Thursday, July 28, 2016

Fear and Timidity in the Pacific - Everyone's Being Bullied

Malaskini on how 1MDB, Najib's other abuses rob new security laws of legitimacy
Our main fear is that the NSC Act will be misused against the opposition and dissenting voices. We are almost certain that, somehow and sometime in the near future, it would lead to this type of abuse in order keep the present government in power. We are almost certain this law will eventually be used to silence government critics by detaining them. 
What is most important and interesting is that the Conference of Rulers in February 2016 had asked Najib's government to refine and review the NSC Act that was submitted to the Rulers for their consent. The Majlis Raja-Raja Melayu is not happy and is worried about the NSC in its present form. However, Najib completely ignored the request and went ahead, gazetting it as law without any amendment. 
Malaysia is already besieged with various controversies and the 1MDB scandal has blown out in a big way, internationally. We fear for our country and our future.Is the NSC really to combat terrorism or is it to strike terror into the hearts and minds of the normal citizens?

19 Indonesian academics kindly ask Jokowi, ASEAN to Grow a Pair on #SouthChinaSea
3. We would like to remind all parties of the importance of ASEAN and its institutions, particularly the Treaty of Amity and Cooperation (TAC) in Southeast Asia renouncing the threat or use of force, of which all ASEAN members and their partners, including China and the United States, are signatory parties. The TAC has been one of the strategic foundations for all other regional instruments of managing peace and stability in the region, including the ongoing ASEAN-China framework of completing a legally-binding Code of Conduct (CoC) based on the 2002 Declaration on the Conduct of Parties in the South China Sea (DoC). 
4. We are cognisant of ASEAN’s dimming lights and growing marginalisation in managing the tension in the South China Sea, which may worsen as the Tribunal’s ruling could inspire less, not more, confidence in the grouping’s centrality. Recent media reports that China has been pressuring ASEAN states to thwart a common regional position has not helped as well. We remain confident, however, in the assessment that, over the long run, ASEAN and its institutions represent the best regional framework to sustain and deepen the strategic space required to peacefully manage tensions as a prerequisite to any peaceful negotiations. 
5. It is our opinion that a reinvigorated Indonesian leadership is the key to ASEAN’s revived centrality in managing the South China Sea. As such, while we support the general sentiment of maintaining peace behind the Indonesian foreign ministry’s response to the ruling, we would like to call on President Joko Widodo to fully support and mobilise the entire foreign policy establishment to play a more proactive, consistent, and productive leadership in ASEAN’s management of the South China Sea issue. As the region continues to undergo a period of strategic flux, especially after the Tribunal’s ruling, there is no better time for Indonesia to demonstrate its commitment to a rules-based order and an ASEAN-led regional architecture.

Civil Beat on Hawaii's Totem Pole Politics:
Christensen talks a good game, although it’s often short on specifics. The lack of detail isn’t surprising given that Christensen is a newcomer to Hawaii politics. He’s never held elected office. University of Hawaii political science professor Colin Moore said Christensen’s lack of experience is his biggest challenge. 
It’s a major obstacle in a Democrat-dominated state where young politicians are expected to pay their dues by running for lower office and waiting their turn until the Democratic establishment gives its blessing. 
Moore said it’s especially hard to win endorsements from labor unions and other influential campaign donors unless candidates can prove that they have what it takes to win an election. At this point, he said it doesn’t appear Christensen has done that. 
“Generally, you need to work your way up,” Moore said. “Unless you are extraordinarily well-funded or well-known, it’s hard to have your first run for public office be for U.S. Senate.”

Eurasianet on Turkey's fulminations over Gulen in Kyrgyzstan:

Ankara’s antagonism to Gülen’s international influence has deep roots, and the Turkish government’s attempt to link the educator with the recent failed coup is intensifying that animosity. But Kyrgyzstan, which is host to at least a dozen Gülen-linked schools and one university, is holding its ground — up to a point.

“In Kyrgyzstan, the [Gülen] gang is very powerful,” said Turkish Foreign Minister Mevlüt Çavuşoğlu, during a working trip in the Antalya region on July 24.

If Turkey’s “brother” does not rid itself of links to the Islamic educator, “the way we look at you will be different,” Çavuşoğlu said, referring to Kyrgyzstan.

The remarks created a stir in Kyrgyzstan, which is accustomed to viewing Turkey as a no-strings-attached alternative for diplomatic engagement to Russia and the United States.

The tone in Turkey has shifted markedly in the last few weeks, however. As of July 26, 10,000 purported Gülenists have been arrested and many more judges, government officials and teachers fired. Çavuşoğlu’s rhetoric has been fittingly proactive.

“This terrorist organization has chosen Kyrgyzstan as a base. Its influence has grown so much that its members are part of the country’s leadership. We warned Kyrgyzstan that they are planning to land a blow,” Çavuşoğlu said in comments projecting a future coup in the Central Asian country.

Kyrgyzstan’s Foreign Ministry was nonplussed, castigating Çavuşoğlu on July 25 for raising the Gülen question “in the language of blackmail and ultimatums.”

Wednesday, July 27, 2016

Has Consensus at All Cost Broken ASEAN?

