the sanctions against Russia to maintain order are one of the factors that led to the collapse of the system. Patnaik sees this as an opportunity not only for the peoples of the “Global South” but also for the workers of the “Global North.” What happens in Europe concerns the entire world; according to Patnaik, increasing strikes in the winter months is a sign: a sign that we are now entering an era of struggle…

‘LACK OF EXTERNAL STIMULI IS ONE OF THE CAUSES OF THE CRISIS’

Your articles and books are followed closely in Turkey. Your recent book Capital and Imperialism: Theory, History, and the Present was translated into Turkish. Let me ask about it: You reject the analysis of capitalism as a closed self-contained system and also you claim that capitalism has always been historically ensconced within a pre-capitalist setting, even its very existence and expansion is conditional upon an interaction between the two. So, it is obvious that you refuse the claim that a simple reproduction can create an expanded reproduction without an external stimulus within the very logic of capitalist production, don’t you? Therefore, colonial setting and imperialism can not be labeled as “stages” in the history of capitalism but they are inherent qualities of capitalist production from the very beginning. 

Yes, absolutely. Because when Marx wrote the reproduction schemes he assumed that whatever surplus value was produced, either consumed, accumulated or accumulated in the form of productive capital, the fact that surplus value can be accumulated in the form of money, in which case it doesn’t create any demand for goods. It is something which has been there in Marx’s writing for a very long time. Marx has rejected what he’s called Say’s law which basically says that supply creates its own demand therefore there is never a problem of efficiency of aggregate demand. But I think while working on his reproduction schemes his concern was really much more to show how exactly the process of circulation of commodities occurs. Not necessarily to claim that actually this is the way that things happen in capitalism. The reproduction schemes are fundamentally based on the assumption that Say’s Law is valid. But in fact that is something which Marx rejected throughout his writings. So I think we should not think of his picture of expanded reproduction as a realistic picture of how things happen under capitalism. The moment we reckon with the fact that accumulation can take money form, that money can be a form in which wealth can be held, then of course it becomes perfectly possible not only to see capitalism as a system subject to overproduction, not just cyclically, but something that can be subject to overproduction over a period of time, and therefore something that may actually settle down at a state of simple reproduction without necessarily experiencing expanded reproduction in the absence of an external stimulus, or in the absence of the availability of an external market. I believe colonialism has played that role or pre-capitalist markets have played that role, passed the way that Rosa Luxemburg had argued in Accumulation of Capital. And after the exhaustion of the pre-capitalist markets, obviously they did get exhausted, I think state intervention has played a similar role. And I argue at this moment in capitalism, since both the external markets are exhausted more or less and since state intervention is virtually ruled out in neoliberalism, capitalism is without an exogenous stimulus, which is why you are experiencing the existing crisis.

So you also reject Nicolai Bukharin’s criticism of Rosa Luxemburg regarding the external market and his emphasis on competition between capitals. You insist that wealth-demand for money can also be used for accumulation.

Yes. Competition forces capitalists to accumulate capital. But accumulation of capital can take many diverse forms. One is accumulation in terms of money. There is no reason why competition should force capitalists to actually accumulate in the form of capital goods. And that’s basically my point. Once one recognises the fact that accumulation can take a money form, then the need for an external stimulus becomes quite obvious.

You count three external stimuli in your book: pre-capitalist markets, public expenditure and innovation. How do you evaluate today’s setting of global capitalism regarding these stimuli? Do we have them in the era of neoliberalism?

Of the three, which have been generally discussed in the literature, I think innovations are really not a serious exogenous stimulus. This is where my argument would be different from Michael Kalecki’s, whose work I rely on so much. Because of the fact that innovations are introduced precisely when the markets are growing. In other words in a period in which there is growth taking place you have innovation being introduced. And this is something very clear during the period of the Great Depression. Lots of inventions came on stream but none of them were introduced as innovations into the production process which they actually had to wait for the post-war period of capitalist boom in order to be introduced. The automobile boom actually far from lifting the United States from the recession or the Great Depression of the 1930s. Actually it became stored because of the depression. So I don’t believe that innovations really provide an authentic exogenous stimulus. Whatever investment is decided upon, it is the form of the new processes, but the new processes themselves stimulate a larger amount of investment, that is what I am skeptical about. 

Obviously, I think public expenditure can be an exogenous stimulus if public expenditures are financed not so much at the expense of the working people, but if it is financed either by taxing the capitalists or taxing the surplus earners more generally. Because in that case a part of the taxes would come out of their savings, so there is some net stimulus. Or, public expenditure can be financed by a fiscal deficit. But the point is that in conditions of neoliberalism, taxing capitalists or surplus earners is generally frowned upon by globalised financial capital. And so is the fiscal deficit which is why most countries have got fiscal responsibility legislation. Because of this fact, under neoliberalism, the individual nation-state policies must conform to the globalised financial capital, otherwise it leaves the country, goes somewhere else. And because of that, most governments find themselves in a position where they really cannot stimulate the economy, neither of the two ways in which alone they could stimulate the economy. And that’s why neoliberalism does not have access to pre-capitalist markets or in the sense that pre-capitalist markets have lost their weight now in stimulating boom under capitalism. And secondly, under neoliberalism the state cannot lead this role. And that is why the period of neoliberalism is associated with a period of general stagnation which has settled to the capitalist world after 2008.

‘HIGH PROFITS ARE THE REASON FOR INFLATION’

So you are skeptical about the so-called Green Energy, Industry 4.0., etc.?

There has been a lot of talk about it. But I do not see any of them in fact stimulating any economy. I mean we are currently moving into a fairly serious world wide recession. You may say that this world wide recession has nothing to do with the more long term factors that I am talking about. But I believe it does have to do with the longer term factors in a certain way. That’s the following: Basically in order to stimulate the economy within the parameters of neoliberalism, the governments, particularly the United States and Europe as well, for a very long time have been pursuing a policy of almost zero interest rates and quantitative easing which is really kind of putting enormous amounts of liquidity into the economy. You know the current inflation was actually stimulated by the rising profit margins. I believe the rising profit margins was in fact facilitated by the floating of this enormous amount of liquidity in most capitalist economies which really greatly reduces the liquidity risks. It would be handicap if the serious illiquidity risks that it will have to face. But the availability of this enormous amount of liquidity and virtually zero interest rates are something that actually reduce the liquidity risks to a point where many of the corporations felt they moulded to push up their profit margins. And I think that was the beginning of the inflation. In order to curb wages now the governments all over the capitalist world are actually increasing interest rates. So that is pushing the world economy into a serious recession.

In your book, you emphasize the role of metropolitan centers regarding the deindustrialization of the colonial periphery. The ocean of small producers and labor reserves serve for center and local landowners and also capitalists can stabilize the value of money even if there is a near constant share of wages. But for decades there has been a deindustrialization in imperialist countries and a sort of industrialization in former colonies. How do you explain this reversal? Moreover, real wages have been decreasing in all advanced capitalist countries progressively. How do you explain this tendency?

