Monday, May 30, 2016

Mercantilist Enterprise: The State of China in Africa

Congo is a part of the Chinese strategy of economic development. China does not possess sufficient strategic resources to fuel its industries. Hence, it has been procuring them abroad, locking up supplies by encouraging state-owned enterprises and private companies to strike exclusive mining deals worldwide. 
China already has a monopoly over rare earth elements, which are key ingredients for most hi-tech manufactured goods, including cars, television sets and mobile phones. Congo is one of the few places that boast a dependable supply of these elements. This is a source of the synergy between Chinese and Congolese interests. 
By contrast, US strategy remains caught up in a political time warp even in the face of Chinese advances. US aid has gone largely into the improvement of health care and other humanitarian areas while China speeds ahead with helping Congo’s infrastructure development.

The slowing of output growth in major emerging economies has been associated with lower commodity prices. Next to supply factors, the marked decline in investment and (rebalanced) growth in China is depressing commodity prices, particularly in metals and energy. Three key factors have underpinned Africa's good economic performance since the turn of the century: high commodity prices, high external financial flows, and improved policies and institutions. Macroeconomic headwinds for Africa's net commodity exporters may imply that Africa's second pillar of past performance - external financial inflows - will suffer as well. 
While lower commodity prices are providing significant headwinds to Africa's commodity exporters, the rebalancing of China may also provide backwinds, albeit gradually. The relocation of low-end manufacturing from China might reinforce positive income effects of lower commodity prices in oil-importing countries. The backwinds can be expected to stimulate FDI inflows into Africa. Benefits from reduced fiscal pressures in countries with high fuel shares in imports (Egypt, Ethiopia, Kenya, Mozambique and Tanzania) mirror significant challenges for energy exporters (Angola, Chad, Congo, Gabon and Nigeria) and other commodity exporters (Ghana, South Africa and Zambia) arising from depressed commodity prices.

In his speech at a recent mega-economic conference in Yaounde, Cameroon president Paul Biya billed his country’s strategic position at the crossroads between West and Central Africa, in addition to its coastline in his pitch to investors, who also included Chinese representatives. 
There are at least five ports on Africa’s western coastline that have some form of Chinese involvement and which are considered strategic by Beijing, according to the plan. These include those in Tunisia, Senegal, Gabon and Ghana. 
With a number of Central African countries either building brand new ports or upgrading local infrastructure, Beijing should not be surprised at being propositioned into extending its maritime plans into Central Africa.

While China’s water footprint in Africa is unlikely to be felt through food – via trade or unnecessary land grabs – it will be felt through the manufacturing industry.  
Chinese manufactured goods have been cheap and plentiful, so the argument goes, because of low labour costs within China. This is only partially true. Another key reason is that the costs of environmental damage – borne by the Chinese – have not been included in the price of the goods it produces (Watts, 2010). Those costs are huge. Growing water scarcity and pollution are reckoned to cost the country some 2-3% of GDP – a sizeable sum in an $18 trillion economy (Doczi et al., 2014). This is one reason why China’s ‘exports’ of water in industrial products far outweigh its imports. In short, exports are environmentally subsidised.  
This situation is likely to change. As labour and resource-intensive manufacturing shifts to Africa, and China begins to import rather than export such goods, the environmental burden will shift from China to Africa. The question then arises: will Africa learn from the mistakes of China and take steps to avoid the damaging effects of water degradation? (PDF, article begins p. 42)

Thursday, May 26, 2016

Martial Law in Thailand, Two Years On
Drifting away from freedom and traditional allies in the name of stability and prosperity will likely yield neither

Thailand’s ruling generals have made clear they are not planning to yield control anytime soon. Initial plans to hold an election in 2015 were deferred until 2016, and are now deferred again until 2017. 
Their proposed draft constitution is fashioned to keep power in the hands of their allies in the traditional elite — using the courts and bureaucracy as their tools — at the expense of the voters’ political representatives. One provision could allow for an unelected prime minister — a concept many Thais believed dead and buried a generation ago along with military dictatorship. Another would see the junta remain in existence for five years after the polls for what is described as a “transitional period.” 
The draft charter will be voted on in an Aug. 7 referendum that amounts to the first measurement of public sentiment toward the military government. The exercise will be far from free and fair — campaigning for or against the draft is subject to nebulous rules that could land activists up to 10 years in prison. Even the sale of a “Vote No” T-shirt is considered against the law.