Emphasizing unity at the table in the face of intransigence by China proxies may have been the wrong approach

Normally, when one bargains in Asia as elsewhere, one starts by insisting on a complete entitlement. The extent of the 498-page judgment, and the precedent it provides, could easily have underpinned such a strong position among ASEAN, at least initially. But at the very first encounter, ASEAN made concessions to Beijing: “Whatever you want to pay, if anything, that’s fine by us.” 
The ASEAN statements, agreed with Beijing, called for activities in disputed waters to be demilitarised, highlighted the importance of freedom of navigation, pledged more meetings to agree a code of conduct in the sea, expressed concern over reclamations, agreed to avoid inhabiting presently uninhabited islets, and urged more joint research and search and rescue co-operation. 
These points, positive though they are, do not require any noticeable change in policy or operations. 
Beijing publicly thanked Cambodia — its leading ally in ASEAN — for its support, crucial within the association’s consensus-based structure for preventing any criticism of China or mention of the arbitration judgment. 
Wang said the statement “was not against China”. He’s right there. The interesting question is the extent to which it plays against ASEAN’s credibility and its persistence as the cornerstone of the economic and strategic architecture of the region.

When asked about the intransigence of Laos and Cambodia, which is heavily dependent on Chinese aid and investment, Retno said that differences were not uncommon in ASEAN. “There will always be differences among countries and the decision is not likely to please everyone involved, but at least it showcases the earnestness of all member states in safeguarding their unity and ASEAN’s centrality,” Retno said. 
The communique is considered a step up from another joint statement adopted in an earlier retreat in February, when ASEAN foreign ministers agreed on respecting “legal and diplomatic processes.”
Separately, however, Yi commented on the international tribunal’s ruling on the South China Sea as “amounting to prescribing a dose of the wrong medicine [...] and it seems that certain countries outside the region have got all worked up, keeping the fever high,” he said, in apparent reference to the US.

While Monday's joint statement referred to the United Nations Convention on the Law of the Sea and freedom of navigation, Australian National University defence and strategic expert Dr John Blaxland said it was not the acknowledgment by China of the recent ruling that some countries wanted. "After such a significant ruling for there to be no mention of it, it is a palpable indicator of the powerlessness of ASEAN," Dr Blaxland told AAP on Tuesday. 
It also showed a "disturbing" push by China to continue pressing harder on the issue, by "ratcheting up the pressure" on those states, such as Cambodia and Laos, that are "effectively beholden" to it, he argued. 
While he noted ASEAN's statements on the South China Sea had been "circumspect" in the past few years, Monday's communication showed how little clout countries such as Vietnam, the Philippines and Indonesia had on the issue. "Their voices are shouted down. It's happened before, it has happened in other forums, but it confirms the trend," he said.

With the bloc faltering in its response to the region's major security challenge of the day, analysts say it risks becoming a talking shop lacking in diplomatic clout. 
Staunch Beijing ally Cambodia has been accused of scuppering efforts by the bloc to unite in a call for China to abide by the tribunal's verdict. While most members want to keep pressure on China over its campaign of island-building in the contested water, they are wary of angering such a vital trading partner. "With Cambodia marching to its own drum the erosion of ASEAN solidarity is on display for all to see," regional expert Carl Thayer told AFP. 
Asked if Monday's statement had been watered down one diplomat involved in the talks simply said "we had to come out with a statement," adding "we don't want the world to say that ASEAN is in disarray." The decision is a boon to China and it quickly praised Cambodia - to whom it ladles out aid and loans - for holding out against fellow members. Beijing also thanked other staunch ally Laos for remaining "objective" during discussions.

Tuesday, July 26, 2016

Snow Job at SCMP? plus Colombos's Deep State, Canberra's Crackdown and Flight Capital Boomerang

Tom Phillips on concerns over a confession in the pages of HK's flagship newspaper which seems all too convenient:
Trust us,” said Ma, scoffing at fears that under his watch editors at the SCMP might buckle to political pressure from the Communist party. But, seven months later, there is anger in the Post’s newsroom and among readers and claims that what was once Hong Kong’s newspaper of record has lost its way. That anger has been brought into relief after the publication of the mysterious interview with Zhao.
Zhao was the youngest target of what activists describe as an unprecedented crackdown on human rights lawyers in mainland China. The interview with her was conducted by telephone on 10 July, just three days after Zhao’s release was announced, and was published the following day under the headline: ‘Young Chinese legal activist ‘regrets’ civil rights activism’.

“I have come to realise that I have taken the wrong path,” Zhao was quoted as saying in the article. “I repent for what I did. I’m now a brand new person.” The story did not make clear how the SCMP had managed to make contact with Zhao and activists, media experts and Zhao’s husband and lawyer suspect the interview was set up by mainland authorities and conducted against her will

Nilantha Ilangamuwa on an all too convenient arrest in the daylight murder of a journalist in Sri Lanka:
Arresting the former Secretary will not be the solution as there are significant political implications. But monitoring, gathering, assessing and analyzing the movement he is instigating would be important. If the government arrested him to teach a lesson, it will be a golden opportunity for him to escalate his political career which is not yet established in the country. 
In this situation, the most important task of the statesmen or stateswomen is to take the country back to the administrative rules and principles. However, unfortunately, the fundamental changes within the administration are yet to be implemented. 
It is amusing to read the answers by the Secretary of Defence Mr Hettiarachchi in a recent interview to a local print newspaper. Those answers show that he is not capable managing this important portfolio of this country. While talking about the Islamic State (IS), the notorious, wicked and diabolical terror outfit, he has urged media to not highlight domestic threats.