Let me state one thing first. Even though there has been a migration of capital in production. There have been movements of goods but capital in production has moved to a few countries of the Global South, particularly Southeast Asia and perhaps to some extent South Asia as well. But notwithstanding this movement of capital, it is true in that sense today’s capitalism is very different in this particular respect from what it was in the colonial period. In the colonial period, the world economy was segmented. Labor from the Global South was not allowed to move to the Global North – it still is not allowed to move freely. And capital from the Global North, even though it was allowed legally to move to the Global South, did not actually do so. So the point is now that the second part is no longer true. Capital from the Global North, at least for certain times of activities, is moving to the Global South. One would have thought that this would therefore use up the labor reserves which are there in the Global South, which are a legacy of colonialism. But that is not happening. And as a matter of fact labor reserves in the Global South are increasing relative to the work forces despite the movement of the capital from the Global North to the Global South. That is because of the fact that the rates of technological progress that this kind of movement of capital brings about are really very high. And what is more, if labor reserves do not get exhausted wages remain at the subsistence level where labor productivity is rising, share of surplus rises, and surplus earners prefer to buy commodities, their preference is for commodities which are really less employment-intensive. 

So the shift in income distribution has also an effect in reducing employment. And of course the very high rates of labor productivity growth. Growth of employment in many countries is simply even less than the natural rate of growth of the workforce. Let alone absorbing the labor reserves. And what is more, the labor reserves are also getting replenished, because in neoliberalism there is necessarily an attack on petty producers and peasants. The whole idea is to open that entire sector for encroachment by capital. And that is why during the period of planning in many of the countries of the Global South, there was actual protection of the petty production sector. Minimum prices for the many crops, subsidiaries. In India price protection still exists for foodgrains which the current government tried to undo. But there was a year long peasant agitation against the withdrawal of this price protection.

‘PEASANT RESISTANCE IN INDIA WAS THE FIRST POLITICAL OBJECTION TO NEOLIBERALISM’

I would like to ask you about this peasant resistance against the imperialist capital. Because you make a distinction between accumulation through expansion and accumulation through encroachment. It sounds like today’s imperialism needs perpetual primitive accumulation and expropriation rather than just absorbing the surplus value. Do you agree with that? Especially in the Indian subcontinent, South East Asia and North Africa peasants and small producers are still important. It seems that expropriating Asian and African peasants is one of the main goals of imperialism.

Yes, of course, absolutely. And in fact this is something that neoliberalism brings about. And one of the things which I stand by is the fact that primitive accumulation is not something which is confined only to the origins of capitalism. The exogenous stimulus that I was talking about is in fact the part of primitive accumulation. As a matter of fact, Marx increasingly became aware of this. He wrote a letter to Danielson in 1881 in which he talks about the drain from India, the drain of the value from India to Britain. Huge figures. He says that the drain from India amounts to the incomes of 60 million agricultural and industrial workers in India. It is really something that cannot be treated just as an epiphenomenal. I think Marx himself was aware of the fact that there was a process of primitive accumulation occurring simultaneously with normal accumulation. He did not have time to develop this idea. So primitive accumulation is something that under neoliberalism, particularly an effort is made to impose a process of primitive accumulation in the Global South. And that, in turn, implies that many peasants and petty producers lose their occupations and they join the workforce in quest of jobs, but of course not enough jobs have been created. So the labor reserves increase, therefore even though there is a shift in the activities, a whole range of activities from the Global North to the Global South, this does not raise wages of the Global South, while it keeps wages in the Global North down. 

So what is the significance of the Indian peasant resistance?

There are a number of things one has to bear in mind. This basically implies that the peasantry is now facing globalised capital, international agribusiness and so on. When Lenin was talking about worker-peasant alliance, the basis of that alliance lay in the fact that the workers would usher in a democratic revolution against the feudal lords and that would free the peasants. But after the peasants are freed from the classes of feudal lords, then of course the basis of that worker-peasant alliance no longer exists. Certainly, not between the peasantry as a whole and the workers. That was the Soviet industrialization debate. The Bukharin-Preobrazhensky debate was about that. And Stalin’s solution to the whole problem through forced collectivisation was, I think, left a mark on the development of socialism, i.e. the entire authoritarian structure that developed and so on. Those were really shaped in that period because recisitums [tasfiyeler] in the Soviet Union because of forced collectivisation. 

Now we live in a very different world, where the basis for a worker-peasant alliance is really much firmer, because both are now confronting globalised capital. So there is no question of kulaks developing capitalist threat to socialist order. Because of the fact that they cannot develop as a capitalist class if the economy is open to encroachment by international agribusiness which would like to keep them under its control. So that actually puts a constraint on the development of indigenous capitalism from among the rich peasant class. On the other hand, to the extent they are squeezed. They have a real interest in making a common cause with the industrial workers. In other words, the basis for a worker-peasant alliance today is stronger than that of any kind from Lenin’s days.

I think the significance of the Indian peasant struggle is that it was the first challenge at the political level to the neoliberal order. The working class has been greatly weakened, both in the Global North and the Global South as well. If you go on strike, the capital would shift elsewhere, and would locate its plant elsewhere. That kind of fear is something that will generally keep the working class subdued. They have one-day strike, two-day strike but not a prolonged action. So the peasant action in India was the first prolonged action. And literally every means at the disposal of the state was used to break the peasant resistance. But they did not succeed. In every conceivable way they were mobilised against the peasants but the government did not succeed.

‘NEOFASCISM, NEOLIBERALISM’S RESPONSE TO POSSIBLE WORKERS’ MILITANCY’

You highlight one of the main consequences of the recent crisis is neo-fascism. It seems like neo-fascism claims that it is against neoliberalism and financial slavery, however, there is no indication that this movement try to cut transnational financial flows or raise workers’ consumption with a new industrial policy and public expenditures. I think India’s Narendra Modi is one of the best examples of this tendency. So, does it seem like there is no escape from neoliberalism? Presidents like Modi, Erdoğan, and Orban claim that they are resisting the Western hegemony and making their countries independent. Is that possible? 

Not at all. Modi is forever begging globalised capital to come and set up plants here, the whole slogan is “make in India.” I think neofascism is neoliberalism’s answer to possible worker class militancy. The militancy that you are currently witnessing in large parts of Europe, and a militancy which can threaten at any kind, even in the Global South. In much of Asia that militancy is going to manifest itself. I think Sri Lanka is a good example. The economic crisis neoliberalism has been pushing that country is going to now explode in the sense of working class and general urban resistance. The point is that now the crisis of neoliberalism has brought it to a situation, where it simply cannot continue without requiring an alternative pillar of political support. Neofascism provides that political support in a number of ways. Firstly, it is of course authoritarian. And it is not just authoritarian in terms of state authoritarianism, but it also has its army of thugs and hooligans who go around and terrorise people. Secondly, it actually divides the working class along the lines of ethnicity, religion and so on. And third, yet most importantly, it changes the discourse. Modi now does not claim anymore that he has brought about an economic revival, created jobs that provided for employment but now he claims that he built a temple. So they change the discourse. I think that is why neofascism is useful for neoliberalism. Except that unlike all fascisms, neofascism also cannot provide any solution for the economic crisis of neoliberalism. Not even a military solution.