The charter calls for an appointed upper house with some seats reserved for the military and police. The junta says this is needed to smooth a five-year "transitional period" before full civilian rule is restored. 
However, the referendum, and a subsequent election, will do little to ease foreign investors' concerns, said an executive of credit rating firm Moody's, since the constitution is unlikely to resolve the issues polarizing Thailand.

"Political uncertainty has weighed on foreign direct investment and economic performance," said Christian de Guzman, a vice president of Moody's, whose "moderate" assessment of Thai domestic political risk ranks it the highest in southeast Asia.

In her statement, Yingluck said Thais were “suffering” as the economy dribbled along and questioned whether the junta had made good on a vow to heal the country’s political divide, a period often described by Thais as “the lost decade”. 
She urged the junta to swiftly return “the basic rights and freedom that will allow the people to once again choose their own destiny”. 
Yingluck was retroactively impeached by the military following their takeover and is on trial for negligence, a charge that could see her jailed for up to 10 years.
The military have promised to hold elections in the summer of 2017, but previous election pledges have slipped.

“Initially, there was relief that we had some law and order. Safety in the streets, no demonstrations. But at the expense of pent-up frustrations. And also at the expense of popular rule that people have come to expect.” 
“But two years is a long time in Thai politics. Now people are saying, ‘Yes, we had some law and order, to the extreme in fact, too much of it. People have been detained. There has been a lot of coercion, violations of basic civil liberties, at the expense of longer term stability.’ ”

“The way ahead is murky. Most worryingly, the coup makers do not have an exit strategy. And it looks the generals aren’t taking over for the future of Thailand and the Thai people, but for the generals themselves. So I think more people are seeing that and more people are showing dissatisfaction that is going to mount.”

It is believed the regime is seeking to expand defence ties with Russia and China and Europe, and reduce armament dependence on the US because of the latter's pressure on the military government.

Since seizing power two years ago, Deputy Prime Minister and Defence Minister Prawit Wongsuwon has led military top brass to China four times. He has visited Russia twice, once with the leaders of three armed forces and the other time with Deputy Prime Minister Somkid Jatusripitak. Prime Minister Prayut Chan-ocha has recently made visits to China and Russia to discuss defence deals.

"I came to Russia with seven cabinet ministers, which is unprecedented. It speaks volumes about Russia's importance," Gen Prayut was quoted as saying to Russian Prime Minister Dmitry Medevev during their meeting.

In the past two years, the junta has been like a python squeezing its prey when it comes to freedom and democracy. Little by little, society loses basic civil rights such as the freedom to assemble, or the ability to hold critical debates about important matters. These are rights hard-won long ago which have been taken for granted for over three decades. The stranglehold on the prey is slow but firm. You can all sit and watch for another year or more as the repression continues if that’s enjoyable.

The bottom line is, young activists such as Ja New and his cadre, plus the United States and the European Union, won’t be able to save Thailand from the onslaught of militarization. Not if the majority of people upset by the repression just eat popcorn in the front row and watch the ongoing spectacle being played out by the junta, whose torture of language and logic being with its name: the National Council for Peace and Order.

Wednesday, May 25, 2016

It's Time for Mature Democracy in #Kazakhstan - Or Else

Video @
A confluence of privatization, inequality, and impunity have eroded the patience of the Kazakh people. The government needs accept that mass dissent is now a thing, grow up, and clean up

Detentions took place in multiple cities across Kazakhstan, with the majority of protesters detained in Almaty, the largest city, and Astana, the capital. Observers, including those who tried to visit police stations, estimate that more than 300 people were detained in Almaty, and more than 200 in Astana. Dozens of others were rounded up in other cities, including Uralsk, Atyrau, and Pavlodar, according to media reports. 
Local media reported police officers had surrounded Republic Square in Almaty and the square near Baiterek monument in Astana before the May 21 protests. Activists interviewed by Human Rights Watch said that when they arrived at protest sites, authorities had already cordoned off the squares, preventing protesters from gathering. Reports on Facebook began to emerge early on May 21 that police had begun to detain activists ahead of the protests.

Remarkable footage filmed by RFE/RL in Almaty captures the grimly farcical events in the city. One young woman was roughly dragged away with her arms in a lock as she belted out Kazakhstan’s national anthem. People in a crowd fleeing police, many of them masked, played cat and mouse with the police as they tried to join those in the swelling numbers of people in detention. If the government continues to bungle its way through one of its most serious political crises since independence in the same fashion, the fear factor is likely to dissipate altogether. 
Kazakhstan’s already problematic international image has been badly dented by a frenzied day of arrests, which by some estimates ranged into the many hundreds.

