Asia-Europe sustainable connectivity scientific conference : book of abstracts.
Date: 2020-09-21
Institutions: Joint Research Centre
Subjects: Asia, Europe, conference proceedings, economic cooperation, free-trade agreement, international competition, international cooperation, political cooperation, scientific cooperation, sustainable development

EUR 30282 EN 

ASIA-EUROPE SUSTAINABLE CONNECTIVITYSCIENTIFIC CONFERENCEStrengthening Asia-Europe links through data and researchONLINESEPTEMBER 22-25, 2020CMYCMMYCYCMYKUntitled Extract Pages.pdf   1   12/09/20   18:42This publication is a Conference and Workshop report by the Joint Research Centre (JRC), the European Commission’s science and 
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Asia-Europe Sustainable Connectivity Scientific Conference 
www.aescon.org  

The ASEM Sustainable Connectivity Portal 
https:/ /ec.europa.eu/asem-sustainable-connectivity  

JRC121167 

EUR 30282 EN 

PDF 

ISBN 978-92-76-20012-3 

ISSN 1831-9424 

doi:10.2760/932920 

Luxembourg: Publications Office of the European Union, 2020  

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How to cite this report: Becker, W. and Neves, A.R. (Ed.), Asia-Europe Sustainable Connectivity Scientific Conference Book of Abstracts, 
EUR 30282 EN, Publications Office of the European Union, Luxembourg, 2020, ISBN 978-92-76-20012-3, doi:10.2760/932920, 
JRC121167.

Contents 

Setting the scene .................................................................................................................................................................. 1 

Opening ................................................................................................................................................................................... 7 

Opening remarks by Stephen Quest ......................................................................................................................... 8 

Opening remarks by Toru Morikawa ...................................................................................................................... 10 

Opening remarks by Koji Hachiyama ..................................................................................................................... 12 

Opening remarks by Miao Lu .................................................................................................................................... 13 

Keynote by Romana Vlahutin: Sustainable Connectivity – The European way ........................................... 14 

Connectivity needs a strong rules-based multilateral framework – for everyone's sake ..................... 15 

People-to-People Connectivity ......................................................................................................................................16 

EU-India Cooperation in Higher Education as an Enabler of the ASEM Sustainable Connectivity ........17 

Implementation People-to-People Connectivity through SHARE Scholarship to strengthen ASEAN 
Identity ............................................................................................................................................................................ 21 

The Filipino Diaspora: A comparative analysis of OFW Remittances from ASEAN and EU ..................... 25 

Advancing of the sustainable connectivity through innovation: highlighting SDG9 and SDG17 ............. 29 

Towards Inclusive City through Tourism Development: Quality of Job and Participation ...................... 30 

Local Energy Markets ...................................................................................................................................................... 34 

Local electricity market projects in China and the EU – A comparative perspective ............................... 39 

International (inter)connectivity via interconnectors? Gas and energy market ramifications ............ 43 

Policy Instruments for Sustainable Connectivity .....................................................................................................47 

The alignment of Chinese financing with the Paris Agreement: propaganda, aspiration or reality? .. 48 

Partnership for Sustainability between Smallholders in Asia and Corporations in Europe ..................53 

Strengthening connectivity to design special pilot zone for paludiculture development ...................... 58 

Emissions embodied in international trade in the Asia-Europe context ..................................................... 62 

Transport Connectivity ..................................................................................................................................................... 66 

The Eurasian Landbridge: Implications of linking East Asian and Europe by rail ...................................... 67 

Climate-Neutral Maritime Connectivity between Europe and Asia .............................................................. 72 

China's Investment in EU Ports: Assessing  Geo-Economic Implications of the BRI in Maritime Europe
 ................................................................................................................................................................................. 76 

Air transport connectivity between Asia and Europe ........................................................................................ 81 

Aerotropolis: At what cost, to whom? An analysis of social and environmental impacts of New 
Yogyakarta International Airport (NYIA) project, Indonesia ........................................................................... 84 

Can Open Skies Agreement Make the Sustainable Development Regime of EU-Asia Civil Aviation 
Market? Game Theory Analysis on the Exploratory Studies of EU-China Open Skies Agreement 
Negotiations ................................................................................................................................................................. 88 

Political Connectivity ........................................................................................................................................................ 93 

An inquiry into synergies and tensions between the EU’s Connectivity Strategy and China’s BRI ...... 94 

Asia Europe Connectivity: Converging the Regulatory Standards and Sustainable Financing ............. 95 

EU and ASEAN Cooperation on Sustainable Development: towards an alignment of regional actions 
plans? ............................................................................................................................................................................. 98 

ii 

The Dark Side of Connectivity: Authoritarian Image Management & Extraterritorial Repression ..... 102 

Paving the road to peace and prosperity? A framework for understanding the conflict impact of 
infrastructure initiatives ......................................................................................................................................... 106 

China’s Belt and Road Initiative 2.0: Promoting Peace and Security in Myanmar? .................................... 111 

 ................................................................................................................................................................................ 114 

Trade and Investment ...................................................................................................................................................... 114 

Enhancing Trade and Investment Facilitation for Global Value Chain Integration in Europe and Asia115 

The Role of Global Value Chains to Strengthening the Connectivity between Europe and Asia ........... 119 

Coffee and Cocoa Connection: I-EU CEPA Potential Impact to Indonesian Farmers .............................. 127 

Quantitative Studies on the Belt and Road Initiative’s Impacts on Asia ....................................................... 131 

Achieving complex development goals along China’s Digital Silk Road .................................................... 133 

Poster contributions ....................................................................................................................................................... 142 

Pakistan’s relations with the EU and China: On the path towards sustainable connectivity ................ 143 

Leveraging IT to preserve cultural heritage in ASEAN ................................................................................... 148 

Bridge the Cross-Culture Understanding: Study Case of BIPA Program in Ambon ............................... 152 

Co-Creating immersive 360° video media with a Singapore-France education collaboration ........... 164 

HODLNG, a Blockchain-based solution for the Liquefied Natural Gas (LNG) market; unleashing Asia-
Europe exports and imports of gas, in the context of a Sustainable Connectivity ................................... 168 

iii 

Setting the scene 

1 

Setting the scene 

Ana Rita Neves and William Becker 

European Commission, Joint Research Centre 

On October 2014, a group of Asian and European leaders gathered in Milan, Italy at the 10th 
Asia-Europe Meeting (ASEM) Summit. On this occasion, the group decided on the need to 
further study approaches and concrete steps for enhancing connectivity between Asia and 
Europe in  all relevant  fields.  Two years  after,  at the  11th ASEM Summit  held in July 2016, in 
Ulaanbaatar, Mongolia, the leaders of the ASEM political forum agreed to:  

• Mainstream  connectivity  in  all  its  dimensions,  including  political,  economic,  digital,

institutional, socio-cultural and people-to-people, into all ASEM activities;

•

Establish a working group, called the ASEM Pathfinder Group on Connectivity, with
the aim of exploring how ASEM could add value in the area of connectivity.

The ASEM Pathfinder Group on Connectivity was tasked with providing a commonly agreed 
definition  of  connectivity  for  the  ASEM  context.  This  definition,  endorsed  by  all  53  ASEM 
partners at the 13th Meeting of ASEM Foreign Ministers in Nay Pyi Taw, Myanmar in November 
2017, is presented in Box 1.   

Box 1: Definition of ASEM connectivity adopted by ASEM. 

Connectivity is about bringing countries, people and societies closer together. It facilitates access and 
is  a  means  to  foster  deeper  economic  and  people-to-people  ties.  It  encompasses  the  hard  and  soft 
aspects,  including  the  physical  and  institutional  social-cultural  linkages  that  are  the  fundamental 
supportive means to enhance the economic, political-security, and socio-cultural ties between Asia and 
Europe which also contribute to the narrowing of the varying levels of development and capacities. 

Bearing  in  mind  the  Asia-Europe  Cooperation  Framework  (AECF)  2000,  ASEM  connectivity  aims  to 
establish  the  sense  of  building  ASEM  partnership  of  shared  interests.  It  upholds  the  spirit  of  peace, 
development, cooperation and mutual benefit. It will also adhere to and effectively implement relevant 
international norms and standards as mutually agreed by ASEM partners. 

ASEM Connectivity covers all modes of transport (aviation, maritime, rail and road) and also includes, 
among others, institutions, infrastructure, financial cooperation, IT, digital links, energy, education and 
research,  human  resources  development,  tourism,  cultural  exchanges  as well  as customs, trade  and 
investment facilitation. 

ASEM connectivity covers all the three pillars of ASEM - economic, political and socio-cultural. It should 
be result-oriented, and in support of the following key principles: level playing field, free and open trade, 
market  principles,  multi-dimensionality,  inclusiveness,  fairness,  openness,  transparency,  financial 
viability, cost-effectiveness and mutual benefits. It should also contribute to the materialisation of the 
principles, goals and targets of The 2030 Agenda for Sustainable Development. Sustainability is one of 
the important quality benchmarks for the connectivity initiatives in the ASEM context. 

2 

Connectivity in the ASEM context is a broad concept, ranging from  physical infrastructure 
(i.e.  transport,  energy  and 
information  and  communication  technologies),  financial 
cooperation  and  economic/trade  links  to  political,  institutional  and  human  connectivity, 
including education and research, tourism and cultural exchanges. The definition underlines 
the  link  between  connectivity  and  sustainable  development,  in  particular  the  Sustainable 
Development Goals (SDGs). 

Although the ASEM group had a definition of connectivity, they were still lacking evidence to 
inform policy making on the state of connectivity between the 51 ASEM member countries. 
This  was  the  reason  why  the  European  Commission’s  Joint  Research  Centre  (JRC)  Centre 
Competence Centre on Composite Indicators and Scoreboards was called to contribute. The 
JRC is the European Commission’s in-house science service and its main mission is to carry 
out research to support European Union (EU) policies. One of its main challenges is to bridge 
the divide between science and policy.  

In November 2017, the JRC took up the mission of developing a measurement framework for 
ASEM sustainable connectivity. Only by measuring connectivity, policy makers could better 
understand how countries are connected to each other as well as in which areas countries 
are frontrunners and in which areas they are lagging behind. 

The  multidimensional  nature  of  ASEM  Sustainable  Connectivity  meant  that  this  concept 
could  not  be  captured  by  a  single  indicator.  Thus,  the  approach  used  was  to  develop  a 
framework  of  relevant  indicators  which  could  be  combined  into  composite  indicators  or 
indexes—  aggregations  of  indicators  that  make  large  and  complex  data  set  accessible  by 
offering a ‘big picture’ overview. In addition, they serve as an access point to the underlying 
data,  enabling  users  to  drill  down  and  explore  the  wealth  of  information  presented  in  the 
indicator framework.  

In fact, we built two indexes, one measuring connectivity and facilitators of connectivity in its 
five  dimensions:  Physical,  Economic/Financial,  Political,  Institutional  and  People-to-people 
and  other  measuring  sustainability 
its  three  dimensions: 
Environmental, Social and Economic/Financial. We put 49 indicators in this framework, but 
to arrive there we reviewed more than 200.  A particularity of measuring connectivity is that 
it suggests the use of bilateral data, i.e. data which measures connections between pairs of 
countries. In total, 16 bilateral datasets specifying the levels of flows and connections between 
51 country pairs were included.  

linked  to  connectivity 

in 

With this approach, we were able to assess how well connected a country is according to the 
ASEM definition and the extent to which this may be reflected in a country’s sustainability. 

In order to make all the information accessible and reachable to everyone, we developed a 
new online data-powered tool – the ASEM Sustainable Connectivity Portal1. The Portal allows 
users to: 

• Understand in which domains a country is performing better or not so well;

•

•

Explore the relationships between connectivity and sustainability and its underlying
components;

Explore the various types of connections between European and Asian countries.

1 https://ec.europa.eu/asem-sustainale-connectivity 

3 

For example, by using the Portal (e.g. the Connectivity Map feature) one can discover that: 

•  Asia  and  Europe  are  leading  trade  partners,  with  $1.5  trillion  of  annual  merchandise 

trade 
Trade  between  ASEM  countries  accounts  for  about  half  of  all  world  merchandise 
trade. Two major hubs stand out: Germany and China. These countries together are 
responsible for one quarter of the overall trade in the ASEM group, and are the main 
trade bridges between the two continents. 

•  Foreign direct investment (FDI) between Asia and Europe reaches close to $90 billion 

annually  
This  is  nearly  the  same  size  as  FDI  flows  within  Europe.  Over  half  of  European 
investment in Asia comes from the UK and Germany, exceeding $32 billion. In fact, 
the UK invests twice as much in Asia than in Europe, with India receiving the greatest 
share. Likewise, China and Japan are the main Asian investors in Europe, collectively 
amounting to $12 billion. 

•  400,000 tertiary education students move annually between Europe and Asia 

International graduate student mobility provides access to quality education abroad, 
as well as the opportunity to improve language skills and explore different cultures 
and  societies.  The  United  Kingdom  is  the  top  destination  for  Asian  students,  with 
nearly  three  quarters  coming  from  China,  India  and  Malaysia.  Chinese  students 
represent  almost  half  of  Asian  students  in  Europe.  Australia  is  the  favourite 
destination for European students, followed by Japan.  

•  Over  200,000  scientific  articles  are  the  fruit  of  collaborations  between  Asian  and 

European research institutions every year 
Cross-continental collaboration in the form of co-authorship of scientific publications 
represents close to one third of research collaborations in ASEM countries. Countries 
such as China, Australia, the United Kingdom, Germany, Russia and France provide 
an intercontinental  bridge for scientists. Cross-bloc collaboration is stronger on the 
Asian side than on the European side, since European countries also have a strong 
internal collaboration network supported by large EU-funded research programmes. 

• 

13 million people have migrated between Asia and Europe 
Germany, the United Kingdom and Australia host the largest number of cross-bloc 
migrants (around 2.5 million each). Large movements  of migrants from the United 
Kingdom  to  Australia  and  from  Russia  and  Kazakhstan  to  Germany  are  associated 
with  historical,  cultural  and  language  ties.  Russia  is  the  main  country  of  origin  of 
migrants to Europe, followed by India. 

Flows  and  connections  between  countries  can  now  be  measured  and  in  this  way  we  can 
understand more precisely how they connect to each other. 

4 

 
Data  also  tell  us  that  Asia-Europe  connectivity  is  aligned  with  most  of  the  Sustainable 
Development Goals, in particular the ones linked to the social dimension of sustainability.  

If we plot on the vertical axis Connectivity – higher score is better, and on the horizontal axis 
– Social  Sustainability,  further  to  the  right  is  better,  then  we  see  that  better  connected
countries  are  associated  with  better  performance  on  social  sustainability  (Figure  1).  Those
countries tend to have lower levels of poverty, lower levels of corruption, less inequality, more
students in tertiary education, more freedom of the press, and tend to be more inclusive to
minorities (which were the indicators we used to measure social sustainability).

e
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i
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i
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70

60

50

40

30

20

10

0

20

R² = 0.7234

30

40

50

60

70

80

90

100

Social Sustainability score

Figure 1: Relationship between the ASEM Connectivity index and the Social Sustainability sub-index. 

The ASEM Sustainable Connectivity Portal came at a time in which connectivity is very high 
on the ASEM political agenda. The Portal was part of the EU contribution to the 12th ASEM 
Summit,  held  in  Brussels,  Belgium  in  October  2018.  Moreover,  the  EU  has  put  forward 
sustainable connectivity in its 2018 ‘Connecting Europe and Asia – Building blocks for an EU 
Strategy’.  The  EU  strategy  has  set  out  an  approach  to  connectivity  which  is  sustainable, 
comprehensive  and  rules-based,  with  policies  that  should  be  economically,  fiscally, 
environmentally and socially sustainable in the long term2.  

The main purpose of the ASEM Sustainable Connectivity Portal and its accompanying study 3 
was  to  provide  evidence  to  support  and  ramp  up  the  policy  debate  on  sustainable 
connectivity between Asia and Europe. 

2 European Commission (2018). Joint Communication to the European parliament, the Council, the European Economic and Social 
Committee, the Committee of the Regions and the European Investment Bank, Connecting Europe and Asia - Building blocks 
for an EU Strategy, JOIN(2018) 31 final.  

3 Becker, W.,  Domínguez-Torreiro, M., Neves, A. R., Tacao Moura, C. J., & Saisana, M. (2018). Exploring ASEM Sustainable Connectivity: 

What brings Asia and Europe together? Luxembourg. doi: 10.2760/738153. 

5 

 
With the aim of continuing linking science and policy in the area of sustainable connectivity, 
the JRC joined efforts with a group of partners to set up the first ever scientific conference on 
Asia-Europe  Sustainable  Connectivity  –  AESCON.  The  conference 
in 
collaboration with the Asia-Europe Foundation (ASEF), the Economic Research Institute for 
ASEAN and East Asia (ERIA) and the Center for China and Globalization (CCG). 

is  organised 

With this conference, we expect to: 

•  Bring together researchers, data and policy analysts in an academic forum to share 
the latest research as well as to discuss the global and local challenges associated to 
connectivity; 

• 

• 

Initiate a network of researchers with interest on Asia-Europe sustainable connectivity 
and create new collaborations; 

Identify  pathways  to  provide  further  support  ASEM  sustainable  connectivity  policy 
making with science. 

6 

• 

Opening 

7 

Opening remarks by Stephen Quest 
Director-General of the Joint Research Centre, European Commission 

It is a pleasure to be with you today, and even if we have had to adapt ourselves to new and 
challenging  circumstances,  I  am  very  happy  that  we  have  found  a  way  to  enable  this 
conference to go ahead.  

This  first  scientific  conference  on  Asia-Europe  sustainable  connectivity  comes  at  a  crucial 
moment. Our world is confronted with a number of serious challenges all at the same time. 
While we battle with the ongoing COVID-19 pandemic, we also need to step up our efforts to 
deal with climate change and meet the Sustainable Development Goals. We need to deal 
with technological changes that have a serious impact on the lives of many, changing the 
ways we work and live. And we face important economic and social challenges. 

Science clearly has a role in helping us to meet these challenges, and in my remarks today I 
would like to focus on three areas where I believe we can usefully strengthen our efforts and 
make a real difference. Allow me to mention them briefly: 

First, we need to strengthen the interface between science, policy and the political level.  

I head up the European Commission’s Joint Research Centre, and with over 2,000 scientists, 
we provide scientific support across the entire range of European Union policies.  

I took the lead of this organisation in the midst of the COVID-19 pandemic and immediately 
witnessed how policy makers looking to scientists to provide the information they require to 
make the right choices.  

During  my  first  months  in  my  new  position,  we  have  made  serious  efforts  to  deepen  the 
connection with policy makers, and it is my strong conviction that much can be gained by 
further strengthening mutual understanding.  

On  the  one  hand,  scientists  need  to  invest  in  understanding  real  policy  needs,  and  to 
understand  and  accept  that  it  will  not  be  scientific  evidence  alone  that  will  determine 
political choices.  

At  the  same  time,  policy  makers  need  to  be  much  more  specific  in  what  they  would  like 
scientists to provide, and understand that science does not necessarily bend in the light of 
policy preferences.  

In this context, I am very pleased that the organisers of this conference have been able to 
bring  together  people  from  these  different  worlds…..  It  therefore  provides  an  excellent 
opportunity for scientists, policy makers and the diplomatic community to explore ways to 
maximize the contribution of science.  

Second, we need to strengthen our scientific efforts. Artificial intelligence, super-computing, 
5 and 6G, new ways of digital cooperation, these are just some of the tools that will help us to 
find new answers, especially in the areas that our conference will be dealing with. 

The Joint Research Centre’s expertise and multi-disciplinary experience will certainly play its 
role. We will be fully mobilised to support the recovery package, which will both support the 
European Union in recovering from the COVID-19 pandemic and drive investment in the twin 
green and digital transitions. 

8 

 
On  the  specific  field  of  sustainable  Connectivity,  the  Joint  Research  Centre  is  already  very 
active: 

For  example,  our  scientists  of  the  Competence  Centre  on  Composite  Indicators  and 
Scoreboards have: 

• 

identified  the  most  relevant  and  available  indicators  to  measure  connectivity  in  its 
physical, economic, political, institutional and people-to-people forms.  

•  provided an online interactive tool to make information accessible and reachable to 
everyone, from researchers and policy analysts to businesses and policymakers. 

•  and were involved in the dissemination of European standards for the construction 
sector in South East Asian countries. Major constructions in Asia have been designed 
adopting these standards. 

Strengthening international cooperation is the third area we need to focus on. The challenges 
we  all  face  are  global  challenges;  therefore  the  answers  must  be  found  through  global 
cooperation. 

The European Commission is a strong advocate of multilateral international cooperation and 
attaches great importance to its relations with our Asian partners. It believes that AESCON 
can  promote  connectivity  is  areas  such  as  transport,  energy,  IT  as  well  as  human  and 
institutional.  

Let  me  give  you  a  concrete  example:  our  study  on  ASEM  sustainable  connectivity  in  2018 
found that over 200,000 scientific articles were the fruit of collaborations between Asian and 
European research institutions every year. It is my firm belief that this number of cross-border 
scientific collaborations has the potential to be even higher. 

Strengthening the interface between science, policy and politics, strengthening our scientific 
efforts and strengthening international cooperation…all these three elements come together 
in this conference, which is itself an excellent example of European and Asian cooperation.  

I believe that our cooperation will bring valuable results and the JRC is certainly committed 
to contribute.  

I wish you a fruitful conference 

Thank you. 

9 

Opening remarks by Toru Morikawa 
Executive Director, Asia-Europe Foundation (ASEF) 

Good  Morning  for  the  participants  from  Europe  Good  Afternoon  for  the  participants  from 
Asia.  

It is a pleasure to welcome you today on behalf of the Asia-Europe Foundation (ASEF), one of 
the  partners  of  AESCON  –  the  Asia-Europe  Sustainable  Connectivity  Scientific  Conference. 
My  name  is  Mr  MORIKAWA  Toru,  and  I  am  the  Executive  Director  of  the  Asia-Europe 
Foundation. 

ASEF is an intergovernmental, not-for-profit organisation  which brings together the people 
of Asia and Europe. We respect diversity, facilitate innovation  and link civil society to the Asia-
Europe Meeting Process, in short “ASEM”, which is an intergovernmental cooperation forum 
with  partners  from  51  countries  and  2  institutions  in  Asia  and  Europe.  ASEM  has  been  an 
important  driver    in  the  relationship  between  its  partner  countries.    ASEF  is  the  sole 
permanently established institution of the ASEM Process. 

As the sustainable connectivity has become the focus of cooperation in the ASEM Process, 
AESCON is organised to bring together researchers and policy analysts from Asia and Europe. 
We are grateful to the other partners and EU as donor  to organize this important meeting. 
Taking  the  actual  pandemic  of  Covid19  into  account,  we  commend  the  timeliness  of  the 
meeting.   

Please allow me talk  a  bit more about ASEF.  For more than  two  decades, ASEF has been 
enhancing  dialogues,  enabling  exchanges  of  ideas    and  encouraging  collaborations, 
providing human connection  through our projects and  activities in seven thematic  areas: 
culture,  education,  governance,  economy,  sustainable  development,  public  health  and 
media. I wish  you consider ASEF as a possible partner of your future work to promote the big 
idea of “Sustainable Connectivity.” 

The growing links between Asia and Europe  are already among the most important inter-
regional relationships  in the world.  According to an article of the World Economic Forum 
before  the  pandemic,    Asia  and  Europe  are  global  leading  trade  partners,  trading  more 
between them  than between any other regions in the world, with USD 1.5 trillion in trade; 
both  continents  also  bring  people  and  societies  together    with  millions  of  people  having 
migrated between the two regions.  

With this in mind, we pose a number of questions; How to draw more benefit  from the huge 
potential of the exchange  between the two regions  to the people in the two regions and 
beyond? How to enhance the connectivity  between the two regions in a more sustainable 
way?    What  are  the  gaps  to  be  addressed?    How  can  we  cope  with    or  avoid  its  negative 
impacts?  And now, how to overcome the challenges  caused by the COVID-19 pandemic?  
Where do we focus  and allocate our limited resources?   

We  wish    through  the  reports  and  the  discussion  in  these  events,  our  participants  and 
partners, are able to share their best practices, find commonalities  and learn from each other, 
for enhanced mutual understandings among them and further, to provide food for thoughts 
to different policy makers of the ASEM process. 

10 

We  hope  that    this  event  will  open  up  the  doors    for  collaboration  with  many  more  like-
minded organisations. With that, I will end my speech by wishing  all of you  will benefit  from 
the exchange of friendships, knowledge and ideas in this meeting.  May this conference  be 
the precursor to more initiatives  to enhance the sustainable connectivity  between our two 
regions.  

Thank you. 

11 

Opening remarks by Koji Hachiyama 
COO, Economic Research Institute for ASEAN and East Asia (ERIA) 

It gives me immense pleasure to welcome all of you to this high powered and academically 
rich Asia Europe Scientific Conference on very important subject of Asia-Europe Connectivity.  

After months of uncertainty, we are gathered in a virtual setup, meeting under the shadow 
of  COVID-19 pandemic, which has disrupted normal life,  business, and connectivity in Asia 
and other parts of world. It is a timely reminder to all present here that connectivity entails 
not just infrastructure and strategies for trade and economic cooperation, regulations and 
soft  infrastructure.  It  entails  connectivity  and  cooperation  in  all  aspects,  especially  in 
knowledge  exchange,  sustainable  development,  security,  mobility  of  people.  Most  of  all,  if 
Asia-Europe region must be future ready to meet the challenges of Digital transformation 
and Fourth Industrial Revolution, digital connectivity with safe, secure and reliable data free 
flow is absolutely essential. Then we can realize completed digitalized society.  In 2020, Asia 
and Europe can cooperate to build the hard and soft infrastructure and develop international 
norms and standards of digital connectivity in the ASEM region, which can also be applicable 
to other parts of the world. 

Asia  and  Europe  represent  a  sizeable  part  of  the  global  community.  Since  its  inception  in 
1996, the Asia-Europe Meeting, or ASEM, has played a key role as a forum for dialogue and 
cooperation in connecting Asia and Europe. I am particularly pleased to see this conference 
form an important event of the 13th ASEM which will be held next year in Cambodia.  

ERIA  is  particularly  proud  to  be  associated  with  Asia-Europe  connectivity  and  the  ASEM 
mechanisms. ERIA was a forerunner of connectivity-related studies in the ASEAN region. It 
developed  the  concept  of  holistic  connectivity,  which  takes  into  account  the  physical, 
institutional, and people’s aspects of connectivity in a community or region. Our connectivity-
related research is also helping closer economic cooperation between Asia and Africa, and 
Asia and Europe. 

To support the ASEM Summit, ERIA prepared the ‘ASEM Connectivity Vision 2025’ jointly with 
Mongolia in 2016.  In 2018, ERIA supported the European External Action Service (EEAS) and 
prepared the “Brussels Report on Strengthening Asia Europe Connectivity’ for the 12th ASEM 
Summit.  ERIA  also  supported  the  ASEM  Pathfinders  Group  on  Connectivity  (APGC)  in 
developing  an  Inventory  of  ASEM  Connectivity  activities  to  draw  out  tangible  areas  of 
cooperation in connectivity (TACC) in ASEM.  

In 2019, ERIA is supporting the ASEM Chair, Cambodia, through a plenary study on Inclusive, 
sustainable  and future ready ASEM. Scholars  and policy experts from Asia  and Europe  are 
contributing  to  this  plenary  project,  which  will  be  presented  to  the  ASEM  leaders  in  the 
summit.  

I am sure that our efforts will continue to bring the people of Asia and Europe closer together, 
and to integrate the two regions as deeply as possible.  

I wish this conference every success over the next days. 

12 

 
 
Opening remarks by Miao Lu 
Co-founder and Vice-President, Center for China and Globalization (CCG) 

It  is  with  great  honour  to  speak  at  the  Asia-Europe  Sustainable  Connectivity  Scientific 
Conference. It is an innovative idea to measure and value the connections between Europe 
and  Asia  with  Sustainable  Development  Goals  (SDGs).  I  much  appreciate  and  admire  this 
research dimension and it is worth of learning by other institutions and scholars as well.  

The European Union (EU) and China are two of the biggest traders in the world. In 2019, China 
was  the  third  largest  partner  for  EU  exports  of  goods  (9%)  and  the  largest  partner  for  EU 
imports  of  goods  (19%).  For  Europe,  currently  China  is  the  EU's  second-biggest  trading 
partner behind the United States. China highly values the relation with EU and is eager to 
strengthen  joint  actions  with  EU  and  seek  for  multilateral  solutions  in  order  to  deal  with 
various  global  challenges  and  issues.  We  can  strength  the  ties  in  people-to-people 
exchanges, fight against climate change, seek for stronger cooperation in business, promote 
the  enforcement  of  intellectual  property  rights  and  also  work  together  towards  on  other 
goals of the SDGs. China is the biggest overseas education market in the world. Amid US’s 
harsh  rhetoric,  it  is  likely  that  U.S.  will  no  longer  be  the  top  choice  for  Chinese  students 
seeking for an oversea education. Alternatively, it is estimated that European countries may 
replace US in the future in the overseas education destination.  

All in all, these circumstances show the existing and necessary connectivity and collaboration 
between  Asia  and  Europe.  We  are  living  in  an  integrated  world  and  it  is  less  possible  to 
overcome  the  challenges  without  collaboration.  Particularly  with  the  absence  of  Trump 
Administration  in  the  multilateral  institution,  China  would  like  to  be  a  main  actor  and 
promotor  of  multilateralism.  Moreover,  think  tanks  between  two  regions  can  also  seek  for 
more  fields  and  areas  to  strengthen  the  partnership.  Center  for  China  and  Globalization 
(CCG) as a leading non-government think tank in China is focused on global movement of 
people, international education, globalization, regional connectivity and global governance. 
CCG  is  the  only  official  Chinese  partner  of  Munich  Security  Conference  and  Paris  Peace 
Forum and has hosted several activities during these two significant events. In August, CCG 
has jointly released the Chinese language version of the World Migration Report 2020 with 
International Organization of Migration (IOM). We are eager to play more roles in the China-
EU  joint  research  and  events  of  people-to-people  exchanges,  education,  trade,  IP,  climate 
change and so on.  

I  believe  this  conference  will  be  a  productive  one  with  the  exchanges  of  researchers  and 
policy analysts  from various countries  and it will definitely  deepen the understanding  and 
promote the connectivity between the two continents. It will be a great chance to host this 
event in China and CCG is keen to co-organise it if possible. Finally, wish a great success of 
the Asia-Europe Sustainable Connectivity Scientific Conference in advance.  

13 

Keynote by Romana Vlahutin: Sustainable 
Connectivity – The European way 
Ambassador-at-Large for Connectivity, European External Action Service 

The European Union (EU) is built thanks to connectivity which is sustainable, comprehensive, 
and rules-based. Connectivity is the EU’s DNA. Our Single Market demonstrates that every 
day.  

After the COVID-19 pandemic, investment in connectivity, in addition to supporting recovery, 
also helps the development of more sustainable, inclusive and resilient economies. 

The EU’s Connectivity strategy is an inclusive platform open for cooperation with all partners. 
Our prosperity and stability is underpinned by connectivity, within the EU itself, its immediate 
neighbourhood and further beyond. Our offer for partnership is based on our key principles: 
sustainability and level playing field. The EU's approach relies on adherence to market rules, 
EU and international requirements and standards, and a level playing field, in order to deliver 
benefits for all parties concerned and in all the countries along the planned routes. 

Infrastructure needs are vast and no country can meet them alone. Both public and private 
capital  is  indispensable  and  may  only  be  achieved  through  due  diligence  and  guarantees 
which  reduce  risk,  for  which  the  EU  has  the  know-how  and  experience.  Cooperation  at 
regional and global level is indispensable. 

Given  the  high  costs  and  long-term  nature  of  such  investments,  it  is  critical  for  us  that 
projects are financially, environmentally, socially and fiscally sustainable, are fully transparent, 
and allow a level playing field for our businesses. The present crisis shows why these criteria 
are  so  important  to  ensure  that  all  parties  concerned  benefit,  in  particular  the  users,  the 
general public and the economy. 

14 

Connectivity needs a strong rules-based 
multilateral framework – for everyone's sake 

Shada Islam 

Managing Director New Horizons Project & Senior Advisor European Policy Centre 

In September 2019, Friends of Europe released the discussion paper “Connectivity needs a 
strong rules-based multilateral framework – for everyone's sake”. The publication underlines 
the  compelling  need  to  multilateralise  connectivity  by  drawing  up  binding  international 
norms, standards and regulations. 

We  all  know  that  connectivity  generates  high  rewards.  Infrastructure  is  indispensable  to 
Agenda  2030  and  achieving  the  Sustainable  Development  Goals  (SDGs).  It  improves 
livelihoods,  increases  mobility  and  empowers  people.  Connectivity  increases  countries’ 
economic  competitiveness  by  improving  trade  ties  and  making  them  more  attractive  to 
investors. It also plays a role in peace-building and conflict resolution. 

But there are challenges – increased connectivity has engendered fierce global competition. 
An increased number of connectivity actors strains an already tense environment. It can lead 
to duplication of projects – or the implementation of those with contradictory aims – a lack 
of basic standards for sustainability and labour conditions, as well as insufficient consultation 
with civil society or the private sector – both of which stand to lose or gain much through 
connectivity projects. 

We put forward three recommendations for improving connectivity – both in the region and 
beyond. And the name of the game is multilateralism. 

• A plurilateral code of conduct should be created. The EU has already signalled its intention
to engage on enhancing connectivity and finding complementary rules and regulations.
Its  Strategy  for  Connecting  Europe  and  Asia  calls  for  fiscal,  environmental,  social  and
economic sustainability, as well as rules-based frameworks. This could become the basis
of a new rulebook for connectivity which connectivity actors sign on to.

• The  Multilateral  Cooperation  Center  for  Development  Finance  (MCDF)  –  established  by
China’s  Ministry  of  Finance  and  eight  multilateral  financial  institutions  –  should  be
reinforced. Its aim is to foster high-quality infrastructure connectivity investments through 
information-sharing, capacity-building and project preparation. This Center could be built
upon to include all connectivity actors and regions which receive connectivity investment.
It could as well become a dialogue mechanism for exchange on connectivity projects.

• Create an International Connectivity Forum for consultations with the private sector and
civil society. For any infrastructure project to succeed, it must have community backing
and  support.  And  the  private  sector  must  be  in  the  loop  as  well  for  local  training,
procurement exercises and employment. Members of this Forum could keep an eye out
for corruption and project delays, provide community insights, and so on.

• These are the potential building blocks for creating a more connected region – and a more
connected world. They can also help to overcome key challenges to connectivity, such as
transparency, communication, sustainability, inclusion and so on.

We  have  seen  that  connectivity  can  create  a  healthy  sense  of  competition,  but  for  it  to 
succeed it is important to know when to compete, and when to cooperate. What we need is 
connectivity cooperation and collaboration, not connectivity conflicts and confrontation. 

15 

People-to-People 
Connectivity 

16 

EU-India Cooperation in Higher Education as an 
Enabler of the ASEM Sustainable Connectivity 

Zane Šime 

Member of the Latvian Political Science Association, Latvia 

Introduction 

There is no better moment for discussing the ASEM connectivity than AESCON, a gathering 
which takes place against the backdrop of recent scholarly appraisals of Mogherini’s focus on 
the EU’s global presence and engagement (Bargués-Pedreny, 2019, p. 2). Likewise, AESCON 
is organised in the wake of the reiterated references to such earlier coined terms as ‘Asian 
century’ (Dams & Verbij, 2019, p. 30), and reassessments of ‘Chindia’ (James, 2019). These are 
just  two  re-emerging  terms  which  mark  the  comprehensive  shift  of  the  nodes  of  gravity 
towards Asia and scholarly interest from across ASEM in this process. This article offers a brief 
introduction  to  smaller-scale  developments  in  higher  education  and  research  with  a 
particular focus on the Latvia-India ties as a constitutive part of the EU-India relations. Despite 
its compact scope, this two-way stream of interaction is relevant in terms of understanding 
more  nuanced  developments  shaping  the  overall  evolving  ties  across  ASEM.  Additionally, 
India  is  a  good  choice  for  further  examination  of  student  mobility  patterns  because  its 
leading  academic  staff  have  earlier  analysed  the 
international  higher  education 
developments in the globalisation context (Sharma, 2016, pp. 258-259). India along with China 
are well known major sources of large volumes of internationally mobile students, which has 
led Chinese policymakers to view its outgoing students as “people-to-people ambassadors”. 
It has encouraged European scholars to analyse this Chinese approach through the lens of 
the EU educational diplomacy and a student as ‘a soft power projector’ towards both sending 
and receiving countries (Bislev, 2017). Perhaps such a perspective holds the potential to be 
relevant also in the case of other groupings of international students, such as talented and 
ambitious Indians. 

By summarising the latest higher education developments taking place in Riga, the capital 
of  Latvia,  this  extended  abstract  offers  a  more  nuanced  picture  of  what  bilateral 
developments  are  supporting  the  EU-India  cooperation.  The  importance  of  bringing 
attention to specific locations supporting the EU-India ties lies in their capacity to raise the 
future  generations  of  academics,  policy-makers  and  opinion-leaders  who  would  promote 
“shared values and understanding” (Joint Research Centre, n.d., p. 12; Becker et al., 2018, p. 23) 
and  be  better  equipped  to  uphold  the  goals  enshrined  in  the  Joint  Communication 
“Elements for an EU strategy on India” through their first-hand familiarity with the EU sector’s 
relevant for their chosen profession and career.  

Concluding  remarks  provide  a  good  example  of  diverging  trends,  namely,  if  the  macro-
picture  offered  by  the  ASEM  Sustainable  Connectivity  Map  indicates  rather  modest 
connections in higher education between the EU and India, then, thanks to a steady rise of 
new collaborative ties and bigger inflows of students, in certain national settings the situation 
is quite the opposite. The importance of a continuous examination of such convergence or 
divergence between macro and micro trends is worth keeping an eye on not solely for the 
mere  purpose  of  tracing  the  statistical  fluctuations.  It  is  also  vital  for  a  better  grasp  of  the 
dynamics shaping the EU-India educational diplomacy, especially taking into consideration 
earlier  acknowledgements  among  the  experts  working  for  the  European  institutions  that 

17 

“traditional  diplomacy  is  no  longer  the  main  channel  by  which  states  project  their  image 
abroad”  and  “EU’s  influence  in  Asia  is  its  attractiveness  to  students  and  researchers 
worldwide” (Vandewalle, 2015, p. 4). 

India-Latvia Higher Education Ties 

This  extended  abstract  is  presented  in  the  aftermath  of  the  conference  “India-EU 
Engagements: A Decade in Reflection and Way Forward” held at the end of 2019 in Manipal, 
India.  The  main  findings  of  the  (forthcoming)  article  “The  Ripple  Effects  of  EU’s  Science 
Diplomacy  Towards  India”  were  briefly  presented  with  an  emphasis  on  the  valuable 
contribution  the  Manipal  Centre  for  European  Studies  of  the  Manipal  Academy  of  Higher 
Education  is  delivering  in  terms  of  strengthening  the  current  limited  student  exchange 
between  the  EU  and  India.  The  data  on  student  flows  taken  from  the  ASEM  Sustainable 
Connectivity  Map  and  complemented  with  some  additional  data  sources  demonstrated 
that,  by  and  large,  the  next  generations  of  Indians  are  gaining  international  academic 
exposure in an ‘Asian Century’ spirit. A lion’s share of Indian students is acquiring a familiarity 
with the Anglo-Saxon and Chinese academic tradition and higher education system. As the 
ASEM Sustainable Connectivity Map displays, the EU hosts some 10% of all Indian students 
studying abroad.  Modest numbers  of Indian students travel to  the EU  with the support  of 
Erasmus+ Programme (Vandewalle, 2015, p. 15) and via the cooperation networks established 
by two Jean Monnet Centres of Excellence or national initiatives. Latvia is far from the top EU 
Member  States  on  this  list  of  most  frequently  chosen  destinations.  While  macro-statistics 
paints a rather gloomy picture for the future of the India-EU strategic partnership, the micro-
picture of certain EU national contexts offer a much more encouraging perspective.  

Despite  the  limited  connectivity  shown  by  the  ASEM  Sustainable  Connectivity  Map  of  164 
Indian students studying in Latvia and one Latvian student studying in India (Joint Research 
Centre,  2019),  the most  recent  statistics  of  specific  EU  Member  States  paint  a  much more 
dynamic  picture.  While  the  tiny  statistics  of  one  Latvian  student  studying  in  India  has 
remained  unchanged  throughout  the  academic  years  of  2015/2016,  2016/2017,  2017/2018, 
2018/2019 (Ministry of Human Resource Development, 2019), Latvia has experienced a steady 
rise of Indian student inflow. In the 2014/2015 academic year – 164, in the 2015/2016 academic 
year – 429, in the 2016/2017 academic year – 750, in the 2017/2018 academic year peaking to 
1233 Indian students studying mostly at the Riga Technical University (518 students), Turiba 
University (259 students), Information Systems Management Institute (181 students), but also 
Transport  and  Telecommunication  Institute  (77  students)  and  EKA  University  of  Applied 
Sciences  (54  students),  Rīga  Stradiņš  University  (44  students),  Rezekne  Academy  of 
Technologies (39 students) and a list of other institutions hosting less than 20 Indian students 
each (Ministry of Education and Science, 2018, pp. 78, 81-86; Ministry of Foreign Affairs, 2018). 
The described pattern follows the overall tendency of Latvia to host an increasing number of 
international students who are mostly pursuing their studies in Riga. India forms one of the 
widest represented countries of origin (Leiškalne, Briede, & Lopatinskis, 2018, p. 6; Ministry of 
Education and Science, 2018, p. 78).  

One of the explanations for such an increase in Latvia’s hosted Indian students is the earlier 
efforts in strengthening outreach activities. Besides the research and innovation section of 
the  EU  Delegation  to  India  (Vandewalle,  2015,  p.  9),  several  EU  Member  States  or  higher 
education and research institutions based in the EU Member States support accessibility of 
information about study opportunities in the EU. In the case of Latvia, a group of universities 
joined forces to promote the availability of information about study programmes in Latvia. 

18 

On 31 January 2014, the Study in Latvia Centre was established in Chennai by a consortium 
of Latvian higher education institutions with support of the Latvian Ministry of Education and 
Science (Nagarajan, 2014; Riga Technical University, 2014).  

All  in  all,  an  increased  familiarity  of  Indians  with  Latvia  and  its  higher  education  is  of 
importance not solely for the bilateral ties between Latvia and India, but also for promoting 
wider awareness and familiarity with those EU Member States which are not the traditionally 
prioritised partners for closer interaction. To clarify, earlier analysis state Germany, France and 
the United Kingdom as the primary interlocutors (Kugiel, 2019, p. 2). It should be added that 
international students who have chosen Latvian higher education institutions benefit from 
exposure  to  an  intellectual  environment  where  such  public  diplomacy  elements  as 
educational  scholarships  offered  by  other  ASEM  Partner  Countries  (namely,  France, 
Germany, Japan, South Korea) are highly valued (Tabuns, 2019, p. 224). Thus, it is fair to argue 
that  Riga  offers  a  conducive  environment  for  the  further  evolution  of  ASEM  collaborative 
encounters. 

Conclusions 

The examination of EU-India and Latvia-India student exchange patterns remind about an 
earlier  assessment  of  the  partnership  expressed  by  Damodaran  (1985,  p.  366):  “The  Indo-
European relationship is at a reasonably high level, but by no means at the highest level; it is 
comprehensive,  but  not  exclusive.  Almost  all  individual  European  countries  have  much 
greater commitments to some other regions of the world and other individual countries than 
to India. This is a good thing.” It captures a balanced assessment and an overarching view on 
the EU-India relations as a far from a two-way or isolated process, but as ties which are shaped 
with due consideration of other orientations and opportunities that international exposure 
to  various  collaboration  options  and  destinations  offer.  No  matter  what  have  been  the 
fluctuations in statistics of student flows to one or the other study destination over the last 
years, certain long-term patterns captured more than 35 years ago by one of the most iconic 
Indian diplomatic and intellectual voices resonate with the current interactive patterns.  

The  steady  and  considerable  increase  of  Indian  students  at  the  Latvian  higher  education 
institutions demonstrates that there is a considerable value in the earlier expressed intention 
to  develop  the  ASEM  Sustainable  Connectivity  Portal  as  a  continuously  updated  data 
repository (Joint Research Centre, n.d., 35; Becker et al., 2018, p. 12). Subsequent inputs of more 
recent  statistics  would  allow  bringing  the  ASEM  macro-picture  up  to  speed  with  certain 
major shifts in quantitative landscape characterising some of the most dynamic EU national 
contexts, such as Latvia.  

If Latvia  or any other entity engaged in promoting EU-India educational diplomacy would 
aim at tailoring it as a component of a ‘SMART 4 public diplomacy’ (Golan, 2014) or draft an 
earlier  suggested  long-term  public  diplomacy  strategy  (Tabuns,  2019,  p.  230),  then  ASEM 
Sustainable  Connectivity  Portal  with  continuous  data  inputs  might  be  a  helpful  reference 
point both in the drafting phase of new initiatives and the performance evaluation after their 
implementation. 

4 Specific, Measurable, Achievable, Realistic, and Time-bound objectives. 

19 

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20 

Implementation People-to-People Connectivity 
through SHARE Scholarship to strengthen 
ASEAN Identity 

Missy Oktavia Manullang and Yuliana Prasetyawati 

LPSR Communication & Business Institute, Indonesia 

The 2030 Agenda for Sustainable Development reflects the interconnected nature of current 
global challenges. This reveals the need for  connectivity as a joint response to  achieve the 
Agenda’s  goals.  Connectivity  and  sustainability  mutually  reinforce  each  other,  as  so 
connectivity  is  largely  driven  by  the  social  pillar  of  sustainability.  In  Asia  and  Europe,  the 
Association of South East Asia Nations (ASEAN) and the European Union (EU) bring regional 
experience  of  creating  a  framework  for  connectivity  but  faces  various  challenges.  Thus,  to 
accomplish  the  systematic  project  of  connectivity,  ASEAN  has  moved  towards  a  regional 
platform  through  public  diplomacy  under  the  ASEAN  Community.  There  is  the  need  to 
strengthen the "we-feeling", referred to as ASEAN identity in serving as a concerted effort in 
building a well-connected community of shared responsibilities.   

ASEAN and EU as dialogue-partners created SHARE through multilateral diplomacy sessions 
and it was formulated based on the ASEAN Socio-cultural Community Blueprint 2025, the 
ASEAN  Work  Plan  on  Education  2016-2020  and  the  Kuala  Lumpur  Declaration  on  Higher 
Education of 2015. The project consists of three main components that is Policy Dialogues, 
ASEAN Qualifications Reference Frameworks and Quality Assurance, ASEAN Credit Transfer 
System  (ACTS)  and  ASEAN-EU  Credit  Transfer  Systems  (AECTS)  which  are  implemented 
through a scholarship. SHARE is a joint effort by ASEAN and the EU to strengthen Regional 
Cooperation  in  ASEAN.  As  stated  by  SHARE  Project  Leader  from  the  British  Council: 
“Diplomacy, generally is about building relations between countries and ideally for mutual 
benefits or in the worst case, to stop us going to war with different countries. So, that’s what 
diplomacy  is  about.  So,  seeing  education  and  culture  and  all  these  things,  that  is  part  of 
diplomacy,  what  it  does  is  built  trust  between  different  countries  or  in  this  case  different 
Regions” (G. Slaven, personal communication, July 19, 2018). 

The EU provided 10 million euros of financial support towards ASEAN as their commitment 
in being a dialogue-partner and assisting countries in need.  As stated by the EU Program 
Manager of Education and Culture: “Most importantly, this assistance is the European Union’s 
commitment  towards  countries  in  need,  especially  as  one  of  ASEAN’s  Dialogue  Partners. 
Certainly,  the  European  Union  is  very  enthusiastic  of  this  Programme.  We  are  not 
implementing the Bologna-Process on ASEAN, but we provide technical inputs. Therefore, 
The  EU  is  very  happy  and  excited  to  wait  for  SHARE’s  results”  (D.  Nugroho,  personal 
communication, July 3, 2018). 

There are 33 Universities in ASEAN included in the SHARE Programme, such as the University 
of  the  Philippine,  University  of  Indonesia,  National  University  of  Management  Cambodia, 
National  University  of  Laos,  Universiti  Kebangsaan  Malaysia,  University  of  Yangon, 
Chulalongkorn University and Viet Nam National University. So far, the SHARE programme 
has  sent  400  students  Intra-ASEAN.  The  scholarship  includes  school  fees,  living  expenses, 
round-trip flights, visas, health insurance, textbooks and other study related expenses for one 
semester.  SHARE  will  foster  people-to-people  connectivity  in  ASEAN  through  a  deeper 

21 

promotion  of social  and cultural understanding  Intra-ASEAN as well as increasing student 
mobility. 

Stoeckel research on social interaction across individuals with different national backgrounds 
found  the  effectiveness  of  the  inter-group  interaction  building  a  collective  identity.  The 
sample includes almost 1500 students at 38 German universities. Participants who studied 
abroad showed a significant increase in their identification with Europe. However, the longer 
the study duration, the weaker the identification. Three-wave panel data set used by Stoeckel 
allowed him to  confirm  the stability  on identity  change. Data shows that studying  abroad 
leaves a stable imprint even months after the student returns to their own country and was 
not just a short-lived effect of their excitement on an adventurous journey. Contact with other 
international students proven to be significant in building a shared European identity, while 
contact  solely  with  nationals  of  host  country  shows  a  different  impact  (Stoeckel,  2016).  In 
contrast, Jonsson (2010)  questioned the plausibility of Southeast Asian regional identity by 
2020.  On  a  state  level,  this  might  be  achieved  if  there  is  a  political  will.  However,  to  make 
ASEAN truly regional, the sense of belonging to a common identity must be “imagined” at 
the  individual  level.  Identities  are  in  a  constant  flux  that  must  be  negotiated:  They  are 
contested depending on political and socio-economic developments. 

Acharya  &  Layug  (2012)  states  that  ASEAN  Identity  remains  important  in  shaping  political 
security,  regionalism  and  international  relations  in  the  Asia-Pacific.  Southeast  Asians  only 
need to work on its ASEAN cohesion, unity, and  clear regional purpose of the trajectory  of 
Asia-Pacific  regionalism  and  its  role  in  it.  However,  just  as  important,  they  must  ensure 
Southeast Asian people sense of ownership, in its ongoing search for ASEAN Identity and its 
role  in  building  Asia  Pacific  Community;  if  not,  community  building  and  regional  identity 
projects will be satisficing but unsustainable. 

The purpose of this research is to study the “how” in the implementation of people-to-people 
connectivity  through  SHARE  scholarship  program  to  strengthen  ASEAN 
identity. 
Methodology used is qualitative research along  with educational diplomacy concepts  and 
common  ingroup  identity  model.  Data  was  gathered  through  in-depth  interview  with 
SHARE implementers and awardees allowing detailed information. 

The main finding of this research is that SHARE has a role in strengthening people-to-people 
connectivity  and  thus,  strengthen  the  ASEAN  identity.  It  facilitates  awardees  in  obtaining 
information  on  the  host  country  and  its  society  through  direct-contacts.  Information 
obtained,  then  it  becomes  an  important  component  in  generating  a  positive  contact 
experience  between  awardees  and  their  contact  partners,  hence  an 
interpersonal 
relationship will be established. Interpersonal relationships established through people-to-
people contact will become the main condition to strengthen ASEAN Identity. This research 
has  shown  ASEAN  Identity  as  a  secondary  identity  possessed  by  ASEAN people  after  their 
national  identity.  As  the  Director  of  ASEAN  Community  Affair  stated:  “ASEAN  Identity  is 
something that you or how a person view or associate themselves with the vision of ASEAN. 
That is ASEAN identity. To me, it is like, you could be Indonesia and ASEAN, and you could be 
Singaporean and ASEAN. It is not a zero sum. You can have both identity, and more and more 
people actually growing this.” (Y. Lee, personal communication, October 2, 2018) 

ASEAN  Identity  is  of  high  importance  in  a  regional  cooperation  as  it  strengthens  bilateral 
diplomacy between member states, as people-to-people connectivity does. ASEAN Identity 
will  push  ASEAN  people  to  be  more  understanding  of  each  other.  It  has  been  stated  that 
ASEAN Identity is very important, but especially for younger generation; being  able to see 

22 

themselves as a part of ASEAN Vision will be a positive contribution to future ASEAN market-
forces. 

