Sichuan’s Min River is the largest and longest of the Yangtze tributaries: it flows 735 km before it joins the mighty Yangtze at Yibin. (Photo: Wikimedia)

                                     by David Parmer

These days a whole series of dams are being built along the Min River to feed China’s incessant hunger for power, to prevent floods and to provide irrigation for agriculture. But long before these dams were even a dream, there was one engineering project that has stood the test of time and still serves the people of Sichuan, and that is the Dujiangyan Irrigation System.

 The Dujiangyan Irrigation System is the oldest no-dam irrigation system in the world. It was built during the Qin dynasty in 256BC by the  provincial governor and engineer whose name has come down to us through history: Li Bing. Governor Li saw the dangers of flooding and the need for irrigation and began to plan an ingenious three-part irrigation system to tame the waters and provide the needed flow for irrigation. The tunnel through Mt. Yulei to the Sichuan plain took eight years to complete. Li Bing’s engineering feat not only prevented floods but also greatly contributed to the long term prosperity of the region.

 In 2000, the Dujiangyan Irrigation System and adjacent Taoist sites on Mount Qingcheng were declared  UNESCO World Heritage sites. Dujiangyan and Mt. Qingcheng are about 60km northwest of Chegndu and accessible by train and bus.

 

 

                              (Illustration: China Discovery)

UNESCO World Heritage Site

http://whc.unesco.org/en/list/1001

                                                  Teheran Grand Bazar (Wikimedia)

Last week’s (April 2, 2015) framework deal between the P5+1 nations (U.S., U.K., France, Russia, China + Germany) and Iran paves the way for Iran’s re-emergence into the world economy. Should a long-term agreement be made early next summer there would be the gradual lifting of international sanctions, particularly in banking, which would potentially energize and enrich Iran’s listless economy.

But would an influx of capital and free exports create major economic growth and prosperity for the country?

 While Iran has a vibrant private sector, in many ways it can be compared to China in the late 1970s prior to Reform and Opening Up. To begin with the state is very much in the economy, and many industries have yet to be privatized. Secondly, much like China’s People’s Liberation Army, Iran’s Islamic Revolutionary Guard Corps has its hands in a number of industries across the economy. To further complicate things, there are the Bonyad, or charitable trusts, which likewise are in all types of businesses, and are repeatedly criticized as bloated and inefficient.

With such a quagmire of economic retardants in place, would even a total lifting of sanctions and the influx of capital create a new golden age for Iran’s economy?

 On the plus side, Iran has a lot going for it. Number one is a young population. Estimates suggest that up to two-thirds of the population is under 30. ( Currently unemployment is high, and these young people who could drive a vibrant economy are going abroad creating a “brain drain” within Iran.) Iran has huge oil and gas reserves as well as the world’s second largest store of copper. Iran also has a substantial auto making industry and has the largest mobile phone market in the Middle East.

 The potential for a re-invigorated Iran is an attractive proposition. Iran’s self-interest could be aligned with that of its regional neighbors and world partners.

Critics hold that the new Iran would not necessarily be politically different.

One of the problems in the West is the habit of seeing Iran as a monolith, just as “Red China” was seen as a monolith in the 1960s.  The Wall Street Journal points out in an April 3 article that those in Iran making the nuclear deal in Switzerland are different from those making regional politics.

 So for Iran, will prosperity come soon, and how will prosperity look? These are the big questions. Will prosperity empower Iran’s young population and create a new political climate? Will Iran take the China road? Or will this chance be lost?  For the sake of the people in Iran, the region and the world, we hope not.

 

http://www.wsj.com/articles/prospect-of-bolder-iran-unnerves-some-encourages-others-1428084595

                                    

                               by David Parmer

Jim Rogers is an American investor, author and financial commentator and world traveller whose thoughts and opinions have regularly appeared in the Washington Post, N.Y. Times, Forbes, Fortune, and the Wall Street Journal. His net worth is said to be $300 million. He is Chairman of Rogers Holdings and Breeland Interests Inc., and founder of the Rogers International Commodities Index.

Rogers was born in 1942 and grew up in Alabama. He attended Yale and Oxford, then worked briefly on Wall Street, where he founded the very successful Quantum Fund with international financier George Soros. (Quantum is said to be the most profitable hedge fund in history). At age 37, Rogers “retired” and moved on to other things including becoming a professor at Columbia University School of Business and hosting a TV show.