Stephanie Peatling on Canberra's new security laws:
"It needs to be targeted at serious offenders, not just someone who's jailed for giving a small amount of money to a terrorist organisation. That's very different from someone who has been convicted of a terrorism offence," Professor Williams said. Prime Minister Malcom Turnbull in Sydney on Monday. Photo: Nic Walker

The test for who "posed a clear and present danger to the community" also needed to be carefully set out, Professor Williams said.

The New South Wales Council of Civil Liberties president, Stephen Blanks, said the legislation was a distraction from the issue of dealing with the risk of terrorism.

"People who have been convicted of serious terrorism offences are in jail for many years to come. We're not being told who is about to be released that they're concerned about." Mr Blanks said.

"With the sex offender cases, there were particular individuals that we were told were about to be released that represented a danger. We're not being given that information now. I don't think there's anybody about to be released, this is possibly just window dressing."

Finally, Reuters on the perceived threat to Singapore banks from Jakarta's new tax amnesty:
The difference between this and other tax amnesties is that ... there's a big risk that all the information is shared with tax authorities," said Dustin Daugherty, an associate for ASEAN Business Intelligence at Dezan Shira & Associates, a consultancy firm for foreign investors. 
Because of the timing we might see a bigger impact than normal ... We expect 10-15 per cent, which should still be considered a success." A Singapore-based private banker and a lawyer, both of whom declined to be named, also estimated around 15 per cent of the money might move back home, based on feedback from their clients.

Monday, July 25, 2016

Lessons in Defenestration from Nepal and Papua New Guinea

Prasad Sharma Oli falls out the window after losing his balance; meanwhile Peter O'Neill hangs on, but sour times are far from over

Before Oli resigns, Jainendra Jeevan on the writing on the wall:
It is not that the people of the country have not voted for a stable government. Twice after the restoration of democracy in 1990, the voters gave the Nepali Congress (NC) a comfortable majority. But owing to their in-house wrangling, both the time the NC government fell pre-maturely. Ever since, an era of hung parliaments has dawned upon this country. The proportional representation (PR) system of elections too, implemented since 2007, has been instrumental in producing hung parliaments. In a bid to make the legislative more inclusive, our naïve leaders could not foresee what a mess the arrangement would create. We are, therefore, cursed to live for a long time to come with this menace of hung parliaments, followed by frequent changes of coalition governments. Meanwhile, we should not give up our efforts to reform and rectify the shortcomings, both in our structures (PR system) and attitudes. Failure to do so will make our nation a failed state. 
Now let us come to the present crisis. Prachanda form the Maoist Centre and Sher Bahadur Deuba from the NC—protagonists of the no-confidence motion—are certainly not angels. Both are as power hungry as any other leaders. But Prime Minister Oli is not a hero either, nor a victim, as portrayed by his zealots, who are provoking him to cling to power even if the no-confidence motion is passed. Citing a constitutional lacuna, they are misguiding him that he cannot be unseated even if he is defeated in the motion. Their contention is that a new government can only be formed either if the constitution is amended accordingly, or if the President uses her discretionary and special power under article 305 to pave the way for a new government, or if a ‘political agreement’ is reached between the opposition and the ruling alliance. But this argument is not only unmerited but also ill-intended to remain in power as long as possible. 
Oli’s associates, of course upon his orders, have also been trying to obstruct the House proceedings on the motion. Their demand is that the Speaker should first give priority to the budget related bills. However, it is shameful on the part of the treasury bench to obstruct the proceedings of the House, especially when the agenda is none other than a no-trust motion against their government. Their demand is aimed at buying time to prolong their days in the office and meanwhile, if possible, to thwart the no-trust motion. Some of his cronies are also saying that Oli should dissolve the House and order snap polls. They forget that the full bench of the Supreme Court has, in its landmark 1995 verdict, ruled that a prime minister who is facing a no-confidence motion in the House has no right to order the dissolution of the same House. Oli, whose services may always be needed by the nation, should not be carried away by such incitements. Failure to do so will cause a backlash.

Sudhi Ranjan Sen on how a tilt to China at the expense of India and sectarian groups contributed to Oli's downfall:
One of the reasons for Mr Oli's waning popularity was his tilt towards Beijing, sending India-Nepal relations into a free-fall. The redrawing of the provinces in Nepal, marginalising the Madhesi community added to the bitterness and India was forced to step in. 
Mr Oli used India's support for the Madhesi community to justify his pro-China policy. But sourcing essential commodities through the Tibetan Plateau and reducing its dependence on India turned out to be difficult and impractical. Realising the futility, China, also advised Mr Oli to mend his relationship with India, sources have said. 
His failing to honour a power-sharing agreement with the Maoist party and his policies made his coalition partners uncomfortable. First to quit to the coalition, even before the vote of no-confidence was put to vote, was the Rastriya Prajatantra Party (RPP) which had a dozen seats in the Parliament. Following the RRP, the MJAF(D) led by Bijay Gachehedar switched sides and supported the no-confidence motion. These desertions open the flood gates. Others soon joined in. 
Key political figures like Prachanda, who led the charge against Mr Oli and is seen as the frontrunner the PM's chair, advocated a much more balanced and nuanced foreign policy where India had larger role to play. Besides the pro-China policy, Prachanda also pointed to Mr Oli provoking the Madhesi community as one of the main reasons for asking him to step down. In his intervention during the no-confidence vote, senior Nepali Congress leader Minendra Rizal said Mr Oli's description of the Madhesi as "foreigners" was misplaced nationalism.

