During the first Cold War, a large group of developing countries sought to distance themselves from the ideological battle between the United States and the Soviet Union to create a Non-Aligned Movement.
Today, three decades later, at the dawn of yet another Great Power competition, this time between the U.S. and China, Global South countries are once again saying they don’t want any part of it.
Jorge Heine, a former Chilean ambassador to China and now a research professor at Boston University joins Eric & Cobus to discuss the new book he co-edited about how this new movement is taking root in the Americas, Asia, and Africa.
- Amazon.com: Latin American Foreign Policies in the New World Order: The Active Non-Alignment Option by Carlos Fortin, Jorge Heine, Carlos Ominami
- The Conversation: When two elephants fight: how the global south uses non-alignment to avoid great power rivalries by Adekeye Adebajo
- Observer Research Foundation: India’s strategic autonomy versus Latin America’s active non-alignment by Hari Seshasayee
About Jorge Heine:
Ambassador Jorge Heine is Core Faculty in Diplomacy & Governance at the Rising Powers Initiative at the Pardee Center for the Study of the Longer-Range Future, a Research Professor at the Pardee School of Global Studies, Boston University, and a non-resident Wilson Center Global Fellow at The Wilson Center in Washington, DC. He served as ambassador of Chile to China (2014-2017), to India (2003-2007) and to South Africa (1994-1999), as a Cabinet Minister in the Chilean Government, and as a past Vice President of the International Political Science Association (IPSA). He has published fifteen books, including 21st Century Democracy Promotion in the Americas; and the Oxford Handbook of Modern Diplomacy (with A. Cooper and R. Thakur, Oxford University Press, 2013,2015). He received his PhD from Stanford University.
Eric: Hello, and welcome to another edition of the China Global South Podcast, a proud member of the Sinica Podcast Network. I’m Eric Olander in Ho Chi Minh City, and as always, I’m joined by China Global South’s Managing Editor in Johannesburg, South Africa. Cobus van Staden. Cobus, a very good afternoon to you.
Cobus: Good afternoon.
Eric: Cobus, it is a fascinating week as what’s unfolding right now in the China global South debt restructuring politics in Sri Lanka, Zambia, and soon in Ghana. The crux of the fight that we’re seeing right now is this question as to whether or not the multilateral development banks, that is the World Bank and the IMF, are going to take write-downs or losses on their loans as is requested by the Chinese. Now, this is a showdown that’s been playing out for a good six months, but it really came to the fore this week due to a Financial Times article that ran that said that the Zambian finance minister had rejected China’s calls for the World Bank and the IMF to take write-downs or losses on their loans.
Now, the FT retracted that part of the story, but it sparked a huge discussion on Twitter among a lot of different stakeholders who are finally waking up to this part of the story. Let me set this up for our discussion today. I want to place some sound from some different stakeholders on this issue to show you where we are today in this standoff between China and the Bretton Woods Institutions, and it speaks to the larger duel that is underway for what China wants to do to reform parts of the international development finance system. Let’s first start with David Malpass, who is the president of the World Bank. Recently, he was questioned by Kathleen Hays on Bloomberg Television about this issue of China demanding that write-downs be taken by the World Bank and the IMF.
Kathleen Hays: I want to run a couple of things that China wants out of this, David, that they have requests, they’re delaying this restructuring of Zambians debt because they want to have the nation’s local currency debt held by foreigners included in a deal, that’s according to a U.S. Treasury official, and they also want the World Bank and the IMF to start taking losses in restructurings. How do you respond as the President of the World Bank to these kinds of requests from China?
David Malpass: To the latter point, as far as World Bank and IMF taking losses, there’s not a mechanism to do that. So, that in part is a delaying tactic or it slows down the process. That’s been discussed actively at the G20 and rejected as a direction. So, I hope they’ll move on from that.
Eric: Well, they have not moved on from this. This has been an issue that has come up now repeatedly to the Chinese Ministry of Foreign Affairs in Beijing in the context of both Zambia and Sri Lanka. In the Sri Lankan context, this is some sound from Chinese foreign ministry spokesperson, Mao Ning, who’s been asked repeatedly on this issue about China’s stance in Sri Lanka, where she said very much the same thing as what she said on Zambia. Now, in Sri Lanka, she has made it very clear that China is the largest bilateral creditor, but it is one of the smaller creditors overall, and that multilaterals must take losses equally just as the bilaterals.
Now, on the Zambian issue, just last week, she said, according to figures released by Zambia’s Ministry of Finance and National Planning, this is again, words from Mao Ning, “Multilateral financial institutions account for 24% of Zambia’s foreign debt, while predominantly Western commercial lenders account for 46%, combined, they hold the bulk of Zambia foreign debt. Okay? Now, here’s the key part, and this is why David Malpass is misled if he thinks the Chinese have moved on — “The key to easing Zambia’s debt burden,” she said, “thus lies in the participation of multilateral financial institutions and commercial creditors in the debt relief efforts.” Cobus, this has brought the debt restructuring processes to a complete standstill.