Media in Kazakhstan regularly report on the opposition figures, independent journalists, bloggers, and civil activists who are taken into custody and put on trial. Even if people do not agree with what these perceived government opponents are espousing, they can still see the process and the government's attempts to silence these people. No one knows the injustices of Kazakhstan's system better than the people living there. 
Media also report on the members of Nazarbaev's family and the president's close friends regularly making their way onto lists of the world's richest people. When you're getting poorer this becomes a much bigger issue.

Why is Kazakhstan so spooked? There are many facets to attempting to explain both the protests and the govrnment’s hamfisted response to them. I cannot pretend to offer a comprehensive explanation, but a start is this: the state is wholly unfamiliar (and uncomfortable) with dissent. It has pursued a narrative of national unity that misinterprets dissension on policy points as disloyalty. It is also enamored of the structure of democracy–or perhaps just the international image of having one–but doesn’t understand the messy reality that it entails. 
The framework within which Kazakhstan understands the relation between the state and its people does not allow much, if any, space for dissent. This is without a doubt inherited from the Soviet Union, but sustained since because of Kazakhstan’s prosperity–relative to Soviet times as well as to its regional neighbors.

Monday, May 23, 2016

If there really will be a war in the #SouthChinaSea, it will be over oil

However, according to a newer USGS study in 2010, there is a 95% chance that there is at least 750 million barrels of oil in the South China Sea Platform, a median chance of around 2,000 million barrels, and a low probability (5%) of over 5,000 million barrels
The South China Sea Platform, according to geologists, is an area rich with source carbon and has the perfect geological conditions necessary for hydrocarbon development, particularly oil. It includes the area containing the Spratly Islands, Dangerous Ground, and the Reed Tablemount – all disputed South China Sea claims.

#SouthChinaSea, International Law, & Historical Imperative

"Chinese activities in the South China Sea date back to over 2,000 years ago. China was the first country to discover, name, explore and exploit the resources of the South China Sea Islands and the first to continuously exercise sovereign powers over them."
Moreover, for China, the state of nature is not ideal or protected, but mutable and corruptible through effective control. Beijing even claims an ability to manufacture new rights from land reclaimed from the sea.
The United States, echoing the Dutch humanist, answers that that the high seas are open to all states and not subject to claims of sovereignty by any nation. Nature is the ideal; artificial structures do not create sovereign privileges. Even if historic title over the South China Sea was available, Washington asserts that this claim must be supported by: (1) an open, notorious, and effective exercise of authority; (2) continuous exercise of that authority; and (3) acquiescence by foreign states in the exercise of that authority. This is a high bar to clear for a Chinese claim spanning two millennia, particularly when considering that during the self-described "Century of Humiliation" Beijing did not exercise effective authority over its mainland, not to mention purported maritime domains.

#SouthChinaSea: Historical Imperative, backed up by Economic Imperative

Confronted with the US pivot and an extensive military build-up throughout the region, in 2013, President Xi Jinping and Premier Li Keqiang elaborated an extensive geo-political strategy of the Silk Road Economic Belt and the 21st Century Silk Road, or One Belt One Road. It's aimed to extricate China from its strategic encirclement by the US and its allies, while opening up further trade and investment opportunities for China. The 21st-Century Maritime Silk Road (MSR) is designed to go from China's coast to Europe through the South China Sea and the Indian Ocean in one route, and from China's coast through the South China Sea to the South Pacific in the other. It emphasises on improving connectivity with Southeast Asia, South Asia, West Asia and even Africa, by building a network of port cities along the Silk Route, linking the economic hinterland in China. More importantly, it aspires to improve China's geo-strategic position in the world.
China's acrimonious relations with some states in Southeast Asia due to maritime disputes have created complex circumstances for itself in building better relations with its neighbours. Through their vision of re-energising the MSR, Chinese leaders aim to impart a new lease of life to China's peripheral policy and diffuse the tension. The main emphasis was placed on stronger economic cooperation, closer cooperation on joint infrastructure projects, the enhancement of security cooperation, and strengthening maritime economy, environment technical and scientific cooperation. Beijing has even proposed to allocate up to $1.4 trillion to finance the huge array of infrastructure projects and is setting up financial institutions alongside the International Monetary Fund, World Bank and Asian Development Bank.