You said that the western sanction regime pushes the world economy away from the neoliberal order to a host of ad hoc arrangements and undermines the imperialist-dominated order altogether. Do you still believe that? Do those ad hoc arrangements draw us up to a bloody world war? Also, Russia has not nationalized any foreign or Russian industry yet and has been strictly avoiding any sign of a Soviet-style economy or socialist measures. It seems that when neoliberal era and imperialist unipolarism come to an end, it doesn’t mean that individual countries which have a strife with the West automatically adopt a new and social economic policy. 

I agree with that. Socialism does not come by stealth. I think the Ukrainian war is certainly an immense crisis for global capitalism. Neoliberalism imposes upon the world an order, that is really an imperialist order because it has opened up all countries to the penetration of metropolitan capital. The post-war period you had dirigiste governments everywhere. They nationalised the industry, introduced some kind of planning, and controlled their local resources. That is something that imperialism tried to subvert. It tried to subvert through individual actions. People often tell me that in the 1950s and 60s yes imperialism was there and today is not, but the truth is the opposite. In the 1950s and 60s imperialism was weakened, which is why they attacked Mosaddeq, Allende and so on. Fundamentally imperialist military interventions were required to topple these regimes. While today that does not really require any military intervention of that kind. Except if a country is trying to threaten the order.

So the point is that I believe that because of the crisis of neoliberalism you really have some kind of a threat to the regime. When you have that kind of a threat, then the efforts to control that threat actually further accentuate the crisis.

Let me give an example. Russia, China, newly emerging countries, they are obviously revolting against the unipolar world. Russia is certainly not a socialist country, they are oligarch controlled. Except that one should not forget that oligarchs were opposed to the Russo-Ukrainian war. And China, while it calls itself a socialist country, there are all kinds of debates and discussions about it. But fundamentally, what you have today, therefore, is not a threat of socialism for the imperialist order, but the threat of multipolarism. 

That is sought to be countered by having sanctions against Russia. What have the sanctions achieved? The sanctions in fact have the opposite effect of making all kinds of countries, India included, have bilateral deals with Russia. And if you have a bilateral deal, then you have opted out of global order, to that limited extent at least. So the global order whose defense is the primary objective, gets undermined by the same defense. That is the symptom of the crisis of imperialism and neoliberalism in the current context. 

A country like Saudi Arabia is developing relations and some kind of bilateral talks with China. Going with Russia in the OPEC+, in order to cut down the daily production of oil against American wishes. These are straws in the wind. They are symptoms of a collapsing order. Saudi Arabia, who would have thought? The global order imposed by imperialism, I think, is collapsing. 

‘THINGS GOING ON IN EUROPE INTEREST THE WHOLE WORLD’

So you think that working people of the Global South can use this opportunity.

Yes, of course, people of the Global South can use this opportunity. But I believe what is happening in the Global North is quite interesting. After all, British workers, German workers… Italian workers, they actually oppose the Ukrainian war. The Italian neofascist government, for instance, is in fact holding the line. Neoliberalism and neofascism have once more formed a formidable alliance in Italy.

What is happening in Europe is of great interest to the entire world and also to the future of capitalism. I am not saying that the workers are engaging in a socialist struggle, the workers are engaging in an economic struggle. But the economic struggle within the parameters of capitalism is really not going to be very successful. So the point is to see what the workers would do next. Obviously, then, political issues would come on to the agenda. And I believe, in a once, European workers are on paths of strikes and actions and so on, these would have a great impact on the Global South as well. I believe generally that we are entering a period of struggles.

INTERVIEW

What’s behind assassination attempt on Fico?

Published

on

Ján Pšenica, Ambassador of Slovakia to Ankara spoke to Harici: “Being an EU and NATO member is of essence for Slovakia. I cannot imagine that we were not a member of those entities which provide us with basic anchor on a political map, in international economy domain and also security.”

Answering our questions, Ambassador Pšenica assessed the socio-economic and international circumstances that led to the assassination attempt on Prime Minister Fico and the impact of the Russian-Ukrainian war on Slovakia.

What is the latest update about the Prime Minister Fico’s health condition?

Fortunately, there are good news. Prime Minister Fico was released from the hospital at the end of May his treatment and recovery continue at home in Bratislava.

What is the latest information about the assassination of Prime Minister Fico? The Minister of Internal Affairs said that the suspect was not a “lone wolf” and that there might be someone behind him. Do you have information about the suspect’s political connections?

The relevant Slovak authorities are continuing in a comprehensive investigation, which also includes an examination of the attacker’s psychological profile and condition. All relevant aspects as well as possibilities are being carefully investigated. It certainly will take some time before the authorities will present their findings and conclusions.

Can we say that Fico’s assassination has a connection with the tense political environment in Europe after the Ukrainian war? In particular, voices against the war are branded as “pro-Putin” and silenced in many countries. Keeping in mind Prime Minister Fico’s views on the war, would it be an exaggeration to think that the bullets were actually fired at everyone who wanted to end the war through diplomatic means? Or Do the majority of public opinion go for internal reasons?

 Usually the simplest interpretation works the best, but on the other side, overly simplistic explanations can lead to wrong conclusions or assumptions. It is not only the unlawful Russian aggression against Ukraine. We all remember well the COVID period and different sorts of restrictions and measures which authorities had to implement, including in Slovakia and in Türkiye. Yet, the COVID cost us a lot: many people, including our friends or family members died, our social and societal interactions weakened, economies suffered too, so the disease had overall clearly negative impact on our health and mental condition. Then the aggression started and increased our uncertainty about future. People are asking themselves: What will be the impact of the war and of the current international situation on my life? Will I be able to adapt on new situations? Will I be able to maintain my current living standard? Is there a possibility how I could help others? Are my representatives able to make the right decisions? – although I do not know which they should be… Is the war going to expand on our territory? If so, will there be someone helping us? And so on. And of course, some people perceive situations only within their families or small communities, whereas other perceive situations in wider context that exceeds the boundaries of their own states. Therefore, I do not want to speculate and will wait for investigation findings and conclusions.

Commenting on the assassination attempt against Prime Minister Fico, the Russian Foreign Intelligence Service said that the globalist elites were turning to open political terror against their opponents. How do you evaluate this comment?

Frankly, I do not know what the Russian Foreign Intelligence Service publicly said and would not comment on it. But I think that everyone should ask himself/herself what is the purpose of a secret service speaking publicly….

How do you evaluate the effects of the current geopolitical fragmentation on your country? Previously, Prime Minister Fico had evaluated Ukraine as “not a sovereign state, but under the control of the USA”. What is your opinion about the USA and the EU continuing the war in Ukraine “to the last soldier” and continuing military aid?

Being an EU and NATO member is of essence for Slovakia. I cannot imagine that we were not a member of those entities which provide us with basic anchor on a political map, in international economy domain and also security. If we were not a member, the level of challenges we would have to address ourselves and alone would be much more difficult.