Awardees  that  experience  positive  direct  contact  in  their  host  countries  claim  to  feel  a 
stronger identification towards ASEAN. They felt the ASEAN Identity growing and take root 
in themselves. Thida explicitly identify herself as both Cambodian and ASEAN: “Re-adjust no, 
but I do act different. I just feel more mature. Going abroad doesn’t make me forget who I 
am, and how to live in Cambodia. It just made… well just like ASEAN Identity, I am Cambodian 
but also ASEAN.” (T. Sann, personal communication, October 14, 2018) 

This  shows  the  role  of  SHARE  to  strengthen  ASEAN  Identity  through  people-to-people 
connectivity. When students experience host country first hand, a sense of care will arise. The 
same  thing  was  felt  by  Fernando  as  he  senses  the  ASEAN  Identity.  While  in  Vietnam, 
Fernando lived in a dormitory with three students from Laos. After returning to Indonesia, 
Fernando began applying for work in other ASEAN member states. 

Common Ingroup Identity Model (CIIM) developed from the theories of social identity such 
as Social  Identity Theory and Self-Categorization Theory to intergroup behaviour based  on 
the process of social categorization. CIIM explains in inter-group social interaction, contact 
conditions  that  accentuate  a  shared  ingroup  identity  will  improve  the  perception  and 
attitude within individuals involved. Shift in the perception toward contact-counterpart from 
an  outgroup  to  a  more  inclusive  ingroup  will  then  allow  interpersonal  relationship  to 
cultivates (Gaertner, Rust, Dovidio, Bachman, & Anastasio, 1994). In this research, inter-group 
interaction  is  interaction  between  awardees  and  host  nationals.  Awardees  will  be  the 
representation of their country and host nationals as the representation of host country. 

Prior intergroup research has closely related “willingness to communicate” as a condition to 
shift  perceptions  and  thus,  cultivates  interpersonal  relationship.  This  condition  is  a 
behavioural manifestation of a shared-identity among individuals involved as the common 
ingroup  identity  they  shared  encourages  a  stronger  desire  to  communicate  (Pettigrew  & 
Tropp,  2006).  In  SHARE,  “willingness  to  communicate”  reflected  through  awardees 
motivation in applying for the scholarships. 

CIIM  highlights  the  function  of  shared  ingroup  identity  in  shifting  the  cognitive  between 
individuals involved on perceiving others (Gaertner & Dovidio, 2014). Previously, based on the 
motivation  they  had,  it  appeared  awardees  have  acknowledged  a  shared  ingroup  identity 
among them and students or nationals in the host country. However, based on the results of 
this  interview,  the  awardees  had  some  negative  perceptions  of  the  host  countries  before 
direct contact was possible. This perception was obtained from media coverage. On top of 
that,  lack  of  awardees  insight  or  awareness  in  regards  of  the  host  countries  also  results  in 
negative  perceptions.  Then,  through  the  facilitation  of  SHARE,  a  positive  cognitive  shift 
occurred  within  the  awardees.  Thus,  it  cultivates  a  positive  interpersonal  relationship 
between the inter-group individuals involved. 

To conclude, this research found out the explorative nature within the awardees supported 
them  in  the  process  of  cultivating  interpersonal  relationship  and  hence  strengthen  the 
ASEAN Identity within them. Educational Diplomacy through SHARE is a way for awardees 
to see, recognize and interact directly with the host nationals; to foster a stronger sense of 
cares and allow the ASEAN Identity to grow and take roots. This research also supports the 
second  condition  of  the  Common  Ingroup  Identity  categorisation  happened  within  the 
awardees, a dual identity. 

23 

 
References 

Acharya, A., & Layug, A.S. (2012). Collective Identity Formation in Asian Regionalism: ASEAN Identity and 
the Construction of the Asia-Pacific Regional Order.  

ASEAN. (2015).  ASCC Blue Print 2025. Jakarta, Indonesia: ASEAN Secretariat Jakarta. 

Gaertner, S. L., & Dovidio, J. F. (2014). Reducing Intergroup Bias: The Common Ingroup Identity Model. 
doi, 10.4324/9781315804576. 

Gaertner, S. L., Rust, M. C., Dovidio, J. F., Bachman, B. A., & Anastasio, P. A. (1994). The contact hypothesis: 
The role a common ingroup identity on reducing intergroup bias. Small Group Research, 25(2), 224–
249. doi, 10.1177/1046496494252005.

Jonsson,  Kristina.  (2010).  Unity-in-Diversity?  Regional  Identity-building  in  Southeast  Asia.  Journal  of 
Current Southeast Asian Affairs, 29(2), 41-72. ISSN: 1868-4882. 

Pettigrew, Thomas, & Tropp, Linda. (2006). A Meta-Analytic Test of Intergroup Contact Theory. Journal 
of Personality and Social Psychology, 90(5), 751-783. doi, 10.1037/0022-3514.90.5.751. 

Stoeckel, Florian. (2016). Contact and Community: The Role of Social Interactions for a Political Identity. 
Political Psychology, 37(3), 431–442. doi, 10.1111/pops.12295. 

24 

The Filipino Diaspora: A comparative analysis of 
OFW Remittances from ASEAN and EU 

Maria Angela G. Zafra 

Strategia  Development  Research  Institute,  Inc.;  Ateneo  de  Davao  University,  School  of 
Business and Governance, Philippines 

An  Overseas  Filipino  Worker  (OFW)  is  a  person  of  Filipino  origin  who  is  temporary  living 
outside the Philippines as a migrant worker. As of 2018, the Philippines Statistics Authority 
(2019)  estimates  that  there  are  2.3  million  OFWs  around  the  world,  96.2%  of  which  have 
existing work contracts.  OFWs contributed  a total of 32  billion USD in 2018, most  of which 
were sent home to the Philippines, through remittances. OFWs contribute to the economic 
growth of both the Philippines as the country of origin and the countries where they work. 
In a largely domestically driven economy like the Philippines, more remittances inflow just 
means more domestic demand, and increasing domestic demand induces more economic 
expansion.  At  the  same  time,  OFWs  who  are  professionals  and  highly  skilled  workers  are 
employed  in  industries  and  economic  activities  that  fuel  the  economic  activities  and 
contribute to the economic growth of the countries that they work in. 

This paper analyses OFW activity within Asia and compares it to the activity within Europe. 
More  specifically,  it  analyses  OFW  remittances  from  ASEAN  and  EU  from  the  lens  of 
supranational organizations that promoted an integrated economy from among member-
states. The analysis includes implications for the Filipino workforce in light of significant geo-
political changes such as Brexit and ASEAN integration and corresponding implications for 
the Philippine economy. 

This study utilizes secondary data available from the ASEM Sustainable Connectivity Portal. 
The  analysis  is  also  supplemented  by  data  from  other  databases  such  as  the  Philippine 
Statistics  Authority.  OFW-specific  data  is  retrieved  from  the  Commission  for  Filipinos 
Overseas.  This  is  corroborated  with  secondary  qualitative  data  from  the  official  reports  of 
government agencies that monitor foreign migrant workers.  

Figure 1 describes the distribution of OFW by country of destination for work. Middle Eastern 
countries continue to lead in the receipt of OFWs, followed by East Asian countries such as 
Japan, Taiwan and Hong Kong. Amongst other ASEAN countries, OFWs are mainly employed 
in Malaysia and Singapore. Europe represents one twelfth of OFWs. Unlike OFWs, majority of 
the stock of migrant Filipinos are based OECD countries – the United States, EU countries, 
and Australia (Asis, 2017) 

25 

 
Figure 1: Distribution of OFWs by work abroad, 2018. Source: Philippine Statistics Authority (2019) 

OFW activity is  part  of the economic  and financial cluster  of the ASEM Connectivity Score 
with personal remittance (received and paid) as the primary indicator. Figure 2 shows that 
personal  remittances  are  the  strongest  indicator  for  economic  connectivity  for  the 
Philippines while trade was the weakest. OFW remittances has reached US$ 30.2 billion for 
the first eleven months of 2019 (Noble, 2019). In contrast, the trade deficit was US$ 34.6 billion 
during the same period (ING, 2020).  

Figure 2: Economic and financial scores for the Philippines. Source: ASEM Sustainable Connectivity 
Portal dataset (2018). 

Amongst ASEAN member-states, the Philippines is third in personal remittances in terms of 
intensive connectivity given the country’s 105 million population against the smaller size of 
Brunei  (430  thousand)  and  Cambodia  (16  million).  However,  in  terms  of  extensive 
connectivity, the Philippines is responsible for the largest flows of remittances in ASEAN.  

26 

 
 
 
 
 
Figure 3: Personal remittances for ASEAN countries, intensive (left) and extensive (right). Source: ASEM 
Sustainable Connectivity Portal dataset (2018). 

An  analysis  of  OFW  remittances  in  Figure  4  reveals  that  cash  remittances  make  up  the 
majority of personal remittances and both figures continue to grow on a year-to-year basis. 
OFW remittances contribute to 11% of the country’s GDP. In contrast, the business process 
outsourcing, the largest industry sector in the Philippines, contributes to 9% of GDP. 

Figure 4: Personal and cash remittance of OFWs, million US$, 2009-2019. Source: Bangko Sentral ng 
Pilipinas (2020). 

Figure 5 disaggregates personal remittances inflow to Philippines by country of destination. 
Amongst  Asia-Pacific  countries,  Malaysia  makes  the  largest  contribution  to  the  inflow  of 
remittances,  which  is  intriguing  given  that  there  are  more  OFWs  in  Singapore  than  its 
neighbouring country. Remittances from Italy and the United Kingdom make up the largest 
inflow,  but  these  are  still  smaller  compared  to  the  top  Asia-Pacific  countries.  Given  the 
importance  of  the  UK,  monitoring  OFW  activity  in  the  region  will  be  critical  with  Brexit 
looming on the horizon. 

27 

Figure 5: Personal remittances inflow to the Philippines. Source: ASEM Sustainable Connectivity Portal 
dataset (2018). 

From a policy perspective, the paper also analyses the policy landscape in ASEAN and EU and 
identifies the enablers and barriers for Overseas. Furthermore, a closer look will be taken on 
the Philippine government’s policies for migrant workers to identify gaps in the mechanisms 
to protect the welfare of citizens who choose to become overseas Filipino workers. 

References 

Asia-Europe  Meeting  (n.d.).  ASEM  sustainable  connectivity  portal  data  set.  Retrieved  from 
https://composite-indicators.jrc.ec.europa.eu/asem-sustainable-connectivity/ 

Asis,  M.  (2017).  The  Philippines:  Beyond  labor  migration,  toward  development  and  (possibly)  return. 
Migration Policy Institute. Retrieved from https://www.migrationpolicy.org/article/philippines-beyond-
labor-migration-toward-development-and-possibly-return 

Bangko 
http://www.bsp.gov.ph/statistics/efs_ ext3.asp 

Pilipinas.  Overseas 

Sentral 

ng 

Filipinos’ 

remittances. 

Retrieved 

from 

(2020). 

exports 
ING 
https://think.ing.com/snaps/philippines-trade-gap-widens-as-exports-slip/ 

gap  widens 

Philippines: 

trade 

as 

slip. 

Retrieved 

from 

Noble,  L.W.  (2019,  December  17).  Remittances  grow  despite  uncertainties. Business World.  Retrieved 
from https://www.bworldonline.com/remittances-grow-despite-uncertainties/ 

Philippines  Statistics  Authority  (2019).  Statistical  tables  on  overseas  Filipino  workers  (OFW):  2018. 
Retrieved from https://psa.gov.ph/statistics/survey/labor-force/sof-index 

28 

Advancing of the sustainable connectivity 
through innovation: highlighting SDG9 and 
SDG17 

Shruti Kulkarni1 and Manoj Manoj Prabhakar2 

1 Indian Institute of Science; 2 Ericsson 

The aim of this paper is to understand the mechanisms through which accounting on the 
Sustainable Development Goals (SDG) 9 and SDG 17 contribute to transform European and 
Asian  countries  using  statistical  and  machine  learning  models.  All  the  SDGs  can  only  be 
realized  with  strong  global  partnerships  and  cooperation.  Economic  activities,  are  being 
pressured  to  direct  their  actions  towards  sustainable  performance,  more  specifically  in  its 
social  and  environmental  facets.  Countries  can  to  deal  with  these  pressures  using 
collaborative efforts to share ideas and foster innovation. Sustainable development requires 
radical and systemic innovations. In this paper, we present results of a study conducted on 
the ASEM Sustainable Connectivity Portal dataset for Asian and European countries in order 
to examine the relationship between innovation and sustainable performance. Data analysis 
was  carried  out  mainly  through  Cronbach’s  Alpha  reliability  analysis  of  scales,  descriptive 
analysis  of  measures,  and  especially  cluster  analysis  and  analysis  of  variance  (ANOVA).  The 
main results categorise the countries into more sustainable, less sustainable and relatively 
sustainable,  according  to  their  performance  profiles.  The  study  also  highlights  the 
relationship  between  size  of  the  country  and  its  effect  on  the  collaboration.  The  literature 
review  as  well  the  evidence  suggests  a  greater  relevance  of  the  relationship  between 
collaboration  and  sustainable  performance.  The  study  contributes  to  the  advancement  of 
the  sustainable  connectivity  by  highlighting  the  relationship  between  innovation  and 
sustainable performance. 

29 

 
Towards Inclusive City through Tourism 
Development: Quality of Job and Participation 

Nadiya Pranindita 

Tokyo Institute of Technology, Japan 

Abstract 

Considering the urgency of growing equality through one of the largest and most potential 
industries, tourism, leads to the context of how tourism contributes to inclusive growth. This 
research  aims  to  investigate  whether  tourism-based  development  can  lead  to  the 
inclusiveness of the city by modifying the conceptual framework of Tourism-Driven Inclusive 
Growth  Diagnostic  (TDIG-D)  from  Bakker  (2018).  The  new  conceptual  framework  does  not 
only focus on proximate factors that influence the quantitative outcome of tourism-driven 
inclusive growth measurement but also other possible determinants of the growth process 
and the distribution of the outcome growth. The job quality reflects the factor that affects the 
growth and distribution of the outcome, while participation in planning and implementation 
represents the factor that influences the process to achieve inclusiveness through tourism 
development. 

Keywords 

Inclusive growth, inclusive tourism, inclusive city, job quality, participation 

Introduction 

Cities  are  facing more  challenges as more  rapid  urbanization  is  predicted  that  70% of the 
world population will live in an urban area (World Bank, 2018). Unpreparedness urbanization 
actors in facing economic and social competition are one of the core reasons for income gap, 
crime and social conflict, discrimination, urban pollution, and evidence that urbanization is 
not yet in the right path in providing equal living conditions for all citizens. Bringing up the 
equality  issues  as  well  as  talking  about  inclusiveness.  Making  the  city  more  inclusive  has 
essential  role  to  ensure  the  poor  and  vulnerable  group  in  accessing  all  opportunities  to 
improve  their  quality  of  life,  take  them  out  from  poverty,  and  involve  or  engage  in 
development  process  (World  Bank,  2009;  Klasen,  2010;  Haan,  2013;  Aoyagi  &  Ganelli,  2015; 
Kanbur & Rauniyar, 2009; Ali, 2007; Chou & Huque, 2016). 

Making use effectively of inclusive cities must be applied in the potential sector, and it could 
be different between cities, regions, or even countries. Among those sectors, this study chose 
tourism  as  a  potential  sector  especially  for  developing  countries  to  generate  economic 
growth. The tourism sector has generated 10.4% of all global economic activities and provides 
about  319  million  jobs  in  2018  (WWTC,  2019).  In  contrast,  we  cannot  deny  that  the  rapid 
tourism development also leads to environment and wildlife degradation, social issues, and 
some  human-made  disasters.  Given  those  positive  and  negative  impacts  of  the  tourism 
industry  on  society,  it  is  remaining  the  question  of  whether  tourism  development  has  a 
positive or negative sign to the inclusiveness of growth in the city. 

30 

From  the  previous  studies,  the  determinations  of  inclusive  growth  are  rarely  focusing  on 
specific  sectors,  such  as  the  tourism  sector.  There  is  one  conceptual  framework  which 
consists of tourism constraint to achieve inclusive growth proposed by Bakker (2018), but it 
did  not  cover  all  main  principle  of  inclusive  growth.  In  order  to  fill  those  gaps,  this  study 
proposes  a new framework of Tourism Driven Inclusive Growth by developing the  existing 
one, concerning not only in inclusive and productive employment but also in how they can 
help  to  reduce  poverty  and  generate  the  community  to  participate  or  get  involved  in  the 
development  process.  The  poverty  context  is  used  to  represent  the  outcome  of  tourism-
driven  inclusive  growth,  quantity  and  quality  of  the  job  will  reflect  the  equal  outcome 
distribution, and participation context will show whether the development process itself is 
inclusive or not. This framework is expected to become the guideline to reveal what is the 
factor  that  influences  inclusive  growth  and  help  to  arrange  in  which  limitation  the  policy 
should address. 

Methodology 

This  study  was  based  on  work  performed  by  previous  research  related  to  tourism-driven 
inclusive  growth  or  T-DIGD  Framework.  Tourism-Driven  Inclusive  Growth  Diagnostics  (T-
DIGD) was made by adapting the Growth Diagnostics framework by Hausmann et al. (2005) 
which is figuring out the policy priorities by identifying the binding constraints on economic 
activity. T-DIGD framework consisted of constraints that influence the possibility of marginal 
group  excludes  from  the  tourism  benefits.  The  existing  framework  was  modified  by 
constraints from various evidence of various cases. Collected references were discussed and 
built new insight into the new framework. 

Discussion and Conclusion 

According  to  Bakker’s  T-DIGD  framework,  inclusiveness  of  growth  from  tourism  activities 
focus on availability and access of opportunities caused by tourism activities and its outcome 
both monetary and non-monetary, but the great sense of inclusive growth has not included 
yet. Overview for some previous research built the new T-DIGD framework which consisted 
of  poverty  reduction,  equal  distribution  of  opportunities  and  social  involvement  or 
participation. Tourism development which can create inclusive city is expected to distribute 
more  opportunities  to  marginalized  groups,  such  as  poor  people,  than  non-poor  people 
(Ashley,2000;  Scheyvens  &  Biddulph,  2018).  The  constraints  which  may  cause  the  uneven 
access  of  the  poor  to  the  opportunities  are  different  among  individuals  as  different 
circumstance  they  are  experiencing  (Truong  et  al.,  2014).  Tourism  impact  on  poverty 
reduction  is  also  influenced  by  broad  regulation,  destination  assets,  and  characteristics, 
institution structure, and type of tourism product (Winters et al., 2013). 

As tourism development occurs, the real, direct, and general outcome that can be felt by the 
poor is an increase in income through higher numbers and more accessible job/employment 
opportunities.  The  importance  of  job/employment  for  building  inclusive  cities  trough  the 
tourism sector is not just the quantity  but also  the quality. Whether the jobs/employment 
provided by tourism development as ‘decent’ or ‘good’ job is expected to reveal which their 
limiting  factors  in  achieving  inclusive  city  are.  The  growth  and  access  to  job/employment 
opportunities  may  be  influenced  by  the  capacity  of  human  resources,  infrastructure, 
business  environment,  and  how  the  policy  or  government  positions  tourism  to  generate  
productive job/employment (Bakker, 2018) while the quality itself covers satisfaction to the 

31 

 
 
job/employment such as on the wage, working hour, safety, and security of working place 
(Findlay et al., 2013; Drobnic et al., 2010; Diaz- Chao et al., 2016; Esenaliev & Ferguson, 2019). 

In order to ensure that the tourism development process itself is inclusive, the ways tourism 
generate  their  participation  level  were  applied  in  the  proposed  framework.  Same  as  the 
above  ideas,  making  tourism  can  contribute  to  the  inclusive  city  means  to  remove  the 
limitation  of  the  poor  to  participate  in  the  tourism  development  process.  Tosun  (2000) 
categorized those challenges and limitations into three: operational, structural, and cultural 
limitations. Operational limitation focus on operational procedure which can influence  the 
capacity of people to participate in tourism such as political and administrative system, how 
the information is distributed, and how people respond to the information (Tosun, 2000; Kim 
et al., 2014). Structural limitations are more about financial matters such as income level, elite 
dominant or power structure, and the roles of stakeholders who involves in the process, while 
cultural  limitations  can  be  defined  as self-awareness and capacity to response the  offered 
opportunities (Tosun, 2000; Mensah, 2017; Kim et al., 2014). 

Figure 1: Modification of Tourism-Driven Inclusive Growth Diagnostic (T-DIGD) Framework. 

Conclusion 

The remaining question of whether the tourism industry can contribute to the inclusiveness 
of the city or not has led to the concept of the Tourism-Driven Inclusive Growth framework 
(T-DIGD). It consists of the constraints that can affect the exclusion of some vulnerable groups 
in  the  society  in  accessing  the  opportunities  in  job/employment,  participation,  and  even 
benefits from tourism development. Implementation of this framework to the real case with 
appropriate qualitative  and quantitative measurements will give a detailed mechanism of 
correlation  between  tourism  and  inclusive  growth.  This  framework  also  can  be  one  of  the 
tools to drive tourism-based city development policies and further related research. 

32 

 
 
 
 
 
 
References 

Ali, I. (2007). Inequality and the Imperative for Inclusive Growth in Asia. Asian Development Review Vol 
24:2, Asian Development Bank. 

Aoyagi, C., & Ganelli, G. (2015). Asia's Quest for Inclusive Growth Revisited. Working Paper, IMF, Asia Pacific 
Department.  Ashley,  C.  (2000).  The  Impacts  of  Tourism  on  Rural  Livelihoods:  Namibia's  Experience. 
Working Paper 128, Overseas Development Institute, London. 

Bakker, M. (2018). A Conceptual Framework for Identifying the Binding Constraint to Tourism-Driven 
Inclusive Growth. Tourism Planning and Development. 

Chou,  B.,  &  Huque,  A.  (2016).  Does  Public  Participation  Matter?  Inclusive  Growth  in  East  Asia.  Asian 
Journal of Political Science, 24(2), 163-181. 

Diaz-Chao, A., Ficapal-Cusi, P., & Torrent-Sellens, J. (2016). Economic Crisis and Job Quality in Spain: A 
Multi-dimensional and Micro-data Empirical Approach. Social Indicator Research, 125, 613-633. 

Drobnic, S., Beham, B., & Prag, P. (2010). Good Job, Good Life? Working Conditions and Quality of Life in 
Europe. Social Indicator Research, 99, 205-225. 

Esenaliev, D., & Ferguson, N. (2019). The Impact of Job Quality on Wellbeing: Evidence from Kyrgyzstan. 
Social Indicators Research, 144, 337-378. 

Haan,  A.  d.  (2013).  Inclusive  Growth:  More  than  Safety  Nets.  SIG  Working  Paper  2013/1,  Canada's 
International Development Research Centre. 

Hausmann, R., Rodrik, D., & Velasco, A. (2005). Growth Diagnostic. 

Kanbur,  R.,  &  Rauniyar,  G.  (2009).  Conceptualizing  Inclusive  Development:  with  Applications  to  Rural 
Infrastructure  and  Development  Assistance.  Occasional  Paper  No.7,  Asian  Development  Bank, 
Independent Evaluation Department. 

Kim, S., Park, E., & Phandanouvong, T. (2014). Barriers to Local Residents’ Participation in Community - 
Based Tourism: Lessons from Houay Kaeng Village in Laos. SHS Web of Conferences, 12. 

Klasen, S. (2010). Measuring and Monitoring Inclusive Growth: Multiple Definitions, Open Questions, and 
Some Constructive Proposals. Working Paper Series Number 12, ADB, Sustainable Development. 

Mensah,  I.  (2017).  BENEFITS  AND  CHALLENGES  OF  COMMUNITY-BASED  ECOTOURISM  IN  PARK-
FRINGE COMMUNITIES: THE CASE OF MESOMAGOR OF KAKUM NATIONAL PARK, GHANA. Tourism 
Review International, 21, 81-98. 

Scheyvens, R., & Biddulph, R. (2018). Inclusive Tourism Development. Tourism Geographies, 20(4), 589-
609 

Tosun, C. (2000). Limits to community participation in the tourism development process in developing 
countries. Tourism Management, 21, 613-633. 

Truong, V., Hall, M., & Garry, T. (2014). Tourism and poverty alleviation: perceptions and experiences of 
poor people in Sapa, Vietnam. Journal of Sustainable Tourism. 

Winters, Paul., Corral, Leonardo., & Mora Moreda, Adela. (2013). Assessing the Role of Tourism in Poverty 
Alleviation: A Research Agenda. Development Policy Review, 31(2), 177-202 

World Bank. (2009). What is Inclusive Growth? World Bank, Washington DC. 

World Bank. (2018). 3-big ideas to achieve sustainable cities and communities. Retrieved from World 
Bank: 
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sustainable-cities-and- communities. 

WWTC. (2019). Travel and Tourism Economic Impact, 2019. World Travel and Tourism Council. WWTC. 

33 

 
 
Local Energy Markets 

34 

 
ASEAN EU cooperation: sharing best practices to 
implement regional energy interconnectivity 

Fabio Indeo 

NATO Defense College Foundation, Rome, Italy 

The  achievement  and  the  preservation  of  the  energy  security  condition  -  namely  “the 
availability of energy at all times, in various forms, in sufficient quantities, and at affordable 
prices”  (International  Energy  Agency,  2019)  -  represents  one  of  the  key  factors  in  order  to 
ensure  and  to  support  the  economic  growth,  development  and  modernization  of  the 
countries in the global scenario. 

Within the framework of the ASEAN-EU Plan of Action 2018-2022, ASEAN and EU have been 
engaged  to  enhance  their  energy  cooperation,  working  together  to  have  free  access  to 
energy reserves in the global markets as well as supporting common initiatives to combat 
climate change, to cut polluting emissions in order to promote a cleaner energy transition 
(ASEAN Official Website 2017). 

We can observe that in the energy sphere ASEAN and EU energy share two relevant issues: 

•  a  similar  energy  landscape,  characterized  by  the  depletion  of  existing  hydrocarbon 
reserves,  high  energy  demand  and  consequent  rising  imports,  the  need  to  diversify 
the  energy  mix  necessary  for  the  electricity  production,  mainly  using  renewable 
sources in order to meet the international commitments to cut emissions; 

•  ASEAN and EU share the same approach in terms of diversification of the energy mix 
and the development of a regional energy grid, mainly fuelled with renewable sources, 
which  will  allow  them  to  produce  “clean  electricity”  that  it  will  be  progressively 
allocated to satisfy rising domestic demand (Indeo, 2019). 

At present ASEAN is the fifth largest economy in the world (if we conceive ASEAN as a single 
country) and  one  of the most dynamic and fastest growing economic regions: in the next 
years, ASEAN region will rise its energy demand to support this economic growth. As a matter 
of fact, according to IRENA & ACE’s comprehensive report (2016) the expected population's 
increase in the ASEAN region - from around 615 million in 2014 to 715 million by 2025 - will 
lead to a 4 percent annual growth in energy demand until 2025, amounting to a rise of 50 
percent over 2014 level, and electricity demand will double between 2014 and 2025. 

Hydrocarbons  (oil,  natural  gas  and  coal)  will  cover  most  of  this  expected  increase  of  the 
energy demand: this scenario will impose to ASEAN countries the urgent need to address 
and to rebalance two different issues and problems: 

•  with  the  exception  of  coal,  the  region  has  limited  indigenous  oil  and  natural  gas 
supplies (Brunei Darussalam and Indonesia excluded): in order to satisfy the growing 
domestic  demand  ASEAN  countries  have  to  increase  energy  imports,  exposing 
regional energy security to a condition of high vulnerability. 

• 

these  (imported)  fossil  fuels  will  further  boost  carbon  dioxide  (CO2)  emissions  and 
exacerbate  local  air  pollution,  worsening  the  effects  of  the  climate  change  in  this  is 

35 

 
highly vulnerable area, posing a particular threat to farmers and coastal communities 
especially in Vietnam’s Mekong Delta. 

In this context, renewable energy sources (RES) appear the best option to increase ASEAN 
and EU energy security through greater diversification of the energy mix and by reducing 
demand for imported fossil fuels. 

EU  policies  to  strengthen  energy  security  are  primarily  focused  on  the  geographic 
diversification  of  energy  suppliers  and  import  routes  -  mainly  aimed  to  reduce  the 
dependence  on  oil  and  gas  imports  from  Russia  -  and  the  efforts  to  increase  domestic 
production of renewable sources to produce clean electricity (European Commission, 2014). 
At present, the EU is the only major economic actor producing more than 50 percent of its 
electricity without greenhouse gas emissions, accounting for 28.5 percent renewable energy 
and 25.5 percent nuclear energy (Eurostat, 2019). 

ASEAN countries have adopted the Plan of Action for Energy Cooperation (APAEC) 2016-2025, 
which includes the ambitious goal to achieve 23 percent renewable energy in total primary 
energy  supply  by  2025:  the  realization  of  the  key  objective  implies  a  two-and-a-half-fold 
increase in the modern renewable energy share compared to 2014 (ASEAN Official Website 
2017). 

In  addition  to  their  commitment  to  increase  RES  production,  both  EU  and  ASEAN  are 
engaged  to  implement  ambitious  regional  energy  grids,  mainly  fuelled  with  renewable 
sources: as a matter of fact, the project to create an ASEAN Power Grid follows the EU attempt 
to create an EU-Mediterranean electricity ring and the EU Northern electricity ring (involving 
Scandinavian and EU Northern countries), building regional interconnections and producing 
“clean electricity” through RES, mainly solar and wind (Indeo, 2019). 

EU's  goal  to  develop  energy  transport  infrastructures,  mainly  the  key  cross-border 
interconnections  between  member  states,  overlaps  with  the  leading  idea  to  shape  the 
ASEAN Economic Community which calls for a well-connected ASEAN to drive an integrated, 
competitive and resilient region also in the energy sphere. 

The ASEAN Power Grid (APG) project has been conceived as an inclusive initiative aimed at 
realizing an integrated regional energy system. This project will become the centrepiece of 
the regional power architecture, encompassing all the 10 members of ASEAN. 

It  is  expected  to  enhance  electricity  trade  across  regional  borders,  which  would  provide 
benefits to meet  the rising energy demand with clean  and sustainable electricity supplies 
delivered through integrated infrastructures. 

The APG project is an interesting project of regional cooperation because it is conceived to 
combine the different renewable energy sources that ASEAN countries are able to produce 
(ASEAN Center for Energy, 2015). As a matter of fact, ASEAN region can benefit of a huge and 
differentiated  renewable  potential  which  can  support  the  ambitious  strategy  to  increase 
endogenous production of clean electricity. Lao is the leading ASEAN country about hydro-
power potential, and at present this country exports electricity to Thailand, Vietnam, China, 
Cambodia  and  Myanmar.  Moreover,  solar  power  is  widely  diffused  in  the  region  (Vietnam, 
Thailand, Singapore and Malaysia) and appears as one of the most profitable sources, thanks 
to  the  very  high  strong  irradiance  which  characterizes  the  area.  Geothermal  energy  is 
another  interesting  option  to  increase  RES  production  in  Southeast  Asia,  considering  the 
existing huge potential, which accounts for 25 percent of the world’s geothermal generation 
capacity.  Most  of  the  regional  capacity  is  located  in  the  Philippines  and  Indonesia,  which 

36 

could  give  a  relevant  contribution  to  implement  this  regional  “clean  energy”  grid 
(International Energy Outlook, 2017). 

The landscape of political cooperation and good relations which characterizes ASEAN region 
appear the main preconditions of the success in the implementation of the ASEAN Power 
Grid  project,  which  will  help  these  countries  to  diversify  the  energy  mix,  reducing  the 
dependence on imports thanks to the distribution of regional-produced clean electricity. 

In  the  EU  case,  a  regional  electricity  grid  has  been  successfully  created  only  in  Northern 
Europe - as the result of the fruitful cooperation among Nordic countries (Finland, Sweden, 
Denmark  and  Norway)  able  to  produce  clean  electricity  by  the  wind  - while  the  instability 
scenario  in  North  Africa  (previously  identified  as  a  potential  producer  of  clean  electricity, 
mainly  from  solar  due  to  the  huge  solar  power  potential  of  these  semi-desertic  land)  has 
frozen all European projects to realize an integrated energy grid in the southern shore of the 
Mediterranean (Indeo, 2019) 

Conclusions 

Starting from a similar energy security scenario, the cooperation between ASEAN and EU in 
the energy sphere have to be mainly tailored to improve bilateral dialogue about common 
issues and to work together in the international scenario. 

ASEAN and EU common goal to shift their energy system from hydrocarbons to renewable 
sources is not only linked to economic issues or ensuring security of supplies, but also reflects 
their mutual engagement to address climate change. As signatories of the Paris climate deal, 
ASEAN  and  EU  have  to  align  their  positions  in  the  international  fora,  pursuing  a 
comprehensive approach to tackle the impact of climate change and promoting sustainable 
development, as a promising framework of enhanced cooperation. 

In economic terms, the ASEAN region will need to invest $27 billion annually in renewable 
energy capacity, a total of $290 billion by 2025, in order to meet the 23 percent renewable 
energy goal: the EU must support this ambitious program, both in political and economic 
terms,  given  the  relevant  impact  of  this  “clean”  energy  shift  promoted  by  ASEAN  working 
together  to  enhance  the  international  visibility  of  their  attempts  and  engagement  to 
promote a decarbonisation process. 

The  convergence  of  strategic  energy  interests  among  ASEAN  countries  and  their  good-
neighbourhood  relations  makes  realistic  the  creation  of  a  regional  integrated  power  grid, 
which could be a reference model also for the EU, within which member countries appear 
more  interested  to  preserve  their  own  energy  security  condition  rather  than  working 
together to achieve a shared and common goal. 

References 

ASEAN Center for Energy (2015). ASEAN PLAN OF ACTION FOR ENERGY COOPERATION (APAEC) 2016-
2025  PHASE  I:  2016-2020,  http://www.aseanenergy.org/wp-content/uploads/2015/12/HighRes-APAEC-
online-version-final.pdf. 

ASEAN  Official  Website 
https://asean.org/storage/2017/08/ASEAN-EU-POA-2018-2022-Final.pdf. 

(2017).  ASEAN-EU  Plan 

of  Action 

(2018 

– 

2022), 

5. 

Eurostat  (2019).  Electricity  generation  statistics  –  first  results,  https://ec.europa.eu/eurostat/statistics-
explained/index.php/Electricity_generation_statistics_%E2%80%93_first_results#Production_of_electri
city 

37 

 
 
Indeo, F. (2019). ASEAN-EU energy cooperation: sharing best practices to implement renewable energy 
sources  in  regional  energy  grids.  Global  Energy  Interconnections,  2  (5),  393-401,  DOI:10.106/j.gloei. 
2019.11.014 

International Energy Agency (2019). Energy Security. https://www.iea.org/topics/energysecurity/ 

(2017) 
International  Energy  Outlook 
https://webstore.iea.org/weo-2017-special-report-southeast-asia-energy-outlook. 

Southeast  Asia  Energy  Outlook 

2017,  89-90. 

IRENA  &  ASEAN  Center  for  Energy  (2016).  Renewable  Energy  Outlook  for  ASEAN:  a  REmap  Analysis.  
International Renewable Energy Agency (IRENA), Abu Dhabi and ASEAN Centre for Energy (ACE), 10. 
http://www.irena.org/documentdownloads/publications/irena_remap_asean_2016_report.pdf. 

38 

 
 
Local electricity market projects in China and the 
EU – A comparative perspective 

Helena Uhde 

Center  for  Energy  and  Environmental  Policy  Research,  Beijing,  China;  Department  of 
Management and Economics, Beijing Institute of Technology, Beijing, China 

Background 

Up  to  today,  the  electricity  system  in  most  parts  of  the  world  is  characterised  by  a 
unidirectional power flow of electricity centrally generated in large, mainly fossil-fuel based 
power plants. While this supports capital accumulation and scale economics, it also leads to 
environmental  and  economic  problems  (Giotitsas,  Pazaitis,  &  Kostakis,  2015)⁠.  These  issues 
include high costs of infrastructure, the vulnerability of the system reliability when the system 
is  exposed  to  terrorist  attacks  or  extreme  weather  events  and  market  failure,  such  as 
monopolistic utilities and prices that fail to reflect local scarcity and surplus. With decreasing 
costs for renewable energy technologies and supporting policies in many countries around 
the globe, the share of electricity generated from renewable sources is growing rapidly. In 
addition  to  the  centralised  approach,  more  and  more  decentralised  and  distributive 
alternatives  have  emerged  in  recent  years.  Distributed  electricity  systems  (DES)  such  as 
rooftop solar, distributed wind power or small biomass plants that generate energy close to 
where  energy  is  consumed  are  extensions  of  the  existing  system.  If  more  electricity  is 
generated  than  needed,  the  distributed  energy  owners  have  different  options  on  how  to 
handle the electricity surplus. They can a) waste/curtail the electricity; b) store the electricity 
surplus; c) feed the electricity into the grid; or d) trade electricity in a local energy market, if 
this is permitted in the respective jurisdiction.  

A local electricity market is an electricity exchange platform on the distribution level of the 
grid  between 
interconnected  participants,  such  as  small-scale  energy  generators, 
consumers and prosumers (consumers who also generate electricity). When we think of  a 
local  electricity  market,  we  can  think  of  a  software,  rather  than  an  analogue  exchange 
platform. In the first step, electricity is generated, measured and logged into smart meters. 
In  the  next  step,  both  generators  and  consumers  send  their  bids  (or  calls)  to  the  market 
platform. Supply and demand are matched according to the market mechanism. After the 
deal  is  made,  the  smart  meters  are  updated.  Due  to  the  nature  of  electricity,  market 
participants cannot track the specific electrons that are exchanged. The electricity can either 
be supplied by the main grid or from distributed storage.  

39 

 
Figure 1: Simplified depiction of a local electricity market (LEM). 

The  increasing  number  of  research  papers  on  "local  electricity  markets"  and  "local  energy 
markets"  shows  that  the  scientists'  interest  in  the  topic  is  increasing.  One  reason  for  this 
growing  interest  is  that  local  electricity  markets  can  give  an  incentive  for  participation  in 
demand-response  mechanism  and  therefore  increase  the  much  needed  flexibility  in  the 
system. While there are many comparisons and analysis of local electricity markets in Europe 
(Mengelkamp, Diesing, & Weinhardt, 2019; Sousa, Soares, Pinson, & Moret, 2019), the concept 
is still quite new in China and not a lot of research has been done. Both, in the legislation of 
the European Union (EU) as well of the Peoples Republic of China, the term “local electricity 
market” is not mentioned in the above mentioned sense. However, similar concepts and pilot 
projects can be found in the two regions. In order to find similarities and differences between 
the  implementation  in  the  EU  and  in  China,  government  publications  from  both  regions 
were screened for concepts connected to the phenomenon “local electricity market”.  

Short overview of “Local electricity market” policies in the EU and in China 

In  the  EU,  the  major  energy  market  reforms  are  based  on  the  three  Electricity  Directives, 
which were adopted by the EU Parliament and the Council in 1996, 2003 and 2009 (European 
Parliament and Council, 1996, 2003, 2009). These directives introduced a European electricity 
market and common rules for the internal electricity market, as well as the unbundling of 
distribution  and  transmission  systems  and  consumer  rights  for  the  free  choice  of  the 
provider.  In  the  next  Electricity  Directive  in  2018,  the  terms  “active  consumers”  and 
“renewable self-consumers” were defined (European Parliament and Council, 2018). In 2019 
with  the  “Clean  Energy  Package  for  all  Europeans”,  the  role  of  “active  consumers”  is 
strengthened  again  (European  Commission,  2019).  Although  the  implementation  of  the 
guidelines may differ in each of the EU member states, these laws now allow consumers to 
store,  sell  and  consume  their  self-generated  electricity.  Consumers  can  also  participate  in 
demand mechanisms or energy efficiency programmes. 

China’s  last  round  of  market  reforms  started  in  2015,  with  the  “Deepening  Reform  of  the 
Power Sector” (“Document No.9”) (CCCPC & State Council, 2015). In addition to the market-
based  instruments,  the  “energy  internet”,  China’s  version  of  the  smart  grid,  is  also 
highlighted. In 2017, the National Energy Agency (NEA) announced the implementation of 
market pilots for distributed energy (NEA, 2017). Details of what these markets could look like 

40 

 
 
 
are published and put up for discussion one year later (NEA, 2018). In 2019, a list of market 
pilots for decentralised energy was issued by the government (NDRC, 2019).  

The concept of a “local electricity market” in the EU and in China 

Table 1 shows an overview of the “local electricity market” concepts in the EU and in China. 

Table 1: Comparison of “local electricity market” concepts in the EU and in China. 

Component 

EU 

China 

Regulation 

2018/2001/EC directive, Clean Energy 
Package for all Europeans⁠ 

Outline of the pilot program for distributed 
power generation market trading, Distributed 
Generation Management Measures, List of the 
market-oriented trading pilots for distributed 
generation 2019 

Concepts 

Renewable energy community, citizens 
energy community, active consumer, 
renewable-self consumer 

Distributed energy owner, trading pilots for 
distributed power generation 

Participants 

Renewable self-consumers, individually or 
through aggregator 

Distributed energy owners, mostly commercial or 
industrial consumers 

Market mechanisms 

Sell through renewables power purchase 
agreements, electricity suppliers and peer-
to- peer trading arrangements 

3 options: 1) direct trade, 2) entrusted sales, and 3) 
sales to grid 

Pilot projects 

Many projects with different objectives, e.g. 
EMPOWER, P2P Smart Test, EcoGrid, NOBEL 

26 pilot projects announced in 2019 

Project developer 

Cooperation of different stakeholders, often 
universities as driving force;  cooperation of 
academia with industry partners, usually 
with government support 

Government in the centre, in cooperation with 
industry and research institutions 

Conclusion 

Neither  in  EU  legislation  nor  in  Chinese  legislation  can  we  find  the  term  “local  electricity 
market”  with  the  definition  used  in  academic  texts.  Instead,  we  find  the  phenomenon 
described in other terms. While the EU's texts emphasize the role and rights of consumers, 
the focus in China is on technical regulations and the definition of market mechanisms. The 
two jurisdictions are alike in that a strategy is defined at the highest, central level, which is 
then implemented at the level of the member states (EU) or provinces (China). Nevertheless, 
the  influence  on  the  content  differs  considerably  in  the  two  regions.  While  in  China  a 
selection  of  market  mechanisms  is  defined  at  the  central  level,  the  design  of  the  market 
mechanisms in the EU is mostly at the project level. Moreover, in the EU, main participants 
are  residential  households,  while  in  China,  the  focus  lies  on  commercial  and  industrial 
enterprises. 

41 

 
 
 
 
References 

CCCPC, & State Council. Deepening Reform of the Power Sector(关于进一步深化电力体制改革的若干意见). 
, (2015). 

European Commission. Clean energy for all Europeans. , (2019). 

European Parliament and Council. Directive 96/92/EC of the European Parliament and of the Council 
of 19 December 1996 concerning common rules for the internal market in electricity. , (1996). 

European  Parliament  and  Council.  Directive  2003/54/EC  of  the  European  Parliament  and  of  the 
Council of 26 June 2003 concerning common rules for the internal market in electricity and repealing 
Directive 96/92/EC. , (2003). 

European Parliament and Council. Directive 2009/72/EC of the European Parliament and the Council 
of  13  July  2009  concerning  common  rules  for  the  internal  market  in  electricity  repealing  Directive 
2003/54/EC. , (2009). 

European  Parliament  and  Council.  Directive  (EU)  2018/2001  of  the  European  Parliament  and  the 
Council of 11 December 2018 on the promotion of the use of energy from renewable sources (recast). , 
(2018). 

Giotitsas, C., Pazaitis, A., & Kostakis, V. (2015). A peer-to-peer approach to energy production. Technology 
in Society, 42, 28–38. https://doi.org/10.1016/j.techsoc.2015.02.002 

Mengelkamp, E., Diesing, J., & Weinhardt, C. (2019). Tracing local energy markets: A literature review. IT 
- Information Technology, (April). https://doi.org/10.1515/itit-2019-0016 

NDRC. (2019). List of the market-oriented trading pilots for distributed power generation 2019 (2019 年

分布式发电市场化交易试点名单). 

NEA. Outline of the pilot program for distributed power generation market trading (In Chinese). , (2017). 

NEA. Distributed Generation Management Measures (Draft for Consultation)(In Chinese). , (2018). 

Sousa,  T.,  Soares,  T.,  Pinson,  P.,  &  Moret,  F.  (2019).  Peer-to-peer  and  community-based  markets
comprehensive 
https://doi.org/https://doi.org/10.1016/j.rser.2019.01.036 

review.  Renewable  and  Sustainable  Energy  Reviews, 

:  A 
367–378. 

104, 

42 

 
International (inter)connectivity via 
interconnectors? Gas and energy market 
ramifications  

Konrad Zawodziński 

Koźmiński University, Warsaw, Poland 

Introduction 

This  papers  looks  at  institutional  aspects  of  economic  cooperation  in  the  energy  sector, 
especially the interplay between the European Union (EU) energy law and the provisions of 
the Free Trade Agreement (FTA) entered into by and between the EU and Singapore. The so-
called  regulatory  exemptions  regarding  interconnectors  serve  to  exemplify  the  intricate 
nature  of  this  interplay.  As  far  as  those  exemptions  are  concerned,  the  research  builds 
prevailingly on the case law referred to in this extended abstract which is regrettably hardly 
more developed than academic literature (Szydło 2009, Däuper and Wüstehoff 2009, Talus 
2013, Talus 2014).  

Anticipating the unquestionable complexity of this field, I shall commence by clarifying the 
concept and importance of interconnectors, proceed to discuss axiological convergence and 
continuity  between  FTA  and  EU  energy market  regulations  and  conclude  by  pointing  out 
disruptions in the continuity between FTA and EU market regulations. 

Interconnectors as critical pieces of infrastructure in international trade   

The definition of interconnectors under EU energy law differs with reference to energy and 
gas markets. From the energy market perspective legislation adopts strictly intra-EU optics 
whilst the gas market approach encompasses international considerations.  

In either instance the interconnector acts as a gateway to the common market and is a key 
to the business of manufacturers and importers. The attempt to capture gas pipelines with 
third countries within the EU regulatory framework poses challenges from an international 
law viewpoint concerning the scope of EU territory and its territorial jurisdiction as well as the 
ascertainment of jurisdictional link vis-à-vis territorial reach of decision-making powers and 
practice of EU institutions and Member States.  

Axiological convergence and continuity between the FTA and EU market regulations 

It its chapter dedicated to the energy sector, the FTA focuses on removing or reducing tariffs 
nontariff and barriers as well as cooperating to foster regulatory convergence with or towards 
regional and international standards. According to Article 7.4 FTA both the EU and Singapore 
shall  ensure  that  the  terms,  conditions  and  procedures  for  the  connection  and  access  to 
electricity transmission grids are transparent and do not discriminate against suppliers of the 
other Party. The FTA includes numerous other commitments to non-discrimination, i.a. in the 
field  of  export  licensing  procedures,  customs  laws  and  penalties  imposed  for  a  breach 
thereof. Notably, the parties to the FTA also agreed to avoid unnecessary or discriminatory 
burdens on economic operators. The language of the FTA resonates within Article XI:1 GATT 
1994,  which  stipulates  that  no  prohibitions  or  restrictions  other  than  duties,  taxes  or  other 

43 

 
 
 
charges,  whether  made  effective  through  quotas,  import  or  export  licences  or  other 
measures, shall be instituted or maintained.  

The  principle  of  non-discrimination  forms  one  of  the  cornerstones  of  the  EU  law;  under 
jurisprudence constante it ‘permeates’ the legislation and application thereof. This principle 
manifests  itself  both  in  horizontal  and  vertical  relations,  i.e.  respectively  among  market 
operators  and  between  undertakings  and  the  state  (or  the  EU).  Horizontal  non-
discrimination in the access to infrastructure is  enshrined in Article 32 item (1) Gas  Market 
Directive  as  well  as  Article  6  item  (1)  Energy  Market  Directive  and  cascaded  into multiples 
other acts. General principles set out in the directives are complemented by i.a. regulations 
on the access to networks (Regulation 715/2009 and Regulation 2019/943) as well as network 
codes,  especially  establishing  the  rules  of  capacity  allocation  mechanisms.  This  non-
discriminatory  access  to  infrastructure  enjoys  duplicate  protection  under  the  EU  law  by 
means  of  public  enforcement  through  regulatory  measures  and  remedies  addressing 
competition  concerns,  beside  private  enforcement  thereof.  The  EU  law  also  guarantees 
vertical  non-discrimination  in  the  adoption  and  execution  of measures  related  to  gas  and 
energy markets (Article 3 items 1 and 2 Directive (EU) 2009/73/EC; Article 3 items 3-5 Directive 
(EU)  2019/944).  EU  rules  on  state  aid  and  services  of  general  economic  interests  (public 
service obligations) complement the aforesaid regulatory framework (Talus 2013). 

There exist, however, measures under the EU law the application of which requires a great 
deal of caution from a viewpoint of international trade concerns. Those entail the certification 
of  third  country  transmission  system  operator,  third  country  investor  scrutiny  under 
Hydrocarbon Directive 94/22/EC, Foreign Direct Investment screening under Regulation (EU) 
2019/452 and, last but not least, regulatory exemptions.  

Disruptions in the continuity between FTA and EU market regulations 

Regulatory  exemptions  under  EU  energy  law  (Article  36  Gas  Market  Directive,  Article  64 
Regulation 2019/943) result in a long-term waiver of the application of energy market rules 
including third party access with respect to i.a. interconnectors (Gökҫe 2019). Their purpose 
is to overcome the risk pertinent to capital-intensive investments in the energy infrastructure 
and  allow  the  investor  to  recoup  its  investment  outlays  incurred.  The  grant  of  such 
exemptions  requires  an  examination  of  several  market-related  conditions  regarding  the 
distortion of competition and functioning of European market. Unlike in the gas industry, in 
the  electricity  market  the  regulatory  exemptions  are  not  premised  over  a  lack  of  adverse 
impact on the security of supplies. Each decision of this nature requires an approval of the 
European Commission and, in the light of a recent General Court judgment (T-883/16), it has 
to be in line with the energy solidarity principle.  

The  regulatory  exemptions  normally  encompass  obligations,  e.g.  determine  restrictions  in 
booking  the  capacities  (e.g.  Article  3  Porto  Empedocle  LNG  Terminal  decision,  point  71  of 
Shannon  LNG  Terminal  decision)  or  impose  a  maximum  import  through  „unregulated” 
capacities (e.g. OPAL Gas Pipeline initial decision of 2009).  

This  is  clearly  a  doubled-edged  sword  in  international  trade  as  it  either  gives  preferential 
treatment to the investor, limits their unbridled usage of their infrastructure or blocks non-
discriminatory access to the installations for other market players. At least two disputes are 
now pending before the Court of Justice of the European Union regarding the application of 
these exemptions on the electricity market T-738/18 (refusal to grant the exemption) and on 
the gas market C-848/19 P (revisiting the conditions during the term of the exemption).  

44 

 
The  latter  concerns  the  OPAL  Gas  Pipeline.  The  background  to  this  dispute  offers  ample 
exemplification  of  how  complex  and  intertwined  regulatory  exemptions  are  (Pirani  and 
Yafimava 2016, Yafimava 2017). Originally, under the initial decision of 2009 the utilization of 
the OPAL Gas Pipeline was subject to conditions intended to address concerns about market 
monopolization and security of supply yet not devoid of controversy (Szydło 2019, Däuper and 
Wüstehoff  2009).  They  were,  however,  challenged  by  the  Russian  Federation  under  the 
World Trade Organization regime. Those conditions were subsequently  amended, prior to 
any determination by the WTO and for reasons beyond the international trade law concerns, 
bringing  further  upheaval.  This  time  several  controversies  arose  with  respect  to  the 
functioning  of  the  market  and  security  of  supply  (Godzimirski  2018),  leading  to  the 
annulment  of  the  OPAL  Gas  Pipeline  amendment  decision  of  2016.  The  General  Court 
judgment is now under appeal.   