Zambia has been at it for two years. Sri Lanka is going into, I think about a year now. Ghana is just about to start, but there is no hope that unless this issue is resolved, that anything is going to change. And at the end of the day, it’s going to be Zambia and Sri Lankans and Ghanaians that suffer.
Cobus: Yes, I mean, there’s a complicated set of issues involved here, including the fact that on the one hand, the World Bank and the IMF are global institutions and they play a global development role, and particularly they charge very low interest and they are a lend of last resort. So, that is some of the reasons for them resisting or for there being a convention that they don’t accept losses in debt restructuring. However, at the same time, they are also western debt. So, it’s a convention that the World Bank president is appointed by the U.S. President and that the IMF is always European. In that sense, what is at stake is, to a certain extent, western leadership of the development space. And more specifically, it’s a reminder that this kind of bipolar geopolitics and every single country and every single institution being made to choose sides between the U.S. and China is becoming more and more of a reality in international relations.
Eric: It’s interesting you say that because that issue came up just this week in Pretoria where your foreign minister, Naledi Pandor, she hosted her Algerian counterpart, Ramtane Lamamra, and made the best case that I’ve heard so far about the stakes that you’ve laid out in terms of how countries are being forced into a space that they don’t want to be in, in terms of the growing tensions between the United States and China, and how it impacts South Africa, African countries and the global south writ large
Naledi Pandor: With reference to the United States and China, all of us are familiar with the trade disputes that there have been. One of them would be with respect to Huawei which is a company that telecoms companies in South Africa do have relations with in terms of both chips production and components. So, the view that if there’s a conflict with China, everybody else must join in is a very worrying one. And, of course, China and the United States of America, the two largest economies of the world, and when they’re trading together in a stable manner, all of us are able to have our economies stable. But once there’s a rift, we are all affected because they’re so big. And so, it is important that whatever differences they have on trade matters are resolved speedily because it’s in the interest of all of us.
Eric: And I want to get one more perspective before we speak with our guests, this time from out here in Asia from Kevin Rudd, before he became Australia’s ambassador to China. This was when he was the President of the Asia Society Policy Institute. This is a soundbite from a few weeks ago. Kevin is regarded by a lot of people, if you’re not familiar with him, as one of the foremost China scholars of our day. And he was very, very blunt in his assessment about the new era that we’re all living in today.
Kevin Rudd: Whether we use, whatever language Washington or Beijing may use, the reality is there is an unfolding strategic competition between them for who will become the dominant power militarily, economically, and technologically, not just in Asia, but eventually globally. And they are the stakes that are being played for whether we choose to recognize that or not or whether political spokesmen in Beijing or Washington would be so bold and brassy as to say that explicitly, which they won’t be. But if you look beneath the surface and observe the behaviors, that’s actually what is happening.
Eric: With all of this unfolding in Africa, in Asia, let’s now turn our attention to Latin America and the burgeoning geopolitical realities in that region, especially as it relates to the U.S. and China and the competition that’s unfolding. There is a fascinating new book that explores this issue in depth — Latin American Foreign Policies in the New World Order: The Active Non-Alignment Option. This is an edited volume of different authors, mostly from the Americas that lay out a new vision for the region’s foreign policy. And we are thrilled to have one of the editors, Ambassador Jorge Heine, now a research professor at the Party School of Global Studies at Boston University and a former Chilean envoy to China, India, and South Africa. Ambassador Heine, congratulations on the new book, and welcome back to the show.
Jorge: Thank you for much, Eric. A pleasure to be with you as always.
Eric: It’s wonderful to have you. We appreciate your time. Before we kind of dive into the book, I also want to give credit to your co-editor, Carlos Fortin, who’s a Research Fellow Emeritus at the Institute of Development Studies at the University of Sussex, and also Carlos Ominami, a Director of the Chile 21 Foundation in Santiago, and a former Minister of Economic Affairs in the Chilean government. I just want to make sure everybody gets their due before we go forward. Ambassador Heine, you opened the book on a rather grim note in your chapter that was entitled ‘A World Order in Crisis.’
I’d like you to reflect on some of the views that you heard in my introduction from David Malpass and from Kevin Rudd and from the others, and then how that relates to the themes that you outline in your chapter and really the book as a whole.
Jorge: Thank you so much and thank you for mentioning my co-editor’s names. This has been very much a team effort as well as, not just the editor, but the contributors. We have some very important analysts in the book and some former foreign ministers in Latin America — former foreign ministers of Brazil, of Mexico, of Argentina, of Chile, Peru. So, it is really a team effort bringing together analysts and practitioners to look at the current situation in Latin America and how it deals with a world in turmoil. Let me set the stage a little bit. We came up with this notion originally in 2019 and further developed it in 2020 and in 2021. What has been fascinating to observe is how the year 2022 was, in many ways, the year of the eruption of non-alignment, the sort of rebirth of non-alignment on the world stage because of the Ukraine war. And how countries in Africa, in Asia and in Latin America as well suddenly discovered the notion that non-alignment that is.
