• China’s new international economic order

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    JAIME J. YAMBAO

    IN an article I wrote in the “Ambassadors’ Corner” during the latter part of the Aquino administration, I worried that the Philippines might join the US and Japan in boycotting China’s initiative of establishing the Asian Infrastructure Investment Bank and thereby miss the boat on the future direction of Asian economic development and trade. But to their credit, the economic advisers of former President Aquino did not tarry in recognizing the intrinsic merits of the initiative and recommended joining the AIIB. This made it possible for Congress in the early part of the administration of President Duterte to ratify the agreement making the Philippines a founding member of the AIIB. And with President Duterte’s state visit to China spectacularly reviving and reinvigorating relations between the two countries, the Philippines has become potentially a full participant and beneficiary of the One Belt, One Road project, of which the AIIB is an important part.

    Observers who once decried the Philippines’ apparent exclusion from what was then called and known as the New Silk Road Initiative, awakened the ghost of the Galleon Trade, which brought Chinese goods to Europe via Latin America shipped on galleons built and manned by Filipinos. The Silk Road and the Galleon Trade indeed formed a single thread in history. The Silk Road actually transported not only Chinese silk to Europe but also spices from Southeast Asia and other products made by countries along the route. (Several routes actually comprised the Silk Road.) When the Silk Road was closed by security issues, among others, the emerging maritime nations of Europe were pressed to look for an alternative route by sea to the sources of the spices that during that time were more valuable than gold. Thus, began the European voyages of discovery ushering Western colonization of America, Asia and Africa.

    (Western colonization of Asia culminated in the Opium Wars, which were waged by Western powers on account of the efforts of the Chinese government to ban their trade in opium and which resulted in the breakup of China and the bit of Chinese history remembered by Chinese as the humiliation of their nation. An ironic historical aside to the criticism of the EU and the former US President of President Duterte’s war on drugs!)

    There is a tendency today to glorify the Silk Road and Galleon Trade. But the historical thread that joined them, that started and ended in China, thus forming a ring knotted in China, was from the standpoint of the masses, a thread and ring of misery and brutalization. The goods transported on the Silk Road and the Galleon Trade were beyond the reach of the masses and merely served the appetites of the ruling classes of medieval and feudal Europe. The record of the early effects of the Galleon Trade on the Filipinos was horrific. Dr. O. D. Corpuz wrote that the galleons were built by slave labor, whose hardships caused the decimation of the Philippine population during the earlier part of Spanish rule. And the profits from the Galleon Trade were so easy and enormous for the Spanish colonizers that the latter neglected to build other sources of livelihood and economic development for the people of the colony. The Galleon Trade was the only game in town.

    Today the countries along the path of the Silk Road and the Galleon Trade and peripheral areas are predominantly countries in various stages of underdevelopment. There are even parts where from the condition of the people time seems to have stopped with the Silk Road and Galleon Trade, where time has moved not forward but backward. China has thus heralded its One Belt, One Road initiative that, judging by its work in Africa far off the old Silk Road, seems now to be open to the whole Third World, as the dawning of a new international economic order.

    That rang bells for me. In the late 1970s. I was a United Nations Institute in Training and Research (UNITAR) fellow in a seminar on the New International Economic Order held at the Maria Theresa Diplomatic Academy in Vienna, Austria. The UNITAR project was an offshoot of the United Nations Declaration on the New International Economic Order passed by the UN General Assembly in May 1974.

    UN members in the Declaration asserted that “the remaining vestiges of alien and colonial domination, foreign occupation, racial discrimination, apartheid and neocolonialism in all its forms continue to be among the greatest obstacles to the full emancipation and progress of the developing countries and all the peoples involved… It has proved impossible to achieve an even and balanced development of the international community under the existing international economic order. The gap between the developed and developing countries continues to widen in a system which was established at a time when most of the developing countries did not even exist as independent states and which perpetuates inequality.” Among other demands, the Declaration called for extension of active assistance by the whole international community, free of any political or military conditions…ensuring that one of the main aims of the reformed international monetary system shall be the promotion of the development of the developing countries and the adequate flow of real resources to them … and securing favorable conditions for the transfer of financial resources to developing countries.

    But almost as soon as I heard the last expert lecture in the seminar, the New International Economic Order faded into official oblivion replaced in series by new slogans and agendas and a new Year, a new Decade, a new Century, and a new Millennium. Even at the UN Conference on Trade and Development (UNCTAD which I covered as Deputy Permanent Representative to the UN in Geneva just before the turn to this century, the NIEO seemed like demonetized currency.

    Dr. Ruth Gordon, professor of law, economics and political science, in her autopsy carried in the Internet points out that the sudden death of the NIEO was brought about by the refusal of the Western world to accept the blame for the backwardness of the Third World and the responsibility of helping them out of the quagmire of underdevelopment “Any notion of equality, justice or responsibility for the poverty of former colonies was utterly rejected, and in its place was (put) conditionality, structural adjustment ….(and) the Washington Consensus of conservative, market-driven ideals, resulting in due course in the tightening of the legal and economic labyrinth that continues to strangle low-income countries.”

    The idea of a new international order, albeit in lower case, was to be read about in the aftermath of the world recognizing countries like Brazil, Russia, China, India, and South Africa as emerging markets and of the West recognizing these countries as sources possibly rescuing the latter from its financial crisis of 2004. But while the BRICS rose in economic growth and standing in the international community, the gap between the richest and poorest countries continued and continues to widen, and meetings of these emerging countries rang with calls for a new international economic order. This time these calls were not addressed to the developed world. They were calls to action and the BRICS addressed them to each other. They were behind the establishment of the BRICS’ International Development Bank. Awash with reserves, China would by its lonesome initiate the establishment of the Asian Infrastructure Investment Bank.

    Both headquartered in China, the IDB and the AIIB, and the One Belt, One Road initiative are founded on the belief that investment in infrastructures is the vital key to the uplift of developing countries. And it is this pragmatic focus that distinguishes to my mind the new international economic order championed and largely supported by China from the NIEO declared by the UNGA in 1974. For the realization of this new international economic order, it matters little if the West takes the blame and responsibility for the poverty of developing countries.

    It is a measure of the influence in the international community of China and the countries of the emerging markets that the United Nations has resurrected the NIEO through a review of what was accomplished in the light of its demands since it was declared in 1974 and the finding that ideas raised in the declaration of NIEO are still relevant and useful for implementing the 2030 Agenda for Sustainable Development.

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