Despite appearances, it's more than likely that any new regime in Nepal will restore the customary balance between China and India, as Ankit Panda from the Diplomat notes (audio).

Paul Flanagan on how Peter O'Neill has just managed to keep the lid on in PNG:
The most likely scenario is a reluctant compliance with the parliamentary vote and a focus on the 2017 election. Civil society will be determined to do what it can to ensure a free and fair election. For his part, O'Neill will be intent on maintaining his increasingly strong grip on the police and defence forces. It is likely he will try to corral the media, especially social media, which continues to be an irritant. 
If civil unrest continues, an emboldened PM may use instruments such as a state of emergency to stifle opposition (one was declared earlier this year to collect power bills). Recent developments in Turkey indicate how the power of the state can be used to suppress opposition. If he feels under threat, a state of emergency could even be used to justify deferring the election. However, the centralisation of power in the Prime Minister's office and selective application of constituency funds provides a huge incumbency advantage. O'Neill is a tough and canny politician. 
If re-elected, his tendency towards autocracy could entrench a pattern of slow decline in democracy and impair development – such as happened in Zimbabwe. And this creates opportunities for greater influence from countries with less democratic and market-oriented belief systems.

BUT, as Jamie Tahana and Johnny Blades write, pressure continues to build as the country heads towards a general strike:
Mr O'Neill's hold on power is unlikely to satisfy thousands of students and other public workers from across the country who have been protesting against his rule for weeks, creating a new level of instability in a country used to political crises. The protests came to a head in June when police opened fire on students who were trying to march on Parliament in support of the motion, seriously injuring a number of students. The academic year at the University of PNG has been cancelled, while the year at the other two main universities remains in peril after unrest at their campuses.
A strike by pilots and workers with the main airline Air Niugini has had a massive impact on transport links in a country dependent on air travel since last week, adding to the withdrawal of services by maritime workers, health and energy sector workers. 
And, as of Monday, members of PNG's National Doctors Association announced they were scaling down operations throughout the country.

Friday, July 22, 2016

1MDB Blows Up

Am I ready for my close-up?
Civil lawsuits filed in federal court on Wednesday did not name Malaysian premier Najib Razak, referring instead to “Malaysian Official 1.” Some of the allegations against this official are the same as those in a Malaysian investigation over a $681 million transfer to his personal bank account. 
The US Department of Justice said $681 million from a 2013 bond sale by sovereign wealth fund 1MDB was transferred to the account of “Malaysian Official 1.” He is described in court papers as “a high-ranking official in the Malaysian government who also held a position of authority with 1MDB.” 
A source familiar with the investigation confirmed that “Malaysian Official 1” is Najib. 
Back in Malaysia, the hashtag #MalaysianOfficial1 was trending on Thursday.

Nothing to see here, really:
Minister in the Prime Minister’s Department Datuk Seri Azalina Othman Said added that the demand was especially unjustified as Najib was not identified in the lawsuit filed by the US Justice Department yesterday. “Their action reveals the true double standards of the opposition. They were silent when the secretary-general of the DAP was charged in court. “This is the unprincipled politics practised by the opposition,” she said in a statement today. 
Azalina took particular issue with Petaling Jaya Utara MP Tony Pua, saying he should “confuse” the public given his position as a Public Accounts Committee (PAC) member. 
She then stressed that the US lawsuit was a civil matter, and not criminal in nature.

Leave it to Letters to cut through to the takeaway:
Inter alia, the Federal Bureau of Investigation (FBI), the US Department of Justice (DOJ), and the Internal Revenue Service (the US tax revenue agency) have concluded that the Malaysian people were robbed. 
They have conclusively arrived at their findings that the co-conspirators “laundered their stolen funds through a complex webs of opaque transactions and fraudulent shelf companies and bank accounts around the world including Switzerland, Singapore and the United States..” The word ‘stolen’ was repeated many times. 
It is an open secret now that Prime Minister Najib, who created and led 1MDB, worked hand-in-glove with flamboyant businessman Low Taek Jho or Jho Low. The US Justice Department report listed three other 1MDB officials who were involved in this alleged fraud and the ‘Malaysia Official No 1', irrespective of who the person is.

Jho Low gives away the store and the story:
Mr. Low climbed the collector ranks quickly, buying Monet’s “Great Saint George” for $35 million in late 2013, the complaint said, and later requesting that it be held in his storage space at the Geneva freeport. In 2014, Mr. Low acquired “Waterlilies with Reflections of Tall Grass” for the equivalent of roughly $57.5 million, according to the complaint. The painting was later added as collateral by Mr. Low to his Sotheby’s loan agreement, and was held by Sotheby’s as of early last month, the complaint said. 
The complaint alleges that art work acquired by Mr. Low was bought using 1MDB funds that had been funneled through entities including accounts at Swiss banks BSI SA, and Falcon.

