Indonesian president says trade wars too destructive

Indonesian President Joko Widodo urged the IMF to identify countries that use economic, foreign exchange, and trade policies to ‘contribute to unfair competitive advantages.’ (AFP)
Updated 12 October 2018
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Indonesian president says trade wars too destructive

  • ‘Victory or defeat in wars always brings the same result — destruction. It’s pointless to become the leading economy in a sinking world’

NUSA DUA, Indonesia: Indonesian President Joko Widodo added to the chorus of criticism on Friday over trade friction between the US and China, telling financial leaders gathered in Bali, Indonesia, that victory in a trade war would be pointless in a “sinking world.”
Widodo’s comments to the annual meeting of the International Monetary Fund and World Bank came as share markets rebounded after The Wall Street Journal reported that President Donald Trump and Chinese President Xi Jinping may meet at the Group of 20 summit in Buenos Aires, Argentina, late next month.
Much attention at the finance meetings in this tropical resort has focused on threats to growth from the uncertainty and disruptions associated with trade friction. A bout of turmoil in financial markets this week added to the sense of urgency over the issue.
Widodo, who often sprinkles his speeches with references to movies, underscored those worries in his opening speech as host to the IMF-World Bank meeting.
“The balance of powers and the alliances among major economies are breaking down. Weakness in coordination and cooperation has caused many problems, including the dramatic rise in the price of crude oil and turmoil in the currency markets of developing economies,” Widodo told the gathering of financial officials, central bank governors and experts.
Instead, attention should be focused on slowing growth and disruptions from new technologies that are turning many industries “upside down,” he said.
In an allusion to the popular TV series “Game of Thrones,” he said fighting among the “great houses” was distracting them from the threat of an “evil winter.”
“Victory or defeat in wars always brings the same result — destruction,” he said. “It’s pointless to become the leading economy in a sinking world.”
In a statement released Thursday, the senior American official in Bali, Treasury Secretary Steven Mnuchin, pointed to relatively strong US economic indicators as evidence policies meant to nurture sustained growth are working.
He urged the IMF to identify countries that use economic, foreign exchange, and trade policies to “contribute to unfair competitive advantages.”
The Trump “administration is committed to achieving a fair and reciprocal trading and investment relationship with all of our partners, including China,” he said. “We welcome the IMF’s work on tariff and non-tariff barriers, and we encourage the IMF to focus on less open trade regimes in order to play a constructive role in promoting global solutions.”
Finance ministers and central bank governors of the Group of 20 industrial nations wrapped their meeting in Bali with no major announcements.
Asked about the tussle between Washington and Beijing over technology policy and trade, Argentine Finance Minister Nicolas Dujovne said the G-20 does provide a ground for discussing such issues.
But he added, the “difference that persists should be resolved between those countries.”
Friday’s IMF-World Bank meeting began with a moment of silence for victims of recent disasters, including a Sept. 28 earthquake and tsunami that killed more than 2,000 people on another Indonesian island, Sulawesi, and left perhaps thousands buried in mud.
World Bank President Jim Yong Kim said the disasters were a reminder of the institution’s mission of helping countries build resilience and deal with disasters, manage debt levels and invest in their people to prepare for the future, while helping to alleviate poverty and promote economic growth.
“Every day that you don’t build human capital, your economy, and your country, will fall farther and farther behind,” Kim said, noting that as when he was born in 1959, South Korea, now an affluent manufacturing powerhouse, was among the poorest countries in the world, with a literacy rate of only 23 percent.