Not taking positions with either Beijing or Washington or Moscow, but simply going and looking at your own national interest and acting accordingly has become very much sort of the order of the day — the position that India has taken, South Africa, Indonesia, Pakistan are all in that same light. And one of the things that has struck us, and we have been you know, having quite a number of book talks on this, is that one of the central tenets that has been set forth by the G7, by Washington, by Brussels, is that the war in Ukraine would underlying would they described as the main cleavage in international system today, one between democracy and autocracy, between democracy and authoritarianism. Well, as it happens, that doesn’t rhyme with the facts.
Some of the biggest and most significant democracies in the world like India, like South Africa, like Indonesia, like Brazil, like Mexico have stayed seriously neutral in the war. They have condemned invasion of Ukraine, but have refused to take sides in the actual war. So, it seems to me that tells us that non-alignment and the particular variant that we identify active non-alignment is very much alive and well.
Cobus: can you expand a little bit on what you mean by active non-alignment? How does that differ from non-alignment itself? What does the active path imply?
Jorge: What we are implying by that is that precisely because the world is in such turmoil right now and it is so dangerous, and as a result of that, Latin America has faced, according to the Economic Commission for Latin America and the Caribbean, its biggest crisis in 120 years. Latin America had a negative growth of 6.6% in 2020, the worst economic performance of any region in the world. Now, what we are saying is that this troublesome international environment requires an especially active foreign policy, one that is constantly looking for opportunities to position our countries in the right situation and manage this very complex situation. Let me give you an example, President Lula, President of Brazil was, this past weekend, in Washington. They agreed on many things with President Biden on the need to fight climate change, on the need to defend democratic institutions, on the need to protect the Amazon, and so on and so forth.
But they differed on one thing, and President Lula has said that he wants to actively mediate in the war in Ukraine and form some sort of international group, particularly the BRICS, perhaps others, that can mediate and bring that war to an end. Now, that is a very different position from the one of Washington or Brussels that want to have the war go on and eventually weaken Russia permanently as somebody has said. Well, that is in, to me, a sort of example of what active non-alignment is all about.
Eric: Well, just as many international relations scholars say that it’s not appropriate to define what the United States and China are in today as some kind of Cold war because the parallels to the actual Cold War between the U.S. and the Soviets just kind of break down when you look at the interdependence between the United States and China today. There is something going on, as Kevin Rudd pointed out, but calling it a Cold War is not appropriate. I just wonder if the same thing applies to this use of the non-aligned reference as well, because it brings back memories of the Bandung Non-Alignment Movement during the Cold War itself, and this creation of what was then called the Third World. And in many ways, the Ukraine War is an highly exceptional event. It’s easy to take a very strong view on that in many respects, because for many countries, it’s just this isn’t our fight.
I see that playing out here in Vietnam and it’s played out in South America as well. Where it gets more complicated, and I’d like to get your take on how active non-alignment plays out in issues that are not as stark or extreme as war. So, issues on telecommunications, on trade, on ideological alignment, this is where people like Lula get into difficult circumstances with the United States or President Fernandez in Argentina as well, who’s very much aligning himself and Argentina with China and the BRICS and the New Development Bank priorities and whatnot. And so, I’m just wondering how does that shape out in these maybe third or fourth tier issues and not war?
Jorge: Sure. Well, but first, let me take issue, if I may, with your introduction to your statement. We published an article in Foreign Affairs Latin America with my colleagues, Fortin and Ominami in 2020 in which we I made the case for active non-alignment, and also expressed that we were getting into what we call the Second Cold War. This was three years ago. We got a lot of luck and a number of colleagues said exactly what you are saying, “Well, this is not another Cold War because situations were different. Moreover,” they said, “this is basically a trade war and a technological war. It does not have ideological or military dimension.”
Eric: Well, that’s not true now that we’re shooting mil balloons out of the sky with F-22s.
Jorge: Well, that’s the whole point. Three years later, it turns out that well, so the G7 is saying this is democracy versus authoritarianism, which is about as ideological as it can get, and they are shooting down balloons. Yes, there are differences between the first and the second Cold Wars, and the one that you identify. First of all, the size of the Chinese economy, which is huge, much, much bigger than the Soviet economy I was, and two, the interdependent that exists between the U.S. and China. I take it this past year they had a record trade of 690 billion, which is a lot and indicates a connection that exists between those two countries. But that doesn’t mean that the challenges that the countries in the global south are facing are not in some ways comparable to the pressures that they felt back in the ‘50s and ‘60s.