As  showcased  in  a  dispute  adjudicated  by  a  WTO  panel  of  the  Dispute  Settlement  Body 
(WT/DS476/R, final report of 10 August 2018, the Appellate Body review pending), the nature 
of  those  exemptions  and  conditions  imposed  by  the  European  Commission  in  decisions 
according  them  may  give  rise  to  discriminatory  treatment  and  quantitative  measures 
tantamount  in  their  effects  to  quotas.  In  its  final  report  the  WTO  panel  found  that  ‘two 
challenged  OPAL  conditions,  that  is,  the  50%  capacity  cap  and  3  bcm/year  gas  release 
programme, are inconsistent with Article XI:1 of the GATT 1994’.  

This, however, lacks direct effect within the EU. International agreements concluded by the 
EU become an integral part of the EU legal system (Case 181/73 Haegeman). The conclusion 
of the agreement makes it directly applicable. However, direct applicability does not equate 
direct  effect.  The  determination  of  the  latter  requires  a  two-prong  test,  i.e.  verification 
whether the ‘nature and the broad logic’ of the agreement does not preclude direct effect 
and the provisions thereof are ‘unconditional and sufficiently precise’  (Joined Cases C-659/13 
and  C-34/14  C  &  J  Clark  International).  Agreements  found  to  lack  direct  effect  include  the 
GATT (Joined Cases C-659/13 and C-34/14 C & J Clark International) (Cannizzaro, Palchetti and 
Wessel 2011, Leal-Arcas 2019). This position is likely to apply to the FTA too.  

Those  observations  are  relevant  in  particular  in  the  context  of  Singapore’s  investments  in 
renewable  energy  generating  installations  (compare  Article  7.3  (1)  FTA)  and  LNG  import 
traded via Singapore. Both spheres of economic cooperation contribute to the attainment of 
climate goals pursued by the EU and Singapore. EU law offers sufficient safeguards to accord 
the rights to Singaporean investors, yet certain measures need to be applied with a degree 
of caution.  

References 

Cannizzaro, E. Palchetti, P. and Wessel, R. (Eds.) (2011). International Law as Law of the European Union. 
Leiden: Martinus Nijhoff Publishers. 

Däuper, O. and Wüstehoff, K. (2009). Die Entscheidung der Bundesnetzagentur in Sachen OPAL – eine 
kritische Auseinandersetzung. Zeitschrift für Neues Energierecht. 13 (2). 99-106.  

Godzimirski, J.M. (2018), EU Gas Supply Security: The Power of the Importer [in:] Szulecki, K. (ed.) (2018). 
Energy Security in Europe: Divergent Perceptions and Policy Challenges. 241. 

Gökҫe, M. (2019). Energy Transitions and the Future of Gas in the EU: Subsidise or Decarbonise. 24-26. 

Leal-Arcas, R. (2019). EU Trade Law. Edward Elgar. 253-276.  

Pirani, S. and Yafimava, K. (2016). Russian Gas Transit across Ukraine Post2019: pipeline scenarios, gas 
flow consequences, and regulatory constraints, OIES Working Paper. NG 105. 

Szydło, M. (2009). Regulatory Exemptions for New Gas Infrastructure - A Key Challenge for European 
Energy Policy. European Energy and Environmental Law Review. 18 (5), 254-269. 

45 

 
Talus, K. (2013). EU Energy Law and Policy: A Critical Account. Oxford University Press. 65-92 and 96-98.  

Talus, K. (2014). Research Handbook on International Energy Law. Edward Elgar. 607-610. 

Yafimava K. (2017). The OPAL Exemption Decision: Past, Present, and Future. OIES Working Paper. NG 
117.  

46 

 
 
Policy Instruments for 
Sustainable Connectivity 

47 

 
The alignment of Chinese financing with the Paris 
Agreement: propaganda, aspiration or reality? 

Mario Esteban1 and Lara Lázaro2 with the assistance of Ugo Armanini and Ngo Tien Minh 

1 Autonomous University of Madrid and The Elcano Royal Institute, Spain  

2 Centro de Enseñanza Superior Cardenal Cisneros and The Elcano Royal Institute, Spain 

Introduction: China, a key (f)actor of connectivity and climate governance 

China has become a major player in infrastructure development, especially in Eurasia, as well 
as a key actor within the international climate change regime. This has been illustrated both 
by  the  Belt  and  Road  Initiative  (BRI)  –  the  world’s  leading  connectivity  initiative  –  and  the 
negotiations  of  the  Paris  Agreement  and  its  implementation  rulebook.  In  addition,  the 
Chinese  sponsored  BRI,  which  already  encompasses more  than  120  countries  and  around 
40% of the world’s Gross Domestic Product (International Monetary Fund 2020), will play a 
fundamental role in framing future carbon trajectories and thus achieving or not the Paris 
Agreement ‘ well below 2 degrees Celsius’ objectives (2DS) (Tsinghua Center for Finance and 
Development, 2019). 

From this perspective it is not surprising that, at least at the rhetorical level, Chinese leaders 
and  major  development  actors  have  called  for  the  alignment  of  the  BRI  with  the  Paris 
Agreement.    However,  data  on  Chinese  investment  by  different  types  of  energy  projects 
(Zhou  et  al.,  2018;  Aminjonov  et  al.,  2019)  and  some  reports  on  the  behaviour  of  Chinese 
international contractors seem to question such alignment. This research uses both primary 
and  secondary  research, 
interviews  with  Chinese 
including  semi-structured  elite 
stakeholders and primary textual sources respectively to determine whether the alignment 
of Chinese infrastructure projects along the BRI with the climate change regime is merely 
rhetorical, a genuine aspiration or whether said alignment is in fact taking place. 

Tackling climate change: A green regulatory ecosystem for Chinese investments 

‘Greening’ the BRI and implementing the objectives of the Paris Agreement can build on a 
growing body of green policies for China’s overseas and BRI investments, including the 2019 
Green Investment Principles and the BRI International Green Development Coalition, one of 
whose thematic partnerships is devoted to Green Finance and Investment. Chinese policy 
and major commercial banks involved in the BRI – like the China Development Bank (CDB) 
and  the  Export-Import  Bank  of  China  (Exim)  –  have  also  displayed  their  commitment  to 
tackle climate change and sustainability and have recently adopted green frameworks for 
investment  (see  Figure  1)  while  increasingly  resorting  to  green  financial  tools  like  green 
bonds. In addition, some Chinese financing institutions, like the People’s Bank of China and 
the  Industrial  and  Commercial  Bank  of  China,  are  proactive  in  leading  world  initiatives  on 
green  finance  and  climate  change  disclosure  like  the  Network  for  Greening  the  Financial 
System and the Task Force on Climate-Related Financial Disclosures. 

48 

 
 
 
Figure 1: China’s overseas and BRI green and climate policies. Source: Ren et al., 2017, Sandalow, 2019, 
Ministry of Ecology and Environment of the People’s Republic of China, 2017. 

Nevertheless, existing high-level regulation has not overarching led to a change of paradigm 
on BRI projects. Fossil energies are still financed on a massive scale along the BRI (Figure 2), 
while green finance is mainly channelled towards China’s domestic market (Figure 4). 

An agnostic BRI that ignores the Paris Agreement, for now 

Chinese  projects  have  a  dubious  track  record  on  environmental,  social,  and  financial 
sustainability. Despite improvements on field practices and socio-environmental standards 
(Kirchherr  et  al.,  2017),  the  big  picture  remains  ambivalent.  The  BRI  is  largely  agnostic:  It 
promotes  both  renewable  energies  and  fossil  fuels  and  sectors  like  coal  still  receive 
significant investments (Eder & Mardell, 2019). 

49 

 
 
 
 
 
Figure 2: China’s major policy banks’ cumulative energy investments in BRI countries, by sector, 2008-
19. Source: China Global Energy Finance Database. 

Major policy banks – CDB and Exim – still channel most of their investments towards non-
renewable sectors, mainly coal, although the share of non-renewables is decreasing towards 
a  parity  between  renewable  and  non-renewable  energies  (see  Figure  2).  State-owned 
companies’  preference  for  fossil  fuels  (Zhou  et  al.,  2018)  is  due  to  structural  factors  like  a 
preference  for  large  projects,  prior  experience  in  implementing  these  projects,  higher 
regulatory  predictability  and  easier  access  to  finance.  Hence,  some  countries  might  get 
locked-in  high-emission  trajectories  for  decades  to  come.  In  Pakistan,  75%  of  the  new 
capacity generation built and financed by China is coal fired (Downs, 2019). In addition, this 
lock-in risk is heightened for BRI countries where the bulk of Chinese investments goes to 
non-renewables in sharp contrast with OECD countries which offer a more balanced picture 
(see Figure 3), arguably due to higher level of economic and environmental governance.  

50 

 
 
 
 
 
 
 
Figure 3: China’s energy investments and construction contracts by sector, 2014-19, %. Source:  The 
China Global Investment Tracker Database. 

Recent advances in Green Finance are also limited. Chinese banks have displayed a series of 
Green frameworks aligned on international standards. But available data suggests that these 
initiatives remain exclusively aimed to the  Chinese market and  only a small share flows to 
overseas projects (see Figure 4).  

Figure 4: Geographical distribution of China’s major offshore Green bonds, 2018, USD million. Source: 
Bank of China, 2019; CECEP consulting, 2018; China Construction Bank, 2019; China Development Bank, 
2018; International and Commercial Bank of China, 2019. 

Conclusions 

implementation 

This paper concludes that alignment of Chinese financing with the Paris Agreement remains 
an aspiration facing multiple challenges, but which also presents multiple opportunities for 
cooperation between different stakeholders along Eurasia. Achieving this aspiration and its 
imperative  to  curb  current  patterns  of 
widespread 
infrastructure development that are clearly incompatible with the 2DS objectives (Tsinghua, 
2019). Unfortunately, the data gathered in the interviews suggested that the current context 
is  not  particularly  conductive  to  this  end  as  the  slowdown  of  the  Chinese  economy,  even 
before the COVID-19, casts a shadow on China’s domestic and international climate ambition, 
since it is prioritising pro-growth policies at the expense of sustainability. 

is  an  urgent 

51 

 
 
 
 
 
 
References 

American  Enterprise  Institute  (2020). China  Global  Investment  Tracker. http://www.aei.org/china-
global-investment-tracker. Accessed 04/04/2020. 

Aminjonov, F., et al. (2019) ‘BRI in Central Asia: Overview of Chinese Projects’, Central Asia Regional Data 
Review 
1–5. 
https://www.researchgate.net/publication/333673045_BRI_in_Central_Asia_Overview_of_Chinese_Proj
ects. 

20: 

Bank of China (2019). Annual Report on Bank of China’s Sustainability Series Bonds. Beijing. 

CECEP consulting (2018). Agricultural Development Bank of China 2018 Euro Green Bond: Third-party 
certification report. Beijing.  

China  Construction  Bank  (2019).  CCB  Green,  Social  and  Sustainability  Bond  Annual  Reports  2018. 
Beijing.  

China Development Bank (2018). 2018 Annual report on China Development Bank’s 2017 Green Bond. 
Beijing. 

Downs, E. (2019). The China-Pakistan Economic Corridor power projects: Insights into environmental 
and debt sustainability. Center on Global Energy Policy, Columbia University. 

Eder, T. S., & J. Mardell (2019). Powering the Belt and Road. Mercator Institute for China Studies (MERICS). 

Gallagher,  K.  P.  (2019).  China’s  Global  Energy  Finance.  Global  Development  Policy  Center,  Boston 
University. 

Industrial and Commercial Bank of China (2019). 2018 ICBC Annual Green Bond report. Beijing. 

International  Monetary  Fund  (2020).  IMF  DataMapper,  World  Economic  Outlook  (October  2019). 
https://www.imf.org/external/datamapper/NGDPD@WEO/OEMDC/ADVEC/WEOWORLD/CHN. 
Accessed 04/04/2020. 

Kirchherr,  J.,  N.  Matthews,  K.  J.  Charles,  &  M.  J.  Walton  (2017).  “Learning  it  the  Hard  Way”:  Social 
safeguards norms in Chinese-led dam projects in Myanmar, Laos and Cambodia. Energy Policy 102, 529-
39.  

Ren. P., L. Zhang, R. Zhu, & J. Zhang (2017). How China’s policy banks can support sustainable foreign 
investment. Beijing. 

Sandalow, D. (2019). 2019 Guide to Chinese Climate Policy. Center on Global Energy Policy, Columbia 
University.  

Ministry  of  Ecology  and  Environment  of  the  People’s  Republic  of  China  (2017).  The  Belt  and  Road 
Ecological and Environmental Cooperation Plan. 

Tsinghua  Center  for  Finance  and  Development  (2019).  Decarbonizing  the  Belt  and  Road:  A  green 
finance roadmap. Beijing. 

Zhou, L., S. Gilbert, Y. Wang, M. Muñoz Cabre, & K.P. Gallagher (2018). Moving the Green Belt and Road 
Initiative: From Words to Actions. Washington, DC: World Resources Institute. 

52 

 
 
Partnership for Sustainability between 
Smallholders in Asia and Corporations in Europe 

Bustanul Arifin, Novi Rosanti and Hanung Ismono 

Department of Agricultural Economics, University of Lampung (UNILA), Indonesia 

Introduction 

Sustainability  certifications  in  global  agricultural  value  chains  require  smallholders  in 
producing countries to form and strengthen their farmers’ organizations in order to increase 
the market access, where large-scale global corporations facilitate and monitor such access 
through an internal control system (ICS) established in the field.  Sustainability certification 
schemes  emerge  in  conjunction  with  growing  concerns  of  environmental  governance, 
especially  among  consumers  in  the  coffee-buying  countries.  On  one  hand,  efforts  to 
democratize  markets  by  increasing  the  role  of  civil  society  in  regulating  production  and 
trade-related  activities  have  grown  rapidly.    On  the  other  hand,  these  sustainability 
certifications and standards could serve as new vehicles of corporate control over global food 
production, trade and consumption. 

Efforts to improve community-cooperative governance structures in the producing regions 
also  help  with  integration,  as  standards  generally  require  establishment  of  farmers’ 
organizations  and  locally  adopted  codes  of  conduct.    Global  buyers  are  interested  in 
improving the control mechanisms that ensure product quality to meet both technical and 
non-economic  requirements  of  coffee  beans  for  the  global  market.    Smallholder  coffee 
farmers  need  to  establish  partnerships  with  global  coffee  corporations,  not  only  to  ensure 
market access and product quality to meet global requirements, but also to increase access 
for information, technical assistance, empowerment and other capacity building programs.  

The study analyses the institutional dimensions of partnership for sustainability certifications 
between smallholder farmers in Asia and large-scale corporations in Europe and examines 
the  impacts  of  partnerships  on  farm  income  Lampung  Province,  Sumatra-  Indonesia.  We 
conducted a farm-household survey by employing face-to-face interviews with a sample of 
78 farm households in West Lampung District; 35 farmers were in a partnership and 43 were 
not; and of 93 farm households in Tanggamus District; 63 farmers were in a partnership and 
30 were not.  These households were selected using a cluster sampling method. The Nestle 
corporation’s  4C  certification  scheme  is  dominant  in  Tanggamus  and  Ecom  corporation’s 
Rainforest  Alliance  (RFA)  certification  scheme  is  dominant  in  West  Lampung.    The  field 
surveys were conducted in July and August of 2018. The semi-structured interviews for coffee 
traders,  local  leaders,  and  government  officials  were  conducted  in  the  period  of  August-
October of 2018. By then, Nestle also started buying coffee from farmers in West Lampung. 
The partnership farmers were selected randomly within the cluster, using the lists provided 
by the ICS agents of these two companies. Non-partnership farmers were selected randomly 
using lists provided by the head of villages and the extension and ICS agents.  

Analytical Frameworks 

We  focus  our  analysis  on  the  impact  of  the  partnerships  for  sustainability  certifications  in 
coffee value chains on farm income. This contributes to the knowledge on the transmission 

53 

 
 
 
of how sustainability certifications could improve market access for coffee, farm income for 
smallholder coffee growers and better crop diversification through the integration of multi-
purpose  tree  species  (MPTS).    We  performed  the  following  three  components  in  the 
econometric analysis: 

•  Probit  model  to  estimate  factors  determining  partnership  participation.  The 
regressors include household size, age and education of household head, dependency 
ratio, size of coffee farm, crop diversification or MPTS, size of total farm, ownership of 
motorcycle, car, and coffee processing unit, distance to rural cooperatives (KUBE) and 
distance to collector traders.  

•  Ordinary least square (OLS) model to estimate factors determining farm income. The 
regressors  are  the  same  as  in  the  probit  model  above  plus  a  dummy  variable  that 
distinguishes  partnership  and  non-partnership  farmers.  We  control  for  observable 
differences between partnership and non-partnership farmers, such as differences in 
farm size, education, and the availability of family labour. This model does not account 
for possible selection bias in contract participation. If unobservable characteristics is 
correlated  with  both  the  dependent  variable  (farm  income)  and  a  regressor 
(partnership  participation),  then  the  coefficient  on  that  regressor  will  be  biased  and 
inconsistent (see Miyata et al., 2009). 

•  Treatment-effects  model  to  correct  the  possible  selection  bias,  which  uses  the 
participation probit model, calculates the inverse Mills ratio, and includes the ratio as 
a regressor in the income model. This is called Heckman selection–correction, where 
the Heckman procedures are used to produce unbiased and consistent estimates in 
the  income  model.  This  analysis  is  a  maximum  likelihood  estimation  in  which  all 
parameters for both models are estimated simultaneously, rather than as a two-step 
procedure. 

Results and Discussion 

Based  on  our  field  works,  there  are  at  least  two  forms  of  partnership  for  sustainability 
certifications  found  in  the  study  sites  in  Lampung  Province,  namely:  (a)  sub-contract 
partnership  and  (b)  general  trading  partnership.  The  sub-contract  partnership  between 
smallholder  coffee  farmers  and  Nestle  Corporations  is  bound  with  a  memorandum  of 
understanding (MoU) and involves the third-party KUBE. The general-trading partnership is 
quite loose, involving smallholder farmers and Ecom Corporations, and occasionally collector 
traders (Figure 1). 

54 

 
 
 
• 
• 
• 

Research institutions
Rainforest Alliance
College

MoU

Exporter

Partner company
• 
Roaster
• 
exporter

certification agency

Kelompok Usaha 
Bersama (KUBe)

farmer groups / 
farmers

Internal Control 
System (ICS)

Collector agent

certification agency

farmer groups / 
farmers

A. Sub Contract Partnership Pattern

B. Pattern of general trading partnership

Figure 1. Two Forms of Partnerships for Sustainability Certifications in Lampung Province. 

Smallholders joining the partnership perform significantly better than those of not joining, 
especially in coffee yield and farm-gate price. Coffee farms within or adjacent to protected 
forests generally have more MPTS than coffee farms in private  or communal lands,  as  the 
Government has been closely monitoring the progress of sustainability principles in forest-
resource management areas. The average land-holding size in West Lampung is 1.71 hectares 
for  partnership  farmers  and  1.48  hectares  for  non-partnership  farmers.  In  Tanggamus,  the 
average land-holding size is larger, 2.22 hectares for partnership farmers and 2.15 hectares for 
non-partnership farmers. Not all farmers can afford to grow 400 MPTS per hectare in their 
parcel. Most coffee farmers in West Lampung (48.6 percent) only control 0.25 to 1.0 hectare, 
while most coffee farmers in Tanggamus (54 percent) control 1.1 to 2.0 hectares. Overall, the 
average farm-holding size is 2.18 hectares for partnership farmers and 2.07 hectares for non-
partnership farmers in the study sites.  

Farmers joining partnerships produce 744 kilogram per hectare, far higher than those not 
joining partnerships (620 kilogram per hectare). The coffee yield of partnership farmers is also 
higher  than  the  national  average,  whereas  the  coffee  yield  of  non-partnership  farmers  is 
lower  than  the  national  average.    Partnership  coffee  farmers  generate  significantly  higher 
farm  income  than  those  who  do  not  join.    Farm  costs  are  significantly  higher  for  non-
partnership farmers and their farm income from both coffee and other agricultural products 
are  lower.    These  results  confirm  previous  studies  that  a  higher  farm-gate  price  and  the 
additional  premium  price  for  contracts  between  smallholders  and  global  corporations 
remain  important  determinants  in  the  implementation  of  sustainability  certifications 
(DeFries et al., 2017; Glasbergen, 2018). 

The probit model for partnership participation correctly predicts which coffee farms have a 
contract in 74.9% of the cases.  Age and education of the household head, the land holding 
size of the coffee farm and distance to rural cooperatives-KUBE are significantly higher for 
partnership farmers, reflecting a more mature character in coffee production for partnership 
farmers.  They have a higher level of education of the household head, larger family size and 
a larger coffee farm compared to that of non-partnership farmers. The distance to KUBE is a 
strong  predictor  of participation in the partnership for sustainability certifications. There is 
some  selection  in  becoming  a  partnership  coffee  farmer  or  joining  contract  farming  for 
sustainability certifications, but it is in terms of the household head’s age, family size, size of 

55 

 
 
 
 
coffee holdings and proximity to rural cooperatives-KUBE, rather than the number of MPTS 
in the coffee farms.  

The  OLS  model  of  farm  income  shows  only  13  percent  of  the  variance  in  farm  income  is 
explained by the variance of household characteristics and the partnership of sustainability 
certifications.  The  income  of  coffee  farmers  is  positively  affected  by  the  proportion  of 
productive  family  members  and  being  a  partnership  farmer.  Moreover,  other  regressors 
show  no  statistically  significance  in  affecting  the  farm  income  of  coffee  farmers.    The 
coefficient for the partnership variable of 3,754,036 means that being a partnership farmer 
increases farm income by Rp 3.75 million or $ 269.70, which is a large premium.  

The result of the treatment effects regression shows that at least one independent variable 
significantly influences the probability that a farmer will join a partnership for sustainability 
certifications. The variables that significantly affect income level are education of household 
head, family size, the proportion of productive family members, land holding size for coffee 
and  agricultural  land,  and  distance  from  the  house  to  rural  cooperatives-  KUBE.  The 
parameter mils lambda or the correlation between error terms in the selection and outcome 
equation is -0.93 and it is highly significant, implying that there is selection bias in the model.  
The coefficient on the partnership variable in this model (Rp 13.7 million) is higher than the 
contract  coefficient  in  the  OLS  model  (Rp  3.75  million),  suggesting  that  farm  income  of 
partnership farmers is about Rp 13.7 million (or US$ 985.24) higher than for non-partnership 
farmers. When the farmers were asked how their income had changed since they began the 
partnership, the majority reported that their income has increased. 

Conclusions 

The institutional arrangements of the partnership between smallholder coffee farmers and 
corporations are manifested by the effectiveness of ICS in implementing the sustainability 
certifications.  The  ICS  and  KUBE  connect  the  incentive  systems  for  both  smallholders  to 
perform  well  in  meeting  the  standards  of  good  agricultural  practices  (GAPs)  and 
opportunities for coffee corporations in securing the supply of coffee beans and the quality 
requirements for the global markets.   

There is some selection or self-selection of partnership farmers for sustainability certifications 
based on the following important factors: the age and education of the household head, land 
holding  size  of  the  coffee  farm  and  the  proximity  or  the  distance  from  house  to  rural 
cooperatives-KUBE.  The  selection  seems  to  be  bias  towards  a  more  mature  character  in 
coffee production and towards relatively larger farmers, although land-holding size by “large 
coffee farmers” is relatively small, less than 4 hectares. The partnership farmers earn higher 
farm  income  than  their  neighbours  who  do  not  join  a  partnership,  particularly  due  to  the 
high number  of  productive family members aged 15-65.  The treatment-effects regression 
model  suggests  that  there  is  a  selection  bias  caused  by  unobserved  differences  between 
partnership  and  non-partnership  farmers,  such  as  entrepreneurial  skills,  risk  tolerance,  or 
intelligence. Farmers joining the partnership expect to receive higher income and access to 
technical assistance and capacity building.    

If the partnership for sustainability certifications raises income, how does it do so, through 
better farm-gate prices, higher yields, more crop diversifications or MPTS, better value chains, 
or  some  other  mechanisms?    Higher  income  from  coffee  among  partnership  farmers  is 
mostly  brought  about  by  higher  coffee  yields  and  farm-gate  prices.  The  farm  cost 
components are higher among non-partnership farmers, mostly because of higher imputed 

56 

 
 
expenses for family labour. Total income from coffee farming among partnership farmers is 
significantly higher than that of non-partnership farmers. 

The public policy should establish a clear legal framework with written codes of conduct and 
other  necessary  consensus  provisions  that  benefit  both  smallholders  and  global  coffee 
corporations.  Moreover, the roles of ICSs initiated by global corporations in implementing 
sustainability certification schemes have somehow positively affected the trust level between 
smallholders  and  corporations.  The  study  also  calls  for  further  research  on  the  transaction 
costs  of  joining  a  partnership  for  sustainability  certifications  in  coffee  value  chains.  Such  a 
comprehensive  analysis  will  reveal  the  efficiency  level  of  coffee  value  chains;  hence  the 
likelihood  that  the  welfare  of  smallholder  coffee  farmers  will  improve.  Nevertheless,  one 
should note that the sophistication of partnership rules, contracts and regulations might be 
quite specific by crop, geographic characteristics and value systems among the smallholders 
and global corporations.  

References 

DeFries,  R.,  J.  Fanzo,  P.  Mondal,  R.  Remans  and  S.  Wood.    2017.  “Is  voluntary  certification  of  tropical 
agricultural  commodities  achieving  sustainability  goals  for  small-scale  producers?  A  review  of  the 
evidence” Environmental Research Letters 12, 33001. https://doi.org/10.1088/1748-9326/aa625e 

Miyata, S., N. Minot, and D. Hu. 2009.  “Impact of Contract Farming on Income: Linking Small Farmers, 
Packers, 
1781–1790. 
http://dx.doi.org/10.1016/j.worlddev.2008.08.025 

China”.  World  Development 

Supermarkets 

and 

(11): 

37 

in 

Glasbergen,  P.    2018.  “Smallholders  do  not  Eat  Certificates”,  Ecological  Economics  147,  pp:  243-252. 
https://doi.org/10.1016/j.ecolecon.2018.01.023 

57 

 
 
Strengthening connectivity to design special 
pilot zone for paludiculture development 

Ibnu Budiman, Rizky Januar, Rahmah D Hapsari and Willy Daeli 

World Resources Institute Indonesia, Jakarta, Indonesia 

Introduction 

Peatland is an important ecosystem in sustainable development, particularly in the forestry 
sector. It involves multiple ecosystem services for the livelihood of the people and plays a vital 
role in stabilising water flows, preventing devastating peat fires, enriching soil nutrients and 
providing clean water and carbon storage for climate change mitigation (Bonn et al., 2016). 
Indonesia has the fourth largest peatland in the world. About 5.8 Mha of peatlands is under 
business  permits  for  industrial  and  palm  oil  plantations  (Murdiyarso  et  al.,  2011).  The  often 
hastily  planned,  large-scale  developments  in  peatlands  are  generally  publicly  justified  as 
being  essential  for  poverty  reduction.  However, many  of  these  developments  have  several 
negative socio-economic and environmental impacts. Many development schemes by the 
government and private sector have been accused of trespassing on customary (adat) rights. 
As a result of peat fires and smog, local communities are affected by high rates of respiratory 
diseases,  loss  of  crops,  negative  impacts  on  transport  and  tourism  and  loss  of  natural 
resources (Silvius & Diemont, 2007). These situations have led to poverty for the communities 
around  peatland.  Therefore,  Indonesia  has  a  role  to  be  a  good  example  for  sustainable 
peatland management that pays attention to local economy and environmental protection. 

Following Government Regulation No. 71/2014 about peatland protection and management, 
the  Peatland  Restoration  Agency  (BRG)  was  established  in  2016  to  restore  degraded 
peatlands in seven priority provinces. One of the restoration activities is the revitalisation of 
the livelihood of the people surrounding peatland in order to reduce their pressures on the 
area. Until 2018, BRG has implemented 213 units of livelihood support for the communities 
surrounding peatland (PRIMS, 2019). However, studies in Riau, South Sumatra  and  Central 
Kalimantan  found  that  many  of  those  units  were  not  delivered  to  communities  whose 
livelihood rests on peatland. Our previous study found that many livelihood supports were 
instead delivered to community groups that are closed with the head of village. Therefore, 
BRG activities have not yet succeeded in revitalising the livelihood of the people who depend 
on  peatland  (Kartodihardjo  et  al.,  2018;  KPRGSS,  2018).  This  study  aims  to  explore  another 
option or strategy to revitalise the livelihood of the people surrounding peatland—using the 
concept  of  special  pilot  economic  zone,  based  on  sustainable  management  of  peatland 
ecosystem—globally. 

Conceptual framework and methodology 

Special Economic Zone (SEZ) is a zone or area that has excellent geo-economics and geo-
strategy  to  accommodate  economic  activities.  The  development  of  SEZ  focuses  on  the 
strategy of business collaboration (Farole & Akinci, 2011). Four characteristics defined the SEZ 
concept:  (1)  geographically  delineated  area,  usually  physically  secured;  (2)  having  a  single 
management or administration; (3) offering benefits for investors physically within the zone; 
and  (4)  having  a  separate  customs  area  (duty-free  benefits)  and  streamlined  procedures 
(UNCTAD, 2019). 

58 

 
 
 
There are several types of SEZ, and among these types is the special pilot (economic) zone 
(SPEZ). This study explores a particular model for SEZ that pays attention to small–medium 
scale  business  activities.  We  found  that  SPEZ  can  be  a  solution  for  sustainable  economic 
zone.  Changes  on  international  trade  rules  and  growing  international  business  interest  in 
corporate socio-environmental responsibility mean that SEZ management agencies have an 
opportunity to explore investment promotion strategies that relate to social, environmental 
and  governance  performance.  SPEZ  has  been  adapted  to  sustainable  management  of 
ecosystem in the case of coastal ecosystem-based management (Nobre & Ferreira, 2009). 

On the basis of the SPEZ concept, this study draws on qualitative and quantitative data from 
literature reviews, document review (policy documents, project reports), interviews with key 
stakeholders,  direct  observation  in  the  field  and  the  meetings  related  to  the  topic  of  the 
research.  Interviews  were  conducted  with  key  stakeholders  such  as  peat  experts, 
policymakers,  NGOs,  concession  holders  and  communities  around  peatlands  in  the  case 
study  areas.  This  research  utilises  the  case  study  of  peatland  management  in  Riau,  South 
Sumatra  and  Central  Kalimantan,  three  provinces  with  large  areas  of  peatlands  and  the 
prioritised areas by the stakeholders for sustainable peatland management. 

Data analysis utilises an interpretative approach to multiple forms of data collected (Creswell 
&  Creswell,  2017).  Multiple  data  from  different  sources  were  organised  to  prepare  the 
structure  of  the  evidence.  These  data  was  organised  through  transcription,  scanning 
materials and typing up filed notes to understand the general sense of the evidence. Later, 
for a more detailed analysis, a coding process was undertaken to generate a description of 
the situation and themes for analysis based on the SPEZ framework used in this study. 

Result and discussion 

We found that the concept of the special pilot economic zone (SPEZ) has the potential to be 
a  strategy  for  revitalizing  the  livelihoods  of  the  people  surrounding  peatland  area.  This 
livelihood  revitalization  can  be  accomplished  in  two  ways;  (1)  By  transforming  traditional 
cultivation  into  a  more  sustainable  process;  and/or  (2)  By  finding  an  alternative  livelihood 
outside the peatland. The SPEZ on peatland provides an opportunity to develop a sustainable 
bioeconomy for communities on peatlands. These ways contribute to reduce anthropogenic 
pressures on the peatland ecosystem.  

Planning  an  SPEZ  on  peatland must  be  started  by;  1.  Preparing  peatland  spatial  planning 
(based on landscape approach) that can lead to the legal determination of a particular area 
as  an  SPEZ.  This  phase  will  provide  a  clean  and  clear  border  and  the  legal  power  for  the 
implementation of the SPEZ. 2. The selection of the SPEZ location must be followed with field 
observation to derive biophysical information of the peatland. This information is important 
to determine peatland suitability for cultivation (Figure 1). 

After the selection of the SPEZ location, five phases of implementation can be carried out. 1. 
Identification of target group, local paludiculture species, and alternative livelihoods around 
peatlands.  2.  Analysing  the  value  chain,  market  demand,  and  cost-benefit  analysis  of 
identified  species  and  alternative  livelihoods.  3.  Conducting  natural  capital  accounting  on 
natural resources related to selected species and livelihoods. 4. Preparing social and business 
innovation  to  develop  institutional  arrangements  and  business  models  that  combine 
paludiculture species and/with alternative livelihoods. This can be done through cooperation 
of  multiple  stakeholders  such  as  communities,  local  governments,  NGOs,  and  concession 
holders  in  the  area.  This  partnership  will  support  increasing  market  creation  of  peatland 
products,  e.g.,  supporting  exporting  products  or  trading  across  (peatland)  regions.  5. 

59 

 
 
Strengthening the  capacity  of  local stakeholders  such  as  the community  to  self-govern  in 
the SPEZ. It includes technical capacity, knowledge, and management skills.  

1. identification 
of commodities 
and livelihoods

5. community 
engagement

2. analysis of 
value chain, 
market demand, 
and cost-benefit

4. designing social 
and business 
innovation

3. natural capital 
accounting

Figure 1: Strategy to design a special pilot zone for bioeconomy on peatlands. 

This study suggests that stakeholders including policymakers to test the SPEZ concept as 
integrated  part  of  the  peatland  restoration  activities,  with  landscape  approach.  These 
strategies  are  found  to  have  challenges  and  opportunities  in  South  Sumatra,  Riau  and 
Central  Kalimantan  province  (Figure  2),  especially  in  terms  of  regulation  for  land  permit, 
institutional  arrangement,  market  chain  for  peat  products,  remuneration  of  external 
benefits,  and  perception  and  capacity  of  community  for  cultivation  on  peat.  The  SPEZ 
framework can also be applicable to concession holders on peatland and to other tropical 
countries that have peatland restoration agendas. 

Figure 2: Potential SPEZ can be linked to existing restoration activities in a peatland ecosystem, e.g. in 
KHG Sungai Bunai – Sungai Sibumbung in South Sumatra Province (Source: PRIMS). 

60 

 
 
 
 
 
 
To  deal  with  various  challenges  that  arise  when  implementing  the  SPEZ  on  peatland,  an 
opportunity  can  be  taken  from  building  connectivity  with  international  stakeholders  that 
have more experience on planning and implementing sustainable peatland management 
and SPEZ. The partnership can be done by having business collaboration on peatland areas 
European 
in Indonesia, particularly through paludiculture practices.  Connectivity  with 
countries  has  the  potential  to  support  the  SPEZ  on  peatland.  The  paludiculture  concept 
comes from northern European countries like Germany. Peatland development in Indonesia 
is  highly  influenced  by  the  Netherlands  through  projects  and  advocacy  through  its  NGO, 
Wetlands  International.  According  to  the  ASEM  Sustainable  Connectivity  Portal,  research 
connection between Germany and the Netherlands is the top second, with more than 8000 
collaborations. The research related to peatlands, specifically on paludiculture development, 
thus  can  relate  to  Indonesia,  where  Germany  has  done  intensive  bi-lateral  cooperation, 
mainly through the GIZ (Gesellschaft für Internationale Zusammenarbeit) for climate action. 
Germany  has  experienced  paludiculture  development  for  about  30  years,  from  the 
production  and  utilization  of  suitable  species,  the  use  of  green  harvesting  machines, 
measuring  ecosystem  services  and  agri-environmental  costs,  the  legal  recognition  for 
providing  subsidies,  stakeholder  (farmers  or  land  owners)  involvement,  and  increasing 
economic  viability  through  integration  with  bioenergy  production.  With  this  experience, 
there is potential to strengthen the further connectivity between Germany, Indonesia, and 
the Netherlands to accelerate the development of the SPEZ of paludiculture on peatland in 
Indonesia. 

References 

Bonn,  A.,  Allott,  T.,  Evans,  M.,  Joosten,  H.,  &  Stoneman,  R.  (2016).  Peatland  restoration  and  ecosystem 
services: An introduction. Peatland Restoration and Ecosystem Services: Science, Policy and Practice. 
Cambridge University Press/British Ecological Society, Cambridge, 1–16. 

Creswell, J. W., & Creswell, J. D. (2017). Research design: Qualitative, quantitative, and mixed methods 
approaches. Sage publications. 

Farole,  T.,  &  Akinci,  G.  (2011).  Special  economic  zones:  Progress,  emerging  challenges,  and  future 
directions. The World Bank. 

Kartodihardjo, H., Mardiana, R., Yulian, B. E., Soetarto, E., & Baskoro, B. C. (2018). ANALISIS DAN STRATEGI 
PENGUATAN KEBIJAKAN PENGELOLAAN GAMBUT. Tim PSA IPB. 

KPRGSS. (2018). RTT Restorasi Gambut Sumatera Selatan. BRG. 

Murdiyarso, D., Dewi, S., Lawrence, D., & Seymour, F. (2011). Indonesia’s forest moratorium: A stepping 
stone to better forest governance? Cifor. 

Nobre,  A.  M.,  &  Ferreira,  J.  G.  (2009).  Integration  of  ecosystem-based  tools  to  support  coastal  zone 
management. Journal of Coastal Research, 1676–1680. JSTOR. 

PRIMS. (2019). Restorasi gambut. BRG. http://prims.brg.go.id/dasbor 

Silvius,  M.,  &  Diemont,  H.  (2007).  Peatlands,  climate  change,  poverty,  biofuels,  pulp  and  reduced 
emissions from deforestation and degradation. Institute for Environmental Studies, 66. 

UNCTAD. (2019). World Investment Report 2019—Special Economic Zones. World Investment Report, 
80. 

61 

 
 
 
Emissions embodied in international trade in the 
Asia-Europe context 

Igor Makarov 

National Research University Higher School of Economics, Russia 

Global climate change is one of the biggest challenges to the global economy in the twenty-
first century. To address it properly, a combination of mitigation and adaptation strategies is 
required.  While  the  responsibility  for  adaptation  lies  primarily  with  national  governments, 
mitigation  is  one  of  the  key  fields  of  international  cooperation.  The  Paris  Agreement  that 
came into force in November 2016 substituted the Kyoto Protocol as a key document that 
provides  a  framework  for  coordination  of  national  policies  regarding  climate  change 
including  greenhouse  gas  (GHG)  emissions  reduction  (UN,  2015).  187  Parties  have  ratified 
Paris Agreement. 

One  important  issue  of  international  cooperation  is  how  to  define  which  country  is 
responsible  for  emissions.  In  order  to  fulfil  commitments  under  international  agreements 
(the  Kyoto  Protocol  and  the  Paris  Agreement),  countries  prepare  national  inventories 
containing  information  about  the  emissions  that  take  place  “within  national  territory  and 
offshore areas over which the country has jurisdiction” (IPCC, 2006). This approach is the most 
transparent  and  feasible  but  has  some  drawbacks.  First  of  all,  it  does  not  address 
international  trade  flows.  Meanwhile,  around  30%  of  global  CO2  emissions  are  released 
during the production of internationally traded goods (Sato, 2014). Therefore, an increase in 
the consumption of carbon-intensive goods in one country may not lead to an increase in its 
emissions, but will contribute to an increase in emissions in other countries who are suppliers 
of  carbon-intensive  products  (this  phenomenon  is  called  ‘carbon  leakage’)  (Aichele  and 
Felbermayr, 2015; Makarov, 2018). 

Most of the carbon-intensive trade flows are directed from leading emerging to developed 
economies (Table 1). China, Russia and India are three major exporters of emissions embodied 
in trade. This makes them key countries in political discussion about carbon leakage. These 
countries are also especially vulnerable to various barriers at international markets which are 
discussed  in  the  West  as  a  means  to  address  carbon  leakage.  For  instance,  the  European 
Green  Deal  in  the  EU  supposes  the  implementation  of  border  carbon  taxes  in  order  to 
address carbon leakage (European Commission, 2019). Similar initiatives are also discussed 
in US (Economists’ Statement, 2019).  

62 

 
 
 
 
 
 
 
Table 1: Production-based, consumption-based emissions and emissions embodied in net exports in 
OECD and BRICS in 2015. Source: Author’s calculations based on OECD data. 

Country 

Production-based 
emissions 

Consumption-
based emissions 

Net exports of 
emissions 

Mt 

% of 
world  

Mt 

% of 
world 

Mt 

OECD, total 

12 204.2  

37.8% 

13 781.2  

42.7% 

-1 581.1  

United States 

5 020.0  

15.6% 

5 794.5  

18.0% 

-785.3  

Canada 

France 

Germany 

Italy 

Japan 

Spain 

Sweden 

556.4  

311.9  

765.7  

346.8  

1 202.3  

263.3  

43.8  

United Kingdom 

430.8  

1.7% 

1.0% 

2.4% 

1.1% 

3.7% 

0.8% 

0.1% 

1.3% 

547.9  

445.0  

853.4  

423.0  

1 361.0  

293.8  

70.2  

575.8  

1.7% 

1.4% 

2.6% 

1.3% 

4.2% 

0.9% 

0.2% 

1.8% 

9.8  

-131.6  

-84.6  

-75.8  

-158.2  

-32.1  

-26.2  

-142.5  

BRICS, total 

13 687.5  

42.4% 

11 853.1  

36.7% 

1 841.0  

% of 
national 
emissions 

-13.0% 

-15.6% 

1.8% 

-42.2% 

-11.0% 

-21.9% 

-13.2% 

-12.2% 

-59.9% 

-33.1% 

13.5% 

China 

India 

Russia 

9 280.8  

28.8% 

7 977.9  

24.7% 

1 308.8  

14.1% 

2 043.4  

6.3% 

1 918.8  

5.9% 

124.2  

6.1% 

1 487.6  

4.6% 

1 167.5  

3.6% 

320.7  

21.6% 

Though  border  carbon  taxation  is  a  powerful  tool  for  preventing  carbon  leakage  and  for 
stimulating emissions reduction by ‘reluctant’ countries (Branger and Quirion, 2014, Condon 
and  Ignaciuk,  2016),  it  could  lead  to  economic  losses  in  both  the  exporting  and  importing 
economies. Moreover, this practice could easily be used as an excuse for protectionism— an 
especially  dangerous  risk  given  the  growth  of  populism  worldwide,  the  weakening  of  the 
WTO  and  the  ongoing  trade  wars.  It  is  technically  very  difficult  to  determine  whether 
countries  would  introduce  border  carbon  taxes  to  protect  the  climate  or  to  advance 
protectionist  and  nationalist  agendas.  For  this  reason,  the  victims  of  border  carbon  taxes 
would  view  such  actions  as  illegitimate.  Thus,  the  introduction  of  border  carbon  taxation 
would  inevitably  decrease  the  level  of  trust  in  the  international  system  and  provoke  new 
conflicts beyond the many that already exist in international trade.  

For leading economies  exporting emissions embodied in trade, such as China, Russia  and 
India, the important objective is to find the responses to border carbon taxation in the EU 
and potentially in US. One possible option is the shift towards ‘consumption-based’ approach 
to  emissions  accounting.  It  considers  emissions  that  are  caused  by  production  of  goods 
consumed  in  a  country  (including  emissions  from  domestic  final  consumption  and  those 
caused abroad by the production of its imports) (Davis and Caldeira, 2010). If this approach is 
used, a large amount of production-based emissions that take place within China, Russia and 
India  would  be  considered  consumption-based  emissions  of  Western  economies.  The 
important issues of responsibility for emissions embodied in trade should be raised here, for 
example, who should take responsibility: an exporter or an importer (Liu et al., 2013). However, 
delving deeper into this discussion is beyond the scope of this article. Much more important 
is the focus on consumption-based emissions itself, which unlike that of production-based 
ones creates a different system of incentives: instead of secondary issues like the location of 

63 

 
 
carbon-intensive production, it helps concentrating on the real reason of growing emissions 
– i.e. the rise of consumption (Makarov, 2018).  

In practical terms, this focus gives access to a broader set of climate policy instruments that 
were not available under a pure production-based approach:  

First, while production-based emissions accounting determines the focus of climate policies 
to be on the supply-side technology solutions (energy efficiency, development of renewables 
etc.), consumption-based accounting increases the significance of demand-side channels for 
mitigating  climate  change.  These  channels  include  strategies  aimed  at  changes  in 
consumption behaviour, lifestyles, infrastructure and service provision (Creutzig et al., 2018). 
These  solutions  have  never  been  popular  in  the  Western  economies  as  they  challenge 
leading  emerging 
conventional  patterns  of  consumption  behaviour.  However,  the 
economies that are moving from low to middle and high incomes in fossil-fuel constrained 
world  need  the  different  growth  models,  and  demand-side  instruments  are  of  prime 
importance.  For  instance,  they  are  especially  necessary  in  the  context  of  Belt  and  Road 
initiative: infrastructure projects that would be built within this initiative will determine the 
dynamics of regional emissions for decades.  

Second,  consumption-based  emissions  accounting  would  give  such  countries  as  China, 
Russia and India a chance to adopt fiscally progressive climate policies. Conventional climate 
policy instruments of developed countries like carbon taxes, emissions trading systems and 
subsidies  for  renewables  are  all  regressive.  The  major  burden  of  low-carbon  transition  lies 
therefore on poorer people who pay larger shares of their incomes for dirtier goods which 
become  more  expensive  as  a  result  of  regulation.  This  policy  framework  faces  numerous 
contradictions even in the West (e.g. yellow vests in France) and is totally inapplicable in the 
leading  emerging  economies  countries  with  their  high  inequality.  Consumption-based 
accounting of emissions and the focus on demand-side climate policies make it possible to 
use  more  flexible  climate  policy  instruments,  which  primarily  address  the  excessive 
consumption of wealthier parts of population (Chancel and Piketty, 2015). Simply speaking, 
they  may  help  transform  carbon  tax  to  the  tax  on  consumption  of  carbon-intensive  final 
goods. This policy framework is progressive and prevents contradictions between the goals 
of climate change mitigation and poverty/inequality reduction that is crucial for emerging 
economies (Grigoryev et al., 2020). It would further make it possible to launch inclusive low-
carbon transition. 

The  move  towards  consumption-based  emissions  accounting  is  not  an  easy  task.  It  is  a 
paradigm shift that requires the coordination of multiple actors and strong political will. The 
conventional regulation of production-based emissions is backed by a 30-year history of an 
international climate change regime, and the rich experience of climate policies in Western 
countries.  However,  these  thirty  years  have  also  revealed  great  limitations.  The  economic 
development of the largest emerging economies will determine the future of the planet, and 
the stakes are too high to base their climate policies on the models coming from the past.  

64 

 
References 

Aichele,  R.,  &  Felbermayr,  G.  (2014).  Kyoto  and  Carbon  Leakage:  An  Empirical  Analysis  of  the  Carbon 
Content  of  Bilateral  Trade.  The  Review  of  Economics  and  Statistics,  97(1), 
104–115. 
https://doi.org/10.1162/REST_a_00438 

Branger, F., & Quirion, P. (2014). Would border carbon adjustments prevent carbon leakage and heavy 
industry competitiveness losses? Insights from a meta-analysis of recent economic studies. Ecological 
Economics, 99, 29–39. https://doi.org/10.1016/J.ECOLECON.2013.12.010 

Chancel, L., & Piketty, T. (2015). Carbon and inequality: from Kyoto to Paris. Paris School of Economics, 
(November), 48pp. https://doi.org/10.13140/RG.2.1.3536.0082 

Condon, M., & Ignaciuk, A. (2013). Border Carbon Adjustment and International Trade. OECD Trade and 
Environment Working Papers, 06. https://doi.org/10.1787/5k3xn25b386c-en 

Creutzig, F., Roy, J., Lamb, W. F., Azevedo, I. M. L., Bruine de Bruin, W., Dalkmann, H., … Weber, E. U. (2018). 
Towards demand-side solutions for mitigating climate change. Nature Climate Change, 8(4), 260–263. 
https://doi.org/10.1038/s41558-018-0121-1 

Davis, S. J., & Caldeira, K. (2010). Consumption-based accounting of CO2 emissions. Proceedings of the 
National  Academy  of  Sciences  of 
107(12),  5687–5692. 
https://doi.org/10.1073/pnas.0906974107 

the  United  States  of  America, 

Economists’ Statement on Carbon Dividends (2019). The Wall Street Journal, 17.01.2019 

European Commission (2019). The European Green Deal. Communication from the Commission to the 
European  Parliament,  the  European  Council,  the  Council,  the  European  Economic  and  Social 
Committee and the Committee of the Regions. Brussels, 11.12.2019 COM(2019) 640. 

Grigoryev, L. M., Makarov I. A., Pavlyushina V. A., Sokolova A. K., Stepanov I. A. (2020). Climate Change and 
Inequality: Solving a Joint Problem. International Organisations Research Journal, 15(1). 

IPCC (2006). IPCC Guidelines for National Greenhouse Gas Inventories. Kanagawa, Japan. 

Liu,  Y.,  Jayanthakumaran,  K.,  &  Neri,  F.  (2013).  Who  is  responsible  for  the  CO2  emissions  that  China 
produces? Energy Policy, 62, 1412–1419. https://doi.org/10.1016/J.ENPOL.2013.08.017 

Makarov,  I.  A.  (2018).  Discrepancies  Between  Environmental  Kuznets  Curves  for  Production-  and 
Consumption-Based  CO2  Emissions.  Higher 
of  Economics  Working  Paper. 
https://doi.org/10.2139/ssrn.3259100 

School 

Sato,  M.  (2014).  Embodied  carbon  in  trade:  a  survey  of  the  empirical  literature.  Journal  of  Economic 
Surveys, 28(5), 831–861. https://doi.org/10.1111/joes.12027 

United  Nations. 
https://doi.org/FCCC/CP/2015/L.9

(2015).  Adoption 

of 

the  Paris  Agreement, 

21932(December), 

32. 

65 

 
 
 
 
 
Transport Connectivity 

66 

 
The Eurasian Landbridge: Implications of linking 
East Asian and Europe by rail  

Richard Pomfret 

University of Adelaide, Australia 

Introduction 

The  paper  documents  the  development  of  overland  rail  transport  links  between  the 
European  Union  (EU)  and  East  Asia  and  analyses  the  consequences  of  the  increased 
connectivity. 

Development 2011-195 

Between 1500 and 2010 trade between East Asia and Europe was dominated by maritime 
transport.  Physical rail links existed but they were uncompetitive with sea freight, especially 
after  the  container  revolution,  when  EU-Asia  trade  grew  rapidly.    The  situation  started  to 
change  in  2011  when  rail  services  were  established  between  western  China  and  Europe 
(starting  with  Chengdu-Łódź  and  Chongqing-Duisburg).6    Since  then,  services  have 
improved  dramatically  with  regular  services  connecting  a  large  number  of  China-EU  city 
pairs and the annual number of containers travelling by rail is heading for a million in 2020. 

An  important  initial  driver  of  EU-China  rail  services  was  the  efforts  by  car  and  electronics 
companies to link their European and Asian value chains into Eurasian value chains (Pomfret, 
2019a).  As rail services became more frequent and regular, freight forwarders provided new 
services (e.g. part container loads, refrigerated containers, multimodal connections) with a 
greater variety of destinations. 7  This broadened the range of potential customers who were 
willing to pay more than sea freight for faster more reliable transport but unwilling to pay for 
air freight (Table 1).  The rapid growth indicates substantial demand.   

5 This paper develops and updates arguments contained in online papers at: https://voxeu.org/article/eurasian-landbridge-linking-
regional-value-chains  and  https://voxeu.org/article/eurasian-landbridge-and-chinas-belt-and-road-initiative.    For  more  in-
depth analysis, see Pomfret (2020, chapter 3). 