At Jordan border, Damascus seeks to revive trade

Updated 21 October 2018
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At Jordan border, Damascus seeks to revive trade

  • The government of President Bashar Assad took back control of the Nassib border post in July
  • By reopening a key land crossing with Jordan this month, the Syrian regime is inching toward a return to trade with the wider region

BEIRUT: By reopening a key land crossing with Jordan this month, the Syrian regime is inching toward a return to trade with the wider region as it looks to boost its war-ravaged economy.
The government of President Bashar Assad took back control of the Nassib border post in July from rebels as part of a military offensive that reclaimed swathes of the south of the country.
Syria’s international trade has plummeted during the seven-year civil war, and its foreign reserves have been almost depleted.
The reopening of Nassib after a three-year hiatus, on Oct. 15, is a political victory for the Damascus regime, said Sam Heller of the International Crisis Group.
It is “a step toward reintegrating with Syria’s surroundings economically and recapturing the country’s traditional role as a conduit for regional trade,” he said.
The Nassib crossing reopens a direct land route between Syria and Jordan, but also a passage via its southern neighbor to Iraq to the east, and the Gulf to the south.
“For the Syrian government, reopening Nassib is a step toward normalization with Jordan and the broader region, and a blow to US-led attempts to isolate Damascus,” Heller said.
International pressure and numerous rounds of peace talks have failed to stem the fighting in Syria, and seven years in the regime has gained the military upper hand in the conflict.
Assad’s forces now control nearly two-thirds of the country, after a series of Russia-backed offensives against rebels.

 

Syria faces a mammoth task to revive its battered economy.
The country’s exports plummeted by more than 90 percent in the first four years of the conflict alone, from $7.9 billion to $631 million, according to a World Bank report last year.
The Syria Report, an economic weekly, said Nassib’s reopening would reconnect Syria with an “important market” in the Gulf.
But, it warned, “it is unlikely Syrian exports will recover anywhere close to the 2011 levels in the short and medium terms because the country’s production capacity has been largely destroyed.”
For now, at least, Nassib’s reopening is good news for Syrian tradesmen forced into costlier, lengthier maritime shipping since 2015.
Among them, Syrian businessman Farouk Joud was looking forward to being able to finally import goods from Jordan and the UAE via land.
Before 2015, “it would take a maximum of three days for us to receive goods, but via the sea it takes a whole month,” he told AFP.
Importing goods until recently has involved a circuitous maritime route from the Jordanian port of Aqaba via the Suez Canal, and up to a regime-held port in the northwest of the country.
“It costs twice as much as land transport via Nassib,” Joud said.
Syrian parliament member Hadi Sharaf was equally enthusiastic about fresh opportunities for Syrian exports.
“Exporting (fruit and) vegetables will have a positive economic impact, especially for much-demanded citrus fruit to Iraq,” he told AFP.
Before Syria’s war broke out in 2011, neighboring Iraq was the first destination of Syria’s non-oil exports.
The parliamentarian also hoped the revived trade route on Syria’s southern border would swell state coffers with much-needed dollars.
Before the conflict, the Nassib crossing raked in $2 million in customs fees, Sharaf said.
Last month, Syria’s Prime Minister Imad Khamis said fees at Nassib for a four-ton truck had been increased from $10 to $62.
Syria’s foreign reserves have been almost depleted due to the drop in oil exports, loss of tourism revenues and sanctions, the World Bank said.
And the local currency has lost around 90 percent of its value since the start of the war.
Lebanese businessmen are also delighted, as they can now reach other countries in the region by sending lorries through Syria and its southern border crossing.
Lebanon’s farmers “used to export more than 70 percent of their produce to Arab countries via this strategic crossing,” said Bechara Al-Asmar, head of Lebanon’s labor union.
Despite recent victories, Damascus still controls only half of the 19 crossings along Syria’s lengthy borders with Lebanon, Jordan, Iraq and Turkey.
Damascus and Baghdad have said the Albukamal crossing with Iraq in eastern Syria will open soon, but did not give a specific date.
Beyond trade, there is even hope that the Nassib crossing reopening might bring some tourists back to Syria.
A Jordanian travel agency recently posted on Facebook that it was organizing daily trips to the Syrian capital by “safe and air-conditioned” bus from Monday.
“Who among us doesn’t miss the good old days in Syria?” it said.

FACTOID

BACKGROUND

Syria’s foreign reserves have been almost depleted owing to the drop in oil exports, loss of tourism revenues and sanctions, while the local currency has lost around 90 percent of its value since the start of the war in 2011.