Now, there’s an important difference here, and we see it in Latin America quite clearly, what you did have in Latin America in the ‘50s and ‘60s and 70s was that there were veto players in our various countries, particularly the military and business. They were strongly opposed to the Soviet Union, and therefore made it very difficult for governments to enhancing work on links with Moscow. Now, today, the incentives for both the military and business in Latin American countries are very different. Why should they oppose strong links with China which has much to offer? And therefore, the situation is quite different. In fact, for South America as a whole, not Latin America, for South America, China today is the number one trading partner.
That leads to a very different equation. What I find fascinating is that what we had in 2022, and Foreign Policy summing up, the magazine, Foreign Policy, summing up the year 2022 in Latin America, described as the year of non-alignment. And what happened was that Latin America, jointly with countries in Africa and in Asia, sort of rediscovered what the non-alignment is all about. Not always calling it that way, but acting in that session.
Cobus: I was wondering where you see non-alignment going. In discussion so far, you’ve mentioned that this being countries led by their own national interests. Is that the upper level that we can see in non-alignment or is there some supernational level as we had in the previous non-aligned movement where it moved beyond individual countries towards being a movement? I was wondering particularly around issues, say, for example, like collective issues like climate change — is active non-alignment some kind of bridge towards some form of greater corporation, or are we looking at an atomized international scene where each country doesn’t think beyond its own borders?
Jorge: I think that’s a good question, and my answer to list is the following — In the case of Latin America, what we argue is that for active non-alignment to work, to be fully deployed, to be fully effective, and I was encouraged by the recent summit meeting of CELAC, the Latin American-Caribbean grouping that met on 24 January in Buenos Aires. They hadn’t met for quite a while. And that it seemed too, was an important signal with a number of leaders that are now in power. And in fact committed to regional corporation because, until recently, we had a number, including President Bolsonaro of Brazil, who not only did not believe in regional corporation, but in fact left CELAC.
Now, amazingly as it may sound, Brazil is the biggest Latin American country. One of the first measures he took was to have Brazil leave CELAC. Now, we are now in a different environment with President Lula in Brazil, President Petro in Colombia, President Fernandez, Argentina, President Boric in Chile, and so on, that are in fact committed to regional corporation. At the regional level, my first statement in response to your question is that we believe the regional corporation and coordination is an important step forward. We’re already seeing some signs in that regard. Now, in the future, we certainly hope that there might be greater coordination between countries in Africa, Asia and Latin America. Brazil played a very important role in the global south during Lula’s presidency with the BRICS, with the India, Brazil and South Africa Initiative, and we are sure that we’ll see a lot more of that.
Celso Amorim, who was the foreign minister of Lula, has a chapter in our book called Brazil in the Global South in which he elaborates precisely on that. So, in that sense, I’m quite hopeful. I am particularly upbeat, I must say, about the BRICS. I’ve been ambassador to three or the five BRICS countries, and I think with President Lula in Brazil, we will see quite an upsurge of BRICS’ activity. As you know, BRICS is thinking about expanding. Argentina has formally requested to join. Indonesia, apparently, is in line as well. And if that happens, well, we would be in our own new world game.
Eric: I guess this is where this non-aligned question comes in again, and I do want to move on from non-aligned because there’s so many other themes and topics in your book, but if you’re sitting in Washington as you are, people don’t look at the BRICS as being non-aligned.
Jorge: I’m in Boston.
Eric: Oh, you’re in Boston now.
Jorge: I’m in Boston.
Eric: Fair enough. But even in Boston, people will do not see joining the BRICS as being part of a non-aligned movement. They see that as aligning fully into a China initiated organization that also includes Russia and that may have Iran involved in it as well. So, you can see how maybe the other side of this equation here that the Americans may look at this with a certain degree of skepticism, and it doesn’t feel like these countries are necessarily trying to avoid taking sides.
Jorge: Well, I mean obviously, and there’s a famous saying — where you stand depends on where you sit, and there’s obviously some truth to what you are saying. But what I find remarkable is that the sort of narrative the war in Ukraine has shown the tremendous unity of NATO and of the G7, all of which is true and admirable in many ways. At the same time, the truth is that the overwhelming majority of people around the world, something like 80% are in countries that well are not taking sides in Ukraine and are taking a different look at what is happening there. I see this as really critical moment, a turning point in which countries in the global south in Africa, Asia, in Latin America, are looking at the world and what is happening with a different and very skeptical light.
There’s this whole notion about that the rules-based order that would somehow be in danger because of what has been happening in Ukraine, well, for a long while, countries in the global south have been very skeptical of this order. They don’t think this order has delivered for them. They don’t think that the existing order was able to react in any coordinated, in systematic or effective fashion to a challenge like the global pandemic, which was quite a fiasco in so many ways, that it’s not doing anything seals about climate change that will be the next big challenge we will face. That you were talking earlier about the financial difficulties of a number of countries in Africa, in Asia, and the difficulties of the established financial system to respond to that. So, there’s a little skepticist of how this order has been working. I see many governments and many leaders looking for something else, for something new. And what we are saying is that active non-alignment provides such a path.