6 Typically  cited  numbers  for journeys along the Landbridge (e.g. at https://www.mordorintelligence.com/industry-reports/china-
europe-rail-freight-transport-market) are 17 (in 2011), 42 (2012), 80 (2013), 308 (2014), 815 (2015), 1,702 (2016), 3,673 (2017) and 6,363 
(2018).    Numbers  are  not  necessarily  balanced  in  both  directions,  but  on  the  most  frequent  route  between  Duisburg  and 
Chongqing of the 1,442 trains 728 were from the EU and 714 from China in 2018.  

7 Eastern European countries (especially the Czech Republic, Hungary, Poland and Slovakia) have been active GVC participants and 
also increasingly important connecting cities to China (Pomfret and Sourdin, 2018).  Łódź quickly established itself as the Eastern 
European hub for EU-China rail freight (Jakóbowski et al., 2018). 

67 

 
 
 
                                           
Table 1: A comparison of the shipping cost, in USD per container, and time in days for goods transported 
between China and Europe (Jakóbowski et al., 2018, 69).8 

Shanghai-Gdynia 

Chengdu-Warsaw 

Shanghai-Rotterdam 

Cost 

37,000 

4,500 

2,600 

Time 

5-9 

19 

37-42 

Cost 

37,000 

5,000 

4,500 

Time 

5-9 

15 

43-50 

Cost 

37,000 

5,000 

2,200 

Time 

5-9 

18 

27-37 

Air 

Rail 

Sea 

The number of city pairs providing freight services has increased rapidly, especially since 2015.  
The  process  has  been  essentially  market-driven  (Pomfret,  2019b).    As  more  cities  offer 
services, some successfully and others not, it is hard to keep track of numbers but in both 
Europe and China over fifty cities are Landbridge termini.  The most reliable volume data are 
those from the Eurasian Rail Alliance (Table 2), which reports growth from 46,000 containers 
in  2015  to  280,500  in  2018  and  extrapolating  the  rough  doubling  each  year  they  predict  a 
million containers will be transported in 2020.

9
Table 2: Volume of Traffic on China-EU-China Container Trains, 2015-18 (UTLC website – www.utlc.com).10 

Year 

2015 

2016 

2017 

2018 

Number of twenty-foot equivalent containers (TEUs) 

46,000 

104,500 

175,800 

280,500 

In Europe, indicators of the increased salience of the rail Landbridge include the holding of 
an annual Silk Road Summit attended by hundreds of logistics service providers (the 3rd in 
November  2019  was  in  Venlo,  Netherlands)  and  the  EU  Commission  engaging  in  how  to 
relate the EU-China service, and the BRI Belt, to the Trans-European Transport Network (TEN-
T) as a top priority in 2020 (Walton, 2019).  The Commission’s interest can be traced back to 
the 2007-12 RETRACK project which  aimed to induce a modal shift  of  freight traffic to rail; 
RETRACK’s  focus  was  on  developing  a  high-quality  commercially  sustainable  rail  freight 
corridor from the North Sea to the Black Sea (Rotterdam-Constanza), but it also considered 
prospects for establishing “Eurasian land-bridges” to China. 11  Connectivity via Russia to China 
has always had a strategic dimension and EU Commission policy is within the framework of 
the European Union Global Strategy (2016).12 

For China, the rail Landbridge has been related to President Xi’s flagship foreign policy, the 
Belt  and  Road  Initiative  (BRI),  that  was  announced  in  2013  and  officially  launched  in  2017.  
However, the first trains preceded the BRI, and much of the activity has been driven by local 

8 All such numbers are approximations, but this table indicates: (1) the prohibitive cost of air transport for all but very high value-
weight or time sensitive items, (2) rail is more expensive than sea but the gap narrows if places are further from seaports (e.g. 
Chengdu-Warsaw)., and (3) rail is faster than sea, with more predictable arrival time. 

9 These numbers remain small compared to maritime freight.  A single ship can carry 20,000 containers.  No more than 5% of the 
value  of  all  freight  between  Europe  and  Asia  goes  by  rail  (European  Commission,  2018,  3).    However,  goods  for  which  rail  is 
preferred tend to be higher value and more tech-intensive than the bulk goods transported by sea. 

10 The Eurasian Rail Alliance (UTLC) was founded by Belarus, Kazakhstan and Russia in 2014 to provide services for container block 

trains running between China and Europe. 

11 The RETRACK final report (van Rooijen et al., 2012) view that the TransSiberian was the most immediately relevant route and routes 
via  Kazakhstan  had  the  best  longer-term  potential,  while  the  TRACECA  corridor  was  the  least  likely  to  flourish,  has  proven 
correct.   

12  The  TEN-T,  including  guidelines  for  the  development  of  a  Trans-European  Rail  Network,  dates  from  July  1996  (Decision  No 
1692/96/EC).  However, extension to eastern Europe was slow and, despite statements of intent to look east in 2011, only in 2017 
were Eastern Partnership states included.  The Joint Communication on Connecting Europe and Asia (European Commission, 
2018) recognizes the significance of looking east and includes specific proposals. 

68 

 
 
 
 
   
 
                                           
governments  in  China  rather  than  at  the  national  level.    Local  authorities  have  offered 
substantial subsidies for freight on trains from their city that are difficult to document with 
any precision.  The central government has imposed a cap of 30% on subsidies in 2020 (Chu, 
2019) and the subsidies are eventually to be discontinued (Jakóbowski et al. 2018, 25).  Given 
the non-transparency, it is impossible to estimate the impact of terminating subsidies, but a 
consensus  among  users  is  that  most  of  the  services  will  continue  to  be  profitable  without 
subsidies. 

Prospects 

Improved  connectivity  will  intensify  the  economic  links  between  EU  members  and  China.  
Although  routes  along  the  Landbridge  are  currently  point-to-point,  the  prospects  for 
economic  development  in  countries  along  the  route  (e.g.  Central  Asia)  are  good,  and  this 
would  strengthen  those  countries’  economic  links  to  the  EU.    There  are  also  prospects  for 
physical  reintegration  of  a  geographically  regionalized  Eurasian  continent,  as  Iran  and 
Southeast Asia are brought into the rail network.13  Such developments are often situated 
within China’s Belt and Road Initiative as a political challenge, but it is important to recognize 
the solid economic foundations, as rail offers a competitive service in terms of reliability that 
is faster than sea and cheaper than air.  As a minor point, the development of alternative rail 
routes is potentially important for maritime countries such as Australia as Indian Ocean ports 
(Bandar  Abbas,  Chabahar,  Gwadar)  and  many  Southeast  Asian  ports  are  linked  to  the 
Eurasian rail network. 

Central Asian links are primarily through Kazakhstan to Russia and Europe (Pomfret, 2019c, 
266-71).  Kazakhstan is also the bridge via Turkmenistan to Iran and for transit to Uzbekistan, 
e.g. the Korea-Lianyungang-Tashkent service that goes on to the GM factory (ex-Daewoo) in 
Andijan.    Kazakhstan  was  an  early  BRI  partner,  linking  its  own  Nurly  Zhol  infrastructure 
program to the BRI.14  Especially since Mirziyoyev became president in 2016, Uzbekistan has 
been keen to increase its transit role, especially by linking to Kashi in China via the Kyrgyz 
Republic,  which  would  shorten  the  rail  route  from  China  to  Iran  and  the  Middle  East.  
However,  the  Kyrgyz  government  is  concerned  that  the  most  direct  route,  which  passes 
through sparsely populated territory, will bring little benefit to the country and may lead to 
debt dependence (Hurley et al, 2018). 

The  Southeast  Asian  countries  have  envisaged  that  the  2015  ASEAN  Master  Plan  for 
Connectivity  will  be  consistent  with  the  BRI  and  benefit  from  financing  from  the  Asian 
Infrastructure Investment Bank.  Most obviously, the Singapore-Bangkok-Kunming rail link 
would connect the Chinese rail network to major ocean ports.  Constriction of railways from 
China to ports in Myanmar (and, further east along the China-Pakistan Economic Corridor, a 
railway from Kashi to Gwadar) will similarly strengthen these infrastructure links.  In all cases, 
however, progress has been slow as resistance to Chinese-funded infrastructure investment 
has been encountered in transit countries (e.g. Malaysia) as well as in least-developed ASEAN 
countries (Myanmar and Laos).15 

13 Prospects for overland connections with South Asia are limited by geography and by political disagreements.  Pakistan is being 
linked  to  China  via  the  China-Pakistan  Economic  Corridor  but  the  geographical  challenges  of  crossing  the  Himalayas  are 
substantial.  Poor India-Pakistan relations and the security situation in Afghanistan inhibit East-West links. 

14 The Nurly Zhol programme for 2015-19 was announced in 2014; 3,000 kilometres of national roads were built and reconstructed, 
15,000 kilometres of regional and district roads repaired, 1,400 kilometres of new railways commissioned, six airport runways 
modernised, the capacity of Kazakh-Chinese border terminals increased to 40 million tonnes per year and the capacity of the 
port  infrastructure  on  the  Caspian  Sea  increased  from  17.5  million  to  27  million  tonnes  per  year  (Yergaliyeva,  2019).  The 
programme has been extended to 2020-25.  See also, Belgibayev & Zhang (2016). 

 Korea and Japan have connectivity programs (Korea’s 2013 Eurasia Initiative and 2015 Eurasia Express rail project) or partnerships 
(the EU-Japan Connectivity Partnership announced in September 2019) that potentially involve improved transport links to the 

15

69 

 
 
                                           
Looking  further  ahead  the  prospect  of  a  high-speed  rail  link  is  not  implausible  given  the 
speed  with  which  China’s  domestic  high-speed  rail  link  has  been  developed  and  the 
generally favourable terrain through which Landbridge routes pass. 

Conclusions 

Economic  prospects  for  continued  development  of  the  Eurasian  Landbridge  are  positive.  
The rail option is attractive to traders with high-value goods for which the savings in time-in-
transit over maritime transport and more assured delivery times justify paying a higher price.  
If  the  price  gap  can  be  further  reduced  by  efficiency  gains  and  by  scaling-up,  then  rail’s 
advantage  will  increase.  Improved  connectivity  will  strengthen  economic  links  between 
Europe and China (and potentially intermediate countries too), especially in the creation of 
Eurasian value chains.16  

All of this is tied to ongoing willingness of the EU, China and transit countries to continue to 
facilitate the international rail service.  The current mainlines through Kazakhstan, Russia and 
Belarus work well for Łódź or Duisburg, but for Slovakia, or Hungary faster routes via Ukraine 
are constrained by the state of Russia-Ukraine relations.  The alternative southern route via 
Iran and Turkey could be even better for South-eastern Europe.  Any route can be disrupted 
by a single non-cooperating transit country whether seeking higher transit fees or in political 
dispute,  although  transit  countries  have  strong  financial  incentives  not  to  be  disruptive  in 
order to earn the transit fees.17 

References 

Baldwin, R. (2016). The Great Convergence (Harvard University Press: Cambridge MA).  

Belgibayev, M., & Zhang X (2016). The OBOR and the ‘Nurly Zhol Path to the Future’: Complementarity 
and challenges. Wuhan University Center for Economic Diplomacy. 

Chu, D. (2019). China-EU railway link to be strengthened via communication. Global Times, 9 June 2019. 

European Commission (2018). Connecting Europe and Asia – Building Blocks for an EU Strategy. Joint 
Communication  to  the  European  Parliament,  the  Council,  the  European  Economic  and  Social 
Committee, the Committee of the Regions and the European Investment Bank JOIN(2018) 31 final, High 
Representative of the Union for Foreign Affairs and Security Policy, Brussels. 

European Union Global Strategy (2016).  Shared Vision, Common Action: A Stronger Europe – a Global 
Strategy 
-  available  online  at 
http://eeas.europa.eu/archives/docs/top_stories/pdf/eugs_review_web.pdf. 

the  European  Union’s  Foreign  and  Security  Policy 

for 

Hurley,  J.,  Morris,  S.,  &  Portelance,  G.  (2018).  Examining  the  debt  implications  of  the  Belt  and  Road 
Initiative  from  a  policy  perspective.  CGD  Policy  Paper  No.  121.  Center  for  Global  Development, 
Washington DC.  

Jakóbowski, J., Popławski, K., & Kaczmarski, M. (2018). The Silk Railroad: The EU-China Rail Connections: 
Background, actors, interests. OSW Studies No.72. Ośrodek Studiów Wschodnich (Centre for Eastern 
Studies), Warsaw. 

Johnson,  R.  &  Noguera  G.  (2017).  A  Portrait  of  Trade  in  Value-added  over  Four  Decades,  Review  of 
Economics and Statistics 99(5), 896–911. 

EU, although they are light on details and it is unclear whether they are intended to be complementary or competitive to the 
BRI.  Korea’s direct rail link to Europe passes over a rail bridge in the sliver of Korean territory at the mouth of the Tumen River 
and then joins Russia’s TransSiberian railway, although there is also a sea-rail connection via Lianyungang. 

16

  Market  integration  has  been  a  driving  force  of  long-term  economic  development  as  local  markets  became  regional  and  then 
national and international.  The GVC phenomenon observed since the 1980s has rarely included truly global value chains but 
rather involved three main regional value chains centred on East Asia, Europe and North America (Baldwin, 2016; Johnson & 
Noguera, 2017; UNIDO, 2018, 3-4), although some GVCs (e.g. the Boeing 787) are already global. 

 According to an Asian Development Bank source, Kazakhstan earned over one billion US dollars in transit fees in 2015 (Pomfret, 

17

2019c, 267). 

70 

 
 
 
 
                                           
Pomfret, R. (2019a). The Eurasian Land Bridge: Linking Regional Value Chains along the New Silk Road. 
Cambridge Journal of Regions, Economy and Society 12(1), 45-56. 

Pomfret, R. (2019b). The Eurasian Landbridge and China’s Belt and Road Initiative: Demand, Supply of 
Services, and Public Policy. The World Economy 42(6), 1642-93. 

Pomfret, R. (2019c). The Central Asian Economies in the Twenty-first Century: Paving a New Silk Road 
(Princeton University Press, Princeton NJ, 2019). 

Pomfret,  R.  (2020).  China’s  Belt  and  Road  Initiative,  the  Eurasian  Landbridge,  and  New  Mega-
regionalism (World Scientific Publishing Company, Singapore). 

Pomfret,  R.,  &  Sourdin,  P.  (2018).  Value  Chains  in  Europe  and  Asia:  Which  Countries  Participate? 
International Economics 153, 34-41. 

UNIDO (2018). Global Value Chains and Industrial Development: Lessons from China, South-East and 
South Asia (United Nations Industrial Development Organization, Vienna).  

van Rooijen, T., van de Lande, P., Zhang, M., Mortimer, P., Jackson, R., Islam, D., Vleugel, J. & Eidhammer, 
O.  (2012).    The  RETRACK  Project  –  Reorganization  of  Transport  Networks  by  Advanced  Rail  Freight 
Concepts. Final Report (TNO, Delft, Netherlands). 

Walton,  S.  (2019).  TEN-T  and  New  Silk  Road  Integration  –  Top  priority  in  2020.  RailFreight.com,  27 
December  –  available  at  https://www.railfreight.com/beltandroad/2019/12/27/ten-t-and-new-silk-road-
integration-top-priority-in-2020/ 

Yergaliyeva, A. (2019). Kazakh government estimates Nurly Zhol programme will cost $16.91 billion over 
next five years. The Astana Time 

71 

 
Climate-Neutral Maritime Connectivity between 
Europe and Asia 

Plamen Tonchev 

Institute of International Economic Relations, Greece 

Introduction 

Shipping  between  Europe  and  Asia  is  a  powerful  factor  of  interconnectedness  and 
interdependence, as some 98% of the volume of commodities transported between Europe 
and Asia is carried through the seas and oceans that connect the two continents. At the same 
time, shipping accounts for 2.6% of global greenhouse gases (GHG) on an annual basis and 
is  not  included  in  most  national  climate  commitments.  A  study  cited  by  the  International 
Maritime Organization (IMO) states that over 570,000 premature deaths will be prevented 
between 2020 and 2025 by the introduction of the tighter guidelines.18  

Short-Term: IMO Requirements for Low-Sulphur Fuels 

This  is  why  the  IMO  is  pressing  ahead  with  setting  tougher  targets  for  reduced  GHG 
emissions in a phased process up to 2050 (Figure 1). Starting from January 2020, shipping 
companies have had to stop using fuels with a sulphur content above 0.5%, compared to the 
previous 3.5% ceiling. They can now burn very low-sulphur fuel oil (VLSFO) or marine gas oil 
(MGO) - or install emissions-cleaning devices, known as scrubbers, to continue using high-
sulphur  fuel  oil  (HSFO).  Another  option  ship  owners  are  looking  at  is  liquefied  natural  gas 
(LNG) as a relatively cleaner fuel. 

18 Jonathan Saul, ‘Factbox: IMO 2020 - a major shake-up for oil and shipping’, Reuters, 17 May 2019,  
https://www.reuters.com/article/us-imo-shipping-factbox/factbox-imo-2020-a-major-shake-up-for-oil-and-shipping-

idUSKCN1SN2BX.   

72 

 
 
 
                                           
Figure 1: International Maritime Organization process to reduce greenhouse gas emissions. Source: HIS 
Markit, 2019. 

Surely, there are numerous challenges ahead. The 2020 sulphur cap is a true game changer 
for  the  shipping  industry  on  a  global  scale.  The  drop  of  sulphur  limits  for  marine  fuels  is 
forcing most ship operators to switch from burning HSFO to new 0.5% sulphur blends. There 
are estimates that at current crude oil prices the bunker industry may need no less than $4 
billion as working capital to meet the higher fuel bills in 2020 alone. 19 As a result, the bunker 
fuel industry is increasingly seeing credit availability as one of its biggest problems, with fuel 
bills set to rise significantly as a result of stricter emissions controls. In addition, to the extent 
that these costs are passed on to shippers, traders and ultimately consumers and the broader 
economy, it is not unreasonable to expect an increase in working capital requirements across 
the entire shipping sector. 

Another industry struggling to adapt to IMO 2020 has been the world's refineries. Given the 
continued  reduction  in  fuel  oil  demand  for  power,  and  the  0.5%  sulphur  specification,  the 
next wave of upgrading is already under way. Yet, it is expected that that out of the 700-odd 
refineries  in  the  world  that  used  to  provide  HSFO  until  recently,  some  200  may  go  out  of 
business – and some of them are in Europe and Asia. 

One of the major issues at this stage is whether there will be enough quantities of compliant 
fuel across the globe. While major fuel bunkering ports, such as Singapore, Fujairah in the 
United Arab Emirates or Rotterdam in the Netherlands, are expected to have compliant-fuel 
supplies, analysts and shipping firms point to concerns over what happens at smaller ports.  

Yet another serious issue is the choice of compliant fuel, depending on its cost. VLSFO prices 
have  soared  with  the  introduction  of  the  IMO-2020  global  sulphur  cap.  For  instance,  in 
Singapore prices rose more than 20% in January 2020.20 Many ship operators appear to be 
committed to the transition to a low-sulphur age, but there is no agreement on the best way 
to do this. For many of them the question is: shall we use low-sulphur oil or shall we scrub? 
Or perhaps turn to liquefied natural gas (LNG)? And how are banks going to ascertain which 

19 Jack Jordan and Tom Washington, ‘Bunker industry faces $2-4 billion IMO 2020 credit squeeze’, Greek Energy Forum, 1 November 

2019, 

https://greekenergyforum.com/publications/ac/opinions/ar/204-bunker-industry-faces-2-4-billion-imo-2020-credit-squeeze. 
20 Marcus Hand, ‘Maersk to hike bunker surcharges on soaring VLSFO prices’, 23 January 2020, Seatrade Maritime,  
https://www.seatrade-maritime.com/bunkering/maersk-hike-bunker-surcharges-soaring-vlsfo-prices. 

73 

 
 
 
                                           
company is ‘green’ and qualifies for a loan? Are there sufficient skills behind the bank counter 
to decide which technology is acceptable and climate-compliant?21 

The truth is that none of the technologies currently available is ideal. Thus, there are concerns 
that some blends of the new VLSFO emit higher levels of black carbon than the heavy marine 
oil they are meant to replace.22 Although LNG contains less carbon per unit of energy than 
conventional marine fuels, it may not deliver the emissions reductions demanded by  
the IMO’s initial GHG strategy and using it might actually worsen shipping’s climate  
impacts.23  And,  of  course,  there  are  political  considerations,  too.  For  instance,  presidential 
candidates  in  the  American  2020  elections  may  be  tempted  to  run  on  a  platform  that 
exempts the US from IMO 2020, which may prove to be a huge vote winner, once the costs 
of the new rules become apparent to a wider public. Given the global nature of the shipping 
industry,  political  developments  in  the  western  hemisphere  can  easily  affect  maritime 
connectivity between Europe and Asia. 

Long-Term: The Way Ahead 

It is important to note that the significant investments needed to decarbonise shipping can 
only be expected to take place if a long-term and commercially viable business case is made. 
Technological developments alone, as important as they are, are not enough - the right mix 
would have to include both technological innovation and appropriate policies at the same 
time. 

The  Global  Maritime  Forum  has  recently  presented  its  report  on  the  level  of  investment 
required  to  decarbonise  the  shipping  sector.  The  scale  of  cumulative  investment  needed 
between 2030 and 2050 to achieve the IMO target of reducing carbon emissions by at least 
50% by 2050, is between $1 trillion and 1.4 trillion, or on average between $50 billion and $70 
billion annually for 20 years. If shipping was to fully decarbonize by 2050, this would require 
extra investments of approximately $400 billion over 20 years, thus raising the total amount 
needed by an extra $500 billion.24 

No doubt, these are daunting figures, but they should not be seen as intimidating, if viewed 
as part of the global effort to address the climate emergency. The entire financial sector is 
looking  for  green  investments  more  than  ever,  as  governments,  asset  managers,  and  the 
public pile on the pressure over climate change. Notably, demand for green bonds currently 
far exceeds supply and this can be seen as a ‘niche’ by banks.25  

Investment  needs  can  be  broken  down  into  two  main  areas:  (i)  ship-related  investments, 
which include engines, on-board storage and ship-based energy efficiency technologies, and 
(ii) 
investments,  which  cover  fuel  production,  storage  and  bunkering 
infrastructure. The biggest share of investment, to the tune of 87%, is needed in land-based 

land-based 

21 

Michael 

Grey, 

‘Viewpoint: 

Virtuous 

lending’, 

Lloyd’s 

List, 

20 

June 

2019, 

https://lloydslist.maritimeintelligence.informa.com/LL1127980/Viewpoint-Virtuous-lending. 

22 Greg Knowler, ‘IMO to review black carbon fuel emissions concerns’, JOC.com, 28 January 2020, 
https://www.joc.com/maritime-news/imo-review-black-carbon-fuel-emissions-

concerns_20200128.html?utm_source=Eloqua&utm_medium=email&utm_campaign=CL_JOC%20Daily%201%2F29%2F20%20
_PC9156_e-production_E-53854_TF_0129_0617. 

23 Nikita Pavlenko, Bryan Comer, Yuanrong Zhou, Nigel Clark, Dan Rutherford, ‘The climate implications of using  

LNG as a marine fuel 
’,    International  Council  on  Clean  Transportation, Working  Paper  2020-02,  p.  19, https://www.stand.earth/publication/climate-
implications-using-lng-marine-fuel. 

24 Johannah Christensen, ‘How decarbonizing shipping could unlock a global energy transition’, Global Maritime Fund, 23 January 
2020, https://www.globalmaritimeforum.org/news/how-decarbonizing-shipping-could-unlock-a-global-energy-transition.  

25 ‘Shipping’s green $1trn is a profitable investment, not a cost’, Splash 247.com, 30 January 2020,  
https://splash247.com/shippings-green-1trn-is-a-profitable-investment-not-a-cost/.  

74 

 
 
                                           
infrastructure and production facilities for low-carbon fuels, while only 13 % of the investment 
needed relates to the ships themselves.26  

But  how  can  necessary  resources  be  mobilised  and  brought  together?  An  encouraging 
example to consider relates to the so-called Poseidon Principles. This initiative27 aims to align 
the shipping portfolios of signatory banks with the IMO’s emission reduction targets. The four 
Poseidon  Principles  (assessment  of  climate  alignment,  accountability,  enforcement  and 
transparency)  are  designed  to  impel  ship  owners  to  make  at  least  a  50%  reduction  in 
greenhouse gases by 2050 and to help financial institutions in managing critical investment 
risks.  

At  present,  signatories  of  the  Poseidon  Principles  represent  around  $140bn  in  loans  to 
international shipping - about 30% of the total global ship finance portfolio. So far, 16 financial 
institutions  have  signed  up  to  the  initiative  are  16  and  it  is  expected  that  the  number  of 
lenders will reach 25 by the end of the year. The list of signatories includes BNP Paribas, Credit 
Suisse,  ABN  Amro,  Amsterdam  Trade  Bank,  Crédit  Agricole,  CIB,  Crédit  Industriel  et 
Commercial,  Danish  Ship  Finance,  Danske  Bank,  DNB,  DVB,  Export  Credit  Norway,  ING, 
Nordea,  Société  Générale,  and  Sparebanken  Vest.  Notably,  Asian  lenders,  such  as  China’s 
ICBC, are also reported to have expressed interest in the Poseidon Principles.28  

Ultimately,  the  shipping  industry  will  have  to  move  towards  a  climate-neutral  mode  of 
operation. To ensure everyone does their part, the shipping community and all stakeholders 
will need a strong set of policies to drive and manage the transition. It is up to the IMO and 
Member States to make sure comprehensive measures are put in place. These could include 
a carbon price mechanism where emitters pay and the money collected is then redistributed 
for research, development and deployment of clean shipping technologies. Not least of all, 
there should be meaningful arrangements in support of less developed countries and small 
island states between Europe and Asia, if this process is to be inclusive and sustainable. 

26 Randall Krantz, Kasper Søgaard, Dr Tristan Smith, ‘The scale of investment needed to decarbonize international shipping’, Global 

Maritime Forum, 20 January 2020, 

https://www.globalmaritimeforum.org/news/the-scale-of-investment-needed-to-decarbonize-international-shipping/ 
27 https://www.poseidonprinciples.org/#home. 
28 Nidaa Bakhsh, ‘More banks pledge to align shipping lending to climate goals’, Lloyd’s List, 22 January 2020,  
https://lloydslist.maritimeintelligence.informa.com/LL1130744/More-banks-pledge-to-align-shipping-lending-to-climate-goals. 

75 

 
                                           
China's Investment in EU Ports: Assessing  
Geo-Economic Implications of the BRI in 
Maritime Europe 

Alessandro Albana 

University of Bologna 

Abstract 

investment 

in  Greek  and 

This paper examines the implications of China’s investment in the port capacity of two groups 
of European Union (EU) member states, in order to assess whether, how and to what extent a 
geo-economic shift from Central-  Western  Europe to  the Eastern  Mediterranean region  is 
taking place. Firstly, this study focuses on the  impact  of  the  growing  presence  of  Beijing’s 
state-owned  enterprises  (SOEs)  and  the  Belt  and  Road  Initiative  (BRI)  on  the  Eastern 
Mediterranean  region,  where  Chinese 
Italian  maritime 
infrastructure plays a key role for upgrading the geo-economic significance of the area. On 
the other hand, maritime hubs of Central-Western EU countries – namely Belgium, Germany 
and the Netherlands – are likely to suffer a decreasing role within, and  because of,  China’s 
geo-economic  strategy  and  the  impact  of  the  BRI  in  Europe.  Notwithstanding  Chinese 
investment  in  these  countries’  ports  is  notable,  Eastern  Mediterranean  hubs  are  gaining 
increasing salience for international logistic  connectivity  within  the  framework  of  the  BRI. 
Given China’s importance for global maritime trade and logistics, such processes are to affect 
more  broadly  the  role  of  Europe’s  Central-Western  and  South-Eastern  ports  as  regional 
container  hubs.  Against  this  backdrop,  this  study  also  emphasizes  how  the  unfolding  of 
divergent trajectories between the two groups of EU member states will contribute to the 
polarization of the European politics. In fact, whereas Central-Western EU countries– and EU 
institutions – are increasingly taking a cautious, or even suspicious, posture vis-à-vis China, 
South-Eastern member states seem eager to engage China as an international partner for 
infrastructure development. 

Research Background 

In the past decade, Sino-European relations have gained unprecedented momentum in the 
field  of  infrastructure  connectivity.  Chinese  investment  in  the  European  infrastructure 
capacity has become a crucial dimension of China’s relationship with the EU and its member 
states, particularly after the unveiling of the BRI in 2013. Chinese SOEs have played a crucial 
role  within  EU  infrastructures.  EU  ports,  particularly,  have  become  key  targets  of  Chinese 
investment; data show that Beijing’s companies have acquired some 10 percent of the EU 
container maritime logistic capacity (Pandya & Tagliapietra, 2018). In 2008, China’s shipping 
SOE COSCO obtained a concession for the operation of two piers at Piraeus, Greece’s main 
port; in 2016, the company won a tender call and acquired a 67 percent share of the Piraeus 
Port Authority (PPA), becoming the majority shareholder of the main container hub in Greece 
(Pallis  &  Vaggelas,  2016).  COSCO’s  investment  in  Piraeus  is  of  crucial  importance  as  it 
established private control over a public authority with Beijing’s direct involvement. Piraeus 
became the world’s fastest growing container hub after COSCO’s investment pushed the port 
container throughput from 880,000 twenty-foot equivalent units (TEU) in 2010 to 3,36 million 
TEU in 2015. In Mediterranean Europe, Italy is also drawing closer to China as an infrastructure 

76 

 
 
 
and  connectivity  partner.  In  March  2019,  the  signing  of  a  Memorandum  of  Understanding 
(MoU)  on  the  BRI  between  Beijing  and  Rome  paved  the  way  for  further  involvement  of 
Chinese SOEs  in  the Italian  infrastructure  system,  especially  in  the  North  Adriatic  port  of 
Trieste and, to  a lesser degree, in Ravenna and  Venice. Furthermore, Italy was  the  only  G7 
country  to  partake  in  the  BRI  Forum  held  in  Beijing  in  May  2017,  a  move  that  signalled 
significant political interest towards Beijing’s connectivity projects. 

The past decade has also been a phase of critical challenges for the EU. The unfolding of the 
global financial crisis in 2008, and most importantly the debt crisis of 2010-2011, affected the 
EU cohesion  and  had  a  dramatic  impact  on  the  Union,  where  some  member  states  have 
suffered  harshly  from  the  economic  downturn.  China’s  growing  interest  in  the  European 
infrastructure came timely as a source of much needed investment for some EU countries. 
Whereas  Greece’s  concession  over  Piraeus  represents  the  most  prominent  case  in  point, 
other  countries  seem  to  be  increasingly  turning  to  China  as  a  partner  for  infrastructure 
development,  as  Italy’s  growing  interest  in  the  BRI  demonstrates.  However,  countries  in 
Central-Western Europe such as Belgium, Germany and the Netherlands, pursue a careful, 
yet healthy, relationship with Beijing, welcoming a limited presence of Chinese SOEs in their 
infrastructure capacity (Gaspers & Lang, 2016; Linden, 2018). Importantly, these countries play 
a crucial role for global maritime trade and logistics. Belgian, Dutch and German ports have 
historically represented leading European hubs for maritime commerce, enjoying cutting-
edge infrastructure technology and geographical proximity to the largest industrialized and 
exporting  countries  in  the  continent.  Against  this  backdrop,  China’s  growing  interest  in 
Eastern  Mediterranean  ports  is  likely  to  impact  first  and  foremost  on  the  commercial  and 
logistic attractiveness of maritime hubs located in Central-Western Europe. 

In this scenario, China’s shareholding of the EU infrastructure capacity has been addressed 
from two different perspectives. On the one hand, scholars, along with a number of European 
political  and  institutional  representatives,  have  warned  against  the  risk  that  the  EU  might 
undergo  loosening  political  cohesion  due  to  China’s  investment  focusing  on  specific 
countries and the ensuing consolidation of Beijing’s political influence therein (Casarini, 2016; 
Le Corre & Sepulchre, 2016; O’Dea, 2019). Others have gone so far as to warn about the security 
implications of China’s presence  in European ports, as Piraeus has recently hosted Chinese 
military vessels. On the other hand, Chinese authorities reassure that Chinese investment is 
driven  by  a  cooperative  logic,  which  is  to  result  in  a  “win-win”  scenario,  a  dimension 
extensively  emphasized  in  publications  and  official  documents  related  to  the  BRI  (NDRC, 
Ministry of Foreign Affairs & Ministry of Commerce of the PRC, 2015). More broadly, seen from 
this perspective, Chinese interest in EU infrastructures is driven by commercial concerns, as 
Beijing’s  investment  aims  to  boost  international  connectivity,  making  shipping  routes 
between  China  and  Europe  increasingly  functional.  Consequently,  Chinese  authorities 
suggest that Europe’s commercial interests will also benefit from Beijing’s investment. 

Research Methodology 

This study compares a group of ports located in Belgium, Germany and the Netherlands, with 
Italian ports in the North Adriatic Sea and Piraeus, in order to assesses whether, and to what 
extent, Eastern Mediterranean ports are growing more attractive, in commercial and logistic 
terms, vis-à-vis maritime hubs   in   Central-Western   Europe.   In   this   context,   this   study  
assesses   whether   infrastructure development in Eastern Mediterranean ports, fuelled by 
Beijing’s  investment,  is  pushing  a  growing  number  of  economic  actors  to  relocate  their 
distribution and logistic hubs from Central-Western Europe to the Eastern Mediterranean. 

77 

 
 
Against  this  backdrop,  this  paper  also  takes  into  account  EU  screening  mechanisms  on 
incoming foreign investments, in order to understand to what extent stricter public scrutiny 
has  actually  limited  China’s  infrastructure  investment,  and  how  such  regulations  have 
impacted on port infrastructure development in the national contexts of these EU member 
states. 

Chinese Investment in EU Ports: Ongoing Trends and Prospective Implications 

This research assesses the significance of the Eastern Mediterranean as a strategic juncture 
for reducing shipping times and costs between China and the European markets. In Eastern 
Europe, China invested in railways and land infrastructures to foster overland connectivity. In 
addition, the enlargement of the Suez Canal in 2015 enhanced the strategic importance of the 
area for international commerce. Maritime routes from Shanghai – China’s main port – to the 
North  Adriatic  Sea  stretch  over  8,600  miles,  whereas  the  shortest  route  from  Shanghai  to 
Hamburg  requires  11,000  miles  of  navigation  (Casarini,  2016).  Under  these  circumstances, 
Piraeus acquired enormous importance for Chinese logistical business. In addition, the Italian 
port of Trieste has drawn great interest from China, as it is located in a strategic position for 
maritime  connections  between  Central-Eastern  Europe  and  East  Asia,  revealing  great 
potential  for  reducing  shipping  lengths  and  costs  between  the  two regions.  In  this  area, 
Chinese  SOEs,  along  with  the  Italian  Ministry  of  Infrastructure  and  the  Ministry  of  Foreign 
Affairs,  have  provided  financial  support  for  the  development  of  the  North  Adriatic  ports 
forming  the  Five-Port  Alliance  (Casarini,  2016)29.  In  this  scenario,  a  growing  number  of 
companies have come to view the area as a strategic logistic juncture. Some multinational 
corporations  are  choosing  Eastern  Mediterranean  ports,  particularly  Piraeus,  as  their  main 
distribution  hubs;  other  companies  are  relocating  their  distribution  centres  and  core 
commercial activities from other areas of Europe to the region. In 2012, Hewlett Packard (HP) 
relocated  its  European  distribution  hub  from  Rotterdam  to  Piraeus  (Van  der  Putten  & 
Meijnders,  2015).  The  move  was  motivated  by  Piraeus’  strategic  position  for  shortening 
shipping  times  and  reducing  transportation  costs  between  Asian and  European  markets 
(Van der Putten & Meijnders, 2015). Huawei, Hyundai and ZTE have also chosen Piraeus as their 
European distribution hub (Van der Putten 2014; Van der Putten & Meijnders, 2015).  Greece 
and Italy welcome Chinese SOEs and seem to consider Beijing’s interest and investment as 
an  opportunity  to  boost  infrastructure  development.  In  a  context  of  prolonged  economic 
stagnation, Athens and Rome seem to view Beijing as a supportive partner for infrastructure 
development. 

In  the  EU,  Belgium,  Germany  and  the  Netherlands  have  also  attracted  relevant  shares  of 
Chinese infrastructure investment. Antwerp, Hamburg and Rotterdam are among the most 
important container hubs in Europe and the world; Rotterdam, particularly, represents the 
busiest European hub, and one of the main world ports in terms of container volume. Despite 
China’s investment in these ports is notable, however, public infrastructure management in 
Central-Western EU countries has generally allowed only minority shares to Beijing’s SOEs, 
whereas in no case port authorities have been taken over by private companies30. From this 
perspective, this study considers the relative openness to foreign private  investment,  along 
with  the  retention  of  public  control  over  port  authorities,  the  key characteristics of the EU 
Central-Western paradigm of port development. However, port infrastructure development 
in the Eastern Mediterranean provides  tangible  challenges for the leading  role  of  Belgian, 

29 The Five-Port Alliance involves Italy’s Ravenna, Trieste and Venice, Slovenia’s Koper, and Croatia’s Fiume. 
30 Zeebrugge represents a partial exception, as COSCO’s shareholding in the port amounts to 85 percent. However, Zeebrugge port 

authority remained under public control. 

78 

 
 
                                           
German and Dutch ports in the European context. Whereas Beijing’s focus on the Eastern 
Mediterranean is seen as an opportunity by Athens and Rome, resulting in growing political 
convergence  between  the  two  countries  and  China,  governments  of  Central-Western 
Europe, and EU institutions, have taken a more cautious approach vis-à-vis Beijing. Tellingly, 
EU  leaders  have  come  to  consider  China  as  “A  cooperation  partner  […]  an  economic 
competitor  […]  and  a  systemic  rival.” 31  Against  this  backdrop,  this  research  sees  China’s 
growing presence in Greek and Italian infrastructures as a potential trigger of further political 
divide within the EU. 

Conclusion 

This research emphasizes how China’s infrastructure proactivity in the EU is triggering crucial 
processes  on  the  geo-economic  ground.  China’s  growing  attention  to  the  Eastern 
Mediterranean region is fostering the area’s development into the maritime core of the EU 
infrastructure system, making it the BRI’s main network of port facilities in Europe. To date, 
observers have focused on the implications of China’s investment in EU infrastructures either 
as a driver of a North-South political divide (Casarini, 2015) or in terms of security implications 
for Europe (O’Dea, 2019). The former group underlines that the most tangible consequences 
of  China’s  investment  in  the  EU  infrastructure  is  likely  to  result  in  growing  polarization 
between  member  states  eager  to  attract  Chinese  SOEs,  on  the  one  hand,  and  countries 
maintaining a cautious approach, on the other. The second group points to the risk of a debt 
trap with Beijing, and the possibility that European ports under Chinese SOEs’ control may 
be  employed  as  dual-use  facilities  –  i.e.  serving  both  military  and  security  purposes  –  by 
Beijing.  Employing  a  different  analytical  perspective,  this  study  focuses  on  the  growing 
importance of the Eastern Mediterranean as a crucial geo-economic implication of China’s 
investment  for  the  European port  capacity.  Located  at a strategic juncture for shortening 
Euro-Asian shipping routes and reducing navigation costs, with  ongoing improvements  of 
the  Mediterranean  Sea-Red  Sea-Indian  Ocean  maritime  connections  through  the  Suez 
Canal, and with EU countries such as Greece and Italy  eager  to  attract  Beijing’s  SOEs,  the 
Eastern Mediterranean holds full potential to emerge as the core maritime region of China’s 
BRI in Europe. Against this backdrop, this research investigates how the BRI impacts on other 
maritime areas of the continent, as sustained infrastructure development fuelled by China’s 
investment  makes  Eastern  Mediterranean  ports  increasingly  attractive as  commercial  and 
distribution  hubs  for  multinational  companies.  In  this  scenario,  this  study  suggests  that 
European maritime hubs in Belgium, Germany and the Netherlands are likely to undergo a 
dwindling role within the framework of the BRI and the Euro-Asian maritime connectivity. 

References 

Casarini, N. (2015). Is Europe to benefit from China’s Belt and Road Initiative?. IAI Papers 15(40), 1-11. 

Casarini, N. (2016). OBOR and Italy: strengthening the southern route of the Maritime Silk Road. In 

F.P. van der Putten, J. Seaman, M. Huotari, A. Ekman & M. Otero-Iglesias (Eds.), Europe and China’s New 
Silk Roads (pp. 38-40). Clingendael Institute. 

European Commission & the High Representative of the Union for Foreign Affairs and Security Policy 
(2019, March 12). EU-China – a strategic outlook. Retrieved from https://ec.europa.eu. 

31 This description is reported in “EU-China – A Strategic Outlook,” released by the European Commission and the High Representative 
(https://ec.europa.eu/commission/sites/beta-

of  the  Union 
political/files/communication-eu-china-a-strategic-outlook.pdf) (Emphasis added). 

for  Foreign  Affairs  and  Security  Policy 

in  March  2019 

79 

 
 
 
                                           
 
Gaspers,  J.  &  Lang,  B.  (2016).  Germany  and  the  ‘Belt  and  Road’  Initiative:  tackling  geopolitical 
implications through multilateral frameworks. In F.P. van der Putten, J. Seaman, M. Huotari, 

A.  Ekman  &  M.  Otero-Iglesias  (Eds.),  Europe  and  China’s  New  Silk  Roads  (pp.  24-29).  Clingendael 
Institute. 

Le Corre, P. & Sepulchre, A. (2016). China’s offensive in Europe. Washington, D.C.: Brookings Institution 
Press. 

Linden, R.H. (2018). The new sea people: China in the Mediterranean. IAI Papers 18(14), 1-21. 

NDRC, Ministry of Foreign Affairs & Ministry of Commerce of the PRC (2015). Vision and actions on jointly 
building the Silk Road Economic Belt and 21st-Century Maritime Silk Road. Beijing: Foreign Languages 
Press. 

Pallis,  A.A.  &  Vaggelas,  G.K.  (2017).  A  Greek  prototype of  port  governance.  Research  in  Transportation 
Business & Management 22, 49-57. 

Pandya, S. & Tagliapietra, S. (2018, June 27). China’s strategic investments in Europe: the case of maritime 
ports. Retrieved from https://bruegel.org. 

O’Dea, C.R. (2019). Asia rising: ships of state?. Naval War College Review 72(1), 55-88. 

Van der Putten, F.P. (2014). Chinese investment in the port of Piraeus, Greece: the relevance for the EU 
and the Netherlands. Clingendael Institute. 

Van  der  Putten,  F.P.  &  Meijnders,  M.  (2015).  China,  Europe  and  the  Maritime  Silk  Road,  Clingendael 
Institute. 

80 

 
Air transport connectivity between Asia and 
Europe 

Panayotis Christidis1 and Alloysius Joko Purwanto2 

1 European Commission, Joint Research Centre, Spain; 2 Economic Research Institute for 
ASEAN and East Asia, Indonesia 

Introduction 

On June 7, 2016, the 28 European Union (EU) Transport Ministers authorized the European 
Commission to start negotiations for EU-level aviation  agreements with the Association  of 
Southeast Asian Nations (ASEAN). The EU-ASEAN Comprehensive Air Transport Agreement 
(CATA) will be the first block-to-block agreement at such a scale and will cover a wide range 
of  areas  of  gradual  regulatory  convergence:  market  access,  safety,  security,  air  traffic 
management, social, consumer and environmental protection, fair competition etc. For the 
EU, agreement shall mean a creation of 1.2 billion passenger aviation market (Hololei, 2019). 
As  of  August  2019,  eight  rounds  of  CATA  negotiations  have  been  conducted  (ASEAN 
Secretariat, 2019) but -by the time of writing- the agreement is still pending.  

An analysis from Tan (2015) reveals three areas where the agreement can take place. First, we 
might  expect  that  EU-ASEAN  CATA  would  provide  a  fully  relaxed  or  an  unlimited  market 
access in the form of direct, non-stop flights between the two regions operated by airlines 
designated  by  both  EU  and  ASEAN  sides  in  term  of  capacity,  frequency  and  aircraft  type. 
Second,  the  agreement  could  also  go  beyond  liberalizing  3rd  and  4th  freedoms  flights  (i.e. 
direct and non-stop flights as mentioned in the first area), to relax 5th freedom operations as 
well.  This means  that  EU  carriers  can  have  intermediate  stops  with  traffic  rights  in  a  third 
region, e.g. Middle East or India as well as beyond-ASEAN rights, e.g. to Australia, New Zealand 
and the Pacific. Conversely, ASEAN carriers could secure similar rights somewhere in India or 
Middle East en-route to the EU as well as beyond EU rights, e.g. to the Americas. Finally, we 
can  expect  that  the  agreement  would  lift  restrictions  on  code-sharing  that  exist  in  the 
current air services agreements between the respective states, i.e. both sides carriers, EU and 
ASEAN, can begin to code-share freely on trunk routes as well as on each other’s regional and 
domestic networks.      

In the meantime, in April 2016, finally all ASEAN member states ratified the 2010 MAFLPAS 
(2010  Multilateral  Agreement  for  the  Full  Liberalization  of  Passenger  Air  Services)  that 
signifies  the  completion  of  the  first  phase  of  the  ASEAN  Single  Aviation  Market  (ASAM). 
According to Lee, J.W (2018) the 2010 MALFPAS consists of two protocols. Protocol I allows 
unlimited  3rd  and  4th  freedoms  between  all  cities  whilst  protocol  II  allows  unlimited  5th 
freedom between all cities except capital-capital-capital.  

Procedural parts 

We analyse the existing situation and potential impacts on airline and airport competition 
using detailed data and Origin- Destination and at flight level. The network efficiency of air 
transport  routes  can  be  expressed  as  the  share  of  trips  that  use  a  direct  connection  from 
origin  and  destination,  as  opposed  to  trips  that  require  two  or  more  connecting  flights. 
Analysing this indicator at airport, country and airline levels reveals continuously changing 

81 

 
 
 
airline network strategies that range from hierarchical hub-and-spoke structures to simple 
point-to-point  connections.  While  the  largest  growth  in  air  transport  activity  is  currently 
within national markets (especially China, India and Indonesia), a buoyant regional market in 
East  and  Southeast  Asia  is  already  visible.  The  long-distance  market  between  Asia  and 
Europa is still relatively limited (Figure 1), but CATA will probably change the balance among 
the hub airports serving the market, allowing new regional and global players to enter.    

Figure 1: Share of EU – ASIA passenger trips served by direct connections. 

Expected type of impacts 

We might expect several impacts of CATA as described in the following paragraphs. 

First,  an  unlimited  market  access  in  the  form  of  direct,  non-stop  flights  between  the  two 
regions, in other words  full 3rd and  4th freedom  rights    operated  by  airlines designated  by 
both EU and ASEAN sides in term of capacity, frequency and aircraft type should result in an 
increasing competition at hub-to-hub operations between the two regions as shown by the 
decreasing HHI index. As market access limitation is eliminated by CATA, more ASEAN and 
EU airlines shall enter to the existing hub-to-hub operation and we can expect a reduction in 
the average travel cost in this operation type. The inclusion of more ASEAN and EU players’ 
shares would also mean a reduction in the share of players from Gulf, Middle East and Turkish 
regions that currently hold the most important shares of the EU-ASEAN air corridors. Finally, 
facing  an  increasing  competition  at  the  hub-to-hub  operation,  we  might  expect  more 
agreements  between  airlines  from  both  sides  for  joint  venture  operations  that  shall  allow 
competing  players  on  a  particular  hub-to-hub  route  to  cooperate  and  engage  in  joint 
marketing and revenue-sharing. 

Second,  unlimited  5th  freedom  operations  where  EU  and  ASEAN  carriers  can  have 
intermediate stops and beyond EU/ASEAN regions with traffic rights in a third region shall 
increase  the  ‘point-to-point’,  ‘behind’,  and  ‘beyond’  shares  in  ASEAN  and  EU  regions. 
Additional flights using the 5th freedom are expected to strengthen the position of both EU 
and ASEAN airports, creating additional demand that in turn can help build the critical mass 
for  new  connections.  From  the  airlines’  perspective,  experience  in  other  open  markets 
suggests that alliances between EU and ASEAN airlines will be in a better position to exploit 
the new opportunities. 

82 

 
 
 
 
Aviation is both the reflection and the driver of the communication and contact between EU 
and ASEAN. Liberalization helps in improving connectivity and provides a safety valve for the 
various geopolitical risks that affect both regions.  

References 

ASEAN  Secretariat  (2019)  Overview  ASEAN-European  Union  Dialogue  Relations.  ASEAN’s  Secretariat 
Information Paper as of August 2019. Jakarta, Indonesia.  

Christidis, P (2016) Four shades of Open Skies: European Union and four main external partners. Journal 
of Transport Geography 50, 105 – 114. 

Hololei, H. (2019) Keynote speech at International Aviation Club, July 23, 2019, Washington DC, United 
States  of  America.  Available  at  https://ec.europa.eu/transport/sites/transport/files/2019-07-23-
international-aviation-club-dc.pdf as accessed January, 14, 2020. 

Lee,  J. W.  (2018)  Strengthening  the  ASEAN  Single  Aviation  Market:  Implementing  the  AEC  Blueprint 
2025 for Air Transport. Policy Ideas no 52, September 2018. 

Njoya,  E.T.  Christidis,  P.,  Nikitas,  A.  (2018)  Understanding  the  impact  of  liberalization  in  the  EU-Africa 
aviation market, Journal of Transport Geography 71, 161 – 171. 

Tan,  A.  K-J.  (2015)  The  proposed  E.U-ASEAN  Comprehensive  air  transport  agreement:  What  might  it 
contain and can it work? Transport Policy 43 (2015) 76 – 84.  

83 

 
 
Aerotropolis: At what cost, to whom? An analysis 
of social and environmental impacts of New 
Yogyakarta International Airport (NYIA) project, 
Indonesia  

Ellen Putri Edita 

Economic Research Institute for ASEAN and East Asia (ERIA) 

Introduction 

Aerotropolis is defined as an area centred on a major airport and surrounded by development 
of  non-aviation  infrastructures,  integrated  transportation,  and  service  facilities,  which  is 
functioned to gain economic benefit (Cyrek & Weltrowska-jęch, 2013; Kasarda & Appold, 2014). 
Following the idea of aerotropolis, New Yogyakarta International Airport (NYIA) was initiated 
as  a  strategic  infrastructure  project  listed  in  Masterplan  for  Acceleration  and  Expansion  of 
Indonesia’s  Economic  Development  (MP3EI)  (Coordinating  Ministry  of  Economic  Affairs, 
2011). Originally, MP3EI was an ambitious program that served as a starting point to transform 
Indonesia  to  be  one  of  developed  countries  in  the  world  by  2025.  The  masterplan  divides 
Indonesia into six main economic corridors, which are Sumatra, Java, Kalimantan, Sulawesi, 
Bali-Nusa Tenggara, Papua-Maluku Islands (Coordinating Ministry of Economic Affairs, 2011). 
Figure 1 illustrates the map of economic corridors of Indonesia.  

Figure 1: Map of Indonesia economic corridor. Source: Coordinating Ministry for Economic Affairs (2011). 

Located  in  Kulon  Progo  district,  Special  Region  of  Yogyakarta  province,  Indonesia,  the 
establishment of NYIA is anticipated to strongly promote MP3EI’s mission in preparing city 
of Yogyakarta as part of economic centres in Java corridor and tourism centres in the country 
(Coordinating Ministry of Economic Affairs, 2011, Widiyanto, 2017).  This project was expected 
to be finished by April 2019 (Indonesia, 2017). 

84 

 
 
 
 
 
 
 
Apart from its crucial position in national development planning, the establishment of NYIA 
brings different layers of issues. The objective to transform productive land into airport led to 
refusal from local people because they are strongly dependent on the land to earn money 
(Muryanto,  2018;  BPS  Statistics  of  Kulon  Progo  Regency,  2018).  Furthermore,  this 
infrastructure development also sparks concerns about the environment since there was an 
issue with the delay in its environmental permit (Muryanto, 2017).   

