This is an archived version of the PW Sources newsletter from Saturday, July 13, 2024. Sign up to receive PW Sources directly to your inbox here.

CHINA-PAKISTAN ECONOMIC CORRIDOR

Because of the China-Pakistan Economic Corridor’s (CPEC) passage through the long-disputed Kashmir region, India has boycotted three consecutive Belt and Road Initiative (BRI) summits. The Indian-occupied territory of Jammu and Kasmir (J&K) remains one of the most militarized zones in the world.

In a 2012 paper, SANTOSH SINGH looks back on the origins of the Kashmir issue and China’s strategic investment in the region:

“Why has Beijing’s activism in Kashmir increased recently? First, as Harrison has argued, China wants high-speed rail and road access to the Persian Gulf region through the Gilgit–Baltistan region of PoK. He stated that once the links were completed, China would be able to transport cargo from its western / eastern regions to the new Chinese built Pakistani naval bases at Gwadar, Ormara and Pasni, just east of the Persian Gulf, within 48 hours instead of two to three weeks. Second, European security expert Andrew Small has opined that China is providing tacit support to Pakistan in its jihadi strategy with an aim to engage half a million Indian troops in J&K (“Tacit China support to Kashmir Militants,” Times of India, 9 July 2010). Third, China finds the Gilgit–Baltistan region valuable because it borders its own Western Xinjiang province, from where it can keep a watch on Uighur separatists. Fourth, Beijing’s sole objective behind questioning India’s legal authority over J&K is to make it defensive and ultimately weaken its locus standi in Pakistan’s illegal possession of PoK. Fifth, China allegedly wants to set up military bases in Pakistan to exert pressure on India and counter US influence in Afghanistan and Pakistan as well (Saibal Dasgupta, “China Eyes Military Bases in Pakistan,” Times of India, 30 January 2010).”

+  “The example of Pakistan—the biggest national recipient of BRI funding—is illustrative of the successes, failures, and governmental shortcomings hampering China’s ambitions to lead the developing world.” By Joe Leahy, James Kynge, and Benjamin Parkin. Link. “China’s ability to achieve a return on its investment depends on Pakistan’s stability.” By James Schwemlein. Link.

+ “The confusion over CPEC arises when commentators mix up long-term industrial zones, for which little planning or conceptual work has been done, with the energy projects that are already at various stages of execution.” By Dr. Ishrat Husain. Link.  

+  “In the wake of India’s announcement of the abrogation of Article 370 of the Constitution and the reorganization of the state of Jammu and Kashmir in August 2019, China’s Kashmir policy further drifted away from its traditional line.” By Masahiro Kurita. Link. And see Gurnam Singh on the geo-political implications of the Karakoram Highway system for India. Link.

NEW RESEARCHERS

Labor Volatility

CHRISTINE BRAUN is an assistant professor at the University of Warwick. In a recent journal article, she proposes an adjusted unemployment rate to capture the rise in the proportion of job seekers classified as out of the labor force.

From the paper:

“It is well-known that the work-horse search and matching model cannot match the volatility in labour market tightness, when using only the standard pool of unemployed, through reasonable productivity shocks (Shimer, 2005). I show that labour market tightness, constructed using the adjusted unemployment rate or total searchers rate, is 24%–38% less volatile. In fact, the labour market is less volatile in several dimensions than previously thought. Second, I calculate new measures of efficient unemployment and show that these measures have been increasing in the post 2008 recession period. Third, I show that the much-debated flattening of the Phillips Curve is significantly less, and in some specifications absent, when using the adjusted unemployment rate, or total searcher rate, as a measure of the output gap.

In assessing the volatility of the labour market, I look at three statistics: job seeker rates, vacancy rates, and labour market tightness. The three job seeker rates I compare are the standard unemployment rate, adjusted unemployment rate, and total searcher rate. The vacancy rates I compare are vacancies per labour market participant. Total vacancies are constructed using the Help Wanted Index taken from Barnichon (2010) from 1980 to November 2000, and total job openings from the Job Openings and labour Turnover Survey from December 2000 to July 2020. The standard vacancy rate is calculated as total vacancies per standard number of unemployed and employed. The adjusted vacancy rate is calculated as total vacancies per adjusted number of unemployed and employed.”

+ + +

+  “Continued disinvestment is the cost for continued occupancy; displacement the condition for investment.” New on PW, Ruthy Gourevitch writes on the lack of safeguards in place to prevent landlords from using IRA-funded repairs as an opportunity for rent hikes. Link.

+  “China remains a huge market for intermediate and end-user products. Chinese consumer power remains an important aspect for any long-term business strategy for Western firms.” Also new on PW, Jewellord T. Nem Singh on the manufacturing prowess of China and the future of industrial competition between China and the US. Link.

+  “It is not implausible to estimate that up to 186,000 or even more deaths could be attributable to the current Gaza conflict.” In a Lancet report, Rasha Khatib, Martin McKee, and Salim Yusuf factor indirect deaths into the death toll in Gaza. Link.

+  James Vernon writes on the outsourcing of services at London’s Heathrow Airport in the 60’s and 70’s, using it as a paradigmatic example of how deregulation reinforces racial hierarchies. Link.

+  “Between 2020 and 2022, the decrease in poverty levels in Iran was largely due to a significant uptick in consumption growth. Income redistribution from the richest to the poorest contributed only marginally to poverty reduction.” From the World Bank’s Spring 2024 Iran Economic Monitor report. Link.

+  A Financial Times report examines the Taliban’s initiative in Afghanistan’s mining sector. By Benjamin Parkin, Jana Tauschinski, Steven Bernard, Chris Campbell, Sam Joiner, Peter Andringa and Sam Learner. Link.

+  “Despite hand-wringing by The Economist, the fact that China’s photovoltaic companies are slaughtering each other by flooding the world with cheap solar panels is prima facie evidence of stunning policy success and value creation.” By Han Feizi. Link. 

+  “In a significant departure from the proposed rule, the final rule does not require registrants to disclose Scope 3 GHG emissions.” A Heads Up review of the finalized rules for emissions reporting in companies’ SEC filings. Link.

+  Umair Javed on Pakistani electoral politics and the parliamentary victory of Imran Khan’s PTI party. Link.

+  “While GDP expanded over time to include forms of unpaid work such as the subsistence agriculture that had so concerned Deane, the exclusion of unpaid household services remains entrenched in international statistical standards, despite contestation by economists, statisticians, and feminist scholars (Braunstein, 2021). According to DeRock, while statisticians in the statistical departments of international agencies such as the United Nations, International Monetary Fund, and World Bank are aware of criticisms, they represent a united front against the inclusion of household services as a result of “shared norms (about the quality of official statistics) and ideas (about the boundaries of markets)” (2021, p. 31). So, although the United Nations System of National Accounts’ production boundary has expanded, unpaid care work remains beyond the pale despite its economic importance.” By Jane Humphries. Link.

Each week we highlight research from a graduate student, postdoc, or early-career professor. Send us recommendations: editorial@jainfamilyinstitute.org