Despite recent reforms, Swiss banks are entangled yet again:
Details are starting to emerge about a string of offshore shell companies linked to bank accounts throughout the world. Several banks from different countries have been named in various documents from prosecutors. 
The first Swiss bank to be named in connection to 1MDB was the Lugano-based private bank BSI, which also has offices in Singapore. In May, the Swiss and Singaporean financial regulators withdrew the bank’s license in the two countries, accusing it of flagrant violations of anti-money laundering obligations. 
The Swiss Attorney general has opened criminal proceedings against BSI while a former employee of the bank has been arrested in Singapore. BSI has appealed the punishment imposed by the Swiss Financial Market Supervisory Authority (Finma), which included an order to surrender CHF95 million of illicitly gained profits, to the federal administrative court. 
Two more Swiss banks have recently been named – UBS and Falcon private bank. UBS was accused last week by the campaigning blog Sarawak Report of helping to funnel more than $2 billion of illicit funds from 1MDB. This accusation remains unverified.

The FT leaves us with the tragic punchline:
At a press conference, Mahathir Mohamad, Malaysia’s influential former premier and Mr Najib’s one-time mentor, called for a referendum on the premier’s leadership. 
But there is little sign the opposition will prevail. It remains divided and its de facto leader, Anwar Ibrahim, is in prison on a sodomy charge his supporters say was trumped up. 
“Najib’s position is fairly secure because his internal enemies, within his party, have been sidelined or dismissed. The opposition are really fragmented and in no position to take advantage of the situation,” said Ibrahim Suffian, director of the Merdeka Center, a Malaysian polling agency.

Thursday, July 21, 2016

Years of Living Dangerously: Normalizing the Memory of Indonesia's 1965 Purge

PKI members and sympathizers detained in Bali, 1965. Original image from  Dhemas Revianto/TEMPO
Indonesia is a nation undergoing epochal change. The election of Joko Widodo as president, increasing burdens and opportunities from overseas, and a growing awareness of her place in the region and world have made it imperative that she deal with unacknowledged scars of her recent past. Chief among these are the mass killings of leftists and others which first took place in 1965-66, in the years between G30S (the abortive coup attempt against Sukarno in September 1965) and the eventual removal of Sukarno in 1967. Estimates of those killed run anywhere from 500,000 to 3 million.

Up until recently, the outside world has looked upon the 1965-67 Purge, if at all, as purely political in motivation. In fact, however, the events of the 30 September Movement also revived sectarian resentments throughout the country. Javanese, Dayaks and Chinese were also killed on the pretext of fighting the PKI, the Indonesian Communist movement which became a scapegoat for G30S (or its failure). Mainstream academics continue to refrain from referring to the purge as "genocide," but many of those who lived through that time feel differently.

In the period since the fall of Suharto and the election of Jokowi, public discussion of the murders has increased. Wider outside attention has also been brought on them, such as with recent documentaries like The Act of Killing and The Look of Silence. Despite this, Indonesia's political establishment continues to sublimate the legacy of the killings, mainly to save face. This has become increasingly difficult in the wake of what is now a global inquiry. The convening of an International People's Tribunal can only be seen as a direct result of continued government intransigence. Other members of the world community will not be immune from the growing reproach.

It's now incumbent upon Indonesia's government to redress these old wounds. 

Wednesday, July 20, 2016

ASEAN at the Rubicon #SouthChinaSea

Not so fast

ASEAN's response to the Hague ruling so far has been, to say the least, timorous. That may change should China push her luck

Rowan Callick doesn't seem optimistic:
Much will depend on how the 10-member Association of Southast Asian Nations — of which Vietnam, Malaysia and Brunei as well as The Philippines all have South China Sea claims, while Indonesia’s navy recently arrested Chinese fishing vessels — responds. 
The ASEAN foreign ministers meet in Vientiane, Laos from tomorrow. They may well be unable to reach their required consensus in responding to the verdict, in the face of the views of leaders such as Cambodian Prime Minister Hun Sen — whose country, like Laos, depends heavily on China — and who said last month he “will not support any judgment by the court”. 
China has said it stands ready to continue to negotiate a regional code of conduct for the sea. But that has been under discussion for 14 years already. A better if just as remote an outcome might be an agreement for all parties to exploit the sea’s resources — obviously sustainably — together.

Up until now, China has offered mainly economic incentives to cooperation (Michael Hart):
Overall, China’s drive for increasing regional economic interactions in the maritime domain, has contributed to ASEAN’s recently visible division over the South China Sea issue. On one hand, six of ASEAN’s members wish to put the South China Sea disputes to one side and maintain a favorable relationship with China in order to benefit from its Maritime Silk Road initiative. On the other hand, the claimant states – particularly Vietnam and the Philippines – are more wary of China’s economic initiatives and rhetoric of co-operation, and fear being held ransom over the unresolved territorial disputes and conflicting claims in the South China Sea. 
China recently followed-up its Maritime Silk Road initiative by launching the ‘Year of China-ASEAN Maritime Co-operation’ in 2015, hoping to advance a global perception of China as a responsible state committed to maintaining regional peace and security. The initiatives have succeeded in partially shifting attention away from the negative image of China associated with the South China Sea disputes, and have contributed to a growing divide within ASEAN over how to handle the matter – resulting in several recent failures to issue joint statements regarding the disputes. 
China’s initiatives have enabled many regional countries to envisage the mutual benefits which could be gained from closer maritime co-operation with China on the economic front, through the AIIB, Maritime Silk Road and the Maritime Co-operation Fund.