This research aims to analyse the driving forces behind the development of aerotropolis as 
well  as  the  social  and  environmental  impacts  of  the  project  in  the  region.  A  field  work  to 
Yogyakarta, Indonesia was performed between 29 January and 9 March 2019. At that time, 
the NYIA project was still under construction.  The approach of this research is a qualitative 
case  study  that  uses  multiple  methods:  interview,  focus  group,  direct  observation,  and 
documents review. In total, thirteen semi-structured interviews have been executed, which 
consist  of  a  group  interview  with  six  participants  and  twelve  individual  interviews.  The 
participants  of  interviews  were  selected  based  on  their  involvement  in  the  case  of  NYIA 
establishment.  In  practice,  volunteers  in  the  field,  local  non-government  organisations, 
researchers,  government  officials,  and  local  people  were  selected  as  interviewees  by 
implementing snowball sampling. For the local people, this research only focused on people 
who live in Glagah and Palihan village, because according to Angkasa Pura I (2017), these two 
villages are the most affected villages from airport construction with 1237  and  1139 plotted 
lands each that will be used for the sake of NYIA construction. 

Social and environmental impacts 

The establishment of the airport leads the local people in NYIA development area to endure 
four major detrimental issues. The first one is displacement, which caused separation of local 
people  into  two  groups:  people  who  agreed  with  the  displacement  and  people  who 
disagreed. In the struggle to secure their land, issue of exclusion, oppression, and violence 
treatment  were  experienced  by  people  who  disagreed  to  be  displaced.  As  a  result  of  the 
displacement  from their own land, the people were relocated in the areas that have been 
determined  by  Angkasa  Pura  (a  state-owned  company  that  has  an  authority  to  control 
airport management in Indonesia). In this process, people still needed to pay for the land as 
well as for the cost of building construction. The process also leads to social changes since 
the current neighbourhood transforms into a more urban area, which cannot be cultivated. 
The third impact is poor compensation. Again, there is a treatment gap experienced by the 
local people. The compensation money was smoothly received by people who agreed to be 
relocated.  In  contrast,  people  whose  land  refused  to  be  appraised  only  received  a  little 
amount  of  money  in  the  end,  which  was  not  enough  to  support  their  families.  The  last 
impacts are loss of livelihoods and identity. When this research was performed, people who 
agreed to be displaced were still waiting for the responsibility of Angkasa Pura to give them 
new jobs as promised before the construction started. In reality, the promising effort did not 
entirely  work  because  the  local  people  of  Kulon  Progo  were  not  selected  to  work  in  the 
project.  A  different  story  comes  from  people  who  opposed  to  be  displaced  since  the 
beginning.  In  this  regard,  this  group  of  people  believed  that  their  identity  as  farmers  who 
supposed to have land that can by far support their families without having to work to other 
people were not acknowledged by Angkasa Pura. This is because the latter perceived that 
the land clearing process was over by exchanging the land with money.  

Apart  from  social  impacts,  environmental  concern  arises  as  the  magnet  of  NYIA  started 
working. The result of the field work indicates that the concept of aerotropolis, which will be 

85 

 
 
implemented in NYIA might lead to higher water exploitation for areas around the airport. 
This refers to the fact that besides airport operation itself, bigger amounts of water will be 
required to support other facilities in the aerotropolis area. Moreover, the establishment of 
NYIA also brings up the issue about shoreline change due to the location of NYIA which is 
widely  considered  to  be  a  vulnerable  landform  with  respect  to  natural  disasters.  The 
urbanization of the airport area, which causes more people to come, will possibly exacerbate 
the current severe condition of Kulon Progo.  

Discussions 

Pushpanathan (2010) argue that infrastructure development is considered as an important 
factor  in  stimulating  economic  recovery  in  the  Association  of  Southeast  Asian  Nations 
(ASEAN) countries after the 2008 global crisis. Therefore, in 2010, the Masterplan of ASEAN 
connectivity (MPAC) was initiated by ASEAN leaders. The formation of MPAC itself is the part 
of a roadmap for the ASEAN Economic Community (AEC) in 2015 (Almekinders et al., 2015). In 
principle, MPAC aims to promote integrated intra-ASEAN trade and ultimate improvement 
of connectivity between ASEAN and global market (Pushpanathan, 2010; Gunawan, 2017). In 
Indonesia, the MPAC was synergized with MP3EI (Gunawan, 2017). Looking at the order, NYIA 
is established to promote Yogyakarta as a centre of economy in the Java corridor. In MP3EI, 
this corridor is responsible to become centre of industries and services (Coordinating Ministry 
of Economic Affairs, 2011). From here, it can be observed that NYIA development is supposed 
to promote industries and services as what has been mandated for Java corridor. Pointing 
out to the local  to global relations, the aerotropolis of NYIA will likely help fostering export 
activity of Yogyakarta’s key commodities so that they can be traded in the global market. In 
terms of services, aerotropolis is likely to invite more people to come as well as more investors 
to invest in hotels or restaurants to support this sector.  

Furthermore,  practice  of  neoliberalism  can  be  clearly  seen  through  the  leadership  of  the 
government of Indonesia. In order to drive economic growth, the government of Indonesia 
enables foreign investors to invest in NYIA establishment through public private partnership 
mechanism.  As  a  leader  of  Indonesia,  President  Widodo  shows  another  neoliberalism 
practice  by  his  maneuver  to  adapt  NYIA  establishment  in  the  National  Medium-Term 
Development. The president also seems to have political reason since he urged to finish the 
airport in the same moment as presidential election by issuing Presidential Decree Number 
98/2017, which specifically aims to accelerate construction of NYIA project so that it can be 
finished by April 2019 (Indonesia, 2017). 

Conclusions 

The explanation above reflects sustainability science issue because there are local to global 
relations, which imply that aerotropolis is developed to eventually serve the global economy. 
This  case  also  demonstrates  the  importance  of  sustainable  development  goals,  namely 
SDG11  about  sustainable  cities  and  communities,  where  development  planning  must 
guarantee positive relations between economic, social and environment as well as inclusivity 
for people to participate in urban practice (United Nations, 2019a). Besides that, SDG10 about 
reducing inequality is a fundamental direction for the case of aerotropolis of NYIA because it 
ensures  proportionate  chance  for  people  to  reach  equality  by  enhancing  justice  through 
relevant policies and regulations (United Nations, 2019b).  

References 

86 

 
 
 
Almekinders, G., Fukuda, S., Mourmouras, A., Zhou, J., & Zhou, Y. S. (2015). ASEAN financial integration. 
Retrieved from https://www.imf.org/external/pubs/ft/wp/2015/wp1534.pdf 

Angkasa Pura I. (2017). Analisis dampak lingkungan hidup (ANDAL) pembangunan bandar udara New 
Yogyakarta International Airport. [Environmental impact analysis (ANDAL) for the construction of the 
New  Yogyakarta  International  Airport].  (Unpublished  company  report).  Jakarta:  PT  Angkasa  Pura  I 
(Persero) 

BPS  Statistics  of  Kulon  Progo  Regency.  (2018).  Temon  subdistrict  in  figures.  Retrieved  from 
https://kulonprogokab.bps.go.id/publication/2018/09/26/0d6872af05e7a8723a027837/kecamatan-
temon-dalam-angka-2018.html 

Coordinating  Ministry  for  Economic  Affairs.  (2011).  Masterplan  for  acceleration  and  expansion  of 
Indonesia 
from 
development 
https://www.aseanbriefing.com/userfiles/resources-
pdfs/Indonesia/FDI/ASEAN_Indonesia_Master%20Plan%20Acceleration%20and%20Expansion%20of%
20Indonesia%20Economic%20Development%202011-2025.pdf 

economic 

2011-2025. 

Retrieved 

Cyrek, D., & Weltrowska-jęch, J. (2013). Aerotropolis - The city of the future. The concept of aerotropolis, 
(283). 

Gunawan, G. H. (2017). A new dynamism of regionalism towards ASEAN connectivity and its linkage with 
national and local development projects: A case study of Indonesia (Doctoral dissertation). Retrieved 
from https://core.ac.uk/download/pdf/158326967.pdf 

Indonesia. (2017). Peraturan Presiden Republik Indonesia Nomor 98 Tahun 2017 tentang percepatan 
pembangunan  dan  pengoperasioan  bandar  udara  baru  di  Kabupaten  Kulonprogo  Provinsi  Daerah 
Istimewa  Yogyakarta  [Presidential  Regulation  of  the  Republic  of  Indonesia  Number  98  of  2017 
concerning the acceleration of the construction and operation of new airports in Kulonprogo Regency, 
Special 
https://setkab.go.id/wp-
content/uploads/2017/10/Perpres-98-Tahun-2017.pdf 

Yogyakarta]. 

Retrieved 

Region 

from 

of 

Kasarda,  J.  D.,  &  Appold,  S.  J.  (2014).  The  economics  of 
https://doi.org/10.1108/S2212-160920140000004015 

international  airline  transport, 

iii. 

Muryanto,  B.  (2018,  July  23).  Last  86  families  still  fighting  against  Yogyakarta  airport  development  to 
keep land. The Jakarta Post. Retrieved from https://www.thejakartapost.com/news/2018/07/22/last-86-
families-still-fighting-against-yogyakarta-airport-development-to-keep-land.html 

Pushpanathan, S. (2010, June 7). ASEAN connectivity and the ASEAN economic community. Retrieved 
from 
https://asean.org/?static_post=asean-connectivity-and-the-asean-economic-community-by-s-
pushpanathan-deputy-secretary-general-of-asean-for-asean-economic-community-2 

United  Nations.  (2019a).  Sustainable  development  goal  11:  Make  cities  and  human  settlements. 
Retrieved from https://sustainabledevelopment.un.org/sdg11 

United  Nations.  (2019b).  Sustainable  development  goal  10:  Reduce  inequality  within  and  among 
countries. Retrieved from https://sustainabledevelopment.un.org/sdg10 

Widiyanto, D. (2017, August 26). Bandara NYIA, jadi pintu gerbang utama pariwisata RI. [NYIA Airport, 
becomes the main gateway for Republic of Indonesia's tourism]. Kedaulatan Rakyat Jogja. Retrieved 
from 
https://krjogja.com/web/news/read/42101/Bandara_NYIA_Jadi_Pintu_Gerbang_Utama_Pariwisata_RI 

87 

 
Can Open Skies Agreement Make the 
Sustainable Development Regime of EU-Asia 
Civil Aviation Market? Game Theory Analysis on 
the Exploratory Studies of EU-China Open Skies 
Agreement Negotiations 

Jiangtian Xu 

University of East Anglia, United Kingdom; UACES Scholar 2017, University Association of 
Contemporary European Studies, United Kingdom 

Keywords 

EU-Asia  Civil  Aviation,  Regime  Making,  Game  Theory,  EU-China,  Open  Skies  Agreement 
Negotiation, Sustainable Development  

Introduction 

The ultimate ambition of the paper is to explore whether EU can be the new international 
new regime maker by initiating the liberalism through its effort to negotiate, contract as well 
as  sustainably  adjust  the  agreements  with  third  countries  based  on  the  externalization  of 
Normative Power Europe. Or China will play a more important role in international regime 
making by using its Regional Multilateralism, Normative Power China, under the One Belt 
One  Road  Grand  National  Strategy  to  deal  with  EU’s  liberalism.  Can  the  EU’s  liberalism  or 
China’s regional multilateralism be winning the battle of regime making?  

Statement of Ambitions  

The core aim of the project is to assess EU’s hegemonic powers in international civil aviation 
which was originally proposed as the future research direction by Kassim and Stevens (2010). 
The rise of the European Union (EU) as an international actor in civil aviation over the past 
decade has been a transformative development. As a supranational body within a historically 
state-centric order, its emergence has been as remarkable as it has been disruptive. The EU 
has forced existing organizations, as well as governments, to recognize it as an actor and to 
acknowledge  its  influence.  The  impression  for  much  of  the  past  decade  has  been  that  its 
powers would continue to expand inexorably.  

introduced 
As  a  putative  new  hegemon  (Dobson  2007,  Stainiland  2008),  the  EU 
multilateralism  as the new currency of international civil aviation.  It established the Single 
European  Aviation  Market.  It  gained  the  power  and  authority  in  2002  to  represent  EU 
member  states  in  civil  aviation  agreement  negotiations  by  the  historic  European  Court  of 
Justice’s ruling on Open Skies Cases, signed Open Skies Agreements with US and Canada to 
open a new era of international civil aviation history, and implemented a civil aviation strategy 
to sign the Open Skies Agreements with all major civil aviation nations in the world. It also 
initiated  a  proposal  for  global  environmental  protection  to  ensure  the  sustainable 
development of civil aviation. Moreover, following earlier interventions in safety and security, 

88 

 
 
 
 
the European Parliament adopted a measure on EU Passenger Name Records in order to 
address safety and security issues of civil aviation as recently as April 2016.  

The EU’s rise and expanding influence have been remarkable, and apparently inexorable, but 
the  defeat  in  ICAO  of  an  EU-backed  proposal  on  environmental  protection  prompted  the 
thought that the EU’s power is not absolute. The aim of this project is to assess EU’s influence 
in  aviation  by  examining  its  capacity  for  re-writing  the  rules  in  international  economic 
regulation, namely the international civil aviation regime making rules.  

The Background of International Civil Aviation Regimes’ Makings 

Since  1944,  international  civil  aviation  has  been  governed  by  a  state-centric  order, 
characterized  by  US  leadership  and  an  embedded  bilateralism.  Under  the  Chicago 
Convention,  the  International  Civil  Aviation  Organization  was  founded  as  the  UN’s  civil 
aviation  chapter.  The  Chicago  Convention  defines  civil  aviation  rights  in  terms  of  state 
sovereignty,  and  subsequently  these  rights  were  traded  through  bilateral  negotiations 
between nations. Due to the fact that the US’s civil aviation power was the strongest in the 
world after the Second World War, US built a global civil aviation regime under its leadership 
on the bilateral principle. Through the deregulation of US aviation industry and the adoption 
of  new  aviation  foreign  policy,  US  was  the  unquestioned  hegemon  of  international  civil 
aviation.  

Although  Chicago  Convention  opened  a  new  page  for  international  aviation  by  clearly 
defining  the  air  sovereignties  of  individual  countries  as  well  as  outlining  various  aviation 
freedoms,  the  ICAO  was  successful  in  standard-setting  and  a  forum  for  cooperation  in 
technical issues, but had limited operational capacities due to the original institution setting, 
power structure as well as its decision making procedures. The EU has emerged as a new 
power  in  international  civil  aviation.  It  has  changed  the  rules  of  international  civil  aviation 
economic regulation, international civil aviation environmental policy as well as international 
civil aviation safety and security policy.  

The EU has introduced a form of multilateralism through its imposition of a new type of air 
services agreement, which it has substituted for bilateral accords. The signing of EU-US Open 
Skies  Agreement  appeared  to  signal  its  status  as  a  new  hegemonic  power.  It  has  also 
successfully signed similar agreements under the umbrellas of EU’s Neighbourhood Policy 
as  well  as  EU’s  Mediterranean  Policy  with  its  neighbours.  It  has  signed  (been  working  on 
signing) Open Skies Agreements with other major civil aviation powers. The EU has not only 
been  active  in  international  economic  regulation.  It  has  also  attempted  to  raise  global 
environment protection standards. Following the extra-territorial implementation of its rules 
on noise emissions, it sought to promote its Emission Trading System more globally. ICAO 
not  only  accepted  to  put  the  environmental  protection measurements  for  discussion,  but 
also set up the environmental protection group of ICAO, more importantly ICAO has finally 
agreed  to  set  up  the  international  civil  aviation  standards  by  2020  which  marked  another 
victory of EU in international civil aviation politics. In terms of the safety and security issues, 
after long interactions between European Parliament, European Commission and European 
Council, the Passenger Name Records was adopted by the European Parliament to tackle 
the issues of civil aviation safety  and security  after terrorist attacks in Europe. There is also 
therefore  momentum  for  EU  to  promote  its  safety  and  security  measurements  to  be  the 
international  standards.  Although  the  EU  is  not  and  cannot  be  a  member  state  of 
International  Civil  Aviation  Organization  (ICAO),  it  has  nevertheless  succeeded  in  exerted 
major international influence. 

89 

 
 
Case Study on EU-China Open Skies Agreement Negotiation 

The research will be done through case studies on finding out whether EU or China or maybe 
both  in  different  contexts  can  make  the  new  international  civil  aviation  regimes  between 
Europe and Asia to help the sustainable development of the EU-Asia Civil Aviation.  

China  has  been  very  ambitious  to  boost  civil  aviation  industry  by  merging  state-owned 
airlines to increase capacities, building airports to enable possibilities. If EU can successfully 
sign the Civil Aviation Agreement with China, it shows very clear that EU has been the new 
hegemon  of  international  civil  aviation  as  EU  succeeds  to  persuade  China  to  follow  EU’s 
multilateralism as the international principle.  

It should be noted that China has promoted the Belt and Road Initiative in the whole world 
since 2013, it is mainly for the economic booming by making the regimes of Belt and Road 
Region under China’s leadership. Belt and Road Civil Aviation Region is one of the top targets 
that  China  is  hoping  to  finalize  after  getting  the  Asia  Infrastructure  Investment  Bank 
established. Therefore China has promised to invest 50 Billion RMB (9 Billion Euro) at the Belt 
and Road Region countries to help their civil aviation industries. In 2018, EU also proposed 
the strategy to connect Asia and Europe which has been in the early stage of the making.  

As  the  EU  and  China  all  have  ambitions  to  connect  Europe  and  Asia,  it  is  definitely  worth 
researching whether EU and China will cooperate or compete or cooperate for the regime 
making. It is worth researching because EU and China have extremely different approaches 
on the civil aviation regime making, while EU is targeting on the selected major civil aviation 
countries  in  Asia,  China  has  included  all  countries  in  the  Belt  and  Road  Region  in 
consideration.  

Research Method of Game Theory Analysis 

Game Theory analysis will be used as the method to explore, whether EU or China can make 
new  model  of  international  regimes  as  new  regime  maker  in  the  world.  The  four-game 
theory scenarios between China and EU’s rational interactions will be exposed, while the four 
payoffs  of  China  and  EU’s  each  within  four  different  contexts  of  EU  and  China’s  rational 
behaviour patterns will be compared vertically and horizontally. More importantly the flows 
between four game theory interaction scenarios will be analysed to figure out the pros and 
cons in line with the gains and losses during the flows to identify the most stable scenario for 
the  two  parties  to  have  the  agreements  signed,  through  which  building  the  new 
international regime can be regarded as the fruit produced by the interplays between EU’s 
liberalism and China’s regional multilateralism initiated by the One Belt One Road National 
Grand Strategy of China.  

Game  Theory  is  the  best  tool  for  exploratory  studies  on  international  negotiations  as  the 
feature of the game theory is to forecast the strategic decision-making procedures based on 
the forecasting of different players’ actions based on the rational way of thinking.  

Conceptual Framework for Analysis  

Figure 1 presents the conceptual framework for analysis, which is based on Game Theory and 
Regimes Theory findings. The conceptual framework shows the possible strategies of the EU 
and the third countries based on the ideologies and values. 

90 

 
 
 
 
Figure 1: Conceptual Framework showing Two Way Interactions between EU and Third Countries on 
their Open Skies Agreement Negotiation Options. 

91 

 
 
 
Table 2 EU-China Open Skies Agreement Negotiation Payoff Scenario  

EU 

Friendly 

Friendly  

C1   E1 

Cold 

C2   E2 

common benefits(Open 
Skies) in conflict with 
each other(5th or 7th or 
8th and 9th), collaborate   

regime 

to avoid certain result (no 
regime) but they have 
conflicts (5th, 7th, 8th or 9th, 
both parties has same 
rights or not). Regimes 
will be made to 
coordinate 

China 

Cold 

C3   E3 

to avoid certain result (no 
regime) but they have 
conflicts (5th, 7th, 8th or 9th, 
both parties has same 
rights or not). Regimes 
will be made to 
coordinate 

Scenario 4 China 
approaches EU member 
states  and US if EU is 
cold to China, UK-China 
Open Skies Agreement 
after Brexit 

C4    E4, No Regime 

Note: The research is only the strategic scenario analysis between EU and China (third country), not the action 
analysis which may require different game theory analysis models.  

Conclusion 

The  research  finds  out  that  the  EU  and  China  all  have  potentials  of  being  the  new 
international regime maker with the ideology of liberalism or regional multilateralism. But it 
is very important for the EU and China to use the right strategy at the right time for getting 
the best payoffs from the rounds of negotiations. If the EU and China as well as other Asian 
countries will be all rational during the whole process of Open Skies Agreement negotiations, 
the  EU-Asia  civil  aviation  market's  sustainable  development  is  very  possible  to  be  made. 
Needless to say, if the EU or China are not very rational during the negotiation process, their 
regime making process will fail because they cannot attract European and Asian countries 
to be members of their regimes.  

References 

Kassim, H., and Stevens H., (2010) Air Transport and the European Union: Europeanization and its limit, 
Houndmills, New York: Palgrave Macmillan. 

Dobson, A.P., (2007) Globalization and Regional Integration: The Origins, Development and Impact of 
the Single European Aviation Market, London and New York: Routledge. 

Staniland,  M.,  (2008)  A  Europe  of  the  Air?  The  Airline  Industry  and  European  Integration,  Lanham, 
Boulder, New York, Toronto, Plymouth: Rowman and Littlefield Publishers. 

92 

 
 
 
 
 
 
 
 
 
 
 
 
 Political Connectivity 

93 

 
An inquiry into synergies and tensions between 
the EU’s Connectivity Strategy and China’s BRI  

Constantin Holzer 

University College Cork, Ireland  

The EU and China are global economic key actors with a profound impact on transeurasian 
connectivity.  Both  like  to  posit  themselves  as  proponents  of  a  multilateral  global  order, 
international trade  and  environmental sustainability - embedded in  a narrative of win-win 
cooperation.  In  order  to  guide  investments,  both  China  and  the  EU  have  recently 
pronounced their own visions for sustainable development on the transeurasian continent - 
the Belt and Road Initiative by China, which was launched by China as early as 2013, and the 
EU's Connectivity Strategy to connect Europe Asia by the EU, launched in September 2018. 
While  both  visions  focus  on  infrastructure,  transport,  energy  and  digitalization,  the  EU\'s 
Connectivity  Strategy  is  emphasizing  sustainable,  comprehensive  and  rules-based,  while 
China\'s  BRI  is  stresses  the  win-win  cooperation  brought  about  by  the  Chinese  state-led 
investment model going global. Upon close examination both concepts differ dramatically 
in  terms  of  1.  strategic  vision,  2.  geographic  scope,  3.  development  methodology  and  4. 
available resources. Based on these fundamental differences, this paper is going to examine 
whether  and  to  what  extent  political-institutional  dialogue  and  cooperation  is  feasible 
between  the  EU's  Connectivity  Strategy  and  China's  BRI.  The  EUs  connectivity  strategy  is 
undoubtedly an important answer to China's BRI that allows the EU to engage transeurasian 
connectivity and to shape it in its own image. The question of political-institutional dialogue 
and cooperation remains a crucial one however in order to maximize benefits and reduce 
tensions between both initiatives. Increased connectivity has been identified by both the EU 
and China as one of the main aspects for boosting trade and sustaining economic growth 
and  the  geopolitical  dimension  of  trade  and  connectivity  is  at  the  centre  of  this  question. 
Synergies and tensions between the EU's Connectivity Strategy and China's BRI have to be 
made explicit in order to facilitate a form of dialogue and engagement that contributes to a 
shared vision of sustainable connectivity. 

94 

 
 
Asia Europe Connectivity: Converging the 
Regulatory Standards and Sustainable Financing 

Anita Prakash 

Economic Research Institute for ASEAN and East Asia (ERIA), Indonesia 

Asia, Europe and Africa are getting interlinked through pan regional connectivity initiatives.  
Asia is leading the narrative on connectivity in which the Masterplan on ASEAN Connectivity 
(MPAC), Belt and Road Initiative (BRI), Asia Africa Growth Corridor (AAGC), and Asia–Europe 
Meeting  (ASEM)  –  all  connectivity  plans  aim  to  deepen  Asia’s  economic  dynamism  and 
extend  it  to  trans-regional  partners.    As  a  significant  partner  of  Asia,  EU  has  put  in  place 
building blocks towards an EU Strategy on Connecting Europe and Asia with concrete policy 
proposals  and  initiatives,  including  through  interoperable  transport,  energy  and  digital 
networks. The EU-Asia connectivity strategy aims for sustainable, comprehensive and rules-
based connectivity. 

The  challenge  is  how  to  ensure  greater  synergy  among  the  connectivity  initiatives  in  the 
region which can result in inclusive and sustainable development, increase social well-being 
of people and deepens trust among partners. A roadmap for developing synergy among the 
connectivity plans and measures must therefore be an important policy agenda. 

‘Connectivity’  has  always  existed  but  use  of  connectivity  as  a  concept  for  determining 
development strategies and influencing international relations is recent. ASEAN is generally 
credited with popularising the term ‘connectivity’ leading to its MPAC, which was adopted in 
Ha Noi in 2011. The ASEAN approach to connectivity uses the context of community building 
and  well-connected  ASEAN  that  will  contribute  towards  a  more  competitive  and  resilient 
ASEAN  community.  The  MPAC  2025  broadens  this  vision  to  achieve  a  seamlessly  and 
comprehensively connected and integrated ASEAN.   

The AAGC aims to facilitate and enhance economic growth in Asia and Africa through the 
development  of  institutional  and  human  resource  capacity,  connecting  institutions  and 
people, facilitating trade and improving technology and infrastructure of the two continents. 
The AAGC is aligned with Agenda 2030 and provides green projects with priority funding and 
implementation.  

The BRI proposed by China aims to promote connectivity among the Asian, European, and 
African continents and their adjacent seas. It aims to establish and strengthen partnerships 
among the countries along the Belt and Road and realise diversified, independent, balanced, 
and sustainable development in these countries.  BRI is backed by strong financial resources 
commitments  from  China  and  decision  making  on  infrastructure  projects  is  based  on 
bilateral agreements with other governments.  

improve  connections  between  Europe  and  Asia, 

The  EU  Strategy  on  Connecting  Europe  and  Asia  lays  out  concrete  policy  proposals  and 
including  through 
initiatives  to 
interoperable transport, energy and digital networks. The approach to connectivity with Asia 
is  sustainable,  comprehensive  and  rules  based.  Establishing  partnerships  for  connectivity 
based  on commonly  agreed rules and standards and  contributing to address the sizeable 
investment  gaps  through  improved  mobilisation  of  financial  resources  and  strengthened 
international partnerships are its important features.  

95 

 
 
The Asia Europe Meeting (ASEM) connectivity differs from the infrastructure connotations of 
the  BRI  and  the  developmental  and  capacity-building  contours  of  the  AAGC.    ASEM  is  a 
multilateral  platform  of  51  countries  in  Asia  and  Europe  with  both  formal  and  informal 
institutions, and connectivity related activities are the most visible face of this group, as they 
runs across all three pillars: political, economic, and socio-cultural.  

In a global milieu, the connectivity plans are competing for space, resources, influence and 
results.    Seeking  convergence  among  competing  connectivity  plans  may  be  a  desirable 
policy objective but it is based on the notion that all connectivity plans have similar objectives. 
The contours of the MPAC, AAGC and BRI are different in terms of their origins partnerships, 
resources and the political and economic priorities of the promoters. Putting the strength of 
different  connectivity  plans  behind  globally  agreed  development  goals  and  global 
governance mechanisms, however, can create commonality of purpose and synergy among 
the different connectivity plans.  

The  transformational  changes  in  global  governance,  international  relations,  aspirations  of 
young  demography,  technological  connectivity  and  future  of  work  are  driving  the  current 
discourse  on  connectivity.  For  this  reason,  free  and  open  Indo  Pacific,  ASEAN-India 
connectivity, AAGC, BRI, EU-Asia connectivity are seeking greater emphasis on governance, 
standards, transparency, and accountability. The ADBI has helped to further this objective by 
providing the estimated costs for infrastructure in Asia ($ 26 trillion till 2030) which includes 
climate adaptation and mitigation costs.  

in  project  preparation  and 
Primarily,  financing  of  connectivity  plans,  transparency 
accountability  in  project  execution  are  important  global  concerns  emerging  from  the 
implementation of connectivity plan. The example of BRI is important  as it has  drawn  the 
global  attention  towards  issues  of  planning  and  project  design,  financing  and  debt 
sustainability, territorial integrity and people’s choices. Controversies in Pakistan, Sri Lanka, 
Maldives,  Laos,  Montenegro  relate  to  debt  sustainability  and  underline  the  disconnect 
between connectivity plan and development strategy.  

Finding  the  global  standards  for  connectivity  projects  and  activities  is  difficult  but  not 
impossible.  The  global  development  programmes  and  impetus  for  multilateralism  can 
provide  the  way  to  create  greater  interlinkages  between  connectivity  plans  through 
governments,  and  regional  and  multilateral  institutions.  The  Bretton  Woods  framework 
monitored  monetary  institutions  for  fostering  peace  and  building  growth  in  the  post  war 
years.  Similarly, with connectivity as the new international strategy for growth, it is essential 
that global governance should reach and monitor its various aspects and actors. It is already 
in  MPAC,  AAGC  and  EU-Asia  connectivity  that  triangular  and  multilateral 
evident 
cooperation  for  connectivity  are  producing  more  inclusive  and  sustainable  plans  due  to 
greater oversight of project preparation processes and plan outcomes.    

The practical aspects of trans-regional connectivity call for a unified or common regime for 
the  carriage  of  goods  and  people  across  continents.  Technical  specifications,  safety 
management  frameworks,  social  and  economic  well-being  of  workers  in  the  sector, 
competition policy, customs cooperation are some important beyond the border issues that 
require agreed standards and regulations, especially in rail and road transport. Air and sea 
connectivity have international rules but require calibration around new collaborations and 
routes. Digital connectivity is embedded in most plans but promoting a peaceful, secure and 
open ICT environment, including data protection requires coherent regulatory approach as 
well  as  policies  and  incentives  to  bridge  the  digital  divide.  Clearly,  the  synergy  in  different 
connectivity plans is incumbent on common rules and standards.   

96 

 
The  challenge  is  to  find  the  imperative  for  global  standards  and  governance  rules  for 
connectivity plans. This can be drawn from the broad commitment to put people and their 
prosperity  at  core  of  connectivity  programmes.  Employing  good  governance  and 
accountability as drivers, the plans must work towards the goals of sustainable development 
and inclusive growth. When connectivity plans converge with regional, national, and global 
development priorities, monitoring of plans will likely become easier. Finally, the monitoring 
and regulatory mechanisms must ensure that connectivity plans are not used  as a foil  for 
regional  leadership.  Nor  can  they  be  planned  to  export  the  debt  problems  in  promoter 
country  or  group  of  countries.    Policy  makers  are  working  towards  global  standards  for 
contemporary  issues  of  taxation,  digital  finance,  internet,  data  ownership  and  transfer, 
artificial  intelligence  etcetera.    Global  consensus  around  climate  change,  sustainable 
development goals, multilateralism and global trade is also being renewed. It is only logical 
that global (and regional) mechanisms for monitoring and regulation of connectivity plans 
should ensure that these plans enhance economic and social well-being among people and 
create trust among partners. The Asia Europe Meeting can be a solid platform to raise the 
efforts  among  Asian  and  European  partners  to  set  the  global  standards  and  regulations 
around infrastructure for connectivity and for the sustainable financing of connectivity plans. 

97 

 
 
EU and ASEAN Cooperation on Sustainable 
Development: towards an alignment of regional 
actions plans? 

Mei-Line Le Goueff 

University of Poitiers, France 

Objectives 

The  objective  of  this  paper  is  to  discuss  and  compare  the  EU  and  ASEAN  sustainable 
development  action  plans  and  its  implementation.  Furthermore,  it  examines  different 
cooperation  and  dialogue  instruments  that  have  emerged  in  the  pursuit  of  sustainable 
development. Lastly, it assesses to what extend these instruments improve the effectiveness 
of the application of actions plans and sustainable development law. 

Keywords 

Sustainable Development — International Environmental Law — Action Plan — Comparative 
Law — Cooperation — Soft Law — Political Instruments 

Introduction 

Despite  the  crisis  in  the  global  economy,  politics,  and  social-environment  between  the 
developed  countries  and  the  developing  countries,  sustainable  development  law  is  a 
potential instrument that can manage to resolve disputes between industrialized countries 
and  developing  countries  and  reconcile  economic  development  with  environmental 
matters. 

Consolidation  of  sustainable  development  law  that  was  undertaken  by  the  Stockholm 
Conference in 1972 and  the  Rio  Conference  in  1992  has  also  had  an  impact  on  social  and 
environmental justice. Indeed, it promotes a double synergy between the protection of the 
environment,  economic  development,  and  State  action.  The  recognition  of  sustainable 
development by the international community represents a significant change to the current 
legal system guaranteed by consistency, rationality, autonomy and structured in hierarchical 
layers. 

However, the emergence of sustainable development in international law and its recognition 
raised concern, questions, and controversy about its legal prospect, sophisticated governance 
and structural limits due to the proliferation of sustainable development standards and the 
growing number of complex institutions. Furthermore, differing practices — e.g., action plans 
and strategies — between the EU and ASEAN point to the need to consider whether there is 
a genuine joint will of both regions to create a new paradigm that can reconcile environment 
protection with economic development. 

Thus,  raising  the  question  of  whether  the  EU  and  ASEAN  new  dialogue  and  cooperation 
instruments  of  dialogue  could  strengthen  the  implementation  and  effectiveness  of  their 
regional action program for sustainable development. 

98 

 
 
 
 
To address the issue, this paper provides, first, a comparative perspective and an analysis of 
different EU and ASEAN regional action programs dealing with sustainable development in 
order  to  build  on  points  of  convergence  and  reduce  points  of  divergence  (1).  Second,  it 
examines  the  EU  and  ASEAN  Strategic  Dialogue  and  Cooperation  instrument  in  order  to 
assess whether these instruments contribute to a greater effectiveness of the application of 
action plans and sustainable development law (2). 

The European Union and ASEAN Action Plans in a comparative perspective 

The  EU  and  ASEAN  play  an  important  role  in  the  application  and  the  effectiveness  of 
international law related to sustainable development by establishing regional actions plans 
which  are  consistent  with  2015  Sustainable  Development  Goals  (SDGs),  Agenda  21  and 
regional strategies (e.g. Göteborg Declaration, 15-16 June 2001 and ASEAN Vision 2025). 

The EU and ASEAN both developed multi-annual action plans to guarantee the protection of 
the environment and sustainable development. Among various actions plans, the EU have 
so  far  seven  Environmental  Action  Programme.  Through  the  EU  example,  ASEAN  also 
established  suitable  actions  plans  to  the  local  needs  such  as  ASEAN  Sub-regional 
Environmental Programme (ASEPs I, II, III et IV) and Programme on nature conservation and 
terrestrial ecosystems. EU and ASEAN actions plans have three common priority objectives 
that  are  interconnected:  greater  effort  to  protect  the  environment,  supporting  economic 
growth and reducing threat hanging over human health and human well-being. Those three 
common objectives are a common ground between the EU and ASEAN. 

Action plans and strategies are soft law instruments that can be used as preparatory work 
for  binding  legislative acts. Besides, these non-binding instruments encourage the EU and 
ASEAN to work toward common goals such as sustainable development and the protection 
of the environment. 

Furthermore,  environmental  action  plans  contribute  to  the 
improvement  of  the 
implementation and the effectiveness of economic and social policies and regulations. For 
example,  sustainable  use  and  management  of  natural  resources  reduce  loss  of  natural 
capital. Improving the resilience of the natural capital leads to positive effect on human health 
and well-being. Since it has promoted innovation and the protection  of  natural  resources, 
climate change adaptation and mitigation measures improve the resilience of the EU and 
ASEAN economy and society. 

Although the positions  of EU  and ASEAN converge on three main objectives, their priority 
areas and methods of implementation and enforcement diverge thoroughly. The effective 
implementation  of  the  action  plans  relies  on  the  capacity  of  the  region  to  keep  it 
homogeneous and compliant. Therefore, the implementation of ASEAN action plans is less 
effective than those in the EU. That is mostly due to the absence of a centralized institution 
with coercive measures and compliance procedures. 

Moreover, both regions choose different priority areas and thematic strategy adapted to the 
context of the region and society. For example, on one hand, ASEP I, II and II have six priority 
areas  such  as  environmental  education,  urban  environment,  industries  and  environment, 
environmental  management,  marine  environment,  conservation  of  nature  and  earth 
ecosystem. On the other hand, the EU 6th EAP (2002-2012) and 7th EAP (2014-2020) focus on 
climate change, nature and biodiversity, environment and health, management of natural 
resources, waste, green economy with specific objectives for 2020. The 6th EAP have a list of 

99 

 
 
future legislative measures that can be adopted for the period of 2002-2012 whereas ASEP 
measures are soft law and are not binding. 

In  the  light  of  these  differences  and  low  effective  implementation  of  the  action  plans,  the 
strategic  dialogue  is  key  to  hold  EU-ASEAN  relation  on  track,  to  promote  mutual 
understanding and to enhance the effectiveness of the action plans. 

The European Union and ASEAN Strategic Dialogue and Cooperation Instruments: toward a 
greater effectiveness of the application of actions plans and sustainable development law 

The EU  and ASEAN constantly sought ways of improving their economic and commercial 
cooperation  and  dialogue.  They  consistently  attached  great  importance  to  political  and 
institutional cooperation which is a more traditional type of intergovernmental cooperation. 
Since  the  conference  of  Rio  (1992),  the  EU  and  ASEAN  have  developed  cooperation  and 
Strategic Dialogue covering environmental protection and sustainable development. The EU 
and ASEAN engage an informal and regular dialogue on the issue of integrating gradually 
environmental consideration into other policies, such as economic development and trade, 
and plans or programmes. 

Beyond  dialogue,  sharing  of  experience  and  information,  good  practice  and  capacity 
building facilitate the conciliation of the action programs, strengthen the implementation of 
sustainable  development  practice  and  the  solving  of  the  dispute.  Strengthening  regional 
cooperation  and  different  action  programs  could  contribute  to  innovation  hence  give 
satisfaction to States. 

For  example,  Asia  Europe  Meeting  (ASEM),  ASEAN-UE  Ministerial  Meeting  (AEMM)  and 
Regional  EU-ASEAN  Dialogue  instrument  (READI)  are  innovative  dialogue  instruments 
which  should  substantially  be  used  to  reinforce and to enhance relationships between EU 
and  ASEAN  through  a  more  comprehensive  and  balanced  agenda  on  sustainable 
development,  especially  in  the  environment  and  education  sectors,  justice  and  poverty 
alleviation.  In  addition,  those  instruments  enable  EU  and  ASEAN  to  focus  strongly  on  the 
implementation  of  sustainable  development  projects  rather  than  meeting.  Projects  have 
been implemented such as Trans-Eurasia Information Network (2010) established by ASEM, 
several seminars on clean energy and climate change. Besides, READY funded eleven action 
plans  to  support  ASEAN  integration  such  as  the  ASEAN  Center  for  Biodiversity  in  2010. 
Funding provided by the EU can be used to support sustainable development action plan, 
ASEAN integration, education and environmental projects, programmes and sectors. 

Despite  the  reinforcement  of  the  dialogue  and  the  EU-ASEAN  relation,  efforts  must  be 
continued,  particularly  in  the  area  of  protection  of  the  environment  in  order  to  have  a 
harmonized action plan or strategies. Indeed, the EU and ASEAN are faced with the same 
environmental  problems  such  as  pollution,  biodiversity,  forestry,  fisheries,  hence,  despite 
vicissitudes, they must pursue the cooperation in those areas and find new solutions to open 
new horizons for mutual understanding thanks to their Strategic Dialogue. 

100 

 
 
 
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101 

 
 
 
The Dark Side of Connectivity: Authoritarian 
Image Management & Extraterritorial Repression 

Alexander Dukalskis 

University College Dublin, Ireland 

Introduction32 

Authoritarian  states  try  to  present  a  positive  image  of  themselves  abroad  (Dukalskis,  2018; 
Brazys and Dukalskis, 2019). They invest in foreign-facing media, hire public relations firms, 
and showcase their successes to elite and popular foreign audiences. On its own this may be 
innocuous “soft power” or “public diplomacy”. However, there is also a darker side to these 
efforts. Authoritarian states try to obscure or censor bad news about their governments and 
often discredit their critics abroad. In extreme cases authoritarian states intimidate, physically 
attack,  or  even  murder  their  (self-)exiled  opponents  overseas.  Extraterritorial  repression  of 
this sort is facilitated by political, economic, and cultural connectivity. 

Connectivity that is truly sustainable must acknowledge and come to terms with modes of 
coercive political connectivity such as extraterritorial repression (for scholarship in this area, 
see  among  others:  Adamson,  2020;  Glasius,  2018;  Cooley  &  Heathershaw,  2017;  Moss,  2016; 
Lewis, 2015). States target political opponents abroad in order to blunt the ability of external 
political critics to influence domestic politics. Silencing critics abroad is part of a strategy to 
drive a wedge between external and internal activists so that  they cannot effectively work 
together. Perhaps most importantly, targeting  challengers abroad is important because it 
undermines their ability to garner the funds and attention necessary to pursue their goals. 
The  international  advocacy  sphere  can  be  considered  a  market,  with  groups  that  wish  to 
challenge governments needing to present themselves and their goals as appealing and in 
line with the aims of  funders able to support them (Bob, 2005). The effectiveness of these 
efforts depends a great deal on the international standing of the group itself. If a government 
can keep its challengers out of the international spotlight or undermine their credibility, they 
can keep activist causes off the international agenda, thus limiting pressure that rebounds 
back on the government.  

This  presentation  maps  the  extraterritorial  repression  of  the  world’s  authoritarian  states.  It 
uses a newly constructed and in-progress events database called the Authoritarian Actions 
Abroad  Database  (AAAD),  which  includes  instances  of  authoritarian  states  attempting  to 
threaten,  threaten  the  family  of,  arrest  or  detain,  extradite,  physically  attack,  and/or 
assassinate their citizens abroad between 1991 and 2019. 

Constructing the AAAD 

More details are available from the author, and will be published in book form, but in sum 
the AAAD contains publicly available information regarding attempts by authoritarian states 
to repress (self-)exiles abroad from 1991 through 2019. The database was inspired in part by 
the  Exeter  Central  Asian  Political  Exiles  Database  (CAPE)  (Heathershaw  and  Furstenberg, 
2019) as well as related work on political exiles featured in Cooley and Heathershaw, 2017: 187-
219) and the conceptual work found in Glasius (2018). The countries included in the database 

32 All rights and copyright retained by author.  

102 

 
 
 
                                           
are  based  on  those  defined  as  authoritarian  in  the  Geddes,  Wright,  and  Frantz  (2014) 
“authoritarian spells” typology after 1991 and for the relevant years. Some adjustments were 
made for states that had become authoritarian after the GWF coding finished or for cases 
omitted from the GWF  data for other reasons, such as population size. Other regime data 
gathering efforts were used as guidance in these cases (e.g. Wahman, et al., 2013).  Because 
authoritarian actions abroad of the sort this project is tracking are usually secretive by nature, 
it  is  likely  that  for  each  case  recorded  there  are  many  more  that  will  never  be  publicly 
reported or verified. This data is just a glimpse into a dark area of connectivity.  

Searching was done using a three-stage process. First, where similar databases existed, their 
content was used given that researchers had already gathered the information and made it 
public.  Second,  Google  news  and  Google  search  terms  were  utilized  in  order  to  identify  a 
population  of  news  articles  and  reports  that  contain  information  about  the  actions  of 
authoritarian leaders against exiles abroad.  For  each search term, the  first 10 to 20 Google 
pages  were  examined  and  a  population  of  relevant  articles  were  gathered  and  then  re-
examined  for  data  extraction.  The  search  terms  were  designed  to  cast  a  wide  net  and 
therefore  required  readers  to  determine  the  relevance  of  each  article.    Third,  given  the 
possibility of recency bias in Google news search terms, Nexis Advance UK was mined with a 
focus on earlier years in the timespan using similar search terms as those from the Google 
news and Google search procedures.  

Information  from  credible  NGOs,  international  watchdog  groups,  and  credible  journalistic 
sources were sought. Where news articles were found, attempts to corroborate each incident 
were  made.  Often,  multiple  news  sources  report  on  the  same  event.  Ultimately,  if 
corroborated, the incident was included in the database. If uncorroborated but the source is 
a  credible  well-known  organization,  then  the  source  was  included  in  the  database. 
Authoritarian  actions  abroad  are  often  inherently  secretive  –  indeed  they  are  usually 
designed as such – and so in cases where responsibility was not always clear the coding team 
discussed the case and used its best judgement to determine whether the case should be 
included or excluded. The database was cross-checked and validated by the coding team to 
ensure inter-coder reliability. 

Full definitions and caveats are available from the author, but in terms of targets, the AAAD 
categorizes  journalists,  activists,  opposition  figures,  former  government  officials,  and  other 
citizens.  In  terms  of  actions  against  targets,  it  covers  the  following:  threatened,  family 
threatened,  arrested/detained,  attacked,  attempted  extradition,  extradited,  abducted,  and 
assassinated. On the latter, attempts are also included, as is an indicator of how clear it is that 
state agents perpetrated the assassination. The perpetrators of authoritarian actions abroad 
are not always clear. This is by design. Authoritarian governments often use “thugs for hire” 
to  intimidate  or  attack  dissidents  domestically.  Ong  (2018)  identifies  three  conditions  in 
which the use of thugs is particularly likely: when the actions are illegal or unpopular, when 
the state wants to evade responsibility, and when states have weak capacity where they are 
operating.  Taking  actions  against  critics  abroad  satisfies  all  three  of  these  conditions.  This 
means that the location of responsibility for authoritarian actions abroad is made inherently 
difficult. There are undoubtedly cases in the AAAD where responsibility is misattributed, but 
nothing  systematic  is  suspected.  Regardless,  this  should  not  preclude  attempts  to  gather 
such data. 

103 

 
 
Overview of Findings 

Tables 1 through 4 give a brief overview of the data. The search procedures detailed above 
yielded 994 discrete cases of authoritarian actions abroad, some of which involved more than 
one person (i.e. when a group of exiles was targeted at once). Table 1 shows the states that 
most frequently appear in the AAAD as instigators of authoritarian actions, with Uzbekistan, 
North  Korea,  China,  Turkey,  and  Tajikistan  the  five  most  frequent  violators.  This  data 
highlights the importance of transnational repressive campaigns, as many of the Uzbekistan 
cases stem from the aftermath of people fleeing after the Andijan massacre in 2005, many 
of China’s cases involve the extraterritorial side of the post-2014 crackdown in Xinjiang, and 
Turkey’s cases are dominated by the post-coup attempt purges and crackdowns after 2016. 
Table 2 shows that citizens and activists are the two most frequent targets. The prevalence of 
activists  and  journalists  –  together  constituting  nearly  half  of  the  cases  –  suggests  the 
importance of image management as a motivator for authoritarian actions abroad. Table 3 
shows the most frequent actions. Of  particular  relevance for  connectivity is Table 4, which 
shows  select  data  on  the  locations  in  which  authoritarian  actions  took  place.  Over  28%  of 
cases  involve  European  states  (including  Turkey  and  Ukraine),  suggesting  that  European 
connectivity  does  come  at  a  cost  for  some  exiles  of  repressive  states.  Russia  is  the  most 
frequent target state with 205 cases, which largely stems from its security connectivity with 
Central Asian states and the cooperation that affords in terms of extradition procedures.  

Table 1: Top 10 Countries in the AAAD (N=994) 

Table 2: AAAD categorised by target 

Country 

Total 

Percentage 

Uzbekistan 

North Korea 

China 

Turkey 

Tajikistan 

Russia 

Syria 

Iran 

Rwanda 

Thailand  

189 

156 

139 

89 

60 

44 

43 

48 

30 

29 

19.01% 

15.69% 

13.98% 

8.95% 

6.04% 

4.43% 

4.33% 

4.83% 

3.02% 

2.92% 

Target 

Citizen 

Activist 

Journalist 

Former gov official 

Opposition 

Total 

Total 

Percentage 

398 

351 

134 

70 

41 

40.04% 

35.31% 

13.48% 

7.04% 

4.12% 

994 

100.00% 

Table 3: AAAD categorised by action 

Table 4: Select European states as targets 

Country 
Turkey 
UK 
Germany 
France 
Ukraine 
Sweden 
Switzerland 
Other EU states 
Europe in total 

Total 
60 
59 
34 
30 
20 
18 
7 
58 
286 

Percentage 
6.04% 
5.94% 
3.42% 
3.02% 
2.01% 
1.81% 
0.70% 
5.84% 
28.77% 

Action 

Total 

Percentage 

Arrested/detained 

Threatened 

Extradition Attempt 

Extradited 

Family threatened 

Abducted 

Assassination 

Assassination Attempt 

Attacked 

Abduction Attempt 

191 

179 

160 

156 

153 

54 

44 

26 

22 

9 

19.22% 

18.01% 

16.10% 

15.69% 

15.39% 

5.43% 

4.43% 

2.62% 

2.21% 

0.91% 

Total 

994 

100.00% 

104 

 
 
 
 
 
 
 
 
Conclusions 

While openness and connectivity can be used by activists and others to push for political change across 
borders, it can also be used by states to silence political threats abroad. For (self-)exiles who rely on the 
protection  of  borders  to  shield  them  from  authoritarian  states,  connectivity  brings  challenges  and 
hazards.  

References 

Adamson, F.B. (2020). Non-state authoritarianism and diaspora politics. Global Networks, 20(1), 150-169. 

Bob, C. (2005). The marketing of rebellion: insurgents, media, and international activism. Cambridge, 
Cambridge University Press.  

Brazys, S. & Dukalskis, A (2019). Rising powers and grassroots image management: Confucius institutes 
and China in the media. Chinese Journal of International Politics, 12(4), 557-584. 

Cooley, A. & Heathershaw, J. (2017). Dictators without borders: Power and money in Central Asia. New 
Haven, Yale University Press.  

Dukalskis,  A.  (2018).  Toward  a  Theory  of  Authoritarian  Extraterritorial  Image  Management,  SPIRe 
Working Paper WP09, School of Politics and International Relations, UCD, Ireland. 

Geddes, B., Wright, J.G., & Frantz, E. (2014). Autocratic breakdown and regime transitions: A new data 
set. Perspectives on Politics, 12(2), 313-331. 

Glasius, M. (2018). Extraterritorial authoritarian practices: A framework. Globalizations, 15(2), 179-197.  

Heathershaw,  J.  &  Furstenberg,  S.  (2019).  Central  Asian  Political  Exiles  Database  (CAPE).  Available  at: 
https://excas.net/projects/political-exiles/.   

Lewis, D. (2015). ‘Illiberal spaces’: Uzbekistan’s extraterritorial security practices and the spatial politics of 
contemporary authoritarianism. Nationalities Papers, 43(1), 140-159. 

Moss,  D.M.  (2016).  Transnational  repression,  diaspora  mobilization,  and  the  case  of  the  Arab  Spring. 
Social Problems, 63(4), 480-498.  

Ong,  L.H.  (2018).  ‘Thugs-for-hire’:  Subcontracting  of  state  coercion  and  state  capacity  in  China. 
Perspectives on Politics, 16(3), 680-695.  

Wahman,  M.,  Teorell,J.  &  Hadenius,  A.  (2013).  Authoritarian  regime  types  revisited:  Updated  data  in 
comparative perspective. Contemporary Politics, 19(1) 19-34. 

105 

 
 
Paving the road to peace and prosperity? A 
framework for understanding the conflict impact 
of infrastructure initiatives 

Pascal Abb 

Austrian Study Centre for Peace and Conflict Resolution33 

The political dimension of infrastructure has recently emerged as a topic of great academic 
and practical interest, mainly as a result of China’s much-discussed Belt and Road Initiative 
(BRI) and competing proposals advanced by actors like the US, EU, Japan and Russia. Much 
of  this  attention  has  focused  on  the  geopolitical  consequences  of  the  BRI,  and  for  good 
reason.  From  the  beginning,  it  was  conceived  of  as  a  "national  strategy"  serving  multiple 
economic and political aims, among them the restoration of China to a position of centrality 
in  world  politics  (Swaine  2015).  Analyses  have  covered  angles  ranging  from  its  impact  on 
reshaping  international  trade  flows,  its  role  in  boosting  Chinese  soft  power  and  agency  in 
global  governance,  or  how  related  investments  could  result  in  moving  recipient  countries 
into Beijing's political orbit (e.g. Huang 2016).  