Eric: Cobus, Ambassador Heine makes a point that you have raised on a number of occasions, and you and I, in fact, just today were talking about this with regards to the IMF, that if the United States is going to go out to the developing world and to global south countries to try and rally support for the World Bank and the IMF, out here in Asia, people have very long memories of the structural adjustment programs that the IMF imposed in the 1997 financial crisis. And there’s this famous picture of the IMF director, I think standing over, I think it was either Thailand or South Korea in this very kind of masterful colonial way, and the reservoir of resentment towards the IMF and the World Bank runs very, very deep in many of these countries for what happens over the past 20, 30 years. And I think this goes to your point that you’ve made and that Ambassador Hine made that the rules-based order has benefited people at the top, but not necessarily people at the bottom of the pyramid. What’s your thought on that, Cobus?
Cobus: Well, yeah, I think that that is clear. The bigger question though is what options these countries have? Because as all of these issues around debt restructuring that you raise in the intro, all of those take place against the background of very, very limited choices from developing regions like Africa in terms of financing, particularly for large-scale infrastructure. If you want to build a rail network, you have very few options, and those options tend to be either kind of financial deals with China, financial deals with western-led institutions or both. That then also relates to other economic activity as well. One of the differences between the old Cold War and the new Cold War is that economies, particularly the Chinese and U.S. economies are so intertwined. And so, even a lot of U.S. experts who are very pro-decoupling admit that fully decoupling the supply chains that we see in the world now is a real challenge.
Ambassador Heine, I actually wanted to segue from that into asking you how you see these issues playing out in the context of non-alignment. Is there an active non-aligned development model where there’s some kind of way of moving forward without these de facto alliances where whether one is ideologically aligned with the U.S. or China or not, one ends up being financially on the hook to them anyway? And also in relation to trade the, previous non-aligned movement, it was also happening in an era of much less globalization where there was still a strong logic of mechanisms like import substitution or essentially other ways of or ideas of closing off economies in order to then grow industrialization. Many of those ideas are gone now, so I was wondering, in terms of trade and in terms of development, what does active non-alignment actually look like on the financial level?
Jorge: Well, it’s good that you bring this up. You say that those ideas of the Third World in terms of input substitution, in terms of protectionism, and so on and so forth, the high tariff barriers and so on have gone away. Well, they may have gone away in some parts of the world, but they have come back elsewhere. What we see today, and I find this most fascinating, is that they have come back in the United States and they have come back in Europe and in the UK. The United States used to talk about free trade. Now, believe it or not, they talk about fair trade. Now, that used to be the rallying cry of countries in the global south. And so, we are living in a way, in a world turned upside down. The United States today is against free trade agreements.
It is not signing any free trade agreements. Here you have this extraordinary paradox. The United States has talked about decoupling. Now, that is exactly what countries in the Third World used to talk about in the ‘60s and ‘70s. I studied at university in Chile in the 1960s where dependency theory came up, and a key element of some variant of dependency theory was that you had to decouple from the world economy so that you could actually develop because the north was exploiting you. Now we have countries in the north saying that they must decouple from China because otherwise they would lose out in the economic competition. Now, does that sound like conventional classical economics to you? It doesn’t sound like that to me. So, we have this extraordinary paradox in which it is countries in our part of the world, in Latin America, in Africa and Asia that want free trade.
And it is the developed countries, those in the G7 that are raising barriers and do not want free trade. In South America, we now have two countries, Ecuador and Uruguay, that are keen on signing free trade agreements with the United States. United States has rebuffed, so they have gone to China. and Ecuador has signed the free trade agreement with China, and Uruguay is exploring that possibility. Now, isn’t that extraordinary? To go back to your question, what active non-alignment is all about is for looking for more trade, for free trade, for a greater flow of international capital and investment. We want more interactions with the world, not less. And it is the northern countries that are closing up. Now, on that one final comment on this question, it is important also to keep in mind this — the World Bank in 2015 released the document talking about, what it calls the ‘world shift’ that we are seeing from the North Atlantic to the Asia Pacific.
Today, there are more billionaires in Beijing than there are in New York City. So, trade flows have shifted, whereas in the ‘70s and ‘80s, no more than say 20% of trade flows had to do with the global south. Nowadays, it’s probably around 40% or 50%. There’s much more trade within the global south than there was in the past. And we’re seeing remarkable things like, for example, in 2021, China invested more in Latin America than it did in the United States and about the same as it did in Europe. Why? Because the United States and Europe are closing themselves off to Chinese investment. Now, capital will always look for places to go. China has a very high savings rate. So, I think we’re going to see a lot more Chinese investment in Latin America, in Africa, and in Asia in years to come.