From 1990 to 1992 Rogers traveled the world by motorcycle logging 100,000 miles. In 1999 he again took a world tour by road, this time with his wife, visiting 116 countries. He has written a number of books including,

• A Bull In China
• Street Smarts
• Adventure Capitalist
• Hot Commodities
• Investment Biker
• A Gift To My Children

 In 2007 Rogers took has family and moved to Singapore where they now live. He has given two reasons for this. First he believes that the future lies in Asia, particularly China, and secondly in order to give his two daughters the best education possible (in the Singapore school system) and to have them become fluent speakers of Mandarin Chinese.

There are  investment opportunities in Myanmar, Russia, and even North Korea as well as China according to Rogers. He is not enthusiastic about India, although in a recent interview with Indian media he said he hoped that Prime Minister Modi could make the necessary reforms to deal with the Indian economy including dealing with an entrenched bureaucracy. Rogers is a frequent guest and commentator on a variety of media. He is very much at ease, always charming, often insightful and never dull.

 Here are some of his thoughts on a number of subjects:

“China is the next great country in the world.” ( J.R. Daily Ticker 13 May 2014)

“China is going to be the most important country in the 21st century whether we like it or not.” (J.R. Sophie Co. Rt.com 26 May 2014)

“China will have plenty of setbacks along the way as does every country, company, family and individual that rises.” ( J.R. Business Insider 17 Feb. 2014)

 “The most sensible skill that I can give anybody born in 2003 is a perfect command of Mandarin.” (J.R. Business Insider 26 Dec. 2011)

 “My top three currencies are the U.S. Dollar, the Chinese Renminbi and the Hong Kong Dollar.” (J.R.  Jim Rogers Talks Markets 27 March 2015)

 

 

                 Oct. 2014 – 21 Asian countries sign on to AIIB   (Photo: People’s Daily)

The deadline for joining the Asian Infrastructure Investment Bank (AIIB) as a founding member is March 31, 2015 . Now, in late March 2015, despite U.S. opposition to the bank, it seems everyone is on board: 22 Asian nations, the Europeans  (UK, France, Germany Italy) and even Australia. Only South Korea and Canada are still on the fence.

 The bank is a done deal, and most observers believe the U.S. made a big mistake by opposing the AIIB, and that it made that mistake very publicly. The U.S. had its reasons for its opposition: it was concerned whether the bank world maintain high standards, be transparent and observe environmental and social safeguards.

The U.S. asked its friends and allies to take a “wait and see” attitude concerning the above points before joining the bank.

 The U.S. has strong influence in the World Bank, the International Monetary Fund, and the Asian Development Bank. Some observers believed that with the AIIB, China would not only get to set the agenda, but also use the bank as a tool of “soft power.”

U.S. friends and allies contended that by joining the bank their very presence will ensure that China runs the bank according to international standards, and will not be able to use it as a tool for its geopolitical agenda.

 One fact that often gets overlooked in this discussion is that there is a real need for funds for Asian infrastructure development.  Estimates of capital needed between 2010-2020 by the Asian Development Bank run to $776 billion. With the present institutions in place, there is a real shortfall of development capital.  Hence the AIIB is a good thing for the region and its growing economies. China’s CCTV ran a story on March 19 with the headline: “China-proposed AIIB is a gift to the world.” The piece ended with the writer suggesting that the U.S. get on board and lend its expertise to the project.

And already it looks like the U.S. is doing damage control. A Wall Street Journal article dated March 22 reports that the U.S. is now holding talks with the Chinese about possible cooperation with the new bank. It seems unlikely that the U.S. will join the AIIB, but cooperation might be another matter.

One thing that can be taken away from this story is the rising arc of Chinese power and influence and the waning arc of post-war U.S. power that has been ascendant and supreme for the past 70 years. In the realm of history, the story of the Asian Infrastructure Investment Bank will be like a few raindrops on the ocean-maybe a footnote at best.  But what has happened this spring of 2015 around the issue is a major shift. The friends and allies of the U.S. decided to go their own way, publicly and without remorse. And once done, they will do again. This may be the point when history says the post-war period was finally over.

 Turkish Weekly Article on AIIB

http://www.turkishweekly.net/news/182018/china-led-aiib-attracts-more-and-more-european-members.html 

CCTV Article on AIIB

http://english.cntv.cn/2015/03/19/ARTI1426756432464213.shtml

Wall Street Journal Article on Cooperation With AIIB

http://www.wsj.com/articles/u-s-to-seek-collaboration-with-china-led-asian-infrastructure-investment-bank-1427057486

Asia Society China File: What Went Wrong With U.S. Strategy

http://www.chinafile.com/conversation/what-went-wrong-us-strategy-chinas-new-bank-and-what-should-washington-do-now