Now, on our relations with Ukraine. We are neighbours so relations between of our nations go back to history. Similarly, as Türkiye, we support independence and territorial integrity of Ukraine, its democracy and prosperity. Already in 2014, we set up a reverse gas flow to be able to cover part of Ukraine gas demand if necessary. Since February 2022 to nowadays, Slovakia´s assistance to Ukraine has reached approximately 1% GDP. In the past, our assistance included also military equipment, such as fighter jets Mig-29s and surface-to-air missile system S-300. Current Slovak government does not provide any military aid from our active military storages anymore and focuses mainly on humanitarian and developments assistance. However, commercial contracts, including those in weapons and ammunition fields are still in force and being implemented. Slovakia recently also set up a reverse electricity flow so our neighbour does not experience large blackouts despite fierce Russian attacks against electricity generation and distribution infrastructure.

Since February 2022, approximately 2 million of refugees from Ukraine came to Slovakia and around 130 000 found a shelter in my country. Many Slovak citizens, including my family have been helping Ukrainians in Slovakia.

In April 2024, a joint meeting of the Governments of Slovakia and Ukraine under the leadership of the two Prime Ministers – Robert Fico and Denys Shmygal – took place in Slovakia. A new phase in relations between the two countries was launched. Three main common projects have been agreed on: 1) Direct railway connection between Kyiv and Košice; 2) Modernization of the Vyšné Nemecké border crossing point.; 3) Reconstruction of the electricity transmission network Mukačevo – Veľké Kapušany. The two Governments also adopted a road map of joint activities.

The war against Ukraine is fundamental violation of international law that brought countless of human tragedies. Slovakia has been contributing to international effort to help Ukraine as much as it can and 1% GDP speaks for itself. Similarly, as Türkiye, we consider crucial that a comprehensive, just, and lasting peace, based on the core principles of the UN Charter, is achieved as soon as possible.

On 15 and 6 June 2024, a Summit on peace in Ukraine took place in Bürgenstock in Switzerland. Slovakia was represented by its Foreign Minister Juraj Blanár. However, originally it was the Prime Minister Robert Fico who had planned to attend the event. Unfortunately, the assassination attempt prevented him from participating. But his will to attend is yet another confirmation that my country, in addition to helping Ukraine, cares about achieving a peace that would be just and in line with the core UN principles.

Continue Reading

INTERVIEW

“The British may not like the Americans, but they have no choice but to stand behind them”

Published

on

On July 4, the United Kingdom will hold snap elections to elect a new parliament and a new government. Decades of economic stagnation in the United Kingdom have been accompanied by a political and social crisis exacerbated by the Brexit process and the rise of geopolitical tensions that began with its inclusion in the holy alliance against Russia.

On the other hand, there is something “unique” about British imperialism. London has long been the nerve center of global financial flows. In the aftermath of the 2008-9 financial crisis, the Gulf countries’ ties with British finance capital came to the fore, while in the 2010s a similar issue arose with China, with London becoming the most important focal point of the global renminbi trade in the West.

At the center of all these financial flows is the famous City of London, or simply The City, also known as the “Square Mile” in reference to its small size. The City, which has its own separate administrative and legal structure, is somehow involved in all the conspiracy theories about finance in the world, as it has always had a dark side.

Tony Norfield, author of The City: London and the Global Power of Finance (Verso, 2017), which focuses on the role of finance in the functioning of the City of London and British imperialism, strongly emphasizes that finance is an integral part of the capitalist world system and that it would be absurd to attempt to separate the two.

However, the City of London and finance also point to the specific nature of British imperialism, with the financial sector in particular playing a critical role in both British GDP and investment structure.

Norfield does not think it is possible for London to pursue a policy independent of Washington. In his view, even if the British wanted to do so, they are too weak to act separately from the US. The rise of China and the pivot of Asia and Latin America towards China, as well as Russia’s victory in Ukraine, are inevitable, Norfield believes, despite all British efforts to the contrary. Norfield writes about his thoughts on current affairs on his personal blog “Economics of Imperialism.”

Let me start with Britain’s role in global finance. The City of London is not well known in Turkey. But especially in the 2010s, City officials have developed deep ties with the AKP government. For example, Public-Private Partnership projects, which are often criticized in Turkey, were approved through Britain and the City of London in the same decade; even the legislation was taken from Britain. Can you tell us a little bit about what distinguishes the City of London from other financial centers and the importance of the City for British imperialism?

Yes, it’s a big topic, of course, but one thing you might remember is that in the middle of the financial crisis in 2008, there was a lot of discussion about interest rate swaps and the sheer volume of them. You know, if you look at how much they are technically involved in terms of hundreds or even thousands of billions of dollars worth of swaps.

What many people overlook is that the legal basis for these interest rate swaps is actually in English law. This may seem strange because not many swaps are done with people in Britain, but it reflects the fact that the British influence on finance is quite large. And this is really based on historical factors because the growth of the British empire, especially in the 19th century, even before that, meant that all kinds of commercial, maritime, transportation, insurance and trade relations, most of these were dominated by the British.

The British, for example, in an earlier period, were the biggest slave traders. So basically they played a very big role in international trade, partly because of their imperial ambitions. In the case of India, for example, they more or less closed down the Indian shipbuilding industry and the Indian shipping industry. Indians were able to build ships, sail ships and go from port to port. But what the British did was that they prevented ships from docking in colonial India unless it was a British port. So a large part of the shipping and shipbuilding industry in India closed down and was instead dominated by the British.

In insurance, marine insurance, Lloyd’s of London I think is the biggest marine insurance company in the world. And of course Lloyds is made up of wealthy individuals who are members. But it still reflects this historical factor, it’s a historical factor that continues today.

The multiple connections that the British have actually go back much further than the Americans. Even though the US is the largest economic power, obviously much larger than Britain, it is quite clear that the connections on which financial and business transactions can be built are very strong in the case of Britain and are actually more widespread than they are for the US.

So what happened? There are actually two phases. First, in the 19th century the City of London was a major financial center for the world economy, as I said, finance, shipping, insurance, insurance in general and trade, basically trade. One historian put it quite nicely and said that England was not the workshop of the world, it was the warehouse of the world. In other words, a lot of goods came in and were sent out again.

So Britain has a long history of being a kind of trading center and financial relationships were built on that basis. So, again, maritime insurance, trade, finance and things like that, and this was very important for the British.

So, even though the British economy in the 19th century had a deficit in commodities, the money that it made from insurance and the investment income from all its investments overseas meant that its current account was actually about 5% of GDP. So it had a huge deficit in trade but a huge surplus in investment income and various financial incomes, including insurance.

This was hit by the First World War of 1914-1918. As you know, this damaged world trade and meant that Britain was in a weaker economic position. In the inter-war period they tried to remedy this. Although they used the empire as a basis for doing that, it didn’t go very well.