But - and this is a big But - environmental damage to the area and the resulting food security concerns are staring them in the face (James Borton):
With more marine scientists from all the claimant nations and others from ASEAN, in agreement that there’s a fishery collapse unfolding, than there’s more than sufficient common ground to address food security in the region. Looking out over the next several years to 2020 and beyond, the dual challenges of rising demand from growing populations and economies, are in a direct collision course from over exploitation, pollution, habitat destruction, and climate change. 
Furthermore, the number of coral reef and fish species in these contested waters has declined precipitously to around 261 from 460 species, and the list of critically endangered species now includes Green turtles, giant clams, and Hawksbill turtles.McManus, Gomez, Shao all point out that many of the coral reef fisheries along the coasts of the South China Sea have been heavily overfished, especially along the coasts of southern China, Vietnam, Malaysia, and the Philippines. The evidence shows that harvests of adult fish have been in a steady and steep decline. They all suggest that offshore reefs may be critical to preventing local extinctions of targeted fish species.

As is sovereignty - unlike China, most ASEAN states are not monolithic (Chin Tong Liew, Wing Thye Woo):
Second, by militarizing outcroppings and artificial islands in the South China Sea, China is unwittingly strengthening ultranationalist groups in the Asean states. This development forces moderate leaders in these countries to adopt a tougher stance toward China than they otherwise would, in order to preempt attacks from the ultraright and assuage their generals. A case in point is Indonesian President Joko Widodo’s recent visit to the Natuna Islands on a warship, a show of force in response to incursions there by Chinese fishermen and Navy vessels. 
China must know that the material advantages from closer Asean-China economic relations will not be enough to guarantee smooth diplomatic relations. Most Asean member-states are middle-income countries with educated elites who hold diverse views. And even extremely poor and politically illiberal Burma (Myanmar) has reduced its dependence on China in response to active wooing by the United States. 
China should rethink its insistence that negotiations over its territorial claims could be conducted only with individual Asean states, and not with Asean as a bloc—a stance that creates the impression that China is committed to bringing about the group’s breakup. But China should not encourage Asean’s demise, because that would drive several now-neutral Asean states further toward the United States. Moreover, because Asean must represent 10 countries with one voice, and must reach a consensus before it speaks, China has little reason to fear that a common Asean negotiating position would be totally unacceptable—particularly given recent history.

Tuesday, July 19, 2016

#SouthChinaSea - Reality sets in; Ankara's lessons for Central Asia; Nepal Politics still a Dumpster Fire

Politics in Nepal remain a hot mess. This time, the drama will draw in more actors:
Nepal’s confusing and fragmented politics took a new, but not entirely unanticipated, turn last week when the Maoists, the second largest constituent in the K. P. Oli-led coalition government, withdrew support and tabled a no-trust motion in the parliament. Oli, who also heads the Communist Party of Nepal-Unified Marxist Leninist, has clearly lost the majority, but wants a test on the floor of the house on July 21. 
Oli’s preference for a trial of strength is largely born out of the hope that the constitution, that came into force in September 2015, is ambiguous about succession, even when the government loses a vote of confidence. Chances of Oli continuing in the post till elections to the parliament are held are high. Oli is banking on the constitution’s silence on succession. However, whatever he does — whether he sticks to his post or quits in deference to the majority decision in the house — will only contribute to anarchy. Meanwhile, the walkout by the Maoists has terminated the Left alliance that many thought would sweep the elections.

The recent coup attempt in Turkey has spurred fears of contagion in Astana and elsewhere:
In early June this year, Kazakh security forces unveiled what prosecutors were to dub a “coup plot” led by a businessman of doubtful reputation from the country’s far south named Tokhtar Tuleshov, engaged in large-scale food and beverage trade and industry and property not just in Kazakhstan but in nearby Kyrgyzstan and Uzbekistan as well... 
Little earlier, Kyrgyzstan became the scene of conspiracy. In late March this year, three ringleaders, namely Bektur Asanov, former governor of the southwestern province of Jalalabad, Kubanychbek Kadyrov, the head of an extra-parliamentary but legal political faction called Chyndyk, and Ernest Karybekov, at the time of his arrest just described as “opposition activist”, were arrested and held for investigation... 
What recently happened in Kazakhstan and Kyrgyzstan demonstrates that if the Turkish coup may have failed, it does give people bad ideas.

Meanwhile, South China Sea interests regroup post-PCA ruling:

Analysts said the arbitral court's ruling has made it easier to set ground on settling these disputes, whether through bilateral or multilateral channels. Historic rights as a basis for economic rights at sea, for instance, are out. 
"The Asean way encourages flexibility and constructive cooperation. How this would work out… after the Hague ruling remains to be seen," said RSIS' Mr Han. 
But he added: "I believe that moving forward, Asean would seek to focus on peaceful cooperation in line with the principles laid down in the 2002 Declaration on the Conduct of Parties in the South China Sea."