However,  a  major  aspect  that  has  been  largely  overlooked  is  the  potential  impact  of 
infrastructure on conflict settings and dynamics. This angle urgently warrants further study, 
since many of the investments envisioned under the BRI and its competitors are intended 
for highly fragile regions that had been underserved by existing infrastructure funding - often 
because  this  fragility  is  a  warning  flag  to  investors.  Under  the  BRI  alone,  an  estimated  60 
billion has been earmarked for the China-Pakistan Economic Corridor (CPEC; MPDR/NDRC 
2017); a similar project in Myanmar, which is in an early planning phase, could even exceed 
this figure. Other countries with high actual or projected investments include Nigeria, Angola 
and  Sri  Lanka  (AEI  2020).  All  of  these  countries  are  currently  mired  in,  or  recovering  from, 
serious internal strife, sometimes at the level of full-blown civil wars in regions traversed by 
the new transport corridors.  

Where  the  link  between  conflict  and  infrastructure  has  been  considered  previously,  it  has 
usually  come  in  two  forms:  first,  by  treating  conflict  as  an  external  risk  to  projects  and 
analyzing  its  impact  on  overall  viability  (Araya  et  al.  2013,  Schwartz  and  Halkyard  2006);  or 
second, by promoting the overall developmental effects of infrastructure and arguing that 
this can help to build lasting peace (e.g. Anand 2005). However, there are reasons to believe 
that  the  interplay  between  infrastructure  and  conflict  dynamics  is  far  more  complex  than 
either  of  these  narrow  angles  suggest.  Infrastructure  has  a  potential  to  deeply  transform 
conflict  environments,  and  not  necessarily  for  the  better:  as  will  be  shown,  increased 
inequality, environmental degradation, corruption and human rights abuses are among the 
adverse effects that need to be considered and anticipated. This has major implications for 
project implementation, and a great deal of care is required to avoid causing or exacerbating 
conflicts. 

33 Early conference draft, please do not cite or copy. The author can be contacted at abb@aspr.ac.at  

106 

 
 
 
                                           
Infrastructure and conflict: a framework 

The term "infrastructure" encompasses an extremely broad category of items, ranging from 
connectivity solutions to power grids and municipal sewage systems. It is also a practically 
ubiquitous element of human civilization, shaping, enabling or constraining a wide variety of 
behaviours and thus making for an extremely complex relationship with conflict dynamics. 
The many potential interactions will be broken down here in two sets that tell very different 
stories: one of infrastructure as a driver of progress, peace and prosperity; and one covering 
the  flipside  of  strife  caused  by  inequality,  corruption  and  environmental  degradation.  The 
effects of any real-life implementation will likely contain elements of both, but dividing them 
by  this  line  helps  to  explain  both  the  attractiveness  which  infrastructure  holds  to  conflict 
societies, as well as problematic factors to be targeted by mitigation measures. 

Table 1: Potential positive and negative impacts of infrastructure on conflict dynamics. 

Positive 

Negative 

Jumpstarting economic activity, alleviating poverty 
and inequality 

Corruption, misappropriation and waste of public 
funds 

Statebuilding and strengthening national cohesion 

Differential provision that only benefits selected areas 
or groups 

Enabling better governance, services and control of 
contested territory 

Environmental degradation and development-
induced displacement 

Symbolizing modernity and creating expectations of 
progress 

Facilitation of repressive methods, securitization and 
militarization  

Transnational conflicts over financing and resource 
access 

 Accordingly, when it comes to conflicts, infrastructure projects need to be accompanied by 
a  political  strategy  to  realize  their  positive  effects  and  mitigate  against  negative  ones. 
However,  the  world's  most  prominent  currently  active  infrastructure-building  initiative, 
China's  Belt  and  Road,  follows  a  decidedly  different  approach.  In  promoting  the  BRI  and 
China's overall contribution to conflict-affected states, Chinese officials have expressed their 
faith that its developmental effects will bring about peace (Xinhua 2017), while also reiterating 
their country's long-standing commitment to the norm of political noninterference. How the 
latter is implemented in practice has changed a lot in recent years, but it still encompasses a 
robust commitment not to pursue the political transformation of other regimes, the mutual 
recognition  of  sovereignty,  a  preference  for  dealing  with  international  relations  at  the 
governmental level, and leaving only very limited possibilities for interventions in the affairs 
of other states (Hirono et al. 2019). Accordingly, the BRI looks set to emerge as a crucial test 
case  infrastructure-related  effects  on  conflict  settings,  and  one  that  is  inspired  by  a  very 
different approach to its political dimension. The following section represents a very rough 
first take at the available evidence for how this is playing out. 

Peace and prosperity through the 'Belt and Road'? 

Figure 1 plots total Chinese infrastructure investments to BRI countries against state fragility. 
Data  on  the  former  was  obtained  from  AEI’s  China  Global  Investment  Tracker  (CGIT;  AEI 
2020), by first limiting the scope to Chinese construction investments in BRI member states 
across four relevant sectors (transport, energy, utilities and telecom). The plotted number is 
the sum total of all such investments in a country since it joined the BRI. This may include 

107 

 
 
 
 
projects already agreed prior to the onset of the BRI, but due to the vague, open nature of 
the  initiative  and  the  rhetoric  surrounding  it,  is  arguably  the most  reasonable  criterion  for 
inclusion.  

Data on state fragility was obtained from the State Fragility Index (SFI) compiled by the Fund 
for Peace, by taking the yearly composite index scores for each BRI member since the time 
of  joining  and  averaging  them.  The  SFI  is  an  aggregate  of  several  political,  economic  and 
social dimensions and exhibits relatively little variation over such short time periods, but this 
average was used for greater precision. 

Figure 1: Chinese infrastructure investments under the BRI by recipient state fragility. 

 Figure  1  sketches  the  overall  bivariate  correlation,  an  estimate  of  the  linear  relationship 
provided  by  the  regression  line,  and  labels  cases  that  have  attracted  particularly  high 
investments  (more  than  10  billion  USD  in  total).  As  these  indicators  show,  Chinese 
infrastructure 
investments  under  the  BRI  are  clearly  skewed  towards  high-risk 
environments. Indeed, just 17 of the observed 86 countries would qualify as „sustainable“ or 
„stable“  using  the  SFI’s  ranking  system,  and  investments  are  heavily  concentrated  in 
especially  unstable  states  like  Pakistan  and  Nigeria.  Purely  from  a  risk  management 
viewpoint,  this  appears  counterproductive:  infrastructure  investments  have  very  long 
amortization  periods,  and  are  highly  vulnerable  to  wartime  destruction  as  well  as  lesser 
like  expropriation.  Accordingly,  we  would  expect  capital  to  flock  to 
political  risks 
environments that exhibit long-term stability, but the opposite is clearly the case for the BRI.  

108 

 
 
 
Some of this is by design - after all, the BRI was specifically intended to alleviate an unmet 
demand  for  infrastructure  across  developing  countries  in  Asia  and  Africa  that  had  at  least 
been  partially  caused  by  their  often  unattractive  risk  profiles  (Deloitte  2019).  There  is  an 
element  of  path  dependence,  too: the  BRI  built  on  decades  of  prior  Chinese  engagement 
with many of its members, often centred around natural resource extraction to fuel China’s 
booming  economy.  As  an  industrial  latecomer,  these  often  had  to  be  acquired  in  fragile 
states where Western corporations feared to thread (Alden and Alves 2009). Another reason 
can be found in the BRI’s perception as a geopolitical project designed to further Chinese 
global influence, which caused the US and many of its allies to abstain from participation and 
discourage  it  in  others.  This  opposition  removed many  of  the  world’s  wealthiest  and most 
stable nations from the pool of potential members, leaving it skewed towards more fragile 
countries.  

Table 2 presents a breakdown of BRI infrastructure investments in three separate groups of 
countries - those with a low fragility score (indicating high stability) of less than 60, a medium 
one between 60 and 90, and a high one of over 90. It also features two key control variables, 
overall GDP and population. 

Table 2: Key metrics of states grouped by fragility. 

State fragility, grouped 

low (N=15) 

medium (N=44) 

high (N=22) 

Share of total 
infrastructure 
investments 

Share of GDP 

Share of population 

8.8% 

14.2% 

2.5% 

49.7% 

72.4% 

67.8% 

41.5% 

13.3% 

29.7% 

 Again, it is immediately evident that less than a tenth of these investments went to stable 
countries. The largest category representing medium-stability countries accounts for almost 
half  of  the  total,  while  the  most  at-risk  group  attracted  41.5%.  This  is  highly  notable, 
considering that the latter group represents just over a quarter of the cases, about a third of 
their population, and most strikingly a seventh of their combined GDP. In other words, the 
size of potential national markets accessed by the BRI does not seem to justify the clustering 
of investments in risky environments. This finding is also confirmed by a very simple linear 
model assessing the relationship between a state's fragility and the total amount of Chinese 
infrastructure investments it received, while controlling for GDP and population size. State 
fragility is estimated to be significantly positively correlated with investments, and is in fact 
considered to be the best predictor among the independent variables in this model.34   

The main takeaway from this analysis is to underscore that BRI investments are marked by a 
very  high  acceptance  for  conflict  risks,  especially  compared  to  competing  initiatives;  that 
in  especially  conflict-prone  national  and  regional 
they  tend  to  be  concentrated 
environments;  and,  by  implication,  that  conflict  management  will  be  a  very  urgent  and 
complicated task in the BRI's implementation. 

While this data provides clear evidence of correlation, it should be interpreted very cautiously 
when it comes to the question of causation. Highly aggregated data collected over the short 
lifetime  of  the  BRI  is,  by  itself,  insufficient  to  investigate  the  complex  and  often  locally 
bounded  relationships  sketched  in  the  earlier  part  of  the  paper.  Accordingly,  this 

34 Significance was estimated at the 0.01 p-level, the model however has a relatively low overall explanative quality with an adjusted 

R2 of about 0.11. 

109 

 
 
 
                                           
presentation is simply intended to frame the problem and to point out the relevance of the 
BRI to the infrastructure/conflict nexus. The enormous influx of resources into highly fragile 
contexts in the wake of the BRI is likely to yield many possible test cases for the varied effects 
of  infrastructure  on  conflict  dynamics.  These,  however,  are  best  investigated  by  giving  full 
regard to national context conditions and especially the effects of individual projects at the 
local level. 

References 

Alden, Chris and Ana Alves (2009). China and Africa's natural resources: The challenges and implications 
for development and governance. SAIIA Occasional Paper 41. 

American 
<https://www.aei.org/china-global-investment-tracker/>. 

Enterprise 

Institute 

(2020). 

China  Global 

Investment 

Tracker.  Online: 

Anand,  Prathivadi  Bhayankaram  (2005). Getting 
infrastructure  priorities  right 
reconstruction. Research Paper No. 2005/42, United Nations University (UNU), 2005. 

in  post-conflict 

Araya,  Gonzalo  Jordan  Schwartz,  and  Luis  Andres  (2013). The  effects  of  country  risk  and  conflict  on 
infrastructure PPPs. Washington, D.C.: The World Bank, 2013. 

Deloitte  (2019).  Shanghai  Municipal  Commission  of Commerce  Belt  and  Road  Countries  Investment 
Index  Report  2018.  Online:  <https://www2.deloitte.com/cn/en/pages/about-deloitte/articles/pr-2nd-
belt-and-road-countries-investment-index-report.html> 

Hirono,  Miwa,  Yang  Jiang  and  Marc  Lanteigne  (2019).  China’s  new  roles  and  behaviour  in  conflict-
affected regions: reconsidering non-interference and non-intervention. The China Quarterly 239, 573-
593. 

Huang,  Yiping  (2016).  Understanding  China's  Belt  &  Road  initiative:  motivation,  framework  and 
assessment. China Economic Review 40, 314-321. 

Ministry  of  Planning,  Development  and  Reform;  National  Development  and  Reform  Commission 
(MPDR/NDRC,  2017).  Long-term  plan  for  the  China-Pakistan  Economic  Corridor.  Islamabad/Beijing: 
MPDR/NDRC. 

Schwartz, Jordan, and Pablo Halkyard (2006). Post-conflict infrastructure: trends in aid and investment 
flows. Washington, D.C.: The World Bank. 

Swaine,  Michael  (2015).  Chinese  views  and  commentary  on  the  ‘One  Belt,  One  Road’  initiative. China 
Leadership Monitor 47(2), 3. 

110 

 
 
China’s Belt and Road Initiative 2.0: Promoting 
Peace and Security in Myanmar? 

Cao Jiahan 

Shanghai Institutes of International Studies (SIIS), China 

The Belt and Road Initiative (BRI), as China’s signature foreign policy enterprise, celebrated 
its sixth birthday in September 2019. Doubtlessly, the BRI has so far achieved much tangible 
progress on the ground, while it also triggers some controversies and even criticism from the 
international  community  mainly  due  to  its  ambiguity  and  grandness  (e.g.  Schicor,  2018, 
Zhang, 2018). In the long run, it is of great importance for China to win more international 
recognition to guarantee the success of the BRI.  

Notably, when Chinese President Xi Jinping addressed a symposium in Beijing marking the 
fifth  anniversary  of  the  BRI  in  August  2018,  he  pointed  out  that  the  overall  layout  of  the 
initiative had been completed during the previous years and demanded a high-quality shift 
from “big freehand” to “meticulous brushwork” in planning future BRI projects (Xinhua, 2018). 
This statement was widely perceived as a signal for an updated version  of the  BRI, or  “BRI 
2.0,”  which  takes  on  board  various  interpretations  and  reflects  Beijing’s  vision  for  further 
advancing the BRI.  

In this light, people are curious about a number of questions, among which are: In what ways 
will the BRI 2.0 become qualitatively different from the previous version? Can this upgraded 
initiative  go  beyond  the  economic  dimension  to  address  environmental  and  social 
challenges? And how much will it promote peace and security in conflict-prone  countries 
like Myanmar?  

Exactly  in  the  same  month  when  President  Xi  made  the  statement,  the  Myanmar 
government published the Myanmar Sustainable Development Plan (MSDP) as the strategic 
guidance  for  the  development  of  the  country  that  provides  an  overall  framework  for 
coordination  and  cooperation  across  all  ministries,  states  and  regions,  in  order  to  forge  a 
common path towards the emergence of a prosperous, peaceful and democratic Myanmar 
through 2030. Also, it localizes Myanmar’s commitments to the United Nations 2030 Agenda 
for Sustainable Development (2030 Agenda) and its Sustainable Development Goals (SDGs), 
showing  strong  alignment  with  the  SDG  16  (Peace,  Justice  and  Strong  Institutions)  and 
especially  SDG  Target  16.5  (Substantially  reduce  corruption  and  bribery)  and  16.6  (Develop 
effective, accountable and transparent institutions) in a variety of action plans (Figure 1).  

111 

 
 
Figure 1: The SDG16-MSDP-Nexus. 

More  specifically,  the  MSDP  prioritises  peace  and  stability  as  the  first  pillar  which  is 
considered  the  prerequisite  of  achieving  socio-economic  development  in  Myanmar.  In 
particular, strategy 1.2 of the MSDP is set to “promote equitable and conflict-sensitive socio-
economic development through all States and Regions” (MFP, 2018). To a large extent, the 
MSDP seems to focus more on liberal political reforms and institutional inclusiveness as what 
is discussed by OECD donors in the approach of “peace-development-nexus”.  

In contrast, the BRI does not explicitly address the issue of peace and security in its “Vision 
and Actions” jointly released by several ministries in 2015, while China does believe that peace 
and  security  can  be  brought  to  fragile  countries  along  the  Belt  and  Road  like  Myanmar 
through  building  state  capacity  and  providing  economic  opportunities,  for  both  of  which 
infrastructure  is  a  crucial  element.  This  Chinese  style  of  peacebuilding  known  as  the 
“developmental  peace”  (e.g.  He,  2017;  Wang,  2018),  as  well  as  its  narrative  regarding  the 
relation  between  peace  and  development,  are  substantially  different  from  the  “peace-
development-nexus” approach adopted by the MSDP.  

Now what is clear is that, right after President Xi’s state visit to Myanmar in January 2020, the 
“meticulous  brushwork”  of  BRI  2.0  in  Myanmar  in  general  and  the  development  of  China-
Myanmar Economic Corridor (CMEC) in particular will be greatly accelerated in coming years. 
Meanwhile, Beijing is expected to be increasingly involved in the Myanmar peace process by 
delivering  more  pressures  on  Ethnic  Armed  Organizations  (EAOs)  for  peace  talks  to 
safeguard border security and economic interests. However, it remains to be seen whether 
China’s approach of “developmental peace” through mega infrastructure projects along the 
CMEC can fit into Myanmar’s priority for national reconciliation and good governance listed 
by the MSDP. Currently, to what degree Chinese efforts in peacekeeping, conflict mediation 
and the BRI-sponsored infrastructure investment in conflict zones are coordinated is still a 
question (Abb, 2018). Since there is a distinct lack of conscious peace and security angle to 
the  BRI,  whether  the  BRI  2.0  can  provide  Myanmar  with  an  alternative  model  of 
peacebuilding needs to be further observed and evaluated.   

In the longer term, the success of the “developmental peace” approach will largely depend 
on  project  management  on  the  ground.  While  BRI-sponsored  infrastructure  projects  will 

112 

 
 
 
generally enable Myanmar to become a regional hub of connectivity, improving the country’s 
trade, foreign investment and living standards of its citizens, they are also likely to cause social 
and  environmental  harm  and  provoke  new  conflicts  in  some  ongoing  conflict  areas  in 
Rakhine, Kachin and northern Shan states, which may in turn derail and undermine these 
projects. Therefore, the growth and development from infrastructure projects would have to 
be well managed to ensure real benefits  and narrowed inequality for ethnic communities 
within conflict-sensitive environments along the CMEC (e.g. Zhou ,2019; TNI, 2019). 

Given  the  shortage  of  experience  of  Chinese  companies  have  in  dealing  with  conflict 
environments, these infrastructure projects along the CMEC will be faced with a wide range 
of security challenges. Furthermore, China’s diplomatic tradition of political noninterference 
together  with  its  emphasis  on  state-to-state  exchanges,  have  constrained  the  options  to 
manage  security  problems.  Therefore,  China  needs  to  develop  its  own  political  strategy  in 
parallel with the implementation of infrastructure projects. Also, Chinese companies need to 
be equipped with more conflict awareness, technical conflict mitigation capabilities as well 
as  stakeholder  outreach  strategies  by  learning  from  and  collaborating  with  developed 
nations when necessary, in order to make the BRI 2.0 qualitatively different and help promote 
peace and security in Myanmar. 

References 

Abb, Pascal (2018). China’s Emergence as A Peacebuilding Actor. ASPR Policy Brief 4/2018, Schlaining, 
Vienna: Austiran Study Center for Peace and Conflict Resolution. 

He, Yin (2017). Developmental Peace: China’s Vision in UN Peacekeeping and Peacebuilding (Fazhan 
heping: lianheguo weihe jianhe zhong de zhongguo fang’an). Guoji zhengzhi yanjiu 4/2017, 10-32.  

Ministry of Finance and Planning (MFP 2018). Myanmar Sustainable Development Plan (2018-2030), 11. 
Nay Pyi Daw: MFP. 

National Development and Reform Commission, Ministry of Foreign Affairs and Ministry of Commerce 
(NDRC/MFA/MOFCOM, 2015). Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-
Century Maritime Silk Road. Beijing: NDRC/MFA/MOFCOM. 

Shichor,Yitzhak (2018).  China’s Belt and Road Initiative Revisited: Challenges and Ways Forward. China 
Quarterly of International Strategic Studies, 4(1), 39-53. 

Transnational  Institute  (TNI  2019).  Selling  the  Silk  Road  Spirit:  China’s  Belt  and  Road  Initiative  in 
Myanmar. Myanmar Policy Briefing. Amsterdam: Transnational Institute. 

Wang, Xuejun (2018). Developmental Peace: Understanding China’s Africa Policy in Peace and Security. 
In: Alden, Chris et al. (eds.), China and Africa, London: Palgrave MacMillan. 

Xinhua  News  Agency 
<http://www.xinhuanet.com/english/2018-08/28/c_137423414_2.htm>.  

(2018).  Xi  gives  new 

impetus  to  Belt  and  Road 

Initiative.  Online: 

Zhang, Zhexin (2018). The Belt and Road Initiative: China’s New Geopolitical Strategy? China Quarterly 
of International Strategic Studies, 4(3), 327-343. 

Zhou, Taidong (2019). Aligning the Belt and Road Initiative with Myanmar’s Sustainable Development 
Plan: Opportinities and Challenges. IDS Bulletin, 50(4), Sussex: Institute of Development Studies. 

113 

 
 
 
 
 
 
 
Trade and Investment 

114 

 
Enhancing Trade and Investment Facilitation for 
Global Value Chain Integration in Europe and 
Asia 

Eleonora Salluzzi, Rajesh Aggarwal, Mohammad Saeed and Qasim Chaudry 

International Trade Centre (ITC), Geneva, Switzerland 

Introduction 

This study aims at studying the key features of global value chain (GVC)   integration 
in 
Europe and Asia to understand how these have spurred trade and investment connectivity 
in the Asia–Europe Meeting (ASEM) region. It is argued that in Europe and Asia, intraregional 
trade  in  goods  and  services,  spurred  by  trade  liberalization  and  regional  integration,  and 
foreign  direct  investment  (FDI)  have  proved  to  be  a  powerful  engine  of  growth  and 
participation in GVCs. 

The study also delves into an analysis of those factors that have hampered technology and 
knowledge  spill-overs  into  some  economies  in  Asia  and  Europe,  preventing  businesses  to 
innovate, move upstream and capture a larger slice of the GVC pie.  

As  a  conclusion,  the  study  argues  that,  in  order  to  strengthen  trade  and  investment 
connectivity, Europe and Asia ought to cooperate to improve soft infrastructure and simplify 
the regulatory trade and investment environment to make engagement in GVCs a success. 

Methodology 

The  study  is  mainly  carried  out  through  a  descriptive  analysis  of  trade  and  investment 
aspects in Europe and Asia, comparing trade and investment trends in Europe and Asia.  

The  study  first  analyses  the  key  trends  of  trade  and  FDI  in  ASEM  in  the  last  few  decades, 
showing the patterns of growth of trade in goods, trade in services and FDI across the two 
continents.  

Subsequently, it analyses the areas demanding the attentions of policymakers in Europe and 
Asia to remove existing barriers to GVC integration. In order to investigate the main obstacles 
to further trade  and investment integration, the study focuses on the  challenges faced  by 
small and medium enterprises (SMEs) to compete, connect and change – using the ITC SME 
Competitiveness (SMECO) methodology – as well as on the non-tariff measures (NTMs) and 
FDI restrictiveness that hamper the integration of businesses in Europe and Asia into existing 
or new GVCs.  

Finally,  the  study  recommends  policy  actions  to  further  enhance  Asia-Europe  trade  and 
investment institutional connectivity, with trade and investment facilitation at the hearth of 
the dialogue and cooperation. 

115 

 
 
 
 
Key highlights 

1)  Key trends of trade and FDI in Europe and Asia in the last few decades 

GVCs are extraordinarily present in ASEM, mainly triggered by intense economic activity of 
intraregional trade in intermediate goods. In Asia and Europe, intraregional trade is the key 
factor driving economic growth, and shows how GVCs in both regions are mostly regional by 
nature. In Asia, the share of intraregional trade as a share of total trade increased to 57.3% in 
2016, up from an average of 55.8% during 2010–2014, whereas in Europe the share amounted 
to 60% in 2016 (Asian Development Bank [ADB] 2017; World Bank 2016).  Nonetheless, trade 
in services is increasingly growing in importance, playing a key role in the expansion in trade 
in Asia and Europe  during the past few  decades. Europe and Asia  are also the world’s top 
destinations for FDI.  

2)  Key policy determinants of GVC trade in Europe and Asia 

Trade  liberalization  has  enabled  Europe  and  Asia  to  participate  in  GVCs,  reducing 
significantly  tariff  barriers  to  the  trade  of  intermediate  and  final  goods.  With  production 
clustered around regional hubs, the rise of “Factory Asia” and “Factory Europe” has become 
the paradigmatic model of trade and development policies in GVCs.   

Trade liberalization has been driven by robust free trade agreement (FTA) activity, which is 
intensifying in dimension and scope. In fact, the new generation of modern FTAs that both 
Europe and Asia are negotiating are deep and comprehensive by nature, going beyond mere 
liberalization of trade in goods. Moreover, decreased transport and telecommunication costs, 
business-friendly reforms and regional integration agendas in Europe and Asia have ensured 
that countries could seize greater FDI opportunity to integrate in GVCs.  

Trade  facilitation  has  contributed  to  make  the  business  environment  more  conducive  to 
trade in the ASEM region, reducing the time and cost to import and export across borders. 
Improvements  in  trade  facilitation  performance  entail  considerable  economic  gains  and 
encourage more backward and forward linkages in GVCs. The entry into force of the WTO 
Trade Facilitation Agreement (TFA) has provided new impetus for trade facilitation reforms. 

3)  Areas demanding attention of leaders in Europe and Asia: barriers to GVC integration  

SMEs are at the bulk of economic activity in Asia and Europe and have many opportunities 
to thrive in the digital commerce era; however, in Asia they are not robustly integrated into 
GVCs. In the different ASEM sub-regions smaller firms face higher costs due to their inability 
to capitalize on economies of scale and show higher gaps in competing and connecting to 
GVCs due to a lack of managerial capabilities and inability to internalize technology.  

Although tariffs in Europe and Asia have decreased, other behind-the-border barriers have 
progressively continued to pose even higher costs on SMEs. NTMs have become increasingly 
important  within  GVCs  to  promote  access  to  information  and  traceability  of  products; 
however, they make compliance for small-scale businesses extremely difficult and impede 
their  integration  in  GVCs.  Procedural  obstacles  encountered  to  comply  with  NTMs  are  a 
major hurdle for SMEs, which often lack the resources to minimize the impact of trade costs 
arising from such obstacles. 

in  the 

improvements 

Despite 
last  decade,  services  restrictiveness  still  affects  the 
competitiveness  of  Asian  economies.  Services  restrictiveness  is  particularly  detrimental  for 
countries connected to GVCs, preventing them from upgrading in the chain. Different levels 
of  competitiveness  and  technological  advancement  occur  among  ASEM  economies, 
determining their different positioning in GVCs. Inability to exploit services to move upwards 

116 

 
in  GVCs  and  to  absorb  technological  and  knowledge  spill-overs  widens  the  gap  among 
better-performing and lagging economies in the ASEM region. 

Conclusions: policy recommendations 

It  is  argued  that  trade  and  investment  facilitation  policies  should  be  further  pursued  by 
policymakers in Europe and Asia to cope with modern challenges in international trade and 
to advance strengthened connectivity between the two regions. 

It is recommended that policymakers in the two continents should keep pursuing deep and 
comprehensive FTAs, with services, investment and trade facilitation provisions, as a means 
to spur an enabling climate for further trade liberalization. Regional approaches to negotiate 
FTAs  should  be  sought  to  simplify  rules  and  pursue  deeper  cooperation  in  a  number  of 
domains. 

It is  also recommended that policymakers establish a robust cooperation  and surveillance 
mechanism  on  addressing  NTMs  for  increased  economic  growth  in  Asia  and  Europe.  In 
particular, a coordinated approach to regional implementation of trade facilitation reforms 
in  Europe  and  Asia  would  be  crucial  to  promote  mutually  workable  solutions  and  reduce 
common procedural obstacles to trade.  

Finally, it is recommended that policymakers differentiate investment policies based on the 
country’s level of development, and implement policies geared towards not only investment 
facilitation but also investment absorption to develop or enhance indigenous technological 
capabilities.  

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Policy Actions in Asia. Metro Manila: ADB. 

ADB (2016), Asian Economic Integration Report 2016. Metro Manila: ADB. 

ADB (2017a), Asian Economic Integration Report 2017. Metro Manila: ADB. 

ADB (2017b), Aid for Trade in Asia and the Pacific – Promoting Connectivity for Inclusive Development. 
Metro Manila: ADB. 

ADB (2017c), Changing Patterns of Trade and Global Value Chains in Postcrisis Asia. ADB Briefs, Metro 
Manila: ADB. 

ADB (2017d), Trade Facilitation and Better Connectivity for an Inclusive Asia and Pacific. Metro Manila: 
ADB. 

ASEAN and UNCTAD (2017), ASEAN Investment Report 2017 – Foreign Direct Investment and Economic 
Zones in ASEAN. Jakarta: ASEAN. 

Baldwin, R. (2012), Trade and Industrialization after Globalization’s Second Unbundling: How Building 
and 
Matters. 
are 
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ers/Globalization/__PROOF_MS_ch5_RichardBaldwin_p306-392.pdf 

and  Why 

Different 

Joining 

Supply 

Chain 

It 

a 

Cadot, O. and L.Y. Ing (2015), Non-tariff Measures and Harmonisation: Issues for RCEP. ERIA Discussion 
Paper Series, ERIA-DP-2015-61. http://www.eria.org/ERIADP-2015-61.pdf. 

Cheng, K. et al. (2015), Reaping the Benefits from Global Value Chains, IMF Working Paper WP/15/204. 
Washington, DC: IMF. 

Correia de Brito, A., C. Kauffmann, and J. Pelkmans (2016), The Contribution of Mutual Recognition to 
International  Regulatory  Co-operation,  OECD  Regulatory  Policy  Working  Papers,  No.  2,  OECD 
Publishing. Paris: OECD. 

European Central Bank (ECB) (2013), Monthly Bulletin, June 2013. Frankfurt: ECB. 

Ernst & Young (2017), Investors Vote ‘Remain’ in Europe – EY’s Attractiveness Survey Europe, May 2017. 

European Commission (2018a), Eurostat. http://ec.europa.eu/eurostat 

117 

 
 
 
European Commission (2018b), Trade Country Profiles. 

Eurostat (2016), Asia–Europe Meeting (ASEM) – A Statistical Portrait. Luxembourg: European Union. 

Eurostat 
website, 
https://ec.europa.eu/eurostat/statisticsexplained/index.php/International_trade_in_goods_by_type_of_
good 

Commission 

European 

(2017), 

Eurostat 
https://ec.europa.eu/eurostat/statisticsexplained/index.php/China-EU_-
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Commission 

European 

(2018), 

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Geneva: WTO. 

118 

 
The Role of Global Value Chains to Strengthening 
the Connectivity between Europe and Asia  

Cungki Kusdarjito 

Dept of Agribusiness, Faculty of Agriculture, Janabadra University, Indonesia 

Introduction 

Globalization that started in the 80-90s changes the world economic landscape through the 
Global Value Chain (GVC). GVC allows quite a lot of opportunities for developing countries to 
participate in global trade and improve productivity. Before the rise of GVC, nations had to 
build  a  deep  and  wide  industrial  base  before  becoming  competitive.  This  is  the  way  the 
United  States,  Germany,  and  Japan  did.  GVC  requires  liberalization  import-export  and 
infrastructure improvement. Some policy options, such as improving connectivity with the 
international  market,  setting  competitive  pricing, 
increasing  domestic  value  chain, 
infrastructure, and services, should be established (Taglioni & Winkler, 2016).  

To  be  sustainable,  either  economically  and  environmentally,  GVCs  should  promote  social 
upgrades  and  equalize  the  opportunities  for  each  people.  Some  East  Asian  countries 
demonstrate that participating in GVC may decrease poverty. Yet, before implementing GVC, 
some  considerations  should  be  taken  into  account.  there  are  three  theorems  in  Beijing 
Consensus, i.e. the use of innovation to encourage progress, foreign direct investment and 
the development of human resources by improving education quality () 

Methodology 

All secondary data were obtained from the ASEM Sustainable Connectivity Portal. Data used 
for  the  analysis  were  extensive  aggregated  data  obtained  from  “Indicator  Explorer”  and 
“Connectivity  map”.  The  aggregated  data  consist  of  Physical,  Economic  and  Financial, 
Political,  Institutional,  People  to  People,  Social,  and  Economic  and  Financial1.  For  the 
connectivity, only Foreign Direct Investment (FDI), Trade in Goods and Research output with 
international collaboration were selected.  

The analyses used in this research were Biplot Principle Component Analysis (in short PCA), 
Self  Organizing  Map  Kohonen  artificial  neural  networks  (in  short  SOM)  for  clustering  the 
countries  and  Social  Network  Analysis  (in  short  SNA)  to  evaluate  the  modularity  of  the 
networks. SOM, as the other neural network model, for each simulation will not guarantee to 
obtain  the  same  results  as  in  the  deterministic  model,  yet  the  pattern  of  cluster  obtained 
from  the  learning  process  will  not  change  too  much.  This  is  due  to  the  random  number 
attached as the weights during the initial simulation.  

A list of countries and their abbreviation used in this research is shown in Table 1. 

119 

 
 
 
Table 1: Country index and abbreviation. 

Index 

Country 

Index 

Country 

Index 

Country 

Austria  

11 DE 

Germany 

21 NO 

Norway 

Index 

31 AU 

Country 

Index 

Country 

Australia 

41 LA 

Lao 

Belgium 

12 GR 

Greece 

22 PL 

Poland 

32 BD 

Bangladesh 

42 MY 

Malaysia 

Bulgaria 

13 HU 

Hungary 

23 PT 

Portugal 

33 BN 

Brunei 

43 MN 

Mongolia 

1 AT 

2 BE 

3 BG 

4 HR 

Croatia 

14 IR 

Ireland 

24 RO 

Romania 

34 KH 

Cambodia 

44 MM 

Myanmar 

5 CY 

6 CZ 

7 DK 

8 EE 

9 FI 

Cyprus 

15 IT 

Italy 

25 SK 

Slovakia 

35 CN 

China 

45 NZ 

N Zealand 

Czech 

16 LV 

Latvia 

26 SI 

Slovenia 

Denmar
k 

17 LT 

Lithuania 

27 ES 

Spain 

36 IN 

37 ID 

India 

46 PK 

Pakistan 

Indonesia 

47 PH 

Philippines 

Estonia 

18 LU 

Luxemburg 

28 SE 

Sweden 

38 JP 

Japan 

48 RU 

Russia 

Finland 

19 MT 

Malta 

29 CH 

Switzerland 

39 KZ 

Kazakhstan 

49 SG 

Singapore 

10 FR 

France 

20 NL 

Netherlands 

30 GB 

U Kingdom 

40 KR 

Korea 

50 TH 

Thailand 

51 VN 

Vietnam 

Results 

Based on the result from PCA, countries in Asia and Europe exhibit different characteristics 
in many aspects. Regionalism in Europe is stronger compared to Asia. Europe is also more 
homogenous than in Asia. Almost all of the Asian countries are located on the opposite side 
of  the  arrow  direction  which  represents  the  indicators.  It  means  that  their  relations  are 
negative. For instance, BN(33) and KZ(39) are negatively related to the Social and Institutional 
indicators. VN(51) is negatively related to the Politics indicator. MY(42) and RU(48) negatively 
related  to  the  Environmental  indicator.  MM(44)  and  LA(41)  are  negatively  related  to  the 
Economic/Financial and People to People Connection indicator. On the other hand, almost 
the European countries follow one or more arrow direction. GB(30), FR(10) and DE(11) are very 
strong  in  Economic  and  People  to  People  Connection,  NO(21)  in  Sustainability,  CH(29)  in 
Social and Institutional indicators. The results from PCA also indicate that the Physical and 
Connectivity indicator are highly correlated. A similar result also found between Social and 
Institutional indicator, thus these two indicators are redundant (see Figure 1).  

120 

 
 
 
 
 
 
 
 
 
 
 
Figure 1: Biplot PCA. 

The result of the SOM-Kohonen is shown in Figure 2 and Table 2. To read the result, node 1, 
symbolized as a circle,  is located at the most left bottom of the diagram and it contains two 
members (countries). The second node located right next to the first node. Nodes that are 
located closely (the neighbour nodes) in the same cluster have some degree of similarity. For 
instance, cluster number 17 (FR, DB, GB) is encircled by cluster number 13 (IT, ES), 14(JP) and 
18 (CN). As shown in Biplot PCA, FR, DB and GB are the top performers and labelled as cluster 
1 in SOM-Kohonen. BE and NL (located in node 9) are closely related to node 13 (IT, ES) and 14 
(JP). Node 9 (BE, NL), 13 (IT, ES), 14 (JP) and 18(CN) are labelled as cluster 2. Node 5 (DK, NO, SE, 
CH),  Node  6(IR),  Node  10  (PL  and  PT)  in  cluster  3  encircled  node  9  in  cluster  3.  Since  they 
located in a different cluster, their similarity is not as strong if they located in the same cluster. 
Node 4 (BD, MM) represents the node with less intense development and network compared 
to other clusters. Node 4 (BD, MM) is close to Node 3 (LA, VN, and KH) and node 8 (IN, ID, PH, 
PK, TH), either in the model or geographically. Node 20 (BN, KZ, MN) are countries which rich 
in natural resources (oil  and coal), the networks  are limited and  close to the RU node and 
classified as cluster 4. 

121 

 
 
 
 
Figure 2: SOM Kohonen Result. 

Table 2 shows the results of clustering by SOM Kohonen. 

Table 2: Clustering by SOM Kohonen. 

Country 

BG,HR,HU, 
LV,LT, 
MT,RO,SK,SI 

#3   

IN,ID, PH, PK, 
TH 

#4 

BE,NL 

#2 

PL,PT 

#3 

1 

2 

Country 

AT,FI 

#3 

CZ,EE 

#3 

Political, 

7 

Institutional, 

Social, Economic, 
Sustainability 

Institutional, 

8 

Social, Finacial1, 

Sustainability  

3 

LA,VN,KH  

Environment, 

9 

#4 

Finacial1 

4 

BD, MM 

#4 

Environment, 
Financial1, 
Sustainability,  

5  DK,NO,SE,CH 

#3  

Physical, Political, 
Institutional, 
Connectivity, 
Environment, Social, 
Sustainability 

10 

11 

13 

Country 

IT,ES 

#2 

Political, 
Institutional, 
Environment, 
Financial1, 
Sustainability 

Environment 

14 

JP #2 

15 

AU,KR,SG 

#3 

Physical, Economic, 
Political, Institutional, 
People, Connectivity, 
Environment, Social 

Physical, Economic, 
Political, People, 
Connectivity, 
Environment, Social 

Physical, Economic, 
People, Connectivity, 
Social, Finacial1 

Physical, 
Economic, Political, 
Institutional, 
People, 
Connectivity, 
Social, 

Sustainability 

Physical, Political, 
Institutional, 
Connectivity, 
Social, 
Sustainability 

16 

LU 

#3 

Economic, 
Institutional, People, 
Connectivity, Social  

NZ 

#3 

Social, 
Sustainability 

17 

FR,DE,GB 

#1 

Physical, Economic, 
Political, 

6 

IR 

#3 

Economic, Political, 
Institutional, 
Connectivity, 
Environment, Social 

12 

CY,GR 

#4 

Political, 
Institutional, 
People, 
Environment 

18 

CN  

#2 

Institutional, 

People, 

Connectivity, 
Environment, Social, 
Sustainability   

Physical, Economic, 
People, Connectivity, 
Finacial1, 

19 

MY,RU  

#3 

Physical, Economic, 
People 

20 

BN,KZ,MN 

- 

#4 

122 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Figure 3 shows the modularity of the SNA for Foreign Direct Investment (FDI) (left) and Trade 
in  Goods  (right).  For  FDI,  three  clusters  of  modularity  are  identified.  RU,  KR,  VN,  and  PK 
becomes small cluster along with the European and Asia Cluster. In Figure 3, Trade in Goods 
provides a more complex structure. The European cluster is divided into four sub-clusters. 
The most connection between Europe and Asia mostly occurs between West Europe. Central 
European and east Europe are more closely related to West Europe. Thus, the connection is 
more  intense  if  the  country  located  in  the  same  region  or  sharing  a  common  history.  The 
connection between Central and East Europe with Asia can be improved in the future.  

123 

 
Figure 3: Modularity in SNA. 

Results from the SNA is shown in Figure 4, CN is the main source of FDI in ID, IN, and  MY 
whilst KR is the main source of FDI in China and VN. GB also has a prominent role in IN. Tough, 
the pattern of FDI is not so apparent in Europe. In terms of trade in goods, CN and DE are the 
main player in their respected region, followed by JP and KR in Asia, and NL in Europe. FDI is 
needed for technological transfer, involving SMEs in the process of production and become 
part  of  the  Global  Value  Chain.  NL,  SG  are  small  countries,  but  they  have  major  roles  in 
logistics and distribution. ID, IN, PK, TH, PH are located in the same node, countries with a 
high population. 

Figure 4: SNA for FDI and Trade in Goods 

The results also showed that countries with a shared border with JP  and KR, i.e. CN in Asia 
and DE in Europe (NL, PL, HU) have advantages for FDI from their neighbour.  

124 

 
 
 
 
 
 
 
Discussion 

According to Taglioni & Winkler (2016) when entering GVC, infrastructure (physical factor) and 
easiness  of  doing  business  need  to  be  improved.  Besides,  the  quality  and  competence  of 
services and efficiency of custom (institution) are also the main factors involve in GVC. Yet, 
based on the SOM analysis, none of the Asian countries is good in institutional indicators. Yet, 
Europe is excel in Institutional indicators compare to its counterpart in Asia. 

FDI in Asia is concentrated in some countries. IN and ID are among the largest recipient of 
FDI, mainly from China whilst VN receive FDI mostly from KR. CN also receives FDI from JP 
whilst ID also receives FDI from GB. Both ID and IN are the largest economy in SE Asia and 
South Asia, therefore they have opportunities to be the economic powerhouse in their region. 
Yet, IN networks are more differentiated compared to ID and ID need to expand its network 
to make GVC more effective 

Central European countries, such as BG, HR, HU, LV, LT, MT, RO, SK, SI are constrained by their 
scale. Some of these countries are trying to capture FDI and flow of trade through modern 
silk-road from China and compete with each other to be the main gates between Asia and 
Europe (especially after BRI was launched in China). But these countries have overlooked the 
potential of the other Asian Countries such as IN, ID, PH, TH, SG and MY which are traditionally 
connected  to  West  Europe  for  their  exports  and  trades,  especially  with  GB  and  NL.  GB  is 
closely related to IN for people to people connection and FDI. 

The networks for some countries which are rich in their natural resources such as BN and KH 
are very limited. Thus, these countries need to improve the networks and participation in GVC 
to  diversify  their  economy,  in  anticipation  when  their  oil  depleted  or  alternative  energy  is 
used  to  replace  the  fossil  fuel  as  the  main  source  of  energy.    MM,  LA  and  KH  are  lack  of 
resources in all aspects. Implementing GVC may put their countries at risk to be controlled 
by foreign investors. Inclusion for these countries can be started from the nearest neighbour 
countries,  for  instance,  LA  and  KH  with  TH  and  VN  rather  than  with  CN  which  involving  a 
large amount of money. A special zone can be used as a stepping stone to economy wide 
improvements (World Bank, IDE-JETRO, OECD, UIBE, 2017). Open the service sectors in the 
process of integrating into globalization is one of the good strategies. The other issue is how 
to improve involvement in small and medium-size firms in GVC. 

To maximize the benefit of Asia-Europe connectivity, countries should take a specialization 
in  GVC.  It  can  be  done  by  maximizing  its  endowment  to  participate  in  the  stages  of 
production. Failure to meet this may result in the exclusion of some countries in the GVC. For 
instance, ID for alternative and renewable energy, VN for electronic devices, SG for services 
and financial centres, TH for automotive, IN for software and back-office and so on. 

However, without the labour that has adequate skills then development is undertaken will 
not  benefit  the  country's  which  results  in  debt  pile  resulted  in  recipients’  countries.  These 
conditions  will  result  in  long-term  dependency  which  is  very  costly  and  reduce  the 
sovereignty  of  recipient  countries  to  control  their  essential  infrastructure  (Ruby,  2017).  The 
higher education institutions can provide training and retraining. They can also help small 
and medium firms enter in GVC. Academics and universities could be more active in tracking 
natural,  social,  and  technological  causes  of  regional  differences  and  could  make  policy-
oriented  initiatives  a  priority  (Yang  et.  al.,  2016).  Incorporating more  environmental  actions 
into the initiative would help achieve long-term global economic prosperity and ecological 
sustainability (Liu et. al, 2015). 

125 

 
 
Conclusions 

GVC allows quite a lot of opportunities for developing countries to participate in global trade 
and improve productivity. Countries like in East Asia can grip the benefits and opportunities 
of  globalization.  GVC  not  only  stimulates  economic  growth,  but  it  also  creates  economic 
polarization  into  three  economic  regions,  i.e.  China  in  Asia,  Germany  in  Europe  and  the 
United States in North America. Joining GVC is faster than the old import-substitution route. 
The  developing  nations  that  adopted  this  new  strategy  are  called  emerging  market 
economies.  It  shifts  the  locus  of  globalization  from  sectors  to  stages  of  production.  These 
opportunities can be improved by enhancing the networks outside the traditional networks 
which are still undeveloped. MM, LA, BN, and KH need to improve their involvement in the 
GVC. IN, as the member of G-20 needs to expand their networks, whilst countries in Central 
Europe may exploit the opportunities of GVC and higher education collaboration with Asian 
countries.   

References 

Liu,  J.,  Hull,  V.,  Luo,  J.,  Yang,  W.,  Liu,  W.,  Viña,  A.,  …  Zhang,  H.  (2015).  Multiple  telecouplings  and  their 
complex interrelationships. Ecology and Society, 20(3), art44. http://doi.org/10.5751/ES-07868-200344 

Taglioni,  D.,  &  Winkler,  D.  (2016).  Making  Global  Value  Chains  Work  for  Development:  Trade  and 
Development Series. Washington: World Bank Group. http://doi.org/doi:10.1596/978-1-4648-0157-0 

World  Bank,  IDE-JETRO,  OECD,  UIBE,  W.  (2017).  Measuring  and  Analyzing  the  Impact  of  GVCs  on 
Economic  Development.  Global  Value  Chain  Development  Report  2017.  Washington  DC. 
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Ecosystem  Health 

Sustainability, 

Sustainability. 

Ecological 

2(10), 

and 

126 

 
 
Coffee and Cocoa Connection: I-EU CEPA 
Potential Impact to Indonesian Farmers 

Felippa Amanta 

Center for Indonesian Policy Studies, Jakarta, Indonesia 

Background 

Trade  numbers  between  the  European  Union  (EU)  and  Indonesia  are  relatively  low 
compared to other trade partners, and on a declining trend. According to ASEM data, trade 
in goods from Indonesia to the EU is at USD 14.5 billion (9.7% of Indonesian exports), and USD 
11.4 billion the other way around (7.5%  of Indonesian imports) (ASEM 2018, WITS 2018).  Key 
challenges to trade from the Indonesian side include tariff barriers, non-tariff measures, low 
human  capital  capacity,  and  low  productivity.  Relatedly,  investment  flow  from  the  EU  to 
Indonesia is also low at an average of USD 2 billion in three years (ASEM 2018). These numbers 
may drop even more since Indonesia is poised to graduate from the Generalized Schemes of 
Preferences (GSP) program in 2023, while other  Asian countries like Vietnam have  already 
completed their trade agreement with the EU. This could negatively affect the livelihood of 
many Indonesian producers, consumers, and labourers. 

Indonesia  and  the  EU  are  currently  negotiating  the  I-EU  Comprehensive  Economic 
Partnership  Agreement  (I-EU  CEPA).  This  research  paper  analyses  the  potential  impact  of  
I-EU CEPA on trade and investments by looking at key export commodities for Indonesia to 
the EU member states: coffee and cocoa. The purpose of the research is to demonstrate the 
positive  economic  and  social  impact  that  can  potentially  be  brought  by  I-EU  CEPA  to 
Indonesia and to encourage its utilization to strengthen the connectivity between Indonesia 
and the EU. 

The research uses qualitative analysis of trade and investment data from ASEM Sustainable 
Connectivity Portal, government statistics, and various trade databases. Further, the research 
studies existing models  of private investments in  Indonesia and its impact, based  on case 
studies in cocoa and coffee sector. The case studies are taken from Nestlé’s work with coffee 
farmers, and Swisscontact’s and Kalimajari’s initiatives in cocoa. 

Indonesia’s Coffee and Cocoa Sector 

Indonesia is among the world’s leading producers of coffee and cocoa, producing the third 
most cocoa and fourth most coffee globally (FAO 2015; ICO 2019). These commodities are also 
major export commodities, including to the EU member states, earning US $1,175.4 million 
for coffee exports and US $53.5 million for cocoa exports (Statistics Indonesia 2018; Statistics 
Indonesia  2019).  The  EU  member  states  together  make  up  20.8%  of  Indonesia’s  export 
destination for coffee. Indonesia’s coffee is 4% of the total coffee import across the EU, with 
Brazil being the main source (European Commission 2017). Meanwhile, Indonesia’s cocoa is 
not  yet  a  major  trading  commodity  to  the  EU,  which  prefers  to  import  cocoa  from  Côte 
d’Ivoire and Ghana. Despite its strategic importance, Indonesia’s cocoa and coffee sector face 
many productivity challenges and are experiencing a decline according to production data 
from the Ministry of Agriculture.  

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Table 1: Official Production Level and Productivity Rates of Cocoa and Coffee (2012-2017) (FAOSTAT 2019). 

2012 

2013 

2014 

2015 

2016 

2017 

Cocoa 

Production (tonnes) 

740,500 

720,900 

728,400 

593,331 

659,399 

659,776 

Productivity rates 
(tonne/ha) 

Coffee 

0.57 

0.41 

0.42 

0.35 

0.39 

0.38 

Production (tonnes) 

691,163 

675,800 

643,900 

639,412 

639,305 

668,677 

Productivity rates 
(tonne/ha) 

0.56 

0.54 

0.52 

0.52 

0.52 

0.53 

Cocoa industry actors believe that MOA overestimates production numbers, as private actors 
believe  production  to  be  only  between  350,000  to  400,000  tonnes  annually  (Glorya  & 
Nugraha 2019). Indonesian cocoa and coffee productivity levels are the lowest among other 
top  producing  countries  like  Ghana  and  Côte  d’Ivoire  for  cocoa,  and  Vietnam,  Brazil,  and 
Colombia for coffee. There are a number of reasons for this, including aging trees, diseases 
such as black pod disease for cocoa and coffee berry borer, elderly smallholder farmers, and 
the  fact  that  cocoa  and  coffee  are  increasingly  low  priority  crops.  Farmers  often  lack  the 
financial resources to invest in seedlings or purchase fertilizers. The products also tend to be 
of lower quality as farmers aim to make quick cash by selling the products soon after harvest 
in  the  forms  of  unfermented  cocoa  beans  and  green  coffee  beans.  This  reduces  the 
opportunity  to  benefit  from  value-adding  operations  that  could  increase  the  quality  and 
returns.  

Government programmes such as providing seedlings or technologies to farmers, research 
and development, and setting national standardization, address the many problems faced 
by  these  major  industries,  but  often  do  so  inefficiently  due  to  the  massive  regional 
differences. In the cocoa industry programmes focus on providing subsidized inputs, but lack 
sufficient education or supervision to ensure these inputs are being used correctly. According 
to Neilson & Mackenzie (2016), between 2009 and 2015 cocoa production decreased despite 
the extensive government programs. The coffee industry programmes focus on increasing 
quality,  yet  are  unable  to  supervise  quality  creation,  and  cannot  guarantee  a  consistent 
market for better quality coffee. 