Then, in the post-war period, the British were in a much weaker economic position, but they used their relationship with the US to continue to strengthen their financial dimension. So in the period immediately after the war, for example in the 1950s, you saw that trade financing was predominantly in British Pounds, not in US Dollars. Again, this seems a bit unusual because of the dominant economic position of the US, but that’s what happened. There was also, especially during the 1960s, the growth of the euro markets. The center of the euro markets was largely in London. The City of London was attracting foreign banks to come to London where they could do these transactions. This was because of the low regulations that existed in the City of London to circumvent local laws in the US that restricted the amount of interest that could be paid on a bank deposit.

European markets, for example, have very different regulations and the Bank of England and the City of London have much less regulation. So most of the big boom in international finance through the euro markets took place in London.

And despite the relative weakness of the UK economy, which was never in very good shape during this whole period, British finance used the US dollar, but it acted as a kind of financial trading instrument. So even today you see that the City of London, or the UK more generally, is not like that.

The City itself is a relatively small area. There’s also Canary Wharf and some other places within London. So geographically it’s not exactly a city, but the City of London, even after Brexit and despite the weakness of the British economy, is still the largest foreign exchange trading center in the world. It’s also one of the biggest financial derivatives trading venues between banks and their clients, like interest rate swaps and things like that.

The banks in the UK, not all of them are British banks of course, but the banks in the UK had the largest international links compared to other countries. And this again was creating stress. I emphasize how big the City is despite the relative weakness of the UK economy, certainly compared to the US, but also compared to a number of European countries.

And you know, they had a big role in setting regulations for the bank, for international agreements, for all sorts of things, because of this accumulation of expertise and because of this role that they played as an allied partner and accomplice with the US. That gave them a lot more freedom and influence than they would have had on their own as the British economy.

The City has a separate administrative structure alongside the British state apparatus. We hear some people in Turkey, some people close to the government, talk about London barons, London bankers trying to interfere in our domestic politics. Because the City of London is a kind of, you know, dark place, an ominous place for foreigners.

I think a lot of the discussion about this on the internet is completely wrong. The City of London has been given all sorts of privileges in terms of financial regulation, but it’s not as if it’s a separate power in its own right. This has been the policy of every government. It has been a deliberate policy of Conservative governments and Labour governments, particularly since the 1970s. To stimulate the financial sector, loosen regulations and allow the city to expand massively.

In 1979, exchange controls were relaxed. From 1986 or 87, I can’t remember, the so-called big boom happened. Then governments did not say, no, this is a bad idea, let’s change it. No, they continued it and they did more and more.

And under the Labor government in 1997, one of the biggest supporters of City was Gordon Brown, the Labour Chancellor of the Exchequer. He even ridiculously praised Lehman Brothers, as I mentioned in my book on the City. This was just a year or so before everything went to hell. This was a consistent British government policy.

So, okay, even though the Bank of England is a different institution, different governments, different policies, etc., it is completely wrong to portray the City as some kind of demon that sits indoors. This is a deliberate, precise and consistent part of British policy. And that’s because they make a lot of money out of it, or the British economy does.

And again, this was looking at the period when a former Labour government was in power. And they were actually praising all these jobs, big bonuses and a lot of tax revenues from tax revenues.

This is something that ironically the Brexit policy has messed up because it has been a factor in reducing the economic benefits for the City.

We’ll come to that. Okay, but I read an article in Politico yesterday and it said that the City has already won the elections because both Labour and the Conservatives have guaranteed how the City will function. But again, in your book you emphasize that all capitalist corporations carry out important financial operations. Where do you think the particular anger towards financial activities comes from? Could it be that the masses, especially the non-proletarian masses, are confronted with the capitalist structure, with the financial sector as one of its 1001 faces?

In general, there is a public opinion that looks at banks, the city, finance and things like that as a negative for the economy of the country. And this was a little bit less. During the boom years, so to speak, when everything looked ridiculously great, stock prices were soaring, all sorts of financial indicators looked good, there was a more popular view against the greed of bankers, that sort of thing. And of course, even young people earning millions of pounds, let alone big executives, were dealing with this sort of thing. It was an easy focus of resentment.

Then the financial crisis of 2008 and the bailout of the banks and things like that became a big thing and there was widespread dislike and hatred of bankers, that sort of thing. But what none of them could deny was that finance was an important factor for the British economy in terms of tax revenue, news and that sort of thing.

So there is a popular view against banking and finance, and it is very common among left radical people. But it’s a very simplistic view. Maybe I should not say that, but I think it’s a stupid view because it ignores the fact that the financial sector is a necessary element added to the functioning of capitalism.

As you mentioned, I talk about this in my book and I even give an example, let’s take Apple. Apple is a huge technical marvel of a company in the US. It also owns one of the biggest bond trading companies, right? It’s funny, I always thought Apple was all about consumer technology and stuff like that. No, they have a huge amount of financial derivatives deals.

It’s involved in a lot of bonds and it’s got a company called Braeburn. Right? Braeburn is a kind of Apple and it’s based in Nevada and a lot of people don’t know about it. They know about iPods and iPhones and Macs and things like that, but they do not really know about Braeburn.

Every big company, not just Apple, every big company has to have a finance arm in terms of dealing with currency risk, interest rate risk transactions and everything else. So you can not escape that. Every single company does it, technically an industrial company, a commercial company or whatever, has to do it. And this is a necessary, inevitable factor of capitalist markets.

So if you don’t like finance but you want capitalist markets, then there is a contradiction. In your view, these things inevitably arise from capitalist markets. So you can’t get around that. You have to do something about capitalist markets, if you don’t like capitalist finance. Otherwise you are on the losing side.

Yes, but related to the previous question, in the aftermath of the 2008 crisis and during the Brexit debate, attention was simultaneously drawn to the City of London’s evasion of EU regulations and to the hyperinflation of the financial sector in the UK and the relative decline in the competitiveness of the so-called productive sectors. Was this debate purely populist or was it an extension of real material class interests for Britain? I mean, there is some debate about industrial capital versus finance capital and so on.

I think this is again a misguided, ill-informed debate. Let me put it this way, there is no great distinction between an honest and wonderful industrial capitalist and an evil finance capitalist, because all these necessary links are there where you find, for example, an oil company like British Petroleum, BP, right? Yes, they do.

They will have a big treasury trading department because they deal with the ups and downs of oil prices, cash flows and all kinds of things. So every big industrial company necessarily has a financial aspect. True, technically they produce things or they are engaged in other things, but they have to do them.

But at the moment most of the world’s production takes place in a number of countries, particularly in Asia, where wages are relatively low and production costs are lower. And that means that the richer countries are focusing on having a monopoly position in the narrower industrial areas – specialized engineering and so on. Or they get involved in commercial power.

Let’s go back to Apple. They get everybody else to produce for them. And they rely on licensing and commercial monopolization to make their big profits. So they do not produce a lot. They outsource all the production elsewhere, but they still make a big profit because they can make big mark-ups.

So everybody else produces for them and they raise prices. It’s an extreme case, but it’s similar to what most of the rich capitalist countries do. So you see that in all these countries in general the share of manufacturing and industry is declining and instead the services sector is growing.