China boycotted the legal proceedings from the beginning and has long said that it would not abide by the court’s decision. We should not expect Beijing to simply decamp from the artificial islands it has just built, so it will fall to concerned states to reinforce the legitimacy of this decision. 
What is important is that we have succeeded in defending our legal rights over the disputed islands. We should continue our diplomatic initiatives, securing the support of our Asean partners, United States, Japan, India, the European Union, and other countries. They are neutral on the region’s sovereignty disputes and are firmly supportive of the legal process, engaging in their own public diplomacy effort bolstering the decision. China of course has been engaged in coalition-building efforts of its own—with less success, it seems. 
Although the Philippines was optimistic in winning the arbitration, few expected such a total victory, winning all our major points. Legally, it is the best scenario that could be imagined. But such a complete victory also poses it own challenge. Now that the ruling has arrived, as one observer pointed out, the Philippines and our new President have been thrown a geopolitical curveball.

Monday, July 18, 2016

New Concerns: Missiles and Missed Opportunities
A look at the Russian (and Chinese and, in some quarters, Korean) view on the consequences of THAAD deployment in South Korea:
Furthermore, in the author’s opinion, presence of THAAD on the Korean Peninsula would sooner contribute to the escalation of tension than to its reduction. The strategic question, which should be asked in this respect, is how the presence of such ABM system would affect the global standoff. The current system of nuclear parity is built upon two principles. The first principle postulates that a missile-nuclear attack launched by another country inflicts an unacceptable harm regardless of whether this country wins or loses in the end. What is clear, though, is that the war would definitely be harmful for the world. The second principle states that, given the speed of a fired missile, the defending party will, most probably, be unable to evacuate its population, but will have enough time to launch a missile in response, thus, rendering both countries vulnerable to destruction from a nuclear attack. Would it make sense to start a no-win war then? Thus far, understanding of meaninglessness and brutality of war helped to maintain peace. But from time to time some countries fall into an illusion that they can (at least hypothetical) overplay the opponent and be quick enough to both launch a missile and counter the opponent’s response, i.e. they believe that they could start war and actually win it. 
And in terms of tactics, THAAD presence would exacerbate tension, since if there is a conflict between the United States and China or Russia, the likelihood of the Republic of Korea becoming a target for Chinese or Russian missiles increases manifold. In case of a conflict, the parties will be acting pursuant to tactical reasoning and not humanism. Thus, if there are THAAD ABM systems deployed on the territory of some country, it will be shelled during a conflict. As we see, if THAAD ABM systems are deployed in South Korea, it, being a hostage of somebody’s political games, will automatically become a target of a missile attack.

Choices for India in offering aid to Afghanistan should be married directly to national interest:
A healthier approach toward developmental aid might acknowledge India’s core interests in the region – namely, a diverse and competitive market for energy supplies and the destruction of safe havens for terrorist groups – and proceed from those. Such an approach would offer exchange caution for romantic claims about India’s “organic” relationship to Afghanistan, whether because of the shared Mughal heritage, Indian Sufi shrines near the Salma Dam or the long history of Afghans who have lived in India. Outmaneuvering Pakistan may offer short-term pride and prestige, but New Delhi could learn from its erstwhile ally in Moscow. What starts off as victories of development politics often becomes entangled in issues of inter-ethnic and inter-Pashtun conflicts that (alas) only Pakistan has the long-term energy or interest to engage in. 
Better, then, to debate India’s long-term interests in what remains (alas, again) a poor country that accounts for less than 1% of India’s trade balance. Do Indian investments into Afghan iron mines merit Indian security commitments? How will New Delhi’s partnership with Iran and Afghanistan square with the expanding Chinese and legacy Russian presence in the region? Given the modest scales of trade involved, these questions should be answered from the point of view of what Afghanistan can do for India, not the other way around.

The Bank of Japan may dismiss helicopter money now, but post-Brexit inflation will continue to pump up the Yen:
Mr. Abe’s solid win in elections to Japan’s upper house of parliament last Sunday has ignited hopes the government will soon announce a big spending package. Many also expect the Bank of Japan to ease policy further at its next meeting, scheduled for later this month. 
Former Federal Reserve chief Ben Bernanke met last week with BOJ Governor Haruhiko Kuroda, which some took as a sign Japan could soon introduce a radical program of money-printing known as “helicopter money,” an option Mr. Bernanke has publicly discussed in the past. 
Still, there is little consensus among market participants as to what stimulus will actually emerge. Already, officials have poured cold water on the helicopter money idea, at least on a version that involves the BOJ directly financing government debt. 
Takuji Aida, chief Japan economist at Société Générale, said he expects a government fiscal stimulus package of at least Y10 trillion ($94 billion), which could include increased public investment, or tax reliefs to spur consumer spending. He also said he expects the BOJ to cut the rate charged on some bank excess reserves to minus 0.2%.“If the Bank of Japan doesn’t cut this month, then dollar-yen could go back to 100,” Mr. Aida said.

