Diplomacy

What Happened: U.S. President Donald Trump has stoked controversy – and alarm – with his insistence that the United States must regain control over the Panama Canal. Behind this demand lurks concern about China’s growing influence in Panama in general, and over the canal specifically, since the two countries established diplomatic relations in 2017. While Trump’s repeated claims that China controls the Panama Canal are baseless, Beijing’s influence in Panama – and potential to disrupt the canal – is real.

Our Focus: In terms of China-Panama relations, “the real issue is the scope of its commercial presence there,” explains R. Evan Ellis, Latin America Research Professor with the U.S. Army War College. Most notably, Chinese company “Hutchison operates ports on both the Atlantic and Pacific sides of the canal… under extremely generous terms and under non-transparent conditions.” COSCO, a Chinese SOE, is one of the canal’s biggest customers. A laundry list of other Chinese firms, both state-owned and private, are involved in big-ticket infrastructure and development projects throughout the country. Beyond the economic links, China’s government has been specifically courting “individual Panamanian academics, businesspeople, politicians, journalists, government officials, and others” through free trips to China, business opportunities, and scholarships.

What Comes Next: “China’s efforts have created a worrisome web of relationships of interest, with the potential to be exploited by Beijing for information, favors, or other purposes,” Ellis concludes. That includes the potential to covertly sabotage the Panama Canal in a worst-case scenario. But the problem won’t be solved by an aggressive U.S. push to seize the canal. Instead, shoring up Panama’s transparency and anti-corruption efforts across the board would help remove the potential for illicit influence peddling by China – or any other foreign actor.

INTERVIEW

Ali Riaz, the head of the Constitution Reform Commission in Bangladesh, on the shift away from “secularism” in the recommended constitution: “Secularism as it has been professed in Bangladesh by the previous regime and its apologists has been limited to toleration of religious diversity, whereas the commission recommended pluralism, which will allow the country to be more encompassing. Pluralism, by definition, professes the coexistence of people of various backgrounds and ensures equal participation in social and political lives.”

Northeast Asia

Over the weekend, U.S. President Trump promised to hit all Chinese imports with 10 percent tariffs, citing China’s role in the fentanyl crisis. As those tariffs took effect on February 4, Beijing retaliated with a set of punitive measures: tariffs on U.S. energy imports and a few other sectors; export controls on tungsten; and sanctions on two more U.S. firms. China is not keen on a trade war, given its fragile economic state, but Beijing has spent the past years honing its ability to retaliate in kind.

South Asia

On February 5, India’s national capital, Delhi, voted in state assembly elections. It was a three-way contest between the the incumbent Aam Aadmi Party (AAP), the main challenger and India’s ruling party, the Bharatiya Janata Party (BJP), and the Congress. The Delhi election is critical, arguably even existential, for all three parties: The AAP needs to hold onto its original stronghold, despite anti-incumbency headwinds and legal woes; the BJP is desperate to regain control of Delhi; and the Congress just wants to remain relevant. Results are expected on February 8.

Southeast Asia

The military junta in Myanmar this week extended its state of emergency for another six months, in order to prepare for an election that it has promised to hold sometime later this year. The decision was made at a meeting of the National Defense and Security Council on January 30, at which junta chief Senior General Min Aung Hlaing said that it was “essential” to restore “peace and stability in relevant regions” prior to the election. Security conditions have markedly worsened over the past 18 months as resistance groups have seized large swathes of territory from the military administration, particularly in Rakhine and Shan states. The fact that the junta could only conduct its pre-election census in full in 145 of the country’s 330 townships makes it likely that this extension of the state of emergency – the seventh since the military coup of February 2021 – won’t be the last.

Central Asia

23-year-old Uzbek chess Grandmaster Nodirbek Yakubboev caused a stir when he refused to shake the hand of a female opponent at a recent tournament. Afterward, he clarified that he meant no offense, citing personal religious reasons for his decision not to shake the hand of Indian Grandmaster Vaishali Rameshbabu. (She went on to defeat him.) The incident, and Yakubboev's careful explanation after, highlights the increasing adoption of Islamic practices by Uzbekistan's youth.

Source: OEC

Despite political tensions since 2020, China’s position as India’s top source of imports remains unchallenged.

Economy

Zaimu Shinrikyo, a term coined by economic pundit Morinaga Takuro to refer to a cult-like orthodoxy supposedly ruling the Japanese Ministry of Finance. (The word “Zaimu” is taken from Zaimusho, the Ministry of Finance, and “Shinrikyo,” from Aum Shinrikyo, the fanatic religious organization that plotted a terrorist attack in the Tokyo subway in 1995.