I mean, of course you need a service sector, don’t you? You cannot live in an economy with only manufacturing, mining or industry. But what happens is that the trading power of the rich countries is an important way for them to siphon value from the rest of the world. This is part of their parasitism on the world economy.

The financial dimension is also an important part of it. So this commercial parasitism and financial parasitism is an important part of the infrastructure of the rich powers that run the world economy. You know, they have a problem when the financial sector goes crazy and explodes, but when the post-crisis period comes and they want to do something else, they try to re-impose it in a different way.

Right now they are having even bigger problems with Russia, China and a number of countries trying to build something different. On top of all this, there is the parasitic system of domination over the world economy that the US, the British and other western powers have been in charge of for decades.

So you disagree with the claim that there is no capitalism anymore and that we are living in a new feudal world order?

No, that’s absurd. It is basically, if you want to call it that, imperialist capitalism, and in many ways a much more parasitic and corrupt capitalism.

You know, rather than having the good old 19th century concept of, you know, I’m a greedy capitalist, but at least I’m investing and producing and things like that. Right? No, what they are doing is they’re setting up a commercial monopolized system to control things and, you know, in the financial commercial sense, it means benefiting their producers as long as they still own them. But even if they don’t own the producers and they outsource the production to you, they want to make sure that the financial links and the commercial links are run by them and that all the big price increases happen for their benefit. That’s what happens, isn’t it?

Yes, I see. Now let’s talk a little bit about the Brexit discussions and this is also relevant. With Brexit, some of the Thatcherite Tory economists said that they wanted to make the UK a new Singapore, and you criticized that very harshly in one of your articles. But don’t you think that complaints about bureaucracy in the EU, Brussels’ attempts to regulate financial institutions, and Tory criticism of a move away from the free market, all of these things represent a bifurcation with capitalist institutions and ideas on the continent?

It’s always been a problem for the British because for a long time Europe seemed to be the main growth area of the world economy, not anymore but for a while it was. With the growth of the European economy and the growth of the EU, there was a big debate in Britain about whether to join the EU or not. Throughout the 1960s there was a lot of internal British debate: Should we join? Should we not join?

And they found that their previous imperial connections were not doing them much good economically. Most of Australia and New Zealand, for example, was one long railroad. The Canadian connections were not as strong. So basically it looked like Germany, France, Italy, Spain. These European countries were growing. Maybe we should have joined them.

The problem was, if the British did that, then would they still have a dominant position? That was always the problem and that was always the calculation they had to make.

In the early 1970s they finally decided: Yes, we have to do this. So they joined the European Economic Community. It made a lot of economic sense for them, but they were using their ties with other Europeans to put economic pressure on their own industries, which were in decline, and to have a competitive whip to improve them and put them in better shape, whereas before they had strong ties with the old empire, the Commonwealth, which gave them a privileged position, but it meant that they were no longer competitive in the rest of the world.

So the Conservative government in the early 1970s and the Labour governments afterwards tried to make the British economy more competitive so that it could compete a little bit more with the Europeans. But they had a big problem, even in the European context, of how to maintain your dominant position when you are no longer so dominant economically.

And they were very concerned about losing their political power. So that was why they didn’t want to join the European Union; or they joined the EU, but they didn’t want to join the new order of creating a single currency and having the euro, because that would be a step too far and it would mean that they would lose their influence. So they didn’t like to do that.

They were also afraid that it would weaken the City’s position and instead give more direct power to, for example, Germany, to the European Central Bank and things like that. So they didn’t like that and they wanted to step back from doing it.

There was always this tension, they wanted to have the connections. In fact, the City of London was doing most of the euro-related business in Europe, and the Europeans didn’t like that very much because the size of Frankfurt or Paris as an alternative financial center was relatively weak to do that compared to the size and power of the British financial system dealing with European finance.

You also mentioned in your Singapore article that during the Brexit debate some Londoners, particularly hedge funds and venture capital, were trying to separate the UK from the EU. But other institutions, some banks and pension funds, and asset managers were in favor of staying. How do you explain this phenomenon?

Brexit was a very stupid economic idea, completely stupid except in a few narrow dimensions. And that’s why you saw that the big companies didn’t make a big deal out of Brexit, because just over half of the population was in favor of Brexit. So they didn’t want to make a big deal out of it and piss off half of their customers. They didn’t want to talk too much about it.

But in the financial sector, for example, or in the business world, the people who were really in favor of Brexit were either hedge funds or venture capitalists, people like that who thought they could benefit from less regulation, lower wages and that sort of thing. So they had a more Brexit-oriented perspective. They also appealed to a more nationalist version which, frankly, most of the British working class supported. So it was British nationalism against a so-called European power that they didn’t like. We were going to be free, we were going to be able to do separate things and that sort of thing. It was a rather silly nationalist view and it actually undermined the social welfare aspects of the British working class. But the British working class generally supported this nationalist, anti-European view.

I’m not saying that Europeans are great progressives and that’s a negative thing from that perspective, but it was certainly a bit stupid from an economic point of view, and it opened the way for a more reactionary perspective that could be implemented by whatever government, in this case a Conservative government rather than a Labour government, because the trade unions, for example, were generally a bit more pro-European because they saw more positive social welfare events in Europe than were likely to happen outside Europe, outside the EU. So this was a reality.

And it was also an anti-immigration against EU migrants, undermining our living conditions and, you know, trying to get British welfare benefits and that kind of thing. That was the anti-immigration aspect of populism, it was anti-European stuff, which led to the British working class, not everybody but most of them, having an anti-EU view, which was the fuel for the Brexit view, which was linked to the anti-EU Nigel Farage type, UKIP type view.

But economically it’s a stupid thing, economically Brexit was a bad mistake. You know, you see the way the European Union is going, it’s not very progressive, it’s also dominated by the US and it’s doing stupid things.

So my position, to be honest, was to abstain. I thought that the European Union was bad and I thought that the great British alternative was bad. I mean, you know, I wouldn’t say that one was better than the other, but, you know, it was clearly absurd to have the view that there was a great British alternative.

Throughout 2010, the UK and the City of London became a hub for Chinese financial flows and in particular the renminbi. In turn, the UK joined the Belt and Road Initiative and the Asian Infrastructure Investment Bank, attracting Chinese investment to Britain despite the crisis. Did Brexit have anything to do with these developments, or was it just a coincidence? Does China still see Britain as a gateway to the western hemisphere?

The British expected more positive economic growth from Asia, whereas the European dimension of growth looked rather weak by comparison. But at the same time they were afraid of Asia’s growing economic power. So it was a bit of a mixed view. So, yes, for a while they wanted more Asian engagement in the economy, but at the same time they were afraid of a larger Chinese dimension and then they easily bought into the American paranoia about China. And that always undermined how much the British could embrace the Asian perspective. So, you know, they. Basically they wanted to be involved in Asia but as long as it could keep Western power in place, which they had a big role in. So that was the angle they were trying to push. And that led to this absurd “Singapore on the Thames” alternative, which went nowhere and looked silly.