New Zealand, Indonesia, look together to wean themselves off of China trade:
Key said the Government had "always recognised that Indonesia is full of potential", with a free trade agreement between New Zealand, Australia and the Association of Southeast Asian Nations (Asean) signed in 2009. "The thing that makes Indonesia interesting is it's got a young population, so it's 250 million and 150 million under 25." 
The country's growing middle class could also prove a boon for New Zealand exporters, particularly in the food and beverage sector, Key said. "As people get wealthier, they consume more protein and their protein numbers are quite low, certainly relative to a developed country like New Zealand. So there's huge potential as they get wealthier to buy a lot more of what New Zealand produces." 
 "I've long been of the view that while China represents enormous opportunities for New Zealand and it's plain to see how successful we've been in China, the risk to New Zealand will always be to replicate the concentration threat that we had when we solely exported to the UK, and reverse that by solely having all our eggs in the Chinese basket. "It's not that we should be worried about the level of trade with China - in fact, it's something to celebrate, but you wouldn't want to get to the point where it's solely China."

Friday, July 15, 2016

Nanhai Next Steps #SouthChinaSea

Not necessarily what it seems
So far, despite preconceptions, most parties want to tread lightly

Philippines choose a familiar face for their front office man, while they weigh their choices:
Certainly, the Philippines cannot stand up to the military might of China. But with US presence in the region, China will have to think twice before attacking its smaller neighbors. Recall that China did not have the guts to encroach on Philippine waters when the US Seventh Fleet was based in Subic naval base in Zambales while a squadron of modern aircraft was based in Clark Field, Pampanga. The Chinese started creeping up on us after the Senate, in a landmark vote, booted out the Americans from both Subic and Clark. Filipino fishermen who were driven out of their traditional fishing grounds near Scarborough Shoal by Chinese gunboats exalted and started going out to sail, prompting the Duterte government to call for restraint. 
Meanwhile, the name of former President Fidel V. Ramos has cropped up as being considered by President Rodrigo Duterte as special envoy to Beijing. This is a good move. FVR has the stature to patch things up with China if the Chinese leadership is willing to deescalate tension in the region.

We hope FVR does a better job than Senator Antonio Trillanes IV who was tapped by former President Benigno Aquino as special envoy to China at the height of the Scarborough Shoal standoff. Ramos’ hand was rumored to be behind Duterte’s presidential run. Being named special envoy to China would validate that suspicion. Generel Hermogenes Esperon, the Armed Forces chief of staff under Ramos, is now one of the top men in Duterte’s inner circle.
Philippine diplomacy could proceed in either one of two ways. In the face of pressure from the allies, DU30 could allow himself to be borne by geopolitical currents and play hardball with China, according to the rules drawn by the US, Japan, Australia and the European allies whose interests may not necessarily be the same as those of the Philippines. Or he could follow his own instincts and insert his own game plan into the broad play of the major international powers. One is more complicated than the other, but nonetheless doable and worth doing. 
The first one requires complete docility to our traditional allies. It merely entails a readiness to jump whenever the leader says “jump,” without asking from what floor. Some of our Presidents did not mind performing this number. But this is the opposite of what DU30 would like his presidency to be known for. In his own words, he would like to be a “leftist” President pursuing an “independent foreign policy,” i.e., not dependent on Washington.

The other option requires greater creativity, resolve and skill. This is what DU30 apparently envisions for himself. Thus, despite the Aquino government’s absolute refusal to consider talking directly with Beijing, DU30 has decided to take the bilateral approach even while awaiting the results of arbitration. DU30’s only mistake appears to be his sense of timing—he telegraphed his move days before the release of the ruling. This alerted the US and other allies on what he had in mind, and gave them the time and opportunity to mobilize their arguments against bilateral negotiations.

Meanwhile Asean stumbles again - efforts at a joint statement come to naught:
The draft Asean statement called for the full and effective implementation of the 2002 Asean Declaration on the Conduct of Parties in the South China Sea that was signed by Asean and China, and for the early adoption by Asean and China of the Code of Conduct that they are now discussing. 
The source declined to reveal which country or countries objected to the joint statement, but Cambodia, historically one of Beijing's closest allies in Southeast Asia, has publicly expressed opposition to such a move. 
Asean has often been split on issuing joint statements commenting on the South China Sea dispute for fear of antagonising China, which has become an important trade and investment partner for many of them, especially for poorer Indo-Chinese countries which also depend on China for financial aid for infrastructure development.

Speaking of preconceptions, the biggest voice for quiet diplomacy may surprise you:
“What we want is to quiet things down so these issues can be addressed rationally instead of emotionally,” said one official, who spoke on the condition of anonymity to describe private diplomatic messages. 
Some were sent through U.S. embassies abroad and foreign missions in Washington, while others were conveyed directly to top officials by Defense Secretary Ash Carter, Secretary of State John Kerry and other senior officials, the sources said. 
“This is a blanket call for quiet, not some attempt to rally the region against China, which would play into a false narrative that the U.S. is leading a coalition to contain China,” the official added. 
The effort to calm the waters following the court ruling in The Hague on Tuesday suffered a setback when Taiwan dispatched a warship to the area, with President Tsai Ing-wen telling sailors that their mission was to defend Taiwan’s maritime territory.