Carillion’s collapse is an opportunity for Jeremy Corbyn

The Labour leader should use the construction firm’s liquidation to advance his argument about the costs of privatisation.

How do you solve a problem like Carillion? It turns out the answer is: you don’t. The government has declined to bail out the troubled construction firm, and the banks declined to continue extending them credit. The firm has collapsed and gone into liquidation. (It hasn’t gone into administration because it has no assets to sell.)

The Telegraph estimates it will leave the Pension Protection Fund on the hook for at least £800m and the knock-on effects could drive small and medium-sized businesses that work for Carillion over the edge too. It also leaves the company’s 48,500 employees, 19,500 of them in the UK, out of work, and the true figure is likely to be higher when you include the many contractors and freelancers the firm itself employed. The British government will also have to pay to keep the government services that Carillion ran going in addition to money already paid out to Carillion.

What about the political fallout? Chris Grayling has a big target on his back as his department gave Carillion £2bn worth of contracts after its first profit warning. Labour pressure and lingering Tory discontent over the reshuffle could turn into a perfect storm for the Transport Secretary. And for Jeremy Corbyn it’s a golden opportunity to advance his big argument about the costs of privatisation.

That in of itself is interesting: one of the strengths that Ed Miliband had over Corbyn was his ability to make the political weather over crises like Carillion. Labour’s quick and painless mini-reshuffle does show that the Labour leader is getting better at playing the game of politics. How and if Labour capitalise on Carillion will show us the extent of the improvement. NEWS SOURCE:newstatesman.com

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The political and economic spheres of Russia-China relations have a life of their own.

Russia-China conference in Shanghai

1. Russia and China: the project is becoming even more complex. Preserving the system: cold at the bottom (economy), hot at the top (politics)

Against the backdrop of the system-wide (economic and political) rise of China, ongoing sanctions against Russia, declining hydrocarbon prices and so on, Russian-Chinese relations are looking increasingly asymmetrical.

On the one hand, Russia’s air strikes in Syria and the possibility of peace talks in Damascus based on an agreement with the United States has confirmed Russia’s global military and political capabilities. Beijing, Washington and other world capitals now clearly realize that Moscow has returned to big politics, and did so not as an observer, but a creator and initiator of particular doctrines.

On the other hand, Russian-Chinese trade and economic relations are marked by weakness and one-sidedness, and Russia is taking too long to turn around and face the east, and so on. All of this keeps intact and sometimes reinforces the skepticism on behalf of particular Chinese circles regarding Russia’s economic revival. It looks as if the political and economic spheres of Russia-China relations have a life of their own. Many in China and Russia are talking about the difficulties involved in developing Siberia and the Far East (although some progress has been made already); however, everyone admires Vladimir Putin’s decisive military and geopolitical moves.

The adoption of the law on security in China can be, perhaps, attributed to Russia’s swift moves in the Middle East. Under the law, the Chinese military can now operate outside of China. Theoretically, China and Russia could jointly initiate – within the UN Security Council or other institutions – a new security system in the Middle East, without leaving behind the old (conventional) Arab-Israeli conflict, the Palestinian issue, and so on.

Against this backdrop, the United States is trying to make the new type of China-US relations a counterweight to Russia-China relations. Their relations are based on enormous amounts of trade and investments (the economic aspect), but there’s nothing that makes their relations appear like a geopolitical alliance. On the contrary, the contradictions are mounting all the way from the controversial issue of the islands in the southern seas to China’s attitude toward the TPP project sponsored by the United States.

The asymmetry also makes itself felt in the diametrically opposed approach of Moscow and Beijing to the Russia-Ukraine conflict.

On the one hand, the specifics of the Russia-China rapprochement in the sphere of global and regional security boil down to the fact that both countries have come close to the line that separates partnership from a military-political alliance. Currently, neither Moscow nor Beijing wants to cross this line, nor do they have plans to establish a bilateral military alliance. Within the existing partnership, many informal attributes of an alliance are clearly present and are effectively developing, such as regular military (land and sea) exercises in bilateral and collective (SCO) formats, defense minister meetings, etc. The Russia-China bilateral Treaty of 2001, Article 9 of which stipulates consultations in the event of a threat to one of the parties from third countries, is the basic document underlying our partnership.

