Topic: The New Economic Zones

Are Shifting Global Defence Lines

Thesis statement: It is quite axiomatic that the
world at the present is witnessing grave
competition in economic growth. The countries
are exploring new economic zones to become
global leaders and with this changing scenario in
economic zones, defence lines on international
level are also changing.
 What are economic zones.
 How economics zones are being changed.
 Effect of change in economics on global
defences lines.
 Strait of Hormuz.
 Malacca dilemma.
 After Donald Trump took over office, the US
launched an investigation into Chinese trade
policies in 2017. It imposed tariffs on billions
of dollars worth of Chinese products last year,
and Beijing retaliated in kind.
 Why tariffs?
 Tariffs, in theory, make US-made products
cheaper than imported ones, and encourage
consumers to buy American.
 No country is a permanent friend of another country. States have
interests for
 which they make allies

 Strategic partnerships may change whenever there is a need

 Pakistan was an ally of USA during cold war to contain USSR. Now
Pakistan
 has given the most feasible path to China against the interest of
USA
 USA had a hard time in Vietnam. Vietnam suffered a defeat but
yet because
 of present strategic interests, Vietnam is skewed towards USA in
the
 economic war of economic giants (USA & China)
 Developed countries need alliances of other
countries. These powers keep looking for new
partners that can benefit them.
 Economic capacity of a state gives an idea of its
political, economic and social independence in
the world.

 Defence budget of Japan in this fiscal year is $47

bn. Yet, it’s only 1% of its economy.

 Economy paves way to influence and that in turn

gives strength and power to a state. Economic
strength is a sign of national power.
 Thank you!!!!
Any Questions??
 China’s economic rise started in 1979 when Deng
Xiaoping started free-market
 China has been among the world’s fastest-
growing economies, with real annual gross
domestic product (GDP) growth averaging 9.5%
through 2017
 World Bank described it as “the fastest
sustained expansion by a major economy in
history.”
 China’s free trade Policy

The ASEAN–China Free Trade Area (ACFTA),

also known as China–ASEAN Free Trade Area
is a free trade area among the ten member
states of the Association of Southeast Asian
Nations (ASEAN) and the People's Republic
of China.
 Belt road initiative (BRI)
The Belt and Road Initiative (BRI) is an
ambitious effort of China to dominate the
world in economic perspectives by having six
trade routes worth $900 bn.
 CPEC is the most feasible route for China.
 India is doing different development projects in
Afghanistan as a diplomacy tactic to influence
Pakistan by having leverage over it.
 Afghan-India Friendship Dam (AIFD), formerly
Salma Dam, is a hydroelectric and irrigation
dam project located on the Hari River in western
Afghanistan. Currently working on SHahtoot
Dam project and can restrict supply of water to
Pakistan from Kabul river.
 The building of National Assembly of
Afghanistan was constructed by India.
 India made a cricket stadium in Kandahar.
 India is providing healthcare and educational
facilities to the public of Afghanistan as well as
military aid in the form of military vehicles (285)
are choppers (Mi-25 and Mi-35) for air force.
 Owing to the cooperation, Afghanistan’s public
as well as the leadership is skewed towards
India. India can use her support pressurise
Pakistan from the Western border as well.
US identified China as a strategic competitor and
an economic threat. That is why USA is making
different kinds of bilateral and multilateral
agreements with ASEAN countries to contain
China’s economic rise. Two important policies of
U.S. are:
 US pivot to Asia
 Trans-Pacific Partnership

