Domino effect on developing economies likely with escalating Ukraine war, recession in Europe
FACE-TO-FACE
Published: 10:15 am Nov 11, 2022
Mirco Günther - Head of the Asia-Pacific Department at Friedrich- Ebert-Stiftung in Berlin visited Nepal this week. Günther had previously served as director of the FES Asia Regional Office in Singapore and resident representative of the FES Afghanistan Office in Kabul. Ram Kumar Kamat of The Himalayan Times had a tete-a-tete with him on the emerging geopolitics in Europe and Asia and their implications on the world in general and smaller nations in particular. Excerpts:
What is the mission of FES in the Asia-Pacific region and in Nepal?
The Friedrich-Ebert-Stiftung is the oldest German political foundation, established in 1925 as a legacy of Friedrich Ebert, Germany's first democratically elected president. We maintain a network of more than 100 offices around the globe, including 15 national and regional offices in the Asia-Pacific.
With our 100th birthday just around the corner, the activities of FES are dedicated to the ideas and values of social democracy. We work with partners in government, political parties, trade unions and civil society to promote democracy and social justice. The FES Nepal Office in Kathmandu was established in 1995. We facilitate dialogue between Nepal and Germany, South Asia and Europe. We also contribute to the positive development of bilateral ties between two countries, which will be marking their 65th anniversary next year.
How has the war in Ukraine impacted Germany and Europe? What are the implications of Germany's Zeitenwende?
Russia's invasion of Ukraine has upended the European security order. We are in the midst of a major reordering of our world. Germany has put in motion a paradigm shift in its foreign, security, economic and energy policy - a historic turning point referred to as Zeitenwende in the German and European political discourse. This includes a 100-billion-euro special fund to close critical gaps in military capabilities, more and faster investments in renewable energy, diversifying energy imports to end Germany's dependence on Russian fossil fuels, and massive relief packages to counter soaring energy, electricity, and food prices, particularly for the most vulnerable groups in our society and the middle class. It is, without a doubt, the most consequential change in decades when it comes to the central pillars underpinning Germany's development model and international posture.
The impact of the war in Ukraine is felt not only in Europe but the entire world. What are the global implications of this war, particularly across Asia, and how should the world deal with them?
The global repercussions of the war are profound and acutely felt in countries throughout Asia and in Nepal. We all share the same concerns with regard to commodity shortages, a worsening food crisis, skyrocketing inflation, as well as uncertainties around energy costs and imports. A prolonged and further escalating war and correspondingly, a recession in Germany and Europe will likely have a domino effect for developing economies.
On top of that, Nepal and other countries in the region are confronted with multiple crises: the aftermath of the COVID pandemic and implications for labour migration and tourism, climate change, security dilemma for South Asia created by last year's hasty withdrawal of the international coalition forces from Afghanistan and the Taliban takeover, as well as shifting supply chains, to name only a few. All of these challenges need to be addressed simultaneously and can only be tackled if we stand together in solidarity, in political and practical terms.
The rivalry between China and the United States in the Indo-Pacific is changing the geopolitics of the region. How can small countries that want to remain neutral best protect their interests?
As a small and landlocked country situated between the world's two most populous countries, Nepal is an example for many with its policy of non-alignment of how to manoeuvre the unfolding geopolitical and geoeconomic 'new normal'. It is a challenging geopolitical situation, yet also ripe with opportunities to navigate and to prosper, moving from land-locked to landlinked and leveraging its strategic geographic location. India and China are indispensable neighbours. The diversification of partnerships is equally important to achieve national economic and social development goals. From what I heard in my conversations with partners in Kathmandu this week, doubling down on connectivity and regional cooperation continues to be a priority, notwithstanding the many challenges.
The future international order will be decisively shaped in Asia, not just by great powers but by countries large and small in a world of asymmetric and dynamic multipolarity. It is a conversation that needs to include all stakeholders. With our FES Asia geopolitics programme, we bring together leaders from government, civil society, media and academia to unpack ideas and develop mutually beneficial strategies to ride the turbulent geopolitical waters of our time. FES offers a multidisciplinary, innovative and inclusive platform for this crucial dialogue, jointly with our host and partner countries, aiming to foster a culture of strategic foresight and future thinking.
Do you think Germany and the European Union should engage more with Nepal and South Asian countries in order to support these countries' development efforts?
The German government is making major efforts to reach out to old and new partners beyond the Western alliances, as is the European Union. Berlin and Brussels have put forward Indo-Pacific strategies that stress the need to diversify partnerships. Their approach is broad-based and comprehensively covers a wide range of topics, including climate change, health, digitalisation, economic cooperation, connectivity, security and defence, as well as research and innovation. Nepal is an important pillar of Germany's expanded outreach across the region. A geopolitical Germany and Europe needs a stronger footprint in Nepal and the wider region.
In its partnership and development cooperation with Nepal, Germany focuses on the core areas of sustainable economic development, climate and energy, and health and social protection.
Nepal was globally among the countries most affected by extreme weather events in the past 20 years. Nepal's role in support of peace and security is crucial and appreciated as one of the biggest contributors of troops and police officers to United Nations peace missions. We also share a keen interest in strengthening multilateralism, regional cooperation and connectivity, which historically have been fairly weak across the South Asian subcontinent.
What role can Western democracies play in upholding the rules-based international order? And what lessons can we learn from the current crisis?
We all need to do an even better job of listening and putting ourselves into the shoes of our partners. The mixed global reactions to Russia's war of aggression in Ukraine show that we need a more strategic dialogue in order to better understand each other's interests, grievances and priorities. Germany and Europe can play a critical role in this dialogue as a facilitating and moderating voice. This also means that we have to recognise the complexity of the issues at hand. The binary discourse of 'democracies vs autocracies', to take one example, is not helpful in this regard and is shared by only a few in Asia. While it is of paramount importance that we strengthen our democratic resilience, the realities across the Asia-Pacific region are more complicated. Geopolitically, highly industrialised nations such as Japan, Australia, New Zealand, South Korea and Singapore have joined the Western sanctions against Russia, to varying degrees.
But Asia's developing and emerging countries, in particular, have gone to great lengths to avoid taking sides in the conflict between Russia and the West and the strategic rivalry between China and the United States. Keenly aware of the multiple challenges to their own development model, they need to carefully manoeuvre between the poles and regional groupings. At the same time, countries in the Asia-Pacific have a vital interest in upholding the rules-based international order. Our understanding of that order occasionally differs: Are we talking about a liberal or a Westphalian order? But by and large, we are all opposed to a world order with exclusives zones of influence and we reject the notions of unipolarity or bipolarity. This is a view we all share as a solid building block for taking partnerships forward in the spirit of principled pragmatism.
A version of this article appears in the print on November 11, 2022 of The Himalayan Times.