Eric: One of the other concepts that was introduced in the book is this notion of equidistance diplomacy. And it was written by one Gabriel Tokatlian, who is the Vice-Rector at the University of Torcuato Di Tella in Buenos Aires. Now, this idea of equidistance diplomacy is to maintain an equal amount of space from both Beijing and Washington. Can you expand on that concept?
Jorge: Yes, it is very much a sister concept to that of active non-alignment, and it is something which Dr. Torcuato has been working for some time. The basic notion here is that countries in Latin America should not choose sides, should not let themselves pressure by either Beijing or Washington, to all align themselves priori and in total with their whole positions. And the idea is to have a sort of intermediate position between the two superpowers. Now, here there are some differences with the notion of active non-alignment. Active non-alignment, it’s important to understand it’s not about neutrality. Neutrality is, say, what Switzerland did. Switzerland was not in the European Union, wasn’t even in the UN until a few years ago. It wanted to stay totally away from any international conflict and international difference. Active non-alignment is not about that.
Active non-alignment will side with a certain country on certain issues. For example, it is more likely that obviously that it will side with the United States on issues related to democracy and human rights. It is more likely it will side with China, say, on issues of international trade or digital connectivity. Active non-alignment in that sense is more flexible than neutrality, more flexible than equidistant diplomacy. And I would underscore again the issue of active, the qualified active. Why? Because what is easy is to say, “Well, I will do whatever Washington tells or whatever Beijing tells me.” What is much more challenging, and I spent 12 years in the Chilean foreign ministry, what is much more challenging is to evaluate each issue on its merits and decide on the basis of that, what is the best way forward and what decision reflects best the national interest/ These are very complex issues that require sophisticated and very deft policy-makers that will able to move the country forward in the right direction.
Cobus: Just following up on that, do you have faith that those policy-makers and that kind of level of not only national kind of interest but regional and group global south interests will be advanced by these leaders? I mean, obviously many global south countries have many different leaders, but I was thinking, as you were speaking about South Africa’s leadership, which always speaks like talks a very good game, but when it comes to implementation, there’s a lot of corruption issues, there’s a lot of other issues, there’s a lot of all kinds of problems. So, how do you foresee those kind of challenges being overcome?
Jorge: Sure. Now, obviously, there are significant bureaucratic and making and leadership challenges that can stand in the way of any effective application of these principles. But what I would like to say is the following — the more countries can work together, the more they can coordinate. We’re not talking about some sort of region or government, but we’re talking about a minimum level of coordination and a minimal level of cooperation, the easier it will become. I mean, let me give you an example. The recent visit by the Chancellor of Germany, Mr. Olaf Scholz, in the case of Chile, it was the first visit by a chancellor of Germany in 10 years, was basically about convincing the countries he visited to send arms and weapons to Ukraine. Now, he misunderstood that the common position of many of these countries is that of active non-alignment.
Well, they wouldn’t even have happened because it would start from the premise that it would be a losing proposition. So, what I’m trying to say is that the more this percolates as a connective endeavor, the easier it becomes in the sense that, well, we all know where we stand, and therefore decision makings become more predictable and easier, and you wouldn’t face these extraordinary situations which Latin American countries are asked to send all kinds of weapons to Ukraine. What does that have to… It’s a European war that Europe is trying to make into a global war, bringing Latin American countries in that have no talk in that fight.
Eric: Yeah, I mean, just picking up on Cobus’s point here in terms of the prognosis of how these policies and these ideas may be implemented, you wrote that there’s an urgency to all of this, and that there’s an urgency to reevaluate the way in which Latin America relates to the international environment. Let’s just get some closing thoughts from you in terms of whether countries, as they’re configured today, I mean, you talked about regional integration and, but let’s be honest now, MERCOSUR is not doing so well these days, the South American trade group. So, it’s not all sunshine and roses right now in terms of how South American countries are interacting with one another. And in many ways, that plays to the advantages of the great powers. I guess, in context of everything we’ve talked about, what is your prognosis about whether or not leaders will be able to take some of your ideas and implement them into action?
Jorge: Well, let me say the following. What we have right now is, on the one hand, a geopoliticization of international relations. Globalization has come under increased criticism and more and more countries are being asked to make what would’ve been commercial, an investment decision on ideological grounds and geopolitical grounds. In that context, we argue very strongly that the last thing Latin America needs is to start making economic decisions on ideological grounds. For Latin America, the great imperative is development as it is for Africa, as it is for Asia. That is the way forward. We must concentrate our efforts on the deadline. Number two, what we have seen in the course of the past year is that number of leaders have been elected, I mentioned this before, like Lula, like Petro, like Boric, and so on, that have a different view of what Latin American integration and corporation is all about, very different from their predecessors that were very skeptical, and if not downright critical, of Latin American integration.