Private Sector Investments 

The private sector provides additional solutions to increase cocoa and coffee productivity. To 
analyse  the  impact  of  these  private  sector  initiatives,  we  identified  and  evaluated  three 
initiatives,  all  of  which  have  some  connections  with  EU  member  states.  The  initiatives  are 
Nestlé, a Swiss-based multinational company who works with coffee farmers in Lampung; 
Swisscontact,  a business-oriented international aid agency who works with cocoa farmers; 
and  Kalimajari,  a  local  NGO  that  arranges  contract  farming  between  cocoa  farmers  and 
buyers,  including  EU  buyers.  These  private  sector  initiatives  focus  mainly  on  educating 
farmers and providing them with the means to increase their income independently. Nestlé 
and  Swisscontact  both  have  established  financial  intervention  programmes  that  not  only 
give  farmers  access  to  financial  support,  but  also  continued  monitoring  and  supervision. 
Meanwhile, Kalimajari’s contract farming program sets certain obligations and rights agreed 
between  buyers  and  farmers,  and  then  trains  the  farmers  in  Good  Agriculture  Practices 
(GAP). In addition, Nestlé, Swisscontact, and Kalimajari all provide extension officers (EO) to 

128 

 
 
 
 
help farmers with their daily challenges. These non-government actors have a very limited 
number of EO, less than 100 each, so they developed partnerships with other market players 
to scale up the number of EO in order to support the work and increase the total number of 
supervised farmers. 

Table 2: Partnerships for extension services. 

Swisscontact 

SECO Switzerland, Barry Callebaut, Big Tree Farm, Cargill, Ecom, Guittard, JB Cocoa, Krakakoa, 
Mars, Mondelēz International, Nestlé, Cocoa Sustainability Partnership Indonesia & PISAgro 

Kalimajari  

Jembrana District Government, Kerta Semaya Samaniya Union, Barry Callebaut, Pipiltin, 
Valrhona, Cau Chocolate Bali, Rainforest Alliance, UTZ, Indonesia Coffee and Cocoa Research 
Institute. & Cocoa Sustainability Partnership Indonesia 

Nestlé 

Indonesia Coffee and Cocoa Research Institute, Nestle Research & Development Centre in 
Tours – France, Swisscontact, & PISAgro 

Findings 

Our study finds that foreign private investments and technology and knowledge transfer in 
these  sectors  in  Indonesia  lead  to  an  increased  human  capacity  and  productivity  rate. 
Swisscontact, with seven years of experience supervising 154,000 cocoa farmers under their 
Sustainable  Cocoa  Production  Program  (SCPP),  explains  that  their  results  vary  with  time. 
Beginner  farmers,  with  two  years  of  Swisscontact  supervision,  can  achieve  average 
productivity  of  0.62  tonnes/ha  annually.  Farmers  with  six  years  supervision,  can  achieve 
average  productivity  of  0.93  tonnes/ha,  and  last  but  not  least,  professional  farmers  can 
achieve average productivity as high as 2.5 tonnes/ha annually. By contrast, the Ministry of 
Agriculture  (MOA)  records  national  cocoa  productivity  to  be  approximately  0.4  tonnes/ha 
annually,  so  Swisscontact  farmers’  average  productivity  is  significantly  higher  than  the 
average  productivity  rates  in  Indonesia.  Swisscontact-supervised  farmers’  productivity  is 
recorded  at  55%  higher  for  beginner  farmers,  133%  higher  for  farmers  with  six  years 
supervision, and 625% higher for professional farmers.  

Kalimajari,  which  only  manages  approximately  619  cocoa  farmers  with  each  farmer 
possessing less than 1 hectare of land, records productivity not much higher than MOA and 
FAO’s  average  productivity  rates.  However,  their  cocoa  beans  are  bought  at  much  higher 
prices due to their fermented quality. Average productivity is 0.3 tonnes/ha for one harvesting 
period  –  0.6  tonnes/  ha  annually.  Farmers  receive  40,000  IDR  for  each  kilo,  meaning  that 
farmers selling to Kalimajari earn a minimum of 12 million IDR per harvest, and 24 million IDR 
annually. These incomes are far higher than those of cocoa farmers who sell their product for 
only around 20,000 IDR per kilo, and are unable to make up for the low prices per kilo with 
greater productivity. 

Nestlé has supervised 20,000 coffee farmers in Lampung for over 30 years and has achieved 
an average productivity of 1.2 tonnes/ha annually. This number is more than twice as high as 
MOA’s reported average productivity for Indonesian coffee farmers, which is approximately 
0.5  tonnes/ha.  It  is  20%  higher  than  Colombia’s  average  coffee  productivity,  which  is 
approximately 1 tonne/ha.  

In  plantations  supported  by  foreign  enterprises,  the  productivity  rate  increased  from  an 
average of 0.4 tonnes/ha to 2.5 tonnes/ha for cocoa, and from 0.5 tonnes/ha to 1.2 tonnes/ha 
for coffee. The investment also increased awareness of sustainable practices and increased 
trade values through certification, which could  strengthen farmers’ ability to meet  the EU 

129 

 
 
 
 
 
 
market’s  preference  for  sustainable  commodities  and/or  Geographic  Indicator  (GI).  Cocoa 
farmers are able to sustainably farm and process the cocoa beans, increasing the value from 
USD 1.42/kg to USD 2.84/kg. Further exploration of these findings can be found in Glorya and 
Nugraha (2019). These case studies illustrate the positive impact that foreign investments can 
bring to Indonesia’s human capital and suggests the need for an I-EU CEPA to facilitate EU-
Indonesia connection in trade and investments. 

References 

Asia-Europe Meeting (2018). ASEM Sustainable Connectivity Portal. Retrieved from https://composite-
indicators.jrc.ec.europa.eu/asem-sustainable-connectivity/connectivity 

European  Commission 
https://ec.europa.eu/eurostat/web/products-eurostat-news/-/EDN-20170929-1 

(2017).  Where  does  your  coffee  come 

from?  Retrieved 

from 

Food  and  Agriculture  Organization  of  the  United  Nation  (FAO)  (2015).  FAO  Statistical  Pocketbook: 
Coffee 2015. 

FAOSTAT  (2019).  Indonesian  cocoa,  coffee,  and  rubber  production:  2012-2017.  Retrieved  from 
http://www.fao.org/faostat/en/#compare  

Glorya, M. J., & Nugraha, A. (2019). Private sector initiatives to boost productivity of cocoa, coffee, and 
rubber in Indonesia. Jakarta: Center for Indonesian Policy Studies. 

International  Cocoa  Organization  (ICCO)  (2019).  ICCO  Quarterly  Bulletin  of  Cocoa  Statistics,  Vol.  XLV, 
No.3, Cocoa year 2018/19. 

Neilson,  J  &  Mckenzie,  F.  (2016).  Business-oriented  outreach  programmes  for  sustainable  cocoa 
production  in  Indonesia:  an  institutional  innovation.  Emerging  institutional  innovations.  Food  and 
agriculture organization of the United Nations (FAO) & Institute national de la recherche agronomique 
(INRA). Rome 

Statistics Indonesia (2018). Ekspor Biji Coklat Menurut Negara Tujuan Utama, 2002-2015 (Cocoa Export 
by Main Destination Country, 2002-2015). 

Statistics  Indonesia  (2019).  Ekspor  Kopi  Menurut  Negara  Tujuan  Utama,  2000-2018  (Coffee  Export  by 
Main Destination Country, 2000-2018). 

World Integrated Trade Solution (2018). Indonesia exports, imports and trade balance by Country and 
Region 2018. 

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Quantitative Studies on the Belt and Road 
Initiative’s Impacts on Asia 

Pradumna B. Rana1, Wai-Mun Chia2 and Xianbai Ji1 

1 S. Rajaratnam School of International Studies, Nanyang Technological University, 
Singapore 

2 School of Social Sciences, Nanyang Technological University, Singapore 

Introduction 

The Belt and Road Initiative (BRI), officially unveiled in 2013, is China’s landmark foreign and 
economic  policy  initiative  to  achieve  improved  connectivity,  regional  cooperation,  and 
economic  development  on  a  trans-continental  scale.  Six  years  on,  how  is  the  BRI  being 
viewed  in  Asian  stakeholding  countries?  What  are  the  potential  impacts  of  the  BRI  on 
national  economic  output?  What  policy  reforms  should  China  and  the  BRI  stakeholding 
countries pursue in order to make the BRI a “win-win” proposition?  

Impacts and implications of the BRI can be assessed either through a survey or through a 
model-based  study.  This  paper  uses  both  approaches  (i)  to  highlight  the  economic  and 
geopolitical  impacts  of  the  BRI  on  Asian  stakeholding  countries;  and  (ii)  to  come  up  with 
policy recommendations that should be implemented by both China and BRI stakeholding 
countries.   

Perception survey of Asian opinion leaders 

We conducted an online perception survey for a month during mid-June to mid-July 2019, 
to which 1230 Asian opinion leaders (defined as policy makers, academics, businesses, and 
media representatives) from 26 East and Southeast, South and Central Asian countries that 
have signed a BRI  agreement with China responded. The highest number of respondents 
(more than 100) were from Pakistan, Singapore, Bangladesh and the Philippines. In terms of 
affiliation, academics (56%) and policymakers (23%) made up the bulk of the respondents.    

Among  the  BRI’s  five  policy  objectives,  respondents  felt  that  achieving  infrastructure 
connectivity  and  unimpeded  trade  are  more  relevant  to  their  countries  than  financial 
integration,  policy  coordination,  and  people-to-people  bonds.  On  infrastructure  types, 
respondents felt that energy, transport, and industrial infrastructure should be the ones on 
which the BRI needs to focus in Asia. 

A majority of the respondents felt that the BRI provides a platform for BRI countries to attract 
trade,  investment,  and  tourists  from  China  and  elsewhere.  They  also  expected  the  BRI  to 
stimulate  economic  growth  and  technological  advancement  while  closing  infrastructure 
gaps. Improved political relations with  China  due to the  BRI was  also highlighted as a key 
benefit by close to three-fifths of the respondents. On the other hand, respondents expressed 
concerns over the potential downsides of the BRI like China’s influence expansion, influx of 
Chinese  migrant  workers,  BRI  projects’  environmental  implications,  lack  of  technology 
transfer opportunities, and debt sustainability risks.  

Overall,  the  respondents  viewed  the  BRI  more  favourably  than  is  generally  the  case.  The 
opinion leaders who categorised the BRI as a “net opportunity” significantly outnumbered 

131 

 
 
 
those who saw the BRI as a “net risk”. Similarly, the respondents were more confident than 
not  that  the  BRI  will  eventually  lead  to  win-win  outcomes.  More  than  four  out  of  ten 
respondents rejected the notion of malicious Chinese “debt-trap diplomacy”. These findings, 
however, must be interpreted with caution because for each of the three questions a large 
chunk of respondents were undecided.  

In  terms  of  policy  actions  that  should  be  taken  to  ensure  a  successful  BRI,  enhancing 
transparency,  offering  more  capacity  building  and  local  employment,  adapting  the  BRI  to 
specific needs of foreign partners, and allowing non-Chinese contractors to bid for projects 
topped the list of recommendations for Beijing to maximise the developmental impact of 
the BRI. As for the stakeholding country governments, the respondents felt that they should 
focus on improving governance, negotiating with China for best possible terms, making sure 
that the BRI fits in a national infrastructure development strategy, performing due diligence, 
and insisting that local companies be allowed to bid for BRI projects.  

Quantitative assessment of BRI’s economic impact 

We  also  examined  the  potential  economic  impacts  of  the  BRI  on  stakeholding  Eurasian 
countries. For this we used a modified, static Global Trade Analysis Project (GTAP) model to 
quantify  the  real  gross  domestic  product  (GDP)  effects  of  the  BRI’s  connectivity 
enhancement (i.e. reducing transport cost)  and  trade liberalisation  agenda. Three findings 
are noteworthy.  

First, the results suggest that while reducing transport costs and tariff barriers would both 
contribute to national economic gains, the latter appears to have a greater beneficial impact 
than the former. This finding points to the need for reforming trade policies while investing 
in  transport  infrastructure  by  China  and  BRI  stakeholding  countries.  Second,  landlocked 
countries (e.g. Mongolia and Kazakhstan) and countries presently with high tariffs (e.g. Iran) 
are likely to be the largest beneficiaries of the BRI. With respect to the Maritime Silk Road, it 
is projected that countries already well-embedded in the global maritime shipping networks 
(e.g. Malaysian and Singapore) could experience higher real GDP improvement than others. 
Third, the economic implications of India’s stance on the Bangladesh-China-India-Myanmar 
(BCIM) and Trans-Himalayan (China-Nepal-India) corridors differ. For the BCIM corridor, the 
absence  of  India  has  a  relatively  muted  economic  impact  on  the  gains  accrued  to  other 
participants. By contrast, for the Trans-Himalayan corridor, the economic impact on Nepal 
depends very much on India’s participation or non-participation in the BRI. 

Acknowledgement 

The research was supported by the Academic Research Fund (AcRF) Tier 1 Grant awarded by 
the Ministry of Education, Singapore. 

132 

 
 
 
Achieving  complex  development  goals  along 
China’s Digital Silk Road 

Kevin Hernandez 

Institute of Development Studies (IDS), United Kingdom 

Introduction 

China’s Belt and Road  Initiative (BRI) is  a 1 trillion USD project spanning over 70 countries 
framed as a revival of the ancient Silk Road which connected China with the West through 
an expansive network of trade routes. Despite being engrained in the BRI’s vision, its digital 
component known as the ‘Digital Silk Road’ (DSR), is often overlooked while most of the focus 
is  placed  on  roads,  ports,  and  energy  infrastructure  (Shen,  2018).  Moreover,  China’s  DSR 
aspirations go beyond infrastructure to include: increasing market share for Chinese device 
manufacturers; acquisition of digital companies by Chinese Internet companies; promoting 
e-commerce, and promoting China’s vision of 'Internet Sovereignty' amongst other goals.

China  has  invited  other  governments  to  partner  with  it  along  the  BRI  through  Overseas 
Development  Assistance  (Renwick  et  al.,  2018).  This  paper  analyses  DSR  activities  using 
findings  from  the  literature  on  trade-offs  and  synergies  between  expansion  of  ICTs  and 
achieving  the  Sustainable  Development  Goals  (SDG)  to  provide  insights  and  advice  to 
traditional  development  donors  on  how  to  engage  with  the  DSR.  The  SDGs  include  169 
targets for 17 goals as well an overarching goal of ‘Leave No One Behind’. There is increasing 
recognition of the interlinked nature of the goals and targets and the need to shift away from 
tackling  goals  in  siloes  towards  holistic  approaches  (Alcamo  et  al.,  2018).  It  is  possible  to 
achieve SDG  targets  or  goals  at the detriment  of other goals. Similarly, there are potential 
trade-offs between large scale efforts like the Digital Silk Road and achieving SDG goals and 
targets. This research covers potential trade-offs between five DSR activities and the SDGs. 

ICT Infrastructure 

Like  other  infrastructure  aspects  of  the  BRI,  it  is  difficult  to  know  where  DSR  digital 
infrastructure  projects  begin  and  end  (Shen,  2018).  UNESCAP,  (2017)  uncovered  13  digital 
infrastructure projects linked to the BRI in Central Asia alone. In 2018, Chinese ICT equipment 
manufactures Huawei and ZTE were the biggest and fourth biggest mobile ICT equipment 
suppliers  controlling  40%  of  the  global  market  (telecomlead,  2018).  Huawei  accounted  for 
over a third of new submarine fibre optic systems installed between 2013 to 2017 including 
cables that link countries in the global south to each other (Huawei Marine, 2018). Chinese 
ICT suppliers have been applauded for their efforts to build infrastructure in places deemed 
unprofitable or risky by other suppliers and have historically provided equipment up to 40% 
cheaper (Cisse, 2012; Kunavut et al., 2018).  Chinese financing for  ICT infrastructure in Africa 
often  surpasses  funding  from  all  Infrastructure  Consortium  for  Africa  members  combined 
which includes the G8 countries and South Korea (ICA, 2017). 

Although China’s 13th five year plan commits to 98% internet coverage within China, China 
has  not made  similar  commitments  along  the  DSR.  There  is  a  risk  that  DSR  linked  digital 
infrastructure is built mainly in places that serve Chinese geopolitical and economic interests 
(Cisse, 2012), while leaving other geographies behind. As more social, economic, and political 

133 

experiences and services continue to migrate to digital channels, a lack of access threatens 
to increase inequalities (Hernandez & Roberts, 2018).  

Huawei has aligned itself with the SDGs in its corporate mission. However, there is a risk that 
Huawei  is  SDG  washing  its  operations  while  ignoring  potential  trade-offs  between  their 
current  ICT  infrastructure  activities  the  SDGs.  Huawei,  (2018)  conflates  correlation  with 
causation  despite  a  well-established  academic  literature  suggesting  that  the  causal 
relationship between ICTs and economic growth is unclear (Friederici et al., 2016; Galperin & 
Viecens, 2017). Huawei makes many correlation based causal assumptions about the impact 
of ICTS on achieving multiple SDGs thus presenting ICT infrastructure as end in itself.   

Moreover, Huawei, (2018) calls for more data centres and suggests that cloud services could 
be  environmentally  beneficial.  However,  the  ICT  sector’s  emissions  unloading  from  other 
sectors has coincided with the ICT sector emitting more greenhouse gases making its net 
impact unclear (Greenpeace, 2017a; Unwin, 2017). Networks (e.g. digital infrastructure) are the 
biggest  electricity  consuming  sub-component  of  the  ICT  sector  and  its  share  of  energy 
consumption is on the rise thanks to the ever increasing amount of data that passes through 
networks. Andrae & Edler, (2015) project that the ICT sector’s share of global greenhouse gas 
emissions is likely to increase even under the best case scenario and may account for over 
50% of energy consumption by 2030 under the worst. Unless efforts are made to power DSR-
linked  infrastructure  with  green  energy,  the  effort  may  subtract  from  environmental  SDG 
goals. Lastly, an over-reliance on increasing availability of infrastructure can lead to a lack of 
progress on tackling other access barriers which DSR activities make little if any reference to 
including: affordability of connectivity; awareness of ICTs, ICT applications and their potential 
benefits; abilities and skills to make effective use of ICTs; and the agency to use ICTs amidst 
social and gender norms (Hernandez & Roberts, 2018). Increasing infrastructure availability 
without tackling other barriers threatens to amplify inequalities between well off groups and 
the poorest and most marginalised (Unwin, 2017).  

134 

 
Figure 2: SDG synergies and trade-offs: Digital Silk Road Infrastructure Activities 

Expansion of Chinese device manufacturers  

Making use of ICT infrastructure requires devices. Chinese device manufacturers have been 
gaining market share over the last few years and are poised to further increase sales across 
the BRI. In 2014, none of the top 9 mobile manufacturers were from Mainland China. In just 
four  years,  Huawei,  Xaomi,  Oppo,  and  Lenovo  rose  to  become  the  3rd,  4th,  5th,  and  7th  top 
mobile  manufacturers  globally 35.    Moreover,  another  Chinese  manufactuer,  Transsion 
Holdings  owns  several  mobile  phone  brands  including  Tecno,  Infinix,  and  Itel  which 
combined  overtook  Samsung  as  the  top  manufacturer  in  Africa  in  2017  (Dahir,  2018). 
Transsioon  has  been  applauded  for  tailoring  its  phones  to  African  contexts  through 
affordable phones with  features that cater to African users (e.g. operating systems in local 
languages, cameras calibrated to take better photos of darker skin tones, multiple slim slots, 
long battery life). Moreover, the company has invested in African research and development 
centres in Nigeria and Kenya as well as factories in Ethiopia.  

However, due in large part to Transsion, the share of smart phones sold relative to feature 
phones sold decreased between 2016 and 2017. This is concerning because, feature phones 
offer users less capabilities and opportunities than smartphones and can potentially lead to 
a ‘smartphone divide’ “based on a user’s ability to access and use [and benefit from] an array 
of different services” which threatens to leave feature phone users behind (Sangwon Lee & 
Park,  2015,  p.  81).  Moreover,  there  are  environmental  concerns  about  Chinese  device 

35 https://gs.statcounter.com/vendor-market-share/mobile/worldwide/ 

135 

 
 
 
                                           
manufacturers.  Huawei  was  the  only  top  3  device manufacturer  that  did  not  report  on  its 
supply chain or emissions in 2017 and “has yet to set any goal to transition its supply chain to 
renewable energy” (Greenpeace, 2017b, p. 13). Huawei along with Oppo, Xiamoi and Vivo were 
all  ranked  poorly,  in  Greenpeace's  (2017b)  Green  Electronics  company  report  card’s  three 
main areas: resource intensity, dirty energy consumption, and harmful chemicals found in 
products.  These  concerns  are  not  limited  to  Chinese  manufacturers.  Although  other 
manufacturers  score  higher  on  average,  the  sector  as  a  whole  are  guilty  of  not  taking 
adequate  measures  to  protect  the  environment  or  to  deal  with  the  e-waste  arising  from 
current ‘planned obsolescence’ business models.  Furthermore, Huawei, ZTE, and Lenovo (as 
well as manufacturers from other countries) have not taken necessary measures to ensure 
that  Cobalt  and  Lithium  ion  used  to  make  and  power  mobile  phones  is  free  from  forced 
labour or children working in hazardous conditions (Amnesty International, 2016).  

Figure 3: SDG synergies and trade-offs: Digital Silk Road Mobile Phone Manufacturer Activities 

Expansion of Chinese Internet giants 

Whilst  Chinese  digital  infrastructure  and  device  manufacturers  have  been  expanding  for 
decades,  Chinese  Internet  companies  international  expansion  was  only  incentivized  and 
promoted  by  the  Chinese  government  in  2015  when  the  government  urged  its  internet 
companies  to  get  involved  in  building  a  ‘Digital  Silk  Road’  (Lee,  2017).  Chinese  Internet 

136 

 
 
 
 
companies have endorsed the call by using the BRI as a mechanism to receive government 
funding, blessing, and diplomatic and political support for their international efforts (Shen, 
2018). Since then, the technology, media and telecommunications sector has outperformed 
all  other  sectors  in  regards  to  attracting  Chinese  Foreign  Direct  Investment  (FDI)  and 
Mergers and Acquisitions (M&A) (Ernst and Young, 2018). Alibaba and Tencent have acquired 
majority  stakes  in  e-commerce  and  other  Internet  companies  (e.g.  ride-sharing  apps, 
messaging  apps,  music  streaming  services,  etc.)  across  the  BRI  including  companies  in 
Turkey, Indonesia, Singapore, Pakistan, and others and aligning these acquisitions with the 
BRI (Sender, 2018).   

These investments tend to occur in countries that lack local venture  capital  and sufficient 
finance  infrastructure  for  SMEs.  Moreover,  Alibaba  and  Tencent  tend  to  introduce  new 
services into the market (e.g. Alipay) after acquisitions. However, Tencent and Alibaba seem 
to be becoming duopoloy funders in some regions creating power imbalances between local 
and  Chinese  companies  (Sender,  2018).  These  trends  fit  into  larger  geo-economic  trends 
where  five  companies  (Google,  Facebook,  Amazon,  Tencent,  and  Alibaba)  continue  to 
consolidate  a  majority  of  the  economic  gains  from  the  Internet  economy  while  limiting 
opportunities for market entry and competition (Internet Society, 2019).  

Figure 4: SDG synergies and trade-offs: Digital Silk Road Internet Company Acquisition Activities. 

Inclusive globalization through e-commerce 

In  2016,  Jack  Ma  introduced  the  electronic  World  Trade  Platform  (eWTP),  labelled  it  as 
‘inclusive globalisation’ platform for SMEs and aligned it with the BRI. The eWTP seeks to help 
SMEs “overcome complex regulations, processes and barriers that hinder their participation 
in  global  commerce”  (Alibaba  Group,  2016).  The  eWTP  includes  ‘Digital  Free  Trade  Zones’ 
(DFTZ)  which  provide  import  and  export  services  to  SMEs  akin  to  those  provided  to  big 
businesses by traditional duty free zones. Moreover, these zones offer SMEs with support and 
training  to  access  international  markets.  Participating  SMEs  also  benefit  from  a  host  of 

137 

 
 
 
 
Alibaba  services  including  e-commerce  and  digital  payment  services  (Rastogi,  2018).  One 
such zone has been launched in Malaysia with mixed results. Yean, (2018) showed that rather 
than being inclusive, 3 of 13 Malaysian states accounted for 67% of all SMEs using the eWTP 
and that SMEs that were already experienced with digital technology and export procedures 
were the most likely to benefit. Moreover, Ma envisions the initiative changing the way goods 
are sold and purchased around the world in way that’s similar to Alibaba’s impact in China. 
However, Alibaba’s e-commerce business model which depends on delivering individualized 
packages  may  have  negative  externalities  on  the  environment.  “The  combined  length  of 
packing  tape  used  by  China  in  2015  could  circle  the  equator  425  times”  and  only  20%  of 
Chinese packaging are estimated to be recycled (Luo, 2017).  

Figure 5: SDG synergies and trade-offs: Digital Silk Road eWTP Activities. 

Internet Sovereignty  

Through the DSR, China is also seeking to spread an alternative vision of Internet governance, 
‘Internet Sovereignty’. Internet Sovereignty suggests that sovereign nations should be able 
to govern the Internet within their borders however they see fit, opening up the option for 
an Internet that is heavily state controlled and censored (Hornby, 2017). China already ranks 
last on Freedom House's (2018) freedom on the net index for four years in a row. China has 
partnered with seven like-minded governments, five of which are also ranked ‘Not Free’ on 
the Freedom on the Net Index, while the other two are not scored. Internet Sovereignty goes 
against the ethos that the Internet was founded on regarding openness and net neutrality. 
It  also  goes  against  traditional  Multi-Stakeholderism  approaches  to  Internet  governances 

138 

 
 
 
 
which deliberately includes civil society, business, and state actors in decision-making and 
tend to be more palatable with citizens from traditional donor countries (Unwin, 2017). 

There  is  evidence  of  China  exercising  its  Internet  sovereignty  extensively.  Its  online 
censorship system has been called ‘the great firewall’ with thousands of foreign websites and 
services blocked in the country and all Internet companies in China required to censor any 
material  that  disturbs  the  economic  or  social  order”,  “endangers  national  honour”,  or  may 
contribute to the “overthrow of the socialist system” (Financial Times, 2017; The Economist, 
2018).  Moreover,  thousands  of  journal  articles  from  high  impact  journals  are  censored 
(Human rights Watch, 2018). There is evidence that the Chinese government actively censors 
content  that  criticizes  the  government  and  content  about  LGBTQI  issues,  ethnic  and 
religious  minorities,  and  mobilisation  for  public  causes.  The  Chinese  government  has  also 
been found to shut down the Internet during times of protest (Freedom House, 2018). This is 
especially  the  case  in  Xinjiang  where  a  large  number  of  the marginalised  Uighur minority 
group reside and facial recognition software has been introduced to prevent any potential 
organising  (Freedom  House,  2018).  Members  of  the  LGBTQI  community  and  ethnic 
minorities  are  two  groups  identified  as  being  under  threat  of  being  left  behind  unless 
targeted efforts are made to improve their lives (UNDP, 2016).  

Figure 6: SDG synergies and trade-offs: Internet Sovereignty. 

Policy Recommendations  

139 

 
 
 
•  Although  Chinese  actors  frame  their  DSR  aligned  activities  as  having  positive  SDG 
implications,  they  fail  to  consider  potential  challenges  and  trade-offs.  The  Chinese 
government  could  take  steps  towards  requiring  Chinese  actors  seeking  to  be 
involved in the DSR to consider trade-offs and plan to tackle them from the start. 

•  The trade-offs presented by the DSR and the expansion of digital technology more 
generally are complex and will likely require global multi-stakeholder partnerships to 
tackle. 

•  Traditional donors need to weigh the risks of being directly involved in BRI-branded 
ICT  activities  given  some  projects  (e.g.  surveillance)  and  goals  (e.g.  Internet 
Sovereignty) are not popular amongst the public in traditional donor countries. 

•  Traditional  donors  can  add  value  by  being  honest  brokers  between  Chinese  actors 
and BRI countries, seeking to independently tackle some of the trade-offs presented 
by ICT expansion in BRI countries. 

•  Traditional donors should seek to provide off-line alternatives for people that remain 

disconnected and risk being left behind.  

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141 

 
 
Poster contributions 

142 

Pakistan’s relations with the EU and China: On 
the path towards sustainable connectivity 

Agnieszka Nitza-Makowska 

Collegium Civitas, Poland 

With  its  strengths  in  environmental  sustainability  and  challenges  related  to  financial  and 
people-to-people connectivity, Pakistan lags behind most Asian countries. Can the European 
Union (EU) and China, through their long-term multifaceted relations with Pakistan, help the 
country catch up with its peers? This paper investigates the contemporary dynamics of the 
EU–Pakistan and China–Pakistan relationships to identify their contribution to the realization 
of the 2030 Agenda for Sustainable Development and its 17 Sustainable Development Goals 
(SDGs) in Pakistan. 

The study is motivated by (i) Pakistan’s characteristics as a pivotal and fragile state. Despite 
its geopolitical and nuclear potential, the country is beset by severe domestic (terrorist and 
separatist  activities)  and  external  (rocky  relations  with  India  and  Afghanistan)  threats.  As 
Pakistan’s security situation has global implications, the fulfilment in the country of the SDGs, 
especially SDG 16 (peace, justice and strong institutions), will have a positive impact on the 
region and beyond. Another reason to conduct the study is (ii) the poor global recognition of 
the EU–Pakistan relationship. While Pakistan maintains strategic relations with the US and 
China,  its  relationship  with  the  EU  lacks  significant  political  dynamics.  Finally,  (iii)  the 
development  of  China’s  Belt  and  Road  Initiative  (BRI)  also  motivates  the  study.  Its  pilot 
project, the China-Pakistan Economic Corridor (CPEC), cannot be ignored when discussing 
Pakistan’s international connectivity. 

SDGs and foreign policy 

Sustainable development is a demanding and attractive (if not utopian) world order project 
(Hass, 1996, p. 239), but the global response to foster development as outlined by the 2030 
Agenda has not been ambitious enough (UN, 2019). Also, as it is primarily each nation’s own 
responsibility to implement the SDGs (Schaller, 2019), expectations that  countries will help 
their peers achieve the Goals may be unrealistic. However, foreign policy, especially vis-à-vis 
fragile  states,  which  to  a  large  extent  depend  on  external  actors,  can  significantly  affect 
countries’ capabilities to achieve the SDGs.  

Despite the evident interdependence between foreign policy and SDG implementation, “the 
foreign  policy  dimensions  of  the  2030  Sustainable  Development  Agenda  have  not  been 
sufficiently broached by foreign ministries to  date” (Carius, Ivleva, Pohl, Rüttinger, Schaller, 
Tänzler & Vivekananda, 2018, p. 1). Nor has this topic been adequately addressed by political 
and  social  scientists.  This  paper  analyses  contemporary  EU–Pakistan  and  China–Pakistan 
relations  through  the  lenses  of  Pakistan’s  sustainability  and  the  nexus  between  the  two 
bilateral connectivity. Based on scholarly literature and primary sources (e.g. the CPEC Long-
Term  Plan  and  the  EU–Pakistan  Strategic  Engagement  Plan),  the  paper  assesses  the  two 
relationships against the ASEM (Asia-Europe Meeting) Connectivity Index and Sustainability 
Index (Becker, Dominguez-Torreiro, Neves, Tacao Moura & Saisana, 2018, pp. 24–25).  

143 

 
 
 
 
 
Pakistan-EU and Pakistan-China: What connectivity? 

Covering physical, economic/financial, political, institutional and people-to-people pillars, the 
Connectivity Index demonstrates the multidimensional characteristics of Pakistan’s relations 
with and the EU and China (Table 1). 

144 

 
 
Table 1: Pakistan’s bilateral connectivity with the EU and China. Source: Becker et al., 2018. 

Indicators 

Origin 

Destination 

Data 

Symmetry 

Stronger 
connectivity 

International flights’ passenger 
capacity (seats) 

Pakistan  EU 

476500  Yes 

Pakistan-EU 

l

a
c
i
s
y
h
P

EU 

Pakistan 

440100 

China 

Pakistan 

157100 

Yes 

Pakistan  China 

157100 

Trade in gas (thousand kg) 

EU 

Pakistan 

194.9 

China 

Pakistan 

13.5 

Trade in goods (bn USD) 

EU 

Pakistan 

Pakistan  EU 

5.8 

6.9 

No 

No 

No 

Pakistan-EU 

Pakistan-China 

l

i

i

a
c
n
a
n
F
/
c
m
o
n
o
c
E

i

China 

Pakistan 

17.2 

No 

Pakistan  China 

1.6 

FDI (m USD) 

EU 

Pakistan 

1600.0 

No 

Pakistan-China 

Pakistan  EU 

13.0 

China 

Pakistan 

3100.0 

No 

Pakistan  China 

108.0 

Personal remittances (m USD) 

EU 

Pakistan 

2800.0  No 

Pakistan-EU 

China 

Pakistan 

22.0 

Embassies network 

EU 

Pakistan 

l

a
c
i
t
i
l

o
P

Pakistan  EU 

China 

Pakistan 

Pakistan  China 

18 

19 

1 

1 

equal 

No 

Yes 

Yes 

l

e
p
o
e
p
-
o
t
-
e
p
o
e
P

l

International students’ mobility in 
tertiary education (n. of students) 

Pakistan  EU 

13400 

No 

n/a 

Pakistan  China 

n/a 

No 

Research outputs with 
international collaborations 

EU 

Pakistan 

6300 

China 

Pakistan 

1978 

Patents with foreign co-inventor 

EU 

Pakistan 

China 

Pakistan 

4 

0 

- 

- 

- 

- 

Pakistan-EU 

Pakistan-EU 

Trade in cultural goods (m USD) 

Pakistan  EU 

410.0 

No 

Pakistan-China 

EU 

Pakistan 

54.0 

China 

Pakistan 

677.0 

No 

Pakistan  China 

5.0 

Migrant stock 

Pakistan  EU 

842200  No 

Pakistan-EU 

EU 

Pakistan 

China 

Pakistan 

n/a 

312 

No 

Pakistan  China 

4500 

145 

 
 
 
 
 
 
 
 
 
Selected  indicators  of  the  Connectivity  Index  (Table  1)  demonstrate  Pakistan’s  stronger 
economic connectivity  with China, which surpasses the EU in trade in  goods and  bilateral 
Foreign Direct Investment (FDI) flows. However, the EU holds the position of Pakistan’s top 
export  partner.  Also,  the  EU  has  developed  stronger  person-to-person  relationships 
(measured  by  research  outputs  with  international  collaborations  and  patents  with  foreign 
co-inventor) and physical connectivity (measured by international flights’ passenger capacity 
and  trade  in  gas)  with  Pakistan  than  China  has.  Both  bilateral  relationships  are  highly 
asymmetrical, which is characteristic of the cooperation between the parties, whose political 
and economic capabilities differ significantly. However, in some cases, such asymmetry can 
harm the weaker party.  

Pakistan’s sustainability 

Pakistan’s unfortunate geopolitical heritage has resulted in a high impact of external actors 
on the country’s performance. The impact was assessed at 8.8 out of 10 by the Fund for Peace 
(2019). Consequently, external actors have the potential to affect Pakistan’s achievements in 
SDG implementation and its performance on the Sustainability Index (Table 2). 

Table 2. The correspondence between the SDGs and the ASEM Sustainability Index. Source: Becker, et 
al., 2018 p. 25.  

Environmental 

SDG 7 (affordable and clean energy), SDG 12 (responsible consumption and 
production), SDG 13 (climate action), SDG 15 (life on land) 

Social 

SDG 1 (no poverty), SDG 4 (quality education), SDG 5 (gender equality), SDG 10 
(reduced inequalities), SDG 16 (peace, justice and strong institutions) 

Economic/Financial 

SDG 8 (decent work and economic growth), SDG 9 (industry, innovation and 
infrastructure) 

However, topics related to Pakistan’s sustainability have been hardly recognized within most 
bilateral agreements. Salik (2016, pp. 123-124) notes that this gap has harmed Pakistan’s social 
sustainability, as “external factors adversely affected [the] government’s development efforts 
and further pushed the vulnerable groups into poverty”. 

In their own commitments to multifaceted connectivity with Pakistan, China and the EU do 
notice the country’s sustainability. However, they approach the social pillar of sustainability 
differently. Unlike China, the EU seeks to exchange best practices with Pakistan on gender 
equality (SDG 5). While both seek to contribute to reducing inequalities (SDG 10) in Pakistan, 
only Brussels highlights the place of minorities in that context. These differences result from 
the  respective  characteristics  of  the  EU's  and  China's  foreign  strategies.  While  Brussels’s 
schemes  emphasize  conditionality—for  instance,  improving  the  standards  of  democracy 
(SDG 16) and human rights (SDG 10)—China’s initiatives do not attach any political strings. 

China’s  and  the  EU’s  ambitious  plans  to  support  the  Islamic  Republic’s  sustainability,  as 
declared in the bilateral agreements, are challenged by the contemporary trajectories of the 
two relationships. Brexit will significantly decrease EU–Pakistan physical, economic, political 
and  people-to-people  connectivity,  as  the  UK  served  as  the  engine  of  the  overall  bilateral 
dynamics.  It  will  be  followed  by  a  decrease  in  the  EU’s  capabilities  to  affect  Pakistan’s 
sustainability. Unlike the EU, China with its CPEC is pivoting towards Pakistan. Wolf (2018, p. 
87) notes, "The CPEC influences many aspects of state and society: it relates to the economic, 
political, and social spheres, as well as foreign policy objectives and geopolitics”. The initiative 

146 

 
 
 
 
 
promises  to  improve  economic  and  social  sustainability,  but  it  poses  a  serious  threat  to 
environmental sustainability, which is the primary sustainability domain in Pakistan. 

References 

Becker, W., Dominguez-Torreiro, M., Neves, A. R., Tacao Moura, C. J., & Saisana, M. (2018). Exploring ASEM 
Sustainable Connectivity–What brings Asia and Europe together. doi, 10, 77696 

Carius, A., Ivleva, D., Pohl, B., Rüttinger, L., Schaller, S., Tänzler, D., Vivekananda, J. (2018). A Foreign Policy 
Perspective on the SDGs, Climate Policy Brief, Adelphi.  

Fund 
https://fragilestatesindex.org/country-data/. 

Peace. 

(2019). 

Fragile 

for 

States 

Index, 

Pakistan. 

Retrieved 

from 

Haas,  P.  (1996).  Is  "Sustainable  Development"  Politically  Sustainable?  The  Brown  Journal  of  World 
Affairs, 3(2), 239–247  

Salik,  M.  A.  N.  (2016).  Post-2015  Sustainable  Development  Agenda:    A  Significant  Opportunity  for 
Pakistan, Strategic Studies, 36 (3), 113–135. 

Schaller,  S.  (2019).  When  Agendas  Align:  The  SDG  Summit  and  ‘Sustainable  Foreign  Policy’,  SDG 
Knowledge Hub. Retrieved from https://sdg.iisd.org/commentary/guest-articles/when-agendas-align-
the-sdg-summit-and-sustainable-foreign-policy/. 

2019, 

UN, 
Retrieved 
https://unstats.un.org/sdgs/report/2019/The-Sustainable-Development-Goals-Report-2019.pdf 

Sustainable  Development  Goals 

Report 

2019. 

The 

from 

Wolf, S. O. (2018). China-Pakistan Economic Corridor (CPEC): Regional Cooperation in the Wider South 
Asian Region. In: B. R. Deepak (Eds.) China's Global Rebalancing and the New Silk Road (85–100). New 
Delhi: Springer. 

147 

 
 
 
 
 
Leveraging IT to preserve cultural heritage in 
ASEAN 

La-or Kovavisaruch and Rinnapatch Khongsuksipas 

National Electronics and Computer Technology Center, National Science and Technology 
Development Center, Pathum Thani, Thailand  

Introduction 

for 

information 

the  purposes  of  knowledge  sharing  and 
Aggregating  cultural 
documentation  is  a  noble  pursuit  but  is  often  very  challenging  to  implement.  In  a  study 
conducted in the US by Günter Waibel (2010), efforts to encourage even a few museums and 
art  collections  to  share  their  collections  spanned  over  40  years.  Europe  saw  more  success 
with a full implementation of the Europeana project (2005), a digital platform for preserving 
and  providing  education  on  European  cultural  heritage.  The  project  was  fundamentally 
driven by a top-down approach, initiated in 2005 by Jacques Chirac, President of France, in 
conjunction with the premiers of Germany, Spain, Italy, Poland and Hungary, and with the 
support of the President of the European Commission. Since its conception, involved leaders 
have  continuously  updated  the  strategy  behind  the  Europeana  project  to  sustain  their 
partnership and inspire ongoing dialogues between art and science. Using the execution of 
Europeana as a model, we hope to move forward a similar pilot project that will result in a 
sustainable platform to leverage information technology (IT) in the preservation of cultural 
heritage in the ASEAN region. 

The National Electronics and Computer Technology Center (NECTEC) of Thailand would like 
to  emphasize  the  significance  of  preserved  cultural  information,  in  both  intangible  and 
tangible forms.  In 2007, a flagship project, dubbed Digitized Thailand (2007), was initiated 
four  phases:  Accumulation,  Knowledge  Management,  Data  Processing  and 
with 
Recommendations. The first phase, Accumulation, consists of content development, R&D on 
related technology for structuring digital information (e.g. creative content), data collection, 
standardization, and digital rights management. Many smaller projects were funded under 
Digitized Thailand; with one being the development of a smart museum guide. The guide 
was built out under the name “Museum Pool,” which per details in Thitipong Wongsatho et 
al. (2015), formed a platform for museum curators to effectively manage media assets for an 
improved visitor experience. A key benefit for end users is the centralized medium, as visitors 
can  access  information  from  any  participating  museum  in  the  network  via  a  mobile 
application. In 2017, “Museum Pool” was officially launched with three founding locations. It 
now  boasts  a  network  of  over  20  participating  museums  in  Thailand  and  plans  to  expand 
within  ASEAN.  Ultimately,  we  hope  that  the  application  can  serve  as  a  primary  source  for 
cultural knowledge sharing across the region. 

More  recently,  we  received  funding  from  the  Thai  Ministry  of  Higher  Education,  Science, 
Research, and Innovation (MHESI), formerly the Ministry of Science and Technology, as part 
of  an  ASEAN  cultural  tourism  initiative  to  start  a  pilot  project  that  would  leverage  IT.  We 
contacted partner universities and government agencies in Myanmar and Lao PDR for the 
opportunity  to  grow  the  impact  of  our  pilot.  Applying  IT  in  the  cultural  context  is  a 
challenging  task  for  these  partners  as  they  are  required  to  involve  various  bureaucratic 
agencies for approval in the project’s implementation. However, with the necessary efforts, 
we have expanded our platform to Myanmar. 

148 

 
 
 
In navigating the sensitivities of handling cultural information over the course of our project, 
we have made some modifications to our primary goal of sharing cultural information, and 
shifted our focus to researching opportunities to improve museum visitor experience via a 
mobile application. Using aggregated data on navigation patterns within museum grounds, 
we  hope  to  be  able  to  draw  recommendations  for  increasing  engagement,  such  as  a 
suggestion feature for other exhibits that may be of interest to a given visitor. 

Methodology 

We  received  two  years  of  funding  from  MHESI  to  study  the  possibility  of  using  IT  in  a 
collaborative  project  promoting  cultural  heritage  education  amongst  ASEAN.  “Museum 
Pool”  forms  the  foundation  of  this  larger  research  initiative,  as  the  technology  provides  a 
space for storing and accessing museum metadata. 

Initially,  we  were  faced  with  the  challenge  of  sourcing  a  suitable  research  partner  for  our 
planned  assignment.  Fortunately,  our  international  collaboration  officer  was  able  to 
introduce us to active candidates from a prior ASEAN gathering.  

In  the  first  year  of  implementation,  we  partnered  with  both  university  and  research 
institutions.  As  shown  in  Figure  1,  the  project  started  with  a  kick-off  meeting  to  align  on 
project objectives and the possibility of collaboration regarding the topic of museum guides 
within each country. From the kick-off meeting, we ascertained that there were no existing 
digital  museum  guides  or  equivalent  in  these  countries.  Therefore,  our  partner  countries 
found the proposal to deploy our Museum Pool solution as a museum content management 
tool attractive. 

Kick off

Site visit

Implementation

- Share project objectives

- Validate circumstances 
in participating countries

- Check readiness of the 
site

- Installation and 
information upload

- Transfer technology

- Remote assistance

Figure 1

Project implementation process. 

. 

After the kick-off meeting, partners made the requisite effort to connect to relevant agencies 
to ensure the successful implementation of “Museum Pool” in their home country. We then 
visited  the  site  to  validate  the  readiness  for  transfer  of  our  technology,  and  subsequently 
provided remote assistance and support to allow for smooth adoption. 

Due to the extensive network of involved parties, there are a multitude of factors affecting 
the project’s success, such as technology, human resources for maintenance, availability of 
content creators as well as funding. After evaluating the readiness of our partner countries, 
as  shown  in  Table  1,  we  planned  to  use  these  contributing  factors  as  rough  criteria  in  our 
rubric  to  recruit  partners  for  our  project  expansion.  So  far,  only  Myanmar  has  been 
successfully  implemented,  with  the  details  of  our  progress  to  be  published  in  a  planned 
collaborative paper. 

149 

 
 
 
 
 
 
 
Table 1

Readiness index using for technology transfer

Readiness 

Technology 

: 

Myanmar 

Lao PDR 

.

Ready to receive the technology transfer 
from Thailand 

Ready to receive the technology transfer 
from Thailand 

Human resources 

Students 

None 

Content creators 

Connection with a content provider 

Connection with various content providers 

Funding 

None 

None 

In the second year of this project, we hope to build on the success modelled by Myanmar by 
sourcing a comparable university in Lao PDR with a similar implementation environment. 
However, due to socioeconomic and political nuances, a “comparable” environment may be 
difficult  to  identify.  Within  this  same  time  period,  we  have  also  extended  invitations  to  a 
research institute from Indonesia that appears to meet the criteria we have developed in our 
rubric.  This  institute  exhibits  a  similar  infrastructure  to  NECTEC,  and  in  accordance  to  our 
index, it owns the technology, human resources and content creators, to make it an excellent 
candidate  for  a  successful  implementation.  In  early  discussions,  we  also  discovered  that 
Indonesia  has  independently  explored  plans  to  implement  a  digital  museum  guide; 
providing the opportunity for us to exchange databases and share metadata for more robust 
project development.  

Results 

Our  partner  in  Myanmar  successfully  deployed  “Museum  Pool”  technology  in  Bagan  and 
Schwedagon  with  the  permission  of  the  Myanmar  Ministry  of  Culture,  while  Lao  PDR  and 
Indonesia  are  currently  still  in  the  planning  stage.    Since  Indonesia  has  an  independent 
museum  guide  database,  an  initial  planned  step  would  be  for  both  parties  to  develop  an 
Applications Program Interface (API) that would allow for the exchange of metadata based 
on  the work  of La-or K.  et al. (2018).  So  far, we  have received  a large quantity  of statistical 
information from Myanmar’s museum visitors, which we hope to use in the improvement of 
museum visitor engagement in each country.   

Conclusions and Lessons Learned  

We  believe  that  our  project  so  far  is  just  beginning  to  forge  the  path  forward  for  IT 
implementation in ASEAN cultural heritage preservation. Although this topic is considered a 
sensitive  issue,  we  hope  that  the  platform  that  we  are  working  on  will  provide  a  basis  for 
unification,  following  in  the  footsteps  of  the  successful  Europeana  project.  With  two 
museums implemented in Myanmar, we have significantly expanded traffic to the network, 
which  provides  us  with  more  data  to  help  us  scope  and  build  our  next  step  towards 
improving visitor engagement: a recommendation system for the visitor navigation.  

So far, there are a few key takeaways that we can glean from our progress: 

•  Establishing trust and professional rapport between partner teams is a vital indicator 

of the project’s likelihood for success. 

•  Funding is a critical factor in project continuity. 

• 

International collaboration is not a linear equation; in a synergistic environment, there 
can be exponential returns (1+1 = 5), or with misalignment, can turn into a resource 

150 

 
 
 
 
 
 
drain (1+1 = 0).  We are in the process of learning and hope to discover the right inputs 
for high impact results.  

•  We proved that diplomacy can facilitate R&D activities.  Once scientific developments 
are encouraged to extend across borders, we are empowered with tools for solving 
broad social challenges.  

Since raising our last round of funding, we received support for only two years. In order to 
take advantage of the momentum we have achieved so far, each country needs to be able 
to source independent financial support. Unlike the European Union, ASEAN does not have 
a  funding  model  for  interdisciplinary  projects,  which  may  prove  to  be  the  most  difficult 
challenge in our project’s continuity. 

Acknowledgment 

Thai  Ministry  of  Higher  Education,  Science,  Research,  and  Innovation  (MHESI)  funds  this 
project.  We  want  to  thank  our  partner  in  the  project:  Dr.  Myint  Myint  Sein,  Pro-Rector, 
Professor and Head of Geographical Information System Laboratory, University of Computer 
Studies,  Yangon  (UCSY),  Ms.  Myat  Thiri  Khine,  Lecturer,  Geographical  Information  System 
Laboratory, University of Computer Studies, Yangon (UCSY), Mr. Sisongkham Phimmasean, 
Lecturer,  Faculty  of  Engineering,  Department  of  Computer  Engineering  and  Information 
Technology,  National  University  of  Laos  (NUOL),  Mr.  Saysongkham  Phanouvong,  Director, 
Technology  Computer  and  Electronic  Institute  (TCEI),  Mr.  Mangkone  Bunnavong,  Deputy 
Director of IoT Division, Technology Computer and Electronic Institute (TCEI) and Dr. Lindung 
Parningotan  Manik  Researcher,  Research  Center  for  Informatics  Indonesian  Institute  of 
Sciences, Indonesian Institute of Sciences (LIPI). 

References 

Europeana website. https://www.europeana.eu/portal/en 

Digitized Thailand (2007), http://www.digitized-thailand.org/images/stories/pdf/dtdocument.pdf 

Harping, Praticia 2009 Museum Database Exchange: CCO Evaluation Criteria for Scoring. 

Günter Waibel, Ralph LeVan, Bruce Washburn (2010) Museum Data Exchange: Learning How to Share. 
DOI:10.1045/march2010-Waibel 

La-or Kovavisaruch, Taweesak Sanpechuda, Krisada Chinda, Sodsai Wisadsud, Thitipong Wongsatho, 
in  Thailand.  Portland 
Anuwat  Chiwongyen  (2018)  Data  Exchange  across  Museum  Platforms 
International Center for Management of Engineering and Technology 2018 

 “Metadata for Cultural and Wisdom Part 1: General” Thailand Industrial Standard, ICS 35.240.30, ISBN 
978-616-346-399 

Thitipong Wongsatho, La-or Kovavisaruch, Taweesak Sanpachuda, Krisada. Chinda, Sodsai Wisadsud, 
Anuwat  Chaiwongyen (2015), “The Development of Museums Network Guide System by using QR code 
on Smart Phone” WMS Journal of Management, Vol. 4, No. 1 pp. 12-22, 2015. 

151 

 
 
 
 
 
 
Bridge the Cross-Culture Understanding: Study 
Case of BIPA Program in Ambon 

Maria Martha Nikijuluw 

Pattimura University, Ambon, Indonesia  

Abstract 

The  purpose  of  this  study  is  to  present  a  systematic  perspective  of  BIPA  students  about 
cultural understanding. The result of this research will contribute ideas to improve the BIPA 
program,  also  the  international  cooperation  in  the  exchange  student  programs.  Thus,  this 
study  investigated  the  relation  between  BIPA  and  culture  understanding  based  on  field 
experience  among  BIPA  students  and  staff.  The  ethnographic  research  design  with  a 
qualitative descriptive approach was adopted for the study. The technique carried out in this 
research is based on a direct survey via a workshop of cross-cultural understanding in Ambon 
in September 2019 and a short course BIPA Plus program in Thailand in November 2019 as 
well as direct observation in the field of study. Findings revealed that live and experienced 
cultures  are  a  good  way  to  understand  another  culture.  There  are  both  differences  and 
similarities  in  culture,  among  others  taboo  and  non-taboo.  Thus,  the  workshop  of  culture 
understanding  is  needed  to  avoid  the  gap  among  cultures  and  understanding  foreign 
cultures.  The  participants  need  to  understand  the  foreign  culture  at  the  beginning  of  the 
program. Bridge cross-culture understanding is a crucial issue in terms of the BIPA program 
in  Indonesia.  While  the  BIPA  program  could  become  a  link  for  interconnectivity  among 
language,  culture  and  friendship;  so  that  the  institutions  are  linked  for  the  best  mutual 
cooperation and people from one country could understand another culture.  