The main goal of US is to limit China's economic

sway in the region.
India has made different alliances with USA.
 QUAD (2017): It is a naval alliance between four countries (USA,
India, Australia and Japan). These countries are doing joint naval
exercises in Pacific ocean.
 LEMOA (2016): USA and India agreed to provide logistics support
to each other’s militaries including food, shelter, fueling, etc.
 COMCASA (2018): USA allowed India to purchase sensitive
intelligence gathering technologies. They also agreed to share
military intelligence.
 BECA: It is a proposed agreement between India and USA under
which both countries shall cooperate in geo-spatial fields.
USA and China are going through a trade war.
 Pakistan’s economy is not stable and need bail
out packages
 Pakistan helped USA contain USSR back cold
war but this time Pakistan skewed towards the
all season friend China and USA is not happy
with it.
 USA imposed restriction on Pakistan not to pay
China off with it
 Thank you!!
Any Questions??
 Mutual trade interests.
1. Oil for USA.
10,000 barrels of petroleum are imported
daily to United States since 2012.
1. Arms for KSA.
Arms due to the consistent rising tensions
throughout the Middle East.
Saudi Arabia accounted for nearly one-fifth of
American of all weapons exports over the past five
years. (Stockholm International Peace Research
Institute).
 USA seeking ally to control Middle East.
 Opposed Communism.
 Support of stable oil prices.
 Against Soviets in Afghanistan.
 Containment of Iran.
 KSA’s reservation about JCPOA.
 Obama administration did not had ideal ties
with KSA
 Donald Trump's trip to Saudi Arabia in May
2017 (First Trip).
 $110B arms deal with Saudi Arabia.
 Support over khashoggi’s issue.
 Saudi money for U.S. made weaponry results in
American jobs.
 “I don’t like the concept of stopping an
investment of $110 billion into the United
States,” Trump said.
 “All they’re going to do is say, ‘That’s OK. We
don’t have to buy it from Boeing. We don’t have
to buy it from Lockheed. We don’t have to buy it
from Raytheon and all these great companies.
We’ll buy it from Russia. We’ll buy it from China,”
he said.
 The enemy of my enemy is my friend .
(Ancient Proverb).
 No official but covert relations to contain
Iran.
 Drone-assembly plant in Saudi Arabia that is
being developed with cooperation
from South Africa is actually a guise for a
clandestine Israeli-Saudi Arabian deal for
buying Israeli drones via South
Africa.(political analyst "Mujtahid" )
 A leaked diplomatic cable called for Israeli
diplomats to “Do everything possible to ramp up
diplomatic pressure against Hezbollah and Iran“.
 On 19 November 2017, Energy Minister Yuval
Steinitz said that Israel has had covert contacts
with Saudi Arabia amid common concerns over
Iran.
 Netanyahu said, “It is very important for the
stability of the region and the world that Saudi
Arabia remain stable“.(Khashoggi’s issue)
 Air India flight from Delhi to Tel Aviv used
Saudi airspace. (Mar 22, 2018).
 Saudi-Israeli rapprochement supported by
Trump and Jared Kushner.
 Most Middle eastern countries either support
Iran or KSA while some are un-aligned
 Frozen diplomatic relations.
 JCPOA. (2015)
 JCPOA withdrawal. (May 2018)
 Sanctions re-imposed.
 Iranian citizens were temporarily banned
from entering the United States by the
executive order "Protecting the Nation From
Foreign Terrorist Entry Into the United
States" of 27 January 2017.
 Iranian president Hassan Rouhani said that if
needed he would "begin our industrial
enrichment without any limitations".
 On 5 July, Iran threatened to close off
the Strait of Hormuz if U.S. decided to re-
impose oil sanctions on Iran following US
withdrawal from the JCPOA.
 On 13 August 2018, Ayatollah Ali
Khamenei banned direct talks with U.S.
 "There will be no war, nor will we negotiate with
the US" and "Even if we ever - impossible as it is -
negotiated with the US, it would never ever be
with the current US administration," Khamenei
said in his speech.
 On 22 August 2018, United Nations Special
Rapporteur Idriss Jazairy described the sanctions
against Iran as "unjust and harmful".
 On 8 April 2019, the US Department of State
announced its intent to brand the IRGC
a Foreign Terrorist Organization (FTO)
 Trump’s tweet to stop trade of Iran with other
countries.
 Thank you!!
Any Questions??
 Brief World Order Background since
Westphalian Order with reference to
Economic Trends.

 From Unipolar to Multipolar.

 Multipolar Order as Balance of power

 Exchange of Arm Race as a vital component
of Economic alliances.

 Induced Arm Race in Asia as a model

 Arm Race as a component of Balance of

Power/Deterrence
 Introduction to Trade Wars.

 US & China Model (Reference to Opium War)

 Impact of Trade Wars on overall Economic

Zones
 Other forms of war have been introduced
since World War 2 instead of Direct War.

 Economic Alliances as win-win-situation

 Unlike past, Economic cooperation treaties

and free trade agreements have intertwined
the economies of countries around the world
 Changing approach from Hard to Soft border

 Trade Relations and Soft Border

 Problem with Hard Border

 THANKYOU!
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 Proper investments in underdeveloped
countries.
 Strict provisions of international law.
 Engaging developed countries in global
economic growth.
 Proper rules for FDI and FTAs.
 Defence lines are being changed at
international level due to economic
competition among the developed countries.
Developing countries are to choose sides for
their own benefits.