In that sense, the current political situation in the region opens an interesting possibility. It seems to me that President Lula has shown that kind of leadership in the past. He was one of the drivers behind the creation of UNASUR. I fully agree with you that MERCOSUR is in serious trouble, but what is now on the agenda is reviving UNASUR, which brings together all countries in South America as a political corporation instrument, as a political corporation tool. It seems to me, if that happens, South America would be in a very different situation and will be able to exercise the sort of influence and have the sort of role it merits in international affairs, and would be able to get out of the current crisis in which it finds itself.
Eric: The book is Latin American Foreign Policies in the New World Order: The Active Non-Alignment Option. I’ve read it and I cannot recommend it enough. It is absolutely essential reading, and what’s best about it is that there are so many diverse voices that are featured in the book and that are absolutely worthwhile reading, especially such a strong vision for how South America navigates itself in this new world that we’re living in, this very contentious world that we’re living in. And we are just so thrilled that Ambassador Jorge Heine was able to join us. He’s one of the editors on the book. Ambassador Heine, thank you so much for your time today and for sharing some of the insights from you, your editors, and your co-authors in the book. We’re going to put links to the book. It’s available on Amazon. And believe it or not, Cobus, it’s actually affordable, which is wonderful.
So, if you want the e-book, it’s only $26, and it is worthwhile getting because again, we have not heard the point of view and that perspective from South America, Central America and the Caribbean on the U.S.-China divide, and this is a great way to do it. Ambassador Heine, you are very active on Twitter, and if people want to follow you there, where can they find you?
Jorge: They can find me @jorgeheinel.
Eric: Wonderful. We’ll put a link to that along with the book and also some of your previous writings on these issues. Thank you so much for taking the time to join us.
Jorge: Thank you, Eric. Thank you, Cobus, for the opportunity. Have a great day.
Eric: Cobus, every time we speak with Ambassador Heine, it’s always so refreshing to hear such a confident voice for this region and these ideas and from so many different people pushing the continent forward, the South America, Central America, and the Caribbean. And as Ambassador Heine was speaking, I was thinking to myself that in the context of the U.S.-China duel, we have not heard, in my view, maybe you can correct me on this, but I haven’t heard this articulation of a vision of how to navigate the complexities of this dynamic and this new world order that we’re in or this new era that we’re in, in an African context. Have you seen it?
Cobus: Not as well articulated or as worked out as seen here. I think at the moment, there’s a lot of anti-westernism and then a lot of anti-Chinasm, but not necessarily anti both of them. I think probably the issue is more that Pan-Africanism itself obviously has a very like long and storied intellectual history, and there is neo-pan-Africanists out there, but I think for a lot of… Pan-Africanism still sounds like the past. And I’m sure it’ll get rethought and revived and so on, but it’ll also probably get revived in probably another version of active non-alignment in terms of global south solidarity, like south-south cooperation. But I think so far, not so much.
Eric: It’s interesting because that dynamic wouldn’t work out here in Asia for the most part because while there is growing economic integration among the countries in Asia, there is growing security fragmentation. And you’re just seeing the strains and the stresses. Again, there’s a buildup of military that’s going on right now, the presence of the United States, Australia, Canada, France, Germany, Japan, China, all in the South China Sea, then obviously the India-China border. And so, in many ways, what Ambassador Heine and his colleagues have done is rather unique and it could serve as a model for what other countries and regions should do. Because if you can’t figure out your way in this world where we are now, you’re going to get lost, you’re going to get crushed, and we are literally seeing this unfold in front of our eyes.
What’s happening in Zambia and Sri Lanka right now is exactly that, that these countries are collateral damage in the bigger fight. Let’s be very clear here, while a lot of focus is being placed on China’s role in all of this, you and I have said this a number of times, yet the United States and the United Kingdom have an enormous amount of leverage in what they can do with private creditors, which they have not exercised. They have tremendous influence in what they can do with the IMF and the World Bank. I have not seen any momentum on that. They also helped to set the agenda at meetings like the G20. And for the past three years, since the beginning of the pandemic, number one, we have not seen one successful debt restructuring, and number two, we have not seen the major powers, the United States and Europe predominantly, to prioritize debt at G20 meetings. So, there’s a lot of blame to go around here.
Certainly, China has its fair share. Absolutely. There’s no doubt that they’re playing geopolitics here at the expense of Zambian taxpayers — no doubt. But they are not alone in this mud.
Cobus: Yeah, I mean I think that has also been one of the kind of revealing things about Ukraine crisis. It’s like, it’s just what is possible in one context is not possible in other contexts. You occasionally, and I mean obviously Western allies, the NATO grouping hasn’t necessarily been unified on all aspects of Ukraine and there’s a lot of different, even within that alliance, there’s a lot of divergent thinking and pulling in different directions. With Ukraine, you get this glimpse of like, oh, this is what it looks like when Europe or the America or America actually cares about something. Then in the process, you’re just, oh, they don’t care about development or they don’t care about kind of debt restructuring, or not at the same level or not in the same non-academic kind of way. That I think is what we’ve been screaming about in into the void, kind of is this kind of thing of faux concern? Calling China out, and I mean, China’s problematic in many, many ways, but then not mentioning stakeholders like private creditors, for example, where they have a direct kind of leverage over, which makes you think that, oh, this isn’t really about debt.