Introduction 

Pattimura University in the framework of internationalization of the university and to support 
the  university  accreditation,  there  needs  an  effort  to  get  international  students.  Thus,  the 
international program such us the BIPA Darmasiswa and BIPA Plus programs play a crucial 
role. The BIPA Darmasiswa is a scholarship program organized by the Indonesian Ministry of 
Education and Culture (MoEC) in cooperation with the Ministry of Foreign Affairs (MoFA). This 
program started in 1974, which admit only students from ASEAN. Then, in 1976 the program 
extended to other countries. Nowadays, it has been extended further to include all countries 
which  have  diplomatic  relationship  with  Indonesia,  with  a  total  of  135  countries.  The 
scholarship  holder  will  learn  BIPA (Bahasa  Indonesia  untuk  Penutur  Asing,  translated  in 
English,  Indonesian  Language  for  Foreigners); language,  art,  and  culture  for  one  year  at  a 
selected university. The program aims to promote the Indonesian language and culture; also 
it  has  been  designed  to  provide  stronger  cultural  links  and  understanding  among 
The 
participants 
Indonesian government continues to work with various activities related to BIPA, including 
Darmasiswa RI scholarship, the KNB scholarship, and sending BIPA teachers abroad. 

(see  https://darmasiswa.kemdikbud.go.id/about-us-2/). 

countries 

While BIPA PLUS is organized specially for Pattimura University's cooperation partners. The 
program has been established by the Language Centre of Pattimura University in 2017, which 
has been an annual program. This program has been conducted in the form of a short course 
program  for  ten  days.  The  aim  is  to  provide  stronger  cooperation  with  the  university’s 

152 

 
 
 
 
partners  such  as  the  university  partners  in  Australia,  Thailand,  Germany,  etc.  Through  this 
program, the participants will learn Indonesian language and one topic related to Maluku, 
such  as  the  economic  empowerment  of  people  on  the  coastal,  traditional  fishing  trap,  or 
traditional cultures in the Moluccas.   

Related to the BIPA program, the supporting facilities, teachers, and their teaching method 
as  well  as  management  of  the  program  are  needed  to  accomplish  the  BIPA  program  at 
university. One but not least is the intercultural competency of teachers and students. There 
are a lot of problems related to the BIPA program, among others are the mental and physical 
sickness  students  sent  to  join  this  program,  and  also  cultural  misunderstanding  between 
students and staffs. For instance, the BIPA students from Europe prefer to travel even during 
the class run and often complain. Thus, this article aims to discuss the relation between BIPA 
and culture understanding based on the field experience among BIPA students and staffs. 

Literature Review: BIPA and Cross-Culture Understanding 

BIPA- Indonesian Language for Foreigners 

In Indonesia, the BIPA program is accommodated by an institution or university. The BIPA 
program has developed rapidly in the last years. Many institutions that provide BIPA program 
are no longer mainly based in Java and Bali or other regions in Western Indonesia, but have 
expanded to Eastern Indonesia, including Maluku. Pattimura University is the only institution 
that organizes the BIPA program in Eastern Indonesia since 2016 (see Latupapua, 2020). BIPA 
is a bridge to introduce the Indonesian Language for foreigners formally. Language learning 
for  foreigners  is  included  in  the  second  language  learning  after  students  master  the  first 
language or their mother tongue (Suyitno 2004, in Nirmalasari 2018: 42).  

Further, BIPA or Indonesian language learning for foreign speakers learns Indonesian from 
the most basic knowledge about words until they are capable to arrange them into a good 
and comprehensible  sentence.  The  level  language  skills  are  A1,  A2,  B1,  B2,  and  C1,  which  is 
framed toward the European language proficiency frame. Those levels will be accomplished 
during a specific duration of time like one year program. For those reasons, in BIPA learning, 
there has to be a good method used to deliver the learning material. One of many important 
issues in organizing BIPA learning program is providing teaching materials or textbooks as 
learning  resources  that 
language  proficiency. 
Furthermore, for the framework of learning BIPA the students must be mastered not only 
the language competency but also culture and intercultural communication competency.   

local  cultural  material 

integrate 

into 

The scientific data shows that the research on BIPA has been done relating to different issues 
and perspectives, and most of the researches had been done to improve the program itself. 
Sumarti, et.al. (2018:361) stated that there is a lot of researches that have been pointed out of 
BIPA, among  others  about the development  of the  authentic teaching materials, which is 
based  on  local  culture,  the  local  culture  “pamali”  as  media  communication,  etc.  While 
Sumarti  et.al.  have  been  developed  research  on  cross-cultural  understanding  of  BIPA 
participants. They stated that “teaching language cannot be separated from culture”. Thus, 
teaching BIPA should be not oriented only in language competency but also in intercultural 
competency.  Further,  BIPA  encouraged  teachers  to  be  able  to  build  “intercultural 
competency”.  Moreover,  the  research  on  BIPA,  which  is  pointed  out  on  grammatical 
Indonesian  Language  toward  BIPA  students  from  Tiongkok  was  done  by  Yohanna 

153 

 
 
 
 
 
Nirmalasari (2018), and the critically outline the issue, including showing the efforts that have 
been  made  to  create  teaching  materials  that  give  more  space  to  local  culture  elements 
(Latupapua, 2020). 

Culture and Cross-Culture Understanding 

"Culture is society's way of creating social connectivity among a group of people through the 
origin, belief, institutions, religion, music, and art" (Tuleja 2019 in notredameonline.com). Thus, 
in international connectivity, culture can be defined by linking interactions  among  people 
from institutions such as a university. Eriksen (2004) emphasized the culture is not easy to 
grasp.  He  added  that  from  the  identified  162  different  definitions  provided  in  that  book 
Culture: A Critical Review of Concepts and Deﬁnitions by Kroeber and Kluckhohn 1952, no 
definition of the culture concept that most anthropologists seem to agree upon. He argues 
that the most famous deﬁnitions of culture stems from the English anthropologist EB Tylor 
1871 that "Culture or Civilization, taken in its widest ethnographic sense, is that complex whole 
which includes knowledge, belief, art, morals, custom, and any other capabilities and habits 
acquired by man as a member of society".  

Further, many theoretical perspectives on the conceptualization of culture and approaches 
can  be  found  in  academic  literature  relating  to  the  concept  of  culture,  which  identified 
cultural differences from different aspects; beliefs, values and behavior (e.g. Wyer, et al. 2009). 
The  interesting  part  contributed  a  concept  of  culture  contrast  with  views  of  culture  as  a 
psychological variable as Schwartz noted as follows: 

“These views see culture as beliefs, values, behaviors, and/or styles of thinking distributed in 
a distinctive pattern among the individuals in a society or other cultural group. Culture, as I 
conceptualize it, influences the distribution of individual beliefs, actions, goals, and styles of 
thinking  through  the  press  and  expectations  to  which  people  are  exposed”  (Schwartz 
2009:128). 

Moreover, recent research about culture has been done based on the 5 dimensions of culture 
proposed by Hofstede, which are the power distance, individualism, masculinity, uncertainty 
avoidance, and long-term orientation (e.g. Ulijn et al. 2010, notredameonline 2019 ). Ulijn et al. 
2010  (96-120)  research  about  cultural  differences  between  German  and  the  Netherlands 
identified  some  aspects  of  cultural  differences  among  other  differences  in  languages, 
dialects,  religion,  food  habits,  mentality,  norms,  behavior,  and  mutual  perceptions.  This 
research deals only with a less intense way of perception. Moreover, the reviewed perception 
literature implies the intercultural perspective that "what you see might not be what it is", for 
instance, "how the Germans and the Dutch see each other" Limaye (2000) and Ulijn and St 
Amant  (2000)  in  Ulijin  et  al.  (2010:  107-108).  In  addition,  the  interesting  concept  is  the 
preparation  of  people  for  intercultural  experiences  by  Richard  W.  Brislin  2009.  The  writer 
summarized Brislin’s concept that people live in a culture is the best way to experience and 
understand a different culture. Besides, the cultural misunderstanding arose because people 
involved  have  the  wrongly  assumed  that  their  own  beliefs  and  values  were  normal. While 
understanding cross-culture recognized three steps, firstly “knowing yourself” is the crucial 
step towards bridging the culture gap. Secondly, the acknowledgment of the way you and 
your compatriots look at the world that is not universal, and thirdly, to find out as much you 
can about other culture’s value and beliefs (Carté, Penny & Fox, Chris, 2008: 161). 

However, this article  aims to try  to respond to  some of the questions  posed  by Ulijin et  al. 
(2010) and Brislin’s concept (2009), explored through BIPA students and staff during the BIPA 
program.  Thus,  this  research  is  conducted  based  on  this  concept  within,  "how  the  BIPA 

154 

 
 
 
students and staffs see each other". For instance, what they think about their own culture, 
foreign  culture,  and  so  on.  Those  concepts  above  help  to  figure  out  the  cross-culture 
understanding as result of this research. 

Methodology 

The ethnographic research design with a qualitative descriptive approach was adopted for 
the study.  Because  the  ethnographic research focuses on  culture "how  the BIPA students 
and  staffs  see  each  other”,  the  researcher  analyzed  the  following  steps:  (1)  collect  data,  (2) 
reading the data again, (3) categorized (4) compare the data, (5) seeking the relationship and 
categories, (6) finding the descriptions and (7) interpretation to find the meaning (Fielding, 
1993,  in  Setyowati,  2006).  Further,    to  enrich  the  research  result,  the  second  additional 
research was conducted during the BIPA Plus program in Thailand in November 2019. Then, 
the  researcher  tried  to  put  seven  questions  that  were  addressed  both  to  12  BIPA  Plus 
students  from  three  universities  of  Thailand  and  4  students  from  a  German  university  to 
structurize  the  research′s  finding.  Those  research  questions  refer  to  the  theory  about 
qualitative  research  questions;  a  central  question  and  associated  sub-questions  (Creswell, 
2002:120). 

Sample description 

The  research  subjects  were  the  4th  BIPA  students  from  Congo,  Sudan,  Ukraine,  and  the 
Czech  Republic,  2  Mandarin  Teachers  from  China  and  8  BIPA  organizer  staffs  have 
contributed to the direct survey. Further, the additional research was addressed both to 12 
BIPA  Plus  students  from  three  universities  of  Thailand  and  4  students  from  a  German 
university. 

Survey instrument 

The technique carried out in this research based on a direct survey via a workshop and short 
course program  as well  as direct observation in  the field. The  first data  collection contains 
responses to a series of tasks that were addressed both to BIPA students and organizer staffs 
in  September  2019  workshop  concerning  the  understanding  of  the  own  culture  and  the 
foreign culture, Taboo and Non-Taboo. To enrich the research result, the second additional 
research was conducted during the BIPA Plus program in Thailand in November 2019. The 
participants  were  given  a  paper  with  seven  questions.  These  questions  in  my  direct  open 
questions survey among 2 suggested countries of Thailand and Germany in November 2019 
through a short course of BIPA Plus in Thailand consisted of three general parts as follows:  

(i) 

(ii) 

(iii) 

(iv) 

The first 4 questions were about the program itself; the benefit of the program, 
teaching material, interesting topic, and teaching method 

The  second  1  question  was  about  the  needs  to  conduct  such  program  at  their 
university 

The  third  1  question  was  about  participant's  opinion  if  the  BIPA  program  can 
strengthen the relationship between universities or countries 

The  last  1  question  was  about  what  participant's  thinking  about  Indonesia, 
Thailand, and Germany before and after (Thailand to Indonesia and Germany, on 
contrary Germany to Thailand and Indonesia). 

155 

 
 
 
 
 
Results 

Table  1  shows  an  ongoing  work  in  conjunction  with  the  participant's  opinion  about  the 
foreign culture (what the BIPA students know about Ambon (Indonesian culture), and on the 
contrary, the staffs wrote about Congo, Sudan, Ukraine, the Czech Republic, and China; the 
second of expected participants own culture what taboo and non-taboo for themselves, and 
the third expected participant's perception of the workshop. 

Table 1: The participant's opinion about the foreign culture. 

 Country 

Habits & Behaviour 

Values 

Appearance 

Arts/nature  

Knowledge 

BIPA Students 

Czech Rep. 

Friendly, punctual,  
consistent 

Ukraine 

Calm and friendly 

Punctual and 
consistent 

Congo  

Unpunctual 

People like beer, 
white skin 

Artistic place 

Calm voice 

White skin 

Like classical music 

Fat, black skin, 
curly hair 

Dancing skill 

Sudan 

Smile, unpunctual, 
stylish 

Black skin,  

Like dancing, 
fashionable 

China 

Always smile 

Business skill, 
stingy 

Looks very 
simple, white 
skin, beautiful 
girl 

Creative, like 
dancing 

African part, 
hot weather, 
tasty food 

African part, 
rich fuel, 
women in 
cover 

Tasty food 

Indonesia 

(Ambon) 

Kind, polite, 
generous 
people, 
friendly, 
different 
understanding 
of time and 
schedule 

highly 
respected 
family, land of 
love, teacher 
relationship, 
particular 
culture, live 
relax 

         Tan skin 

           Fresh air,      
beautiful beach, 
speak Arabic 
many Moslem 
and mosque, hot 
and wet weather, 
city of songs, 
stylish and luxury 
wedding 

       Tasty food 

The result suggested that participants understand the foreign culture in the way, how they 
look  at  other  people’s  appearance  (e.g.  hair,  white  or  dark  skin,  big  size  body/fat  or  thin, 
beautiful), habits, behaviour, values, activities, arts, and nature. While participants see their 
own culture as shown in Table 2, what taboo and non-taboo for themselves from what they 
normally did, compared to what they see other people doing as follows: 

Countries 

Taboo 

Non-Taboo 

Table 2: The expected own culture (taboo and non- taboo). 

Sitting on ground, taking someone place when 
waiting in line, no talking to strangers, being too late 
disobeying rules, almost no taboos, everything very 
open and honest 

Czech 

Congo 

Addressing someone mistake, use tissue 
more, ask a lot of questions, calling 
teacher by name, stand up late, make 
fun for everything, all people same level, 
no hierarchy 

Its normal to ask too much questions 
about privacy, Its normal to eat in the 
same plate, say something if you don’t 
like 

156 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sudan 

Using your left hand to offer things, e.g. food, 
smoking among guests, compliment an item in 
Sudanese house 

Ukraine 

Almost no way to say “no” directly to express dislike or 
critics 

China 

Indonesia 
(Ambon) 

No green hat, don’t eat by using hand, don’t ask the 
age, income, marital status when you meet a person 
in first time, don’t use chopsticks to knock the bowl or 
plate, don’t like the number “4, 14, 24, 34… 

Fart is impolite when you having meal, greetings 
elder people by name, not seat in front of the door, do 
not talk during eat, do not sweep the feet of people, 
don’t married with “gandong”, don’t give Moslem 
“meat pork” to eat, no using left hand by giving 
things, laughing loudly with open mouth. 

Stand up when greeting, shaking hands, 
respect elder people, Friday is the most 
popular day for visit, family gathering at 
least in one meal 

honestly not taking things personally 

Like chitchat, gossip among  people 

The result regarding the expected participant's perception of the workshop suggested that; 
(1)  the  workshop  of  cross-culture  understanding  must  be  done  for  BIPA  Darmasiswa 
students, thus the foreign student who learns at the Pattimura University don’t blame each 
other, (2) all participants accept the workshop as a great idea and a great chance within, they 
know other culture, (3) the workshop participants (staffs) are realizing that there are some 
similarities  between  foreign  culture  and  culture  in  Indonesia,  and  (4)  acknowledging  that 
"every  city  or  country  has  a  specialty,  for  that  reason,  we  shall  tolerance  and  understand", 
wrote one Mandarin teacher. 

Further, the additional research revealed that the first 4 questions about the program itself; 
the benefit of the program, teaching material, interesting topic, and teaching method that 
was varied answers. The author prefers to describe the interesting topic for themselves that 
Thailand's  students  from  3  different  universities  (Khon  Kaen  University,  Buriram  Rajabaht 
University, and Lampang Rajabaht University) stated different topic as an interesting topic 
for them, such as foods, family and traveling (3 persons of 12 participants, or 25%). While most 
of  the  German's  student  (75%)  wrote  that  the  "traveling"  was  as  an  interesting  topic  for 
themselves. 

Table 3: The direct open questions survey – questions 5 - 7 

Answers 

No. 

Questions 

Thailand’s Students 

Germany’s Students 

Thailand’s Students 
answered only shortly, "yes, 
this is a great program and 
a great chance for students 
at my university", 

What about the needs 
to conduct such as the 
program of BIPA at 
your university? 

German's students answered it with 
arguments; (a)"just pay attention that the 
group is not getting too big", (b)"getting to 
know Asian culture can be a valuable thing 
which can help someone develop their 
personality and strengthen intercultural 
relationship", (c) It's a great experience to be in 
a totally different group of students in an 
unknown country. Everybody should do such 
as trip in his study time".  

The participant's 
opinion on whether 
BIPA program can 
strengthen the 
relationship between 
universities or countries. 

Thailand's students said "yes, 
we exchange language and 
culture, means that we are 
friend" 

"It’s a good part of an intercultural team at 
universities and it builds bridges between 
countries. Even if the students accept it, it is a 
win-win-win situation for students, universities, 
and whole countries". 

5 

6 

7  What participant's 
thinking about 

Thailand's students said that 
before they thought that the 

(a) “Thai people are very friendly, every time 
smile, welcoming, and Indonesians are similar; 

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Indonesia, Thailand and 
Germany before and 
after? 

Germans are quite serious 
and hard to smile, but after 
met and learned together, 
they are also friendly and 
humourist. 

(b)"The stereotypes in Germany are mainly 
Chinese or Japanese- stereotypes for 
Europeans Asia is just too big to separate 
each country from another if you have never 
been there". 

Discussion 

The results of descriptive analysis showed that the bridge cross-culture understanding is a 
crucial issue in terms of the BIPA program in Indonesia. The participants need to understand 
the  foreign  culture  at  the  beginning  of  the  program.  Thus,  teaching  BIPA  should  not  be 
oriented only on language competency but also in cross-culture understanding. 

Based  on  the  analysis,  then  the  research’s  finding  are  structured  based  on  the  central 
questions and associated sub-questions; “how the BIPA students and staffs see each other”, 
what they think about their own culture and the foreign culture, what about the benefit of 
the program for themselves, and the connectivity of their universities and countries such as 
the benefit of the program, teaching material, interesting topic and teaching method. For 
the answer to the question “how the BIPA students and staffs see each other” refers to the 
concept of Brislin (2009) that people who live in a culture is the best way to experience and 
understand  a  different  culture.  Besides,  the  concept  of  “knowing  yourself”,  “the 
acknowledgment” and the way to look at other culture’s value and beliefs by Carté, Penny & 
Fox, Chris (2008: 161) has proved the findings. The first research finding through the workshop 
builds the intercultural competency of BIPA students and teachers or staff. In fact, there are 
not only differences, but also similarities in some aspects of culture, for instance what taboo, 
and non-taboo. Thus, the BIPA students and staffs should pay attention on both differences 
and  similarities  during  the  communication  or  during  the  program.  Whether  the  culture 
understanding through  the workshop is effective, the  BIPA students  from other countries 
are  capable  to  understand  the  local  culture  where  they  will  live  in.  In  other  word,  culture 
understanding gives benefit for both the BIPA students and staff that they can understand 
each  other  from  the  perspective  of  taboo  and  non-taboo  for  themselves  and  for  others. 
Besides, the staffs have  knowledge about BIPA  student’s country without visiting or living 
there. 

For  the  benefit  aspects  of  the  program,  teaching material,  interesting  topic,  and  teaching 
methods  that  were  varied  answers.  Those  aspects  showed  that  the  institution  should  pay 
extra  attention,  improve  the  management  of  the  program  and  prepare  teachers  for  this 
program.  While  the  topic  will  be  dependent  on  individual  interest  but  also  the  country’s 
image of interest such as Germany. This country is also known for people like to spend time 
for traveling. Further, the BIPA program could become a link for interconnectivity among the 
language,  culture  and  friendship;  so  that  the  institutions  are  linked  for  the  best  mutual 
cooperation and people from one country could understand another culture.  

Conclusions 

In summary, one find outs two main points as follows: 

1)  Participants understand foreign culture in the way how they look at other people. So, 
live  and  experienced  cultures  are  a  good  way  to  understand  another  culture. 
Moreover, the workshop understanding  culture is needed to avoid the  gap  among 
cultures and understanding foreign culture. 

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2)  Understanding  international  cultural  can  be  linked  with  the  exchange  culture 

programme among institutions such as a university. 

References 

Carté, Penny & Fox, Chris (2008). Bridging the Culture Gap: A Practical Guide to International Business 
Communication. ed. London and Philadelphia. Kogan Page. 
Creswell, Jhon W. 2002. Research Design: Qualitative, Quantitative, and Methods Approaches. 2nd Ed. 
Los Angeles, London, New Delhi, Sinagpore: SAGE 

Eriksen, Thomas Hylland (2004). What is Anthropology? London: Pluto Press. 

Latupapua,  Falantino.  (2020):  In  Searching  of  Appropriate  to  Local  Cultures  Teaching  Materials: 
Problematics of BIPA Teaching in Maluku. Arbitrer Journal. April  2020,  Volume  2, Nomor  1, Pg. 233-
244 

Morgan,  Carol  &  Cain,  Albane  (2000).  Foreign  Language  and  Culture  Learning  From  a  Dialogic 
Perspective. Clevedon. Bufallo. Toronto. Sydney: Multilingual Matters LTD. 

Nirmalasari,  Yohanna,  (2018).  Pola  Kalimat  Bahasa  Indonesia  Tulis  Pembelajar  BIPA  Tingkat  Pemula 
Asal Tiongkok di Universitas MA Chung.  Journal KLAUSA: Kajian Linguistik, Pembalajaran Bahasa, dan 
Sastra. Volume 2 No. 1. 2018. Pg. 41-50.  

Setyowati,  (2006).  Etnografi  Sebagai  Metode  Pilihan  Dalam  Penelitian  Kualitatif  di  Keperawatan. 
[Ethonographie  as  a  Chosen  Method  in  Qualitative  Research  in  Nurshing].  Jurnal  Keperawatan 
Indonesia, Vol. 10. No.1. March 2006. P. 35-40 

Sumarti,  et.al.  Lintas  Budaya  (Interkultural)  Dalam  Pembelajaran  Berbicara  Bagi  Peserta  BIPA 
Darmasiswa  di  Universitas  Lampung.  International  Conference  topic  on  Teaching  Indonesian 
Language 

Ulijn, Jan., Duysters, Geert., & Fèvre, Jean- Marie (2010). Culture and its perception in strategic alliances: 
does it affect performance? An exploratory study into Dutch–German ventures. In: Strategic Alliances, 
Mergers  and  Acquisitions:  The  Influence  of  Culture  on  Successful  Cooperation.  Edited  by  Ulijn,  Jan., 
Duysters, Geert., & Meijer, Elise. UK: Edward Elgar Publishing. ISBN 9781848443365, 96-120. 

Wyer, Robert S., Chiu, Chi-yue., & Hong, Ying-yi (2009). Understanding Culture Theory, Research, and 
Application.  New York. London: Psychology Press Taylor & Francis Group, LLC. 
Notredameonline.com.  (2019.  October  8th).  The  5  Dimensions  of  Culture  with  Dr.  Elizabeth  Tuleja. 
Accessed  on 
2019,  https://www.notredameonline.com/resources/intercultural-
January 
management/exploring-the-five-dimensions-of-culture/ 

29th 

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Co-Creating Lightboard Media for a Singapore- France Education Collaboration 

Fun Man Fung1,2, Christoph Dominik Zimmermann3, Hui Ru Tan1,4, Etienne Blanc5, 
Thierry Koscielniak6 and Xavier Coumoul5

1Department of Chemistry, National University of Singapore, Singapore 

2Institute for Application of Learning Sciences and Educational Technology (ALSET), 
National University of Singapore, Singapore 

3Department of Materials Science and Engineering, Singapore 

4Department of Food Science and Technology, National University of Singapore, 
Singapore 5Université de Paris, UFR des Sciences Fondamentales et Biomédicales, Paris, 
France 6Conservatoire national des arts et métiers (Le Cnam), Nationale du Numérique, 
Paris, France 

Abstract 

We present a unique joint Singapore-France education project that uses technology to 
make  more  engaging  student  content  as  well  as  leveraging  an  intercontinental 
collaboration  to  gain  a  greater  understanding  of  students  from  different  cultural 
backgrounds and their respective learning process. 

The Lightboard is a recently developed means of making tutorial-style learning videos 
which enable eye-contact, rather than students seeing lecturer’s back, handwritten and 
informal  teaching,  which  have  been  associated  with  benefits  for  students'  learning. 
Lightboard videos have a more informal, conversational style, which could yield better 
results even than high production quality/cost videos. 

Understanding  the  student  and  catering  to  their  expectations  is  an  important  part  of 
being  an  empathetic  and  effective  teacher.  Students'  differences  in  their  cultural 
backgrounds can have an impact on their preferences when it comes to teaching style, 
understanding the content and instructional design. Our cross-continental collaboration 
between  lecturers  in  Singapore  and  France  allows  to  gain  a  deeper  understanding  of 
how  cultural  background  affects  teaching  style.  The  experienced  lecturers  from  both 
countries each bring their own unique understanding of their respective local student 
population and spark new ideas. 

Introduction 

The use of videos in education has been promoted as early as 1980 (Rossi, 2015), where 
video technique and equipment was explained to the layman to promote greater use of 
this  technology  among  instructors.  Over  the  past  years,  video  has  become  a  popular 
supplement to traditional teaching methods such as didactic teaching, since they can 
be watched and re-watched anytime by students at their own pace. This also frees up 
valuable  student-teacher  time  for  guided  practice  and  questions,  rather  than 
instruction.  For  this  reason  as  well  as  videos  combining  both  the  auditory  and  visual 
sense,  videos  are  often  used  in  the  flipped  classroom  setting  as  replacements  to  live 
lectures (Gloudeman, Shah-Manek, Wong, Vo, & Ip, 2018). 

160 

 
 
 
 
 
In this joint France-Singapore, collaboration, we filmed chemistry toxicology videos with 
the Lightboard. Simply speaking. A Lightboard is a glass writing board used for recording 
video lectures (Fung, 2017). Lightboard setup consists of a mounted LED-lit glass board, 
monitoring device, video recording device, and fluorescent markers to write annotations. 
It is pioneered by Michael Peshkin, a professor at Northwestern University (Peshkin, 2013). 
A  step-by-step  guide  on  how  to  build  a  Lightboard  can  be  found  in  his  website: 
Lightboard.info. 

Method, Result and Discussion 

In this paper, we experimented with the Lightboard to produce several video styles using 
the Lightboard as a tool for educational videos. The two styles are 1) the Interview-style 
and 2) the multi-presenter style (Figure 1). The rationale for the different video styles are 
explained in further detail in the proceeding section. 

Figure 1. Top, from left to right: Interview- style and multi- presenter Lightboard videos. Bottom, 
from left to right: Schematic diagram of the recording setups for each video style. Presenters are 
positioned behind the glass board and annotate normally on the board, i. e. not writing 
backwards. Dashed lines on the diagram refer to the camera frame representing the area 
around the  Lightboard that  are  captured on video. 

First,  the  interview-style.  Unlike  conventional  single-presenter  Lightboard  videos,  the 
interview-style involves a more interactive, two-way conversation between the presenter 
and the interviewer. With another person supporting the dialogue, the presenter is able 
to receive verbal cues and prompts from the interviewer in case the presenter forgets to 
say  something  or  is  stuck  in  a  particular  part  of  the  dialogue.  Furthermore,  the 
interviewer can help to moderate the dialogue being recorded, making sure that what 
is  being  said  is  accurate  and  relevant. This makes it easier  for the  presenter to  deliver 
content as opposed to delivering a  lecture individually, where the presenter has to be 
aware of their own verbal cues with no one to support them in case they make mistakes 
in the middle of recording. 

Another added benefit is that with interview-style videos, the presenter can channel their 
eye contact to the interviewer instead of the camera, which can reduce the awkwardness 
normally  felt  when  recording  a  conventional  straight-to-camera  Lightboard  lecture 

161 

 
 
 
 
 
video. However, interview-style video recording would not help to moderate the content 
of the video, if both the interviewer and the presenter are unprepared and/or nervous, or 
if  the  interviewer  is  easily  swayed  by  digression.  In  addition,  due  to  the  question-and- 
answer interview format, the presenter may take longer to deliver their message what 
could have been done shorter in a shorter period. 

When recording our interview-style Lightboard video, the presenter found that having 
the interviewer verbalize questions helped to segmentate his content, making it easier 
for him to present as he could worry less about forgetting his content or flow of speech 
as opposed to recording a conventional single presenter video. One drawback he found 
was that writing on the Lightboard became more difficult as he had to split his attention 
between  the  interviewer  and  the  Lightboard.  He  also  noted  that  sitting  down  also 
reduces the amount of text that he could write on the Lightboard. Understanding this 
limitation, one improvement that we propose is to reduce the restriction of movements 
in the presenter, by making both the interviewer and presenter stand up normally. This 
would make this very similar to the multi-presenter style video. 

Second, the multi-presenter style. Generally, there are only slight distinctions between 
interview-style and multi-presenter videos. One difference is that interview-style videos 
focus on a question-and-answer format and are typically recorded with both speakers 
seated. 

In  the  multi-presenter  style  recording,  the  dynamics  of  content  delivery  is  further 
increased as the presenters are not bound to taking turns to speak on camera, but are 
instead  able  to  engage  in  interactive  conversations  to  engage  their  audience  further. 
Similar to the interview-style videos, having multiple presenters in the recording allows 
them to support each other in case one forgets or deviates from the topic of interest. This 
is  assuming  that  all  presenters  have  self-control  over  their  content  and  are  not  easily 
swayed away by digressions. 

Discussion 

One disadvantage of multi-presenter videos we found was the minimal space available, 
both  for  the  presenters  to  move  and  for  them  to  annotate  on  the  Lightboard.  In  fact, 
having  annotations  on  the  Lightboard  becomes  more  challenging  as  the  number  of 
presenters  increase,  as  not  only  does  the  amount  of  space  to  write  becomes  limited; 
having  the  amount  of  elements  present  in  the  video  distracts  viewers  and  makes  it 
harder for the writing on the Lightboard to stand out. This is further aggravated when 
the presenter wears light coloured clothing, which makes annotations on the Lightboard 
less legible (Figure 2). 

One measure to counter these limitations would be to ensure that presenters all wear 
dark coloured clothing. Besides that, allowing more freedom of movement, for instance 
by situating themselves outside the camera frame or further back from the Lightboard 
at certain moments during recording. Limiting the number of presenters to four people 
would also help to ensure sufficient space during recording. 

162 

 
 
 
 
Figure 2. Photo of interview style setup. During the recording, the camera is zoomed in to show 
only the presenter/interviewee’ s  visage. The interviewer’ s  face remains out of  the  camera. 

Conclusion 

According  to  current  research,  the  Lightboard  itself  is  a  tool  that  enables  lecturers  to 
create more engaging video content due to the instantaneous handwriting and face-to-
face  explanations.  Different  recording  styles—interview-  and  multi-presenter,  were 
created  between  the  French  and  Singapore  faculties  to  generate  various  modes  of 
instructional  teaching.  Despite  their  minor  limitations,  these  exploratory  experiments 
show that there is a large variety of video types that the Lightboard allows to create. In 
conclusion, we experimented with several novel styles to use the Lightboard device. 

References 

Fung,  F.  M.  (2017).  Adopting  Lightboard  for  a  Chemistry  Flipped  Classroom  To  Improve  Technology- 
Enhanced  Videos  for  Better  Learner  Engagement.  Journal  of  Chemical  Education,  94,  956–959. 
https://doi.org/10.1021/acs.jchemed.7b00004 

Gloudeman, M. W., Shah-Manek, B., Wong, T. H., Vo, C., & Ip, E. J. (2018). Use of condensed videos in a 
flipped  classroom  for pharmaceutical  calculations:  Student  perceptions  and academic  performance. 
Currents in Pharmacy Teaching and Learning, 10(2), 206–210. https://doi.org/10.1016/j.cptl.2017.10.001 

Peshkin, M. (2013). Lightboard.info. Retrieved from https://lightboard.info/ 

Rossi,  R.  D.  (2015).  ConfChem  Conference  on  Flipped Classroom:  Improving  Student  Engagement  in 
Organic Chemistry Using the Inverted Classroom Model. In Journal of Chemical Education (Vol. 92, pp. 
1577– 1579).    https://doi.org/10.1021/ed500899e 

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Co-Creating immersive 360° video media with a 
Singapore-France education collaboration 

Christoph Dominik Zimmermann 1, Rainer Dumke 2,3, Thierry Koscielniak 4, Etienne Blanc 5, 
Xavier Coumoul 5 and Fun Man Fung 6,7 

1 Department of Materials Science and Engineering, Singapore 

2 Centre for Quantum Technologies, National University of Singapore, Singapore 

3 Division of Physics and Applied Physics, Nanyang Technological University, Singapore 

4 Conservatoire national des arts et métiers (Le Cnam), Nationale du Numérique, Paris, 
France 

5 Université de Paris, UFR des Sciences Fondamentales et Biomédicales, Paris, France 

6 Department of Chemistry, National University of Singapore, Singapore 

7 Institute for Application of Learning Sciences and Educational Technology (ALSET), 
National University of Singapore, Singapore  

Abstract 

In this abstract, we present a cutting edge method of immersive learning in tertiary STEM 
education,  using  interactive  360°  videos  immersive  environments,  based  on  a  cross-
continental  collaboration  between  Singapore  and  France.  The  motivation  for  using 
immersive  learning  is  that  it  provides  learners  the  opportunity  to  experience  learning 
content overseas virtually - such as remote locations or restricted-access labs - which they 
otherwise  would  not  get  to  explore  in  real  time.  The  interactive  and  experiential  learning 
journey that is enabled through immersive learning environment could provide novel, and 
potentially  powerful,  ways  of  conveying  topics  to  learners,  while  potentially  positively 
affecting their motivation.  

Introduction 

Field trips are commonly used activities for environmental teaching. They are a great way for 
instructors  to  engage  students  and  give  them  a  first-hand  understanding  of  a  subject. 
However,  the  execution  for  a  field  trip  in  a  compact  schedule  renders  it  logistically 
challenging and resource-intensive. On top of that, it is common for students and instructors 
to have back-to-back lectures. As such, the tight schedule restricts the implementation of a 
local field trip, let alone an overseas one. The lack of visual engagement with the environment 
deprive students who are interested to see the real scene in the environment to stimulate 
critical  thinking  (Ernst  &  Monroe,  2004).  Because  of  the  challenge,  our  France-Singapore 
team applied immersive learning field trip with the use of the individual VR gear for their own 
exploration to a real site where the 360° media are captured by the instructors across both 
countries (Figure 1). 

Method 

This immersive field trip was carried out on a cohort of 74 third- and fourth-year chemistry 
students over the duration of two lessons across three weeks, each ranging from 1 to 1.5 hours 
in  duration.  The  course  code/title  is  CM3261/Environmental  Chemistry.  The  first  lesson’s 

164 

 
 
 
 
objectives were to introduce the idea of VR in the classroom setting using immersive 360° 
video media and to allow students to familiarize themselves with both the VR gear and the 
online 360° media application. During the first lesson, the instructor led the students through 
the various 360° photospheres and 360° elements. Then, students were then left to explore 
the virtual site for themselves https://tinyurl.com/uptale-CM3261.  

Figure 1: View of the 360o media (Left). The split screen show two pictures for each eye. By doing so it 
creates an immersive environment. VR gear—goggle (A) and lenses (B) on the right. 

For  the  second  lesson,  students  were  given  a  unique  code  to  access  a  new  module 
containing  the  set  of  360°  photospheres  filmed  in  Ungaran,  a  rural  city  in  Indonesia 
(Zimmermann,  Ardisara,  Fung,  &  Leang,  2019).  During  the  lesson,  the  instructor  directed 
students to specific areas of the photosphere to draw further emphasis to specific areas of 
interest. Students were then allowed to explore the field trip on their own (Figure 2). After the 
second lesson, students were then required to answer environmental chemistry questions 
regarding their field trip (Fung et al., 2019).  

Figure 2. Students immersed in the virtual field trip at their own pace. 

165 

 
 
 
 
 
 
 
Result  

After conducting the second VR class, a voluntary anonymous survey was posted to gather 
feedback  on  using  the  360°  immersive  video  (response  rate:  80%).  The  feedback  primarily 
revolved around the enthusiasm towards the first use of VR in a chemistry course at NUS. On 
a Likert scale of 1—5, students rated their virtual field trip experience (Table 1).  

Table 1. Students’ Perceptions Regarding the Virtual Field Trip. 

Question for Student Response 

Responses by Scorea N (Total N = 59)b 

On a scale from 1 to 5, how would you rate your experience based on 
today’s virtual field trip class? 

5 

5 

4 

33 

3 

14 

2 

6 

1 

1 

a The scores from 5 to 1 represent the following agreement levels: “very good”; “good”; “neutral”; “poor”; and “very 
poor”, respectively. The total number of responses for each level of agreement are tabulated.  b Response rate = 
80%. 

From the data, it suggests that the students were generally receptive towards the use of the 
immersive technology in the virtual field trip. From a user experience perspective, the main 
challenges faced were disorientation and app limitations. The reported disorientation could 
be caused by the 15-minute virtual excursion that was conducted without intervals. A possible 
solution is to punctuate the session into 5-minute chunks. In this way, students can afford a 
break from the virtual world, look into the real world, and return to the virtual excursion when 
ready. Due to the lack of functionality such as a zoom element, students were unable to view 
clearly, certain images or objects within the photospheres. A possible workaround is to check 
the mobile app that is monitoring the recording to preview that the 360o camera captures 
all  salient  objects  (Ardisara  &  Fung,  2018).  Nevertheless,  majority  of  the  students  gained  a 
positive experience.  

Discussion 

Faculties  in  France  and  Singapore  annotated  360°  videos  which  provide  learners  limited 
interaction  and  "movement"  within  the  360°  environment.  Using  360°  videos  to  create 
immersive learning environments presents a - albeit low-fidelity - low-cost alternative to fully-
developed  virtual  reality  environments  commonly  found  in  advanced  games  or  training 
simulations.  We  presented  annotated  360°  video  media  as  a  feasible  alternative  to  virtual 
reality  environments,  as  it  provides  a  way  to  create  immersive  learning  content  in  shorter 
time and significantly cheaper. Furthermore, the ease-of-use of 360° videos allows even non-
technical  instructors  to  create  custom  content  that  follows  their  current  curriculum. 
Potentially,  they  can  even  choose  to  co-create  immersive  360°  experiences  with  students, 
which has been shown to be beneficial. 

Conclusion 

We co-created this immersive 360° video project as a fruitful cross-continental collaboration 
between teaching teams in Singapore and France. The understanding of different cultural 
backgrounds 
lead  to  an  understanding  of  unquestioned 
assumptions of what teaching means. Our project being used both in Singaporean as well 
as  French  lecture  halls,  we  can  gain  a  better  understanding  of  whether  our  teaching 
approaches and students' responses to them are "universally" applicable or culturally specific.  

in  this  collaboration  can 

166 

 
 
 
 
 
    
 
References 

Ardisara, A., &  Fung, F. M. (2018). Integrating 360° Videos in an  Undergraduate Chemistry Laboratory 
Course. 
product-review. 
Education, 
https://doi.org/10.1021/acs.jchemed.8b00143 

1881–1884. 

Chemical 

Journal 

95(10), 

of 

Ernst, J., & Monroe, M. (2004). The effects of environment‐based education on students’ critical thinking 
skills  and  disposition  toward  critical  thinking.  Environmental  Education  Research,  10(4),  507–522. 
https://doi.org/10.1080/1350462042000291038 

Fung, F. M., Choo, W. Y., Ardisara, A., Zimmermann, C. D., Watts, S., Koscielniak, T., … Dumke, R. (2019). 
Applying a Virtual Reality Platform in Environmental Chemistry Education to Conduct a Field Trip to an 
Overseas  Site.  Journal  of  Chemical  Education,  96(2),  382–386.  https://doi.org/10.1016/S0006-
3061(00)80131-3 

Zimmermann, C. D., Ardisara, A., Fung, F. M., & Leang, S. (2019). 360° Immersive Field Trip to Ungaran for 
from 
Excursion. 
Environmental 
https://tinyurl.com/uptale-CM3261 

Chemistry  Overseas 

Retrieved 

January 

2020, 

2, 

167 

 
 
 
HODLNG,  a  Blockchain-based  solution  for  the 
Liquefied  Natural  Gas  (LNG)  market;  unleashing 
Asia-Europe  exports  and  imports  of  gas,  in  the 
context of a Sustainable Connectivity 

Jean-Christophe Finidori 

Founder, General Manager, at HODLNG OÜ, Blockchain start-up incorporated in Tallinn, 
Estonia 

Summary 

HODLNG,  a  Blockchain-based  solution  for  the  Liquefied  Natural  Gas  (LNG)  industry;  with 
smart contract, we address contracting issue, triggering an innovative and fair profit-sharing 
mechanism.  Our  utility  tokens  generate  additional  revenue;  contributing  to  positive  social 
impact. 

Context: exports and imports of gas 

The report “Exploring ASEM sustainable connectivity” (Becker et al., 2018) states that trade in 
gas is essential for many countries, which may have little or no natural resources of their own 
to  draw  on.  It  is  frequently  a  central  topic  in  energy  interdependency  and  international 
politics. The gas trade includes gas exported via pipelines, as well as in liquid forms via other 
means of transport. HODLNG subsumes in its logic an inherent European dimension due to 
the purpose of its tool: natural gas. Tackling anti-competitive provisions, our solution solves 
issues  raised  during  events;  as  the  workshop  co-organized  by  the  European  Commission 
Directorate  General  for  Energy  and  METI,  Japan  on  global  LNG  market.  Our  proposition  is 
cross-border and multi-country integrated. It serves to fulfil the European Union (EU) single 
market, addressing fragmented domestic markets and providing flexibility in destination (re-
export).  

Introduction 

LNG  markets  are  going  through  momentous  changes.  The  phasing  out  coal  approach  is 
leading to meaningful effect transition policies. This industry is undergoing a major transition 
where LNG may be re-sold several times on an individual spot cargo basis or through a chain 
of short contracts. The competition comes from a wide range of suppliers and options in the 
markets, and moves towards more destination flexibility in contracts. Governments should 
pay  close  attention  to  LNG  project  structure  and  the  long-term  LNG  sale  and  purchase 
agreements between LNG producers and  off-takers. In particular, the practice  of diverting 
LNG cargos to more lucrative export markets than the ones initially designated in off-take 
agreements should be regulated and monitored by governments  to balance the  financial 
incentives to LNG sellers with the interests of LNG-exporting  countries. The market has to 
cope  with  the  anti-competitive  provisions  prohibiting  diversion.  This  is why  we  decided  to 
tackle this issue, with Blockchain technology; and, introducing innovative fair profit-sharing 
mechanisms. 

168 

 
 
 
 
 
Blockchain solutions 

We  intent  to  develop  a  Blockchain  based-solution  to  govern  diversion;  introducing 
innovative profit-sharing mechanisms, and more diversified and advanced pricing formulas 
and contracts. In order to solve the problem we identified, we will use a public Blockchain. 
We create a native utility token and a wallet, to manage the scarcity and managing additional 
revenue,  to  be  transferred  to  the  selected  NGOs,  local  communities,  and  indigenous  or 
marginalized people. The novelty is to transfer to a permission-less Blockchain with a smart 
contract  language  the  existing  excessive  contentious  clauses  on  the  paper  contract;  by 
upholding the concerns of exporting countries, particularly low-income countries. 

Thanks to the Blockchain technology, our disruptive approach is to link additional revenue 
get from natural resources to development and social impact; bringing more transparency 
in  contracting  process  and  revenue  sharing.  To  achieve  that,  we  will  use  Blockchain  for 
transparency,  traceability  and  tamper-proof.  We  are  building  the  path  toward  more 
standardized, efficient and cost-competitive practices, consolidating major trends of the LNG 
market: growing liquidity and efforts to simplify supply agreements.  

HODLNG is a Blockchain start-up incorporated in Tallinn, Estonia. We’re fully dedicated to 
fixing problems in one market - the Liquefied Natural Gas, or L N G, industry, at both the EU 
and  global  levels.  We’re  doing  that  by  developing  a  Blockchain-based,  smart  contracting 
regime for L N G logistics. We help L N G stakeholders to address contracting issues, while 
also  creating  a  space  for  an  innovative  and  fair  profit-sharing  mechanism,  generating 
additional  revenues  and  contributing  to  positive  social  impact,  including  sustainable 
development  and  climate  change.  HODLNG  Solutions  are  tackling  contracting  (anti-
competitive provisions), enhancing the flexibility of the LNG market. 

LNG Market, inefficiencies and lack of transparency 

LNG  is  about  shipping  gas  via  tankers,  from  LNG  producers  to  importers;  and  there  is  big 
demand for it. 2019 was a record year for LNG supply growth, and the sector has tripled since 
2000. Here is currently some 1.4 trillion dollars being invested in it. For the fifth consecutive 
year,  global  LNG  trade  set  a  record,  reaching  far  more  than  3  hundreds  (316.5)  million  of 
millions BTU. LNG is also growing in terms of diversity, from a limited number of importers – 
less than 10 in 2000 – to over 40 last year, and 50 in the coming decade. So you have a fast-
growing sector with more and more exporters and importers every year. A study published 
recently stressed that the market is anticipated to reach nearly 20 Billons US Dollar by 2026. 
To unleash the huge potential of this sector, it is crucial to allow gas to flow where it is valued 
most, and when it is needed most. Global LNG procurement trends are undoubtedly shifting 
toward shorter contracts with smaller volumes and increasingly flexible commercial terms 
(destination,  resale  rights,  price  indexation,  take-or-pay  clauses,  and  volume  flexibility). 
National governments in LNG-producing economies need better insight into the valuation 
of  LNG  sales  and  the  corresponding  impact  on  their  revenues.  They  also  need  to  better 
monitor  and  control  the  routing  of  their  valuable  natural  resource.  Blockchain  is  the  ideal 
way to do this.  

So  you  have  an  important  resource  that  brings  a  lot  of  benefits,  and  could  represent  a 
significant  driver  of  prosperity  for  the  Global  South.  The  problem  is  that  a  complex  supply 
chain has arisen in LNG, with many inefficiencies and a lack of transparency. 

169 

It  is  typically  developing  countries  like  Trinidad  and  Tobago,  Papua  New  Guinea  and 
Mozambique (to name  a few) that are producers. So you have an important resource that 
brings a lot of benefits, and could represent an important driver of prosperity for the Global 
South. The problem is that a complex supply chain has made LNG far too tempting in terms 
of corruption; “suffering” of lack of transparency; and unfair redistribution. 

Corruption  is  a  gigantic  social  evil  -  an  estimated  2.6  trillion  US  dollars  is  stolen  annually 
through corruption – a sum equivalent to more than 5 per cent of the global GDP. But its 
impact on the LNG economy is extremely pernicious; lastly in December, news raised that 2 
billion dollars is believed to have been lost to the treasury of an ASEAN country by the actions 
of its former Minister of energy, because of corrupt LNG contracts.  

As  raised  by  an  Ambassador  of  an  LNG  exporter,  our  tool  will  support  them  for  fighting 
corruption; another Ambassador echoed by saying that our solution supports their efforts for 
transparency enhancement.   

In  fact,  HODLNG’s  technology  has  been  specifically  designed  to  facilitate  a  more  secure, 
flexible, fair and balanced LNG contracting environment, powering a truly transparent global 
LNG market. This would benefit producing economies, as well as make the overall market 
more  efficient.  Governments  should  push  for  these  agreements  to  maximize  the  price 
flowing back to the LNG plant. 

An innovative solution to incentive diversion 

We  remove  destination  restriction  in  LNG  contracts;  diversion  clauses  will  now  being 
governed  by  smart  contracts.  In  particular,  the  practice  of  diverting  LNG  cargos  to  more 
lucrative export markets than the ones initially designated should be balanced between the 
financial incentives to LNG sellers with the interests of LNG-exporting countries, especially 
the least developed ones. 

HODLNG does this by a truly smart contract allied with the foundations of a truly fair profit-
sharing mechanism. We propose a move to a smarter and more sophisticated approach for 
contracting LNG.  This will benefit producing economies, as well as making the overall market 
more  efficient.  LNG  is  an  important,  growing  sector  that  offers  great  opportunities  for 
developing  countries,  but  that  opportunity  could  be  tragically  wasted  if  the  market  is  not 
made more trustworthy and fair. 

Technical solution 

We  propose  a  3-layer  architecture,  integrating  a  full  stack  of  existing  open-source 
technologies. At layer 1, the consensus protocol from a public chain. At layer 2: smart contract, 
with a scalable and private off-chain process. At layer 3, a utility token to incentive contractors; 
managing profit-sharing agreements. Blockchain technology is needed to program smart 
contracts, to stack native token, and to provide the security, immutability, transparency and 
tamper-proof when needed. By migrating almost all activities off-chain, our solution is fully 
scalable  and highly  flexible. In order to assure privacy of permissioned sets of  participants, 
data recorded in the Blockchain are cryptographic hashes; only users who validate contract 
execution can see all of the chain data.  

Additionally,  using  an  off-chain  solution,  we  address  main  constraints  of  Blockchain: 
scalability,  speed,  privacy,  and  minimizing  transaction  costs;  increasing  the  contract's 
capacity and greatly reducing transaction costs, without significant load on the main chain. 
We  have  selected  Off-chain  Labs  solution.  It  acts  as  a  second  layer  on  any  block  chain 

170 

(Blockchain  agnostic),  allowing  it  to  process  programs  and  transactions  off-chain,  either 
through side-chains or state channels, through enhanced privacy and scalability. It’s allowing 
them to push services, dApps, or tokens from Ethereum to arbitrage exploiting the benefits 
of OffChain Labs solution – better privacy and scalability.  

Next steps: stable coins and digital hub 

We  are  exploring  to  issue  an  asset-backed  stable  coins;  a  both  crypto-collateralized  to 
stabilize the coins, and backed by a gas ledger reserve. Additionally, LNG stakeholders view 
us as a potential promising LNG digital hub. Interestingly, we could address issue raised in 
your report regarding data gathering and statistics (quoting) “This is a recognized issue in 
energy  statistics,  which  is  why  we  have  omitted  the  study  on  gas  networks  in  this  edition 
until it is possible to assemble a more reliable data set.” 

Conclusions 

Our solution will make it possible to facilitate the interactions in the LNG market. With our 
service, LNG diversion clauses are now governed by smart contracts; managing a fair profit-
sharing mechanism, benefiting to projects with social impact. Our service will render more 
transparent extracting industry activities and generate more revenue from natural resources; 
leveraging development projects. In the context of the UN SDGs, we focus on goals 7 & 8; as, 
financing low-carbon technology for underserved regions. HODLNG can be a force multiplier 
to address the requirement of the global energy system: de-carbonization. Additionally, our 
service can be a virtual global LNG hub; serving as a catalyst across all industry stakeholders. 
It will serve also as a LNG pricing benchmark; moving away from the prevalence of oil index 
pricing.  Lastly,  our  service  is  viewed  as  a  solution  for  a  more  “commodified”  global  LNG 
market. We participate to a more secure, flexible, fair and balanced LNG trade system. 

Acknowledgments 

This  project  has  received  funding  from  the  European  Union’s  Horizon  2020  research  and 
innovation programme under grant agreement No. 824509. 

References 

Abache Abreu (Lead Author). New horizons - The forces shaping the future of the LNG market; July 2019, 
S&P Platts. 

Becker, W., Dominguez-Torreiro, M., Neves, A. R., Tacao Moura, C. J., & Saisana, M. (2018). Exploring ASEM 
Sustainable Connectivity–What brings Asia and Europe together. doi, 10, 77696. 

T. Lassourd,  A.  Shafaie,  T. Scurfield  (2019).  Lessons  for Generating  Government  Revenue  for  New and
Prospective  Liquefied  Natural  Gas  Producers  –  Natural  Resource  Governance  Institute;  Policy  Brief,
December 201

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