But the British are in the middle of nowhere in this respect, frankly, they are not strong enough to implement some kind of independent view. As far as the Americans are concerned, they are number two or three on the list. The Europeans don’t like them very much, but they are stuck. They look a bit stupid, frankly.

But they will always, you know, try to strengthen their great international position. We are not Americans. We are not as aggressive and imperialistic as the Americans… But they are doing a lot of what the Americans are doing.

Today the European Union also announced new tariffs on Chinese electric vehicles. According to news reports, Germany, Sweden and Hungary opposed the new tariffs, while France and Spain in particular pushed for new tariffs. So how realistic do you think Europe’s decoupling from China, or “de-risking” as it is officially called, is?

First, it cannot be done. Secondly, whether from a British perspective or a European perspective, it is an attempt to prop up a very weak European economy.

But we can say that many German companies are completely against this idea of decoupling. And decoupling from China cannot be done. Basically, it cannot be done. And it’s stupid to try to do it.

And it’s not only China. They are worried about Korea, they are worried about India, they are worried about basically all kinds of things where they cannot compete with Asia. That’s the bottom line. You know, they cannot compete with the growing power of the Asian economy. So they want to do these kinds of things but basically they cannot compete. That’s the whole thing.

And they’re going to pick China in particular, because China is a big economy that continues to grow, a stronger, competitive economy. So they will claim that Huawei is doing all this bad spying, whereas the great Google, the great Amazon and all these kinds of things don’t spy as much as the Chinese do. It’s just ridiculous.

And they just want more western, American based power rather than Chinese risk, which they don’t like, which is not an independent power.

Lately we have been hearing a lot of talk in the western media about China’s overcapacity. Before it was about China dragging emerging economies into debt. Do you think there is any truth in all this? Does China’s great economic power aim to make countries, especially in Asia and Latin America, dependent? Or accusations of dumping from the EU?

This is absurd. You know, many African countries, for example, are choosing China as a more progressive alternative, a productive alternative to western domination. That’s it and it works for them, doesn’t it?

Who is going to build these things? I mean bridges, roads, railroads, power stations, etc. It’s not going to be the fucking Brits, Europeans and Americans. It’s going to be the Chinese. So it’s not a debt trap. And frankly this whole debt trap hoax is nonsense and has been proven not to be true. But basically they want to argue that.

Of course, I’m not claiming that every Chinese investment is great and every European investment is completely terrible, that’s not true. But to say that China is a debt trap and everything else is good is nonsense. There is all sorts of evidence that this is nonsense and that they cannot compete. But they don’t have as much control as they did when the Anglo-American view of the wonders of Western power was dominant. And that’s the point. And they are worried about losing that. That’s basically the issue.

You said this in one of your articles. In the past years, the BRICS countries have done some things outside the western financial system. It is also argued that the sanctions policy of western imperialism, led by the US, has failed and accelerated this process. But unlike Russia, China is still cautious about relations with the US, given the tensions between the other members of the bloc. What are the prospects for BRICS as an alternative?

Basically very good. And this is the way to go. It’s a good idea to build something more productive and different than the Western-US-Anglo type of domination that many Asian countries, Latin American countries and African countries have suffered and know they have suffered in previous decades.

There will be all kinds of conflicts and grievances and all the rest, but this is a more productive alternative than what was offered to them by the British, Americans and Europeans.

So this is the way to go and they are doing it in all kinds of ways. This will continue. The Americans will complain, the British will complain, the Europeans will complain, but it is a good thing that they are trying to build an alternative productive economy that is not dominated by parasitism, by the parasites of the western world. Basically, they are trying to get out of this trap and it is working. It’s better for them. And they see it every time. One of them now sees that there is an alternative to this nonsense and they don’t want it anymore, so they are trying to build an alternative. And that’s it.

There might be a mess here and there, whatever. It may not always work exactly. Yes, but to build an alternative to these things; that’s what they have to do and they are doing it.

Turkey, Asia and other countries should join in. Not the western nonsense that is trying to dominate them instead.

Finally, let’s talk about the ongoing occupation of Gaza, the war in Ukraine and Britain’s role in all this. Britain has been actively supporting Israel since October 7th. In addition, London has established a very close financial and political relationship with reactionary Arab regimes that have overt or covert relations with Israel. Given the financial infrastructure of British imperialism, what can you say about the role of the British government in the Middle East at the moment? As far as Ukraine is concerned, Britain seems to be pursuing a tougher anti-Russian policy than the US in Eastern Europe and the Black Sea region, as well as in the South Caucasus. It has established deep relations with Poland, the Baltic states, Turkey and Azerbaijan. Is Britain trying to create a cordon sanitaire against Russia?

The British, of course, are strong allies with the Americans and they see any real challenge to American power as a problem for them. It’s kind of like, you know, being the great helper who wants to be a great alternative or not an alternative but has their own thing. It doesn’t exactly suit them but they can’t do anything else. They want to be bullies but they are dependent on the Americans. That’s the real issue. They want to pretend that they have alternatives, but they don’t. They need to depend on the Americans to increase their power.

So they are more anti-Russian when it comes to Ukraine than the Americans are when it comes to Ukraine. They are more against what the Russians are doing than the Americans are. But this policy will lose because Russia will win.

But instead they want to strengthen something else because they are worried about losing their power, the power of the Americans and the West in general. And something else is being built that is not the power of the Americans and the West. That’s why they don’t like it.

That’s how all these things should be looked at. That is the key point. Anything that happens today is about whether there will be western power, mainly American power, and the British have their own point of view or European power or whatever, and instead there will be an alternative built by other countries.

The British don’t like it, the Americans don’t like it and they try to argue how terrible it is. But these other countries are obviously trying to build a better alternative. That’s what we are trying to build.

What about the Middle East connections and the Gaza war going on in the Middle East in Palestine?

Yes, the British have a reactionary role in this. They have a terrible role in this. But you know, there is no way they can be a progressive force in Palestine, in Gaza, in the Middle East, in West Asia. It will always play a reactionary role. They realize that now with their policy of supporting Israel in every way, it depends on supporting the Americans.

But it has to fail. I hope so, but it’s not something that they are really going to back down or try to do something different. All their policies are reactionary and stupid and they will fail.

So you still think that the UK will act as a kind of lapdog of American imperialism around the world?

Yes, because that’s basically their only option. They want to be independent, they want to be a great alternative. They don’t like the Yanks. They want to be something different but they can’t be because they are too weak. So they want  British stuff. But the British don’t do anything for anybody, they don’t build anything and they are not an alternative for any other country. So basically they support the reaction, not the alternative. That’s how it works.

So they have to support the reaction in the Middle East and in the rest of the world and that’s what they are doing.

I think the basic idea is that the Europeans are losing. They may not like the Americans very much and they want to be different from the Americans, but it turns out that they are not that different. The Americans, one of them, is trying to ruin you too. Okay, I’m British, but that’s basically what they’re doing. So if you want to build something different you have to look elsewhere.