This is, again, about geopolitics. That I think is part of the disillusionment that one feels in the global south. And I think that it manifests in terms of when they’re suddenly called onto, for example, to send troops or weapons or contributions to Ukraine, why there’s such a lukewarm reaction. Because that feeling is like, oh, okay, so, now it’s important? Now our contributions are important? Now we should all pull together, but when Sri Lanka’s melting down, then that’s not a problem.
Eric: Two other very quick points before we go that I want to bring up from what’s happened this week. Last week actually, Cambodian Prime Minister Hun Sen went to Beijing, and he went with a very big shopping list in his pocket. And it was very interesting to watch that visit unfold. And I had a lot of expectations on that particular visit, in part because China and Cambodia are very much strategically aligned. Chinese influencing Cambodia is tremendous. The Chinese are reportedly revamping or building a very small navy installation there of some kind of base, I don’t know what you want to call it, but it’s some kind of outpost. These are about as good a friends as you’re going to get. China owns about 40% of Cambodia’s $10 billion debt. And Prime Minister Hun Sen went with a vision to get quite a bit of money out of Beijing to upgrade two of the country’s railways into high-speed rail, and he came back with a $44 million grant.
And Cobus, I thought that was so interesting, because if anyone was going to get a large-scale infrastructure loan from China, it was going to be a country in Southeast Asia that is strategically important — and that didn’t happen. So, $44 million really is an indication of where we are in the current environment for China and overseas development finance. The days of the big billion dollar railways being financed by China are now over.
Cobus: I think it’s also very interesting that it’s a grant — not a loan. I’ve been reading a lot about debt restructuring and some of the internal dynamics about debt restructuring over the last few days, and one of the things that some of the newer reporting is pointing out is the huge role that different issues within officialdom within China plays in the advancing of loans, and then making how difficult it is to actually write-off loans. One of the problems with accepting losses in debt renegotiation is that in the first place, all of these write-offs have to be cleared much higher up. And then also each time a loan has to be written off, a loan essentially fails, that the officials involved, their careers are changed. There is all of this institutional and personnel level kind of resistance against writing off loans that then kind of manifest higher up in terms of China’s “foot dragging” and all of the other complications that we’re seeing behind the scenes in relation to these issues.
It is interesting for me that they decided to just give a grant. And I was wondering if one of the reasons behind it is oh, just avoid loans at all costs. I was also wondering, in relation to that, whether bad situations like the Standard Gauge Railway in Kenya, for example, essentially burnt the entire global south. That the lesson that China learned there is that these big infrastructure loans are bad news no matter… Rather than, oh, we should manage them better.
Eric: Well, they don’t have to look as far as Kenya for that example because there’s an equally expensive standard gauge railway in Laos, $6 billion railway there. Again, the question is whether or not Laos can repay that debt. A lot of skeptics say they can’t. So, here in Southeast Asia, those issues are front and center — don’t have to go all the way to Kenya. The other thing going on this week that is worth keeping an eye on is a three day visit by Iran’s President Ebrahim Raisi, who met with Chinese president Xi Jinping on Tuesday. Xi apparently is trying to nudge Iran back into the Iran nuclear talks known as the JCPOA. Again, in many ways, we’ve heard over and over again from China-Iran analysts that says that China’s main priority in Iran is to get Iran to behave and not complicated its relationships with more important countries in the Persian Gulf, namely Saudi Arabia, United Arab Emirates, and Qatar, who, by the way, also is on deck to sign another massive natural gas deal.
Energy deals coming out of the Gulf are very important. And this relationship with Iran, though a big concern in places like Washington, is, generally speaking, of secondary importance to the Chinese in the Gulf. But nonetheless, it’s interesting to see this presidential visit, so I encourage everybody to keep an eye on that. So, we’ve covered a lot of ground today from debt to Iran, to Latin America, to non-aligned movements, so it was a lot to kind of digest. I hope you’re able to stay with us. Of course, this is what we do every day in the China Global South Daily Brief that goes out to thousands of diplomats of business leaders. Ambassador Heine receives it every morning at 6:00 AM East Coast time. So, if you’d like to join our growing community of readers around the world who follow what the Chinese are doing in the global south, go to chinaglobalsouth.com/subscribe.
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Cobus and I will be back again next week with another edition of the China Global South Podcast. For Cobus van Staden in Johannesburg, I’m Eric Olander in Ho Chi Minh City, thank you so much for listening.
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