Pacific Security: scrap the "Quadrilateral Dialogue" in favor of "Minilateralism" #SouthChinaSea

"We can achieve our aim – interoperability of our forces – without an upfront quadrilateral security dialogue," says Dr. Ghosh. "We can do it with separate bilateral and trilateral arrangements more subtly, with finesse."
In the light of India's reservations, such 'minilateral' mechanisms "are actually much more effective" than a four-way arrangement restricted by a lowest common denominator, says Rory Medcalf, head of the National Security College at Australia's National University in Canberra. "There has been much more profound cooperation – high-level exercises and sensitive intelligence sharing" than would have been possible in a "quad," he adds.
That regional approach also "sends signals to China that its behavior is obliging [its neighbors] to strengthen security relations with each other and with the US," Prof. Medcalf says.

Wednesday, May 18, 2016

#ToiChonCa - Will Rotting Fish Bring Down Heads in Vietnam?

Up until now, civil society protests in Vietnam have been limited to quality of life issues, or patriotic defense of South China Sea sovereignty issues. A massive fish kill in Phu Loc has spawned something more profound

What started off as an alarming but manageable environmental event a bit more than a month ago, something that might have been solved by a public apology and a big fine, has morphed into an acutely embarrassing circumstance for the prime minister. In Vietnam’s new regime, the party machinery has reasserted its primacy and mere prime ministers are disposable.  The regime’s decision to amp up police repression of popular demonstrations is of greater import. So is Hanoi’s obvious disinclination to put Formosa Ha Tinh Steel in the dock. Yes, Vietnam has worked hard and successfully to market itself as a stable, low wage location for foreign investors. That doesn’t mean that Hanoi ought not hold foreign investors to account when something goes wildly wrong. 
By Sunday evening, first person accounts were lighting up Facebook. Blogger Lang Anh posted a photo of a woman whose child, she said, witnessed police beating her mother.  According to the blogger, “She was attacked only because she expressed her wish that her child might live in a nation that’s cleaner and, for everyone, more stable.  Hoping to be heard, they marched peacefully, but were violently repressed.”

Moreover, the true root causes of the disaster are deep and numerous. While the fish die-off in these four coastal provinces is an unprecedented phenomenon in Vietnam, the mass fish kill has occurred in other places in the country. For instance, tons of farm-raised fish in Bach Lang River and Buoi River in the central province of Thanh Hoa have died in the last few days. The severe contamination of these rivers caused by factories’ unprocessed waste water is identified as the primary cause of this mass fish death. 
To deal with these environmental disasters, the Vietnamese government must reconsider its development policy. It can no longer industrialize at all costs because the country will pay heavy environmental prices for such a careless and irresponsible industrialization.Furthermore, in a way, like its coastal seas and rivers, Vietnam’s political environment is also severely polluted and corrupted.

Though the scale of this disaster was evident to everyone in the region, the media didn’t pick up on the story until mid-April, and the government took even longer to respond. By this time news of the dead fish had spread throughout the country on Facebook and other social media sites, which are widely used and outside of the state-censored national media. 
People were angry and Formosa’s flippant reaction only made matters worse. On April 25 Chou Chun Fan, Formosa Ha Tinh’s public relations director, told Vietnamese villagers that they had to choose between having fish and a modern steel industry. It wasn’t possible to have both, he is reported as saying. 
Fan was quickly fired and his bosses apologised for the remark, but the damage was already done. The phrase toi chon ca (I choose fish), became a rallying hashtag on social media as members of the public blasted Formosa for its disregard for the environment.

These fish kill protests are some of the biggest Vietnam has seen in its major cities in recent years and were attended by more than the politically motivated. Across the board, the population has been horrified by so many tonnes of fish washing up on already polluted beaches (newspapers and commentators have noted a certain cognitive dissonance in the anger at a foreign company when beaches are regularly trashed by local tourists). 
Foreign investment and corruption are twin challenges for the government. General Secretary Nguyen Phu Trong committed to continuing Vietnam's reforms when he retained the top post in the new government that was ushered in by the January national congress. At that time, the emphasis was on fighting corruption, reforming state-owned enterprises, and bringing the country in line with TPP (Trans-Pacific Partnership) commitments of transparency and rule of law. Making sure  foreign investors observed environmental guidelines was not on the agenda. Reform is touted as a way to entice foreign investment; ignoring your own environmental laws is not but seems to have worked too, to the anger of the population. 
Government transparency in solving problems and laying blame where it may be due has also remained a non-issue for the ruling party, publicly at least.