Continue Reading

INTERVIEW

‘BRICS has achieved a lot including ASEAN’

Published

on

Pornchai Danvivathana, Secretary General of the Asia Cooperation Dialogue spoke to Harici: “BRICS  has achieved a lot including ASEAN, where I came from. Because I came from Thailand.”

With 35 members, the Asia Cooperation Dialogue (ACD) is known as Asia’s most widely participatory dialogue and consultative forum.

The ACD, an international organisation established in 2002 to promote cooperation among Asian countries and help integrate different regional organisations such as ASEAN, SAARC and the Gulf Cooperation Council, has six pillars of cooperation: “connectivity”, “science, technology and innovation”, “education and human resource development”, “food, energy and water security relationship”, “culture and tourism”, “promoting inclusive and sustainable development”.

Dr. Pornchai Danvivathana, Secretary General of the ACD, answered our questions on cooperation mechanisms in the Global South, connectivity among international organisations, and the competition between Asian and Western organisations.

You are the first international organization to cover the whole of Asia. The rapid rise of Asia in social, economic, technological, etc. fields has turned the world’s attention to this geography. How do you evaluate the cooperation platforms in Asia? Can more initiative organizations be established in the region?

I think it’s on the rise because  in terms of  interdependence,  when one needs  others, in especially, to tackle transboundary issues or new challenges, I think, this is the platform for dialogue and also to promote diplomacy as the theme of Antalya Diplomacy Forum.

Some regional organizations such as ASEAN and the Gulf Cooperation Organization are often in the middle of the US-China rivalry. Do you agree with this assessment? How should regional organizations be positioned in the context of multipolarity and multilateralism?

Well, whether you define it as rivalry or not, I would like to look at it as competition which is always every corner of the world. When we have cooperation, of course, we do have competition at the same time. This is not a bad idea because if you would like to look in the aspect of economy, you could see for yourself that we promote competitiveness and also we consider comparative advantage as part of factors that could help promote competition with others. In that case, I think whichever country would like to contribute or to be involved with others, I see it as positive sign; because if we would like to promote partnership, it starts from scratch. You cannot expect  any  huge contribution without anything in return.

Comparisons are often made between organizations based in Asia and the Global South, such as the Shanghai Cooperation Organization and BRICS, and Western-based organizations such as the G20 and the European Union. Can these organizations be alternatives to each other? Is cooperation between Western and Eastern-based international organizations possible?

Yes, it is also possible. In fact, I’m a lawyer by training. If you look into the UN Charter which promotes regional arrangements as an a mechanism or instrument to promote peace and security, then sub-regional or regional mechanisms like ASEAN, BRICS, ACD (Asia Cooperation Diaologue) could play a very vital role in promoting peace and security including diplomacy as Türkiye has been pushing forward.

How do you evaluate Turkey’s Asia Anew Initiative? How can this initiative be utilized more actively?

I personally and officially welcome this approach since the beginning because it’s a kind of approach that some or many countries has been focusing on. Look, the building blocks for countries in Asia to promote cooperation and also partnership. And the ACD is one among others. When ACD itself has been serving as a platform for dialogue to promote cooperation on non-political issues. So, I do believe that the approach of Türkiye is complement and supplement to the vision and also values of the ACD.

How would you evaluate China’s Belt and Road initiative in terms of connectivity in Asia? On the one hand, it is criticized because it’s causing some debts to the countries which are involved. On the other hand, it’s very productive. So, it’s a little bit complicated. Please give a detailed take on this.

In fact, this kind of question was the question that media in China asked me last year.  My reaction to that is as follows: First and foremost, connectivity is one of the prioritized areas of the ACD. When it comes to connectivity the Belt and Road Initiative is one that help narrow the Missing link. We cannot deny that. ACD vision also mentioned about the Belt and Road initiative, however, it happens that some might see it in a negative way. As Secretary General, I think that the best way to look at it is to look at the overall picture and for advantage or disadvantage that some countries may have been facing as regard to the Belt and Road Initiative. It’s for the countries to concern, to discuss with China to how this can be settled. It’s not for me to question or to  comment  on it but  as far as the ACD is concerned, the Belt and Road Initiative has been recognized as one of the mechanism that helps make connectivity within the ACD  work in a positive way.

The rivalry between China and India is being discussed recently as two huge powers in Asian world. Do you think this rivalry is actually heping be more productive regarding the other countries’ contribution in this cumulative economy? Or are they taking more than their fair share?

I’m aware of bilateral conflicts between or among countries, not only in Asia but also elsewhere. It happens all the time. Some may call it rivalry, some may call it conflict. But the ACD is a window of opportunity for member countries of 35, all together to discuss and pave the way to avoid conflicts and also to reduce rivalry in whichever way. So far, since 2002 up to now, we have been proven that it’s a useful platform. So, with regard to bilateral relations, that could be set aside as far as the ACD is concerned.  That is why we discuss anything but politics. We are a non-political platform.

A very well-known economist based in London, Timothy Ash, told me “What did BRICS achieve?” in an interview. There is an approach claiming that the eastern economical alliances can never compete with the western ones. What do you think about BRICS and what do you think about this western approach?

It depends on your perspective and how you look at issues and where you stand. That is my first point. And secondly, in my view nothing is impossible. If you talk about East-West cooperation or inter-regional cooperation, I think that is what the ACD is for. Because we promote regional, sub-regional and also international cooperation within the ACD context. And we try to offer ourselves as again a window of opportunity for countries of 35 to explore the way forward and work together.

What would be your response if I ask you what has BRICS achieve up to now?

Well, I think, it has achieved a lot including ASEAN, where I came from. Because I came from Thailand. Yes, it might take some time or a lot of time but over the years we have established not only cooperation but also people to people connectivity or understanding. That’s what I would like to underline. We cannot do without public diplomacy and this is one of the rational that might help ACD sustain.

I’m sure you are aware of Zangezur Corridor which is trying to be built in Azerbaijan’s Karabakh connecting the road and railway to Türkiye. It is going to connect a new trade logistic route. How do you think Zangezur Corridor can contribute to regional peace and Asia’s economic growth?

No doubt about it. Because, for me, myself, without consulting my member states, I would say that connectivity should not be limited only within the ACD but also beyond.  As we would like to promote not only institutional connectivity but also people to people. And when it comes to people, it goes beyond. In my understanding, connectivity knows no borders. But how to make sure that it fits the requirements of each and every country, that’s another issue. I respect, of course, sovereignty and territorial integrity of each and every nation that is why it has to be discussed and also explored.

Regarding Zangezur Corridor, you say that it should be respectful to Armenia’s border and territorial integrity. Is that right?

This is something that we need to be mindful of, but of course as a diplomat, I think nothing is carved on stone. We can discuss and explore and of course, come to a solution which is amicable or acceptable to all.

Lastly, do you want to say any word about the Türkiye’s growing initiative to be influential on Asia, especially Turkic world?

Not only that I appreciate the Asia Anew initiative but also I personally and officially appreciate how Türkiye decided to serve as ACD share for 2 years, especially when we are moving forward in the positive direction, however we faced Covid-19.

Continue Reading

MOST READ

Turkey