Editor   30 Jan 2012   Brussels e-Briefings

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Host: Richard Werly
Date: 26 January 2012

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The following is a digest of the webinar discussions held on Thursday, 26th January, 2012 with our host Richard Werly.

Taking the opportunity of NATO first press briefing of the year 2012, Richard has pointed out the Alliance's priorities and the main challenges it will be facing:

  • Withdrawal of all foreign forces from Afghanistan by the end of 2014 remains on the agenda
  • Confidence in the Afghan National Army (ANA) despite the recent killing of 4 french instructors by an Afghan soldier remains high.
  • Feeling is that the situation has largely improved in most of the provinces, and that attacks from the Taliban have been concentrated in Kandahar, Kabul and the East

Overall, Afghanistan will remain a key challenge for NATO in 2012 and this will be highlighted during the 20-21 may summit in Chicago. The difference with the past, however, is that NATO now sticks to a timetable approved by the US and its allies. Retreat in an orderly manner is the priority. The decisive political challenge is therefore an Afghan one, as the national government has to prove it can both hold the country and engage into a peace process with the Islamic insurgents.

On other fronts, NATO will face difficulties in dealing with Russia, per the missile defense, and in dealing with shaken transatlantic relations. 2012 shall confirm the American intention to disengage from Europe and to re-deploy in Asia. More financial burden will be on the shoulders on America’s European allies who already have to cope with the debt crisis.

Asia-Europe divergent Paths

  • The debt crisis has brought opportunities of investment in Europe and we expect Asian countries to continue to benefit from it. China is on the forefront. We expect Asians to invest in European infrastructure (harbor, telecommunications, transport) so the can in the meantime a) find good financial bargains b) speed up technological transfers
  • Asians are expected to remain reluctant to come to the financial rescue of the euro-zone, though they might at the end reinforce the International monetary fund. Reason for this reluctance is: 

a) they remember the Asian financial crisis and the hardship they had to endure

b) they remain defiant of the so-called European social model, see as too expansive and not    sustainable in the long run

c) Asians are scared by the fact that even european countries, like Germany, keep their distance with the most fragile European economies. So if Europeans don't trust each others, why Asians should?

  • Asia remains interested by the know how of Europe and by the access to the European market. But their prime focus will be in 2012 the expansion of Asian regional trade, so they need for that to import more energy and more natural resources. We expect 2012 to be, for Asia, a year of re-routing: keeping an eye on Europe but continue to maximize its investments in Africa, in the Arab world and in the east.
  • Finally, Europe is obviously not in a position to fill in the security gap and to compete with the Americans for the protection of three key Straits: Ormuz, Malacca, Taiwan. US are back in Asia while Europe, despite an Asia-Europe summit in October in Vientiane, will have to remain distant.

 

Questions? Post a comment below, or e-mail Richard Werly at richard.werly@letemps.ch

 

Comments

  • Salman (not verified), 04/09/2020 - 20:16

    Asian countries do not understand Chinese financial system to finance their trade. They turn to European banks. The European sovereign debt crisis is causing inter-bank lending freeze which, in turn, is hurting Asian economies to finance their trade.

    Well, an European buyer would be able to open letter of credit (LC) to import Asian goods when there is freeze of inter-bank lending.

    In other words, due to existing/impending recession (means low demand of Asian products and services) and freeze of inter-bank lending in Euro zone, exports of Asian economies are suffering a setback.

    Hence, any sovereign debt default in any fragile economy of Euro zone will trigger flight of capital from fragile European countries to safe heaven like Germany or USA. That will reinforce export and trade finance problems of Asian countries.

    Right now, crisis in Euro zone is like the slow motion catastrophic journey of a train!!

  • Richard (not verified), 04/09/2020 - 20:16

    Very good observation about the financial impact of the european recession. You could add up to that the fact that the decrease of european imports will get tougher as austerity-based policies are gaining weight. So more than ever, the challenge for Asia is to balance this negative european impact with an increase in regional trade. At a risk: seeing a growing imbalance between China and the other asian emerging countries.
    Best, R

  • Mukena Bali (not verified), 04/09/2020 - 20:16

    NATO is an Organization that have a goal to make Peace , so its clear that peace is a must .

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