On the other hand, China is implementing a number of important transport/infrastructure projects with Turkey and Ukraine, and officially supports Kiev with regard to the “Russian annexation of Crimea,” etc. However, informally (at the expert level), our Chinese colleagues speak about “friendly neutrality” with regard to Russia as it applies to Ukraine, or even their full support. Clearly, Beijing has to engage in this double game, because it has a number of similar issues (Taiwan, etc.) itself.

2. China and Russia as part of China’s One Belt – One Road megaproject

The Chinese megaproject is gaining momentum with each passing day. Russia has so far been affected by this acceleration only insignificantly. In general, despite a slight slowdown in its economic growth, China is boiling with ideas, money and projects, some of which go to the “priority” – Central Asian – states, which are the geographical starting point of the Great Road.

Russia is not eager to wait in that line, offering instead its own vision of how to combine the three projects: the Silk Road Economic Belt, the Eurasian Economic Community and the SCO, which was officially adopted by President Vladimir Putin and President Xi Jinping in the form of a joint statement in Moscow on May 8, 2015. Truth be told, a host of issues, both at the bilateral (Russia-China) and the multilateral levels, with the participation of the Central Asian region, have remained unresolved, even after this document was formally signed. Most of the outstanding issues concern two subjects: transportation and hydrocarbons.

The construction of a Moscow-Kazan high-speed rail is underway. At the expert level, it’s necessary to diversify the discussion about the Chinese megaproject and to give it a structure. Two key components can be clearly seen, namely, transport and hydrocarbon energy, as they apply to the Central Asian region. In other words, we have a virtual triangle – Russia-Central Asia-China – which is now focusing on transport and energy (plus a raw material processing joint venture, developing local/light industry, water resources, etc.). However, this is all realistic thinking as there is a long way to go before we reach the practical implementation of any real-life projects.

Russia’s plan to broaden the scope of cooperation in building transit corridors with China and other Central Asian countries runs up against the Central Asian countries’ plans to use their and China’s territories to form a new (their own) Eurasian corridor, which would become a source of foreign exchange earnings based on transportation of transit goods.

Clearly, additional transit corridors, including subsequent communication with the SCO member states and linking with China’s main railroads, will become actual competitors to the Trans-Siberian Railroad, primarily due to comparatively low freight rates.

Formally and informally, our Chinese colleagues support the idea of creating the Eurasian Beijing-Moscow high-speed transport corridor. Perhaps, in theory, this project could be mutually beneficial. It will clearly expand the export market for Chinese-made high-tech products and streamline the trade structure between China and Russia. Russia will get unique experience and acquire technology for building and upgrading high-speed railroads.

According to individual Russian experts, Russia is in fact becoming an increasingly insignificant partner for the Asia-Pacific Region, whereas the importance of the latter for Russia will inevitably increase, as the bulk of global economic activities are shifting toward that region.

The majority of Russian pundits still believe that the prospects for Russia’s full inclusion into economic and integration processes in the Asia-Pacific Region and Central Asia remain extremely important and necessary. This will give Russia the opportunity to start building high-tech transit and transport systems and use the few remaining capabilities that have not yet been completely lost.

3. Confluence, Chinese style. Does China need to consolidate its positions?

– The Russian-Chinese and Central Asian confluence (dui ze) has clear economic and geographical outlines and fairly detailed descriptions of the tasks of China’s individual regions in the project’s implementation. For example, the provinces of the upper and middle reaches of the Yangtze River are advised to cooperate with their partners in the Volga Region. In general, China’s inland areas are oriented toward cooperation with the central, southern and western parts of Asia. The Xinjiang Uyghur Autonomous Region is assigned the role of a “window” and “vanguard” in the movement to the West by land.

– There are at least six major routes in the Silk Road Economic Belt (SREB): 1) the aforementioned Beijing-Moscow high speed railway; 2) the China-Mongolia-Russia link; 3) the China-Central Asia-West Asia route; 4) the China-Indochina route; 5) the China-Pakistan route; and 6) the Bangladesh-China-India-Myanmar route.

London CityCulture-UNION JACK





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