Indonesia’s Presidential Elections 2014: A Lesson for Malaysia


July 26, 2014

Indonesia’s Presidential Elections 2014: A Lesson for Malaysia

by Karim Raslan@www.thestar.com.my

http://www.thestar.com.my/Opinion/Columnists/Ceritalah/Profile/Articles/2014/07/26/Msia-can-learn-from-Indonesian-polls/

What’s striking is how much more advanced the republic’s elections have become, with the General Elections Commission uploading a photograph of each of the result forms from all 479,000 voting stations.

Jokowi. IrINDONESIA has a new President and – to the relief of many – it’s Joko Widodo or Jokowi as he is fondly known.

His extraordinary personal journey, from the slums of Solo to the Istana Negara, says as much about the man as it does about the republic itself, now into its 16th post-Reformasi year. The excitement is palpable but we must hope and pray that this fairy tale-like story, with its egalitarian hue, ends in real achievements and a better life for all Indonesians.

Even though I am a proud Malaysian, the 2014 presidential elections has reminded me of how our politics is so very disappointing.We used to regard Indonesia as a basket case. But they have shown that their democracy hasn’t impeded economic development. Moreover, it remains vigorous despite the determined manipulation of the pre-Reformasi elites.

Consider this fact – some 133 million voters cast their ballots on July 9 – much more than some 120 million who turned out in 2009 to re-elect President Susilo Bambang Yudhoyono (SBY).

Still, many of my Malaysian friends kept (and are still) buzzing me about the elections.This was especially after his challenger, Prabowo Subianto, regrettably and petulantly refused to accept the results. The tone from my fellow Malaysians was generally along these lines: “My God! It was so close!

Will Bapak be allowed to win? Will there be violence?” This, I suppose, betrays the fundamental differences in politics between Malaysia and Indonesia – as well as what we can learn from our neighbour to the south.

First off, Jokowi’s margin of victory over Prabowo (70,633,576 votes or 53.15% of the popular vote to 62,262,844 votes or 46.85%) was by more than eight million votes and 6%.

A narrow win? Perhaps. But let’s not forget that Barisan Nasional only won 47.38% of the popular vote in Malaysia’s 2013 general election.

Indeed, the eight million-plus voters who propelled Jokowi to victory make up over 60% of the total voter turnout at the Malaysian polls last year. So while Prabowo can try to halt Jokowi via legal challenges – the fact remains that the Solo-born entrepreneur’s victory was clear and decisive.

But what’s really struck me is how much more advanced and sophisticated Indonesia’s elections have become.On polling night itself, various reputable polling houses were able to release “quick counts” that gave a remarkably accurate reading of the election results.

Over the weeks that followed, the “real count” by the General Elections Commission of Indonesia (KPU) was updated in “real” time on their official website. Parallel websites were also put up by civil society groups, monitoring the recapitulation.

Furthermore, the KPU actually uploaded a photograph of each of the result forms (dubbed C1) from all 479,000 voting stations.This is transparency. Having had to endure our own elections first-hand on live TV, I can say that the Indonesian election process was far more open and robust.

Jokowi

A Remarkable Journey to the Presidency

More importantly, Indonesia’s elections – and I’ve said this before – also featured lively and extensive debates between Jokowi and Prabowo plus their running mates: five separate nationally televised events, covering a range of subjects from the economy to foreign policy.

This process forced the candidates to articulate and argue for their respective platforms. The debates varied – some were boring and over-full of rhetoric. Others were scintillating.Whatever the case, the voters were able to decide for themselves as to the suitability of the two candidates.

Indonesia and Malaysia are united by language but separated by political experience. We are still living in the equivalent of Suharto’s New Order with a drastically curtailed and censored media while they are savouring a dramatically more open environment. So for those who question the scale of Jokowi’s victory, I say don’t just look at the result, consider the process.Isn’t it time we move forward?

Karim Raslan is a regional columnist and commentator. The views expressed are entirely the writer’s own. His online documentaries can be viewed at: http://www.youtube.com/user/KRceritalah. The views expressed are entirely the writer’s own.

Indonesia’s New Leadership


July 23, 2014

The Guardian view on what the election of Joko Widodo will mean for Indonesia

EDITORIAL

The Guardian, Tuesday 22 July 2014 19.55 BST

Jokowi JK

Indonesia is the fourth most populous country, the third largest democracy, and the biggest Muslim nation. It made the transition from dictatorship to democratic rule after the fall of Suharto in 1998 with remarkable smoothness. For years it counted with Turkey as a leading model of democracy for the Islamic world. Now, with Turkey showing signs of a regression to authoritarianism, troubled democracies in Pakistan and Bangladesh, and only Tunisia still holding on to what now seem the very fleeting achievements of the Arab spring, Indonesia constitutes, because of its size and importance, a massive and even more relevant proof that democracy can work as well in Muslim societies as in others.

The victory of Joko Widodo in the presidential elections, although still disputed by his opponent, represents a further advance in Indonesian political life. It means that for the first time a person with no direct connections with the older, authoritarian era will occupy the country’s highest office. The departing president, Susilo Bambang Yudhoyono, was an ex-military man from the Suharto years and the son-in-law of a general involved in the massacres of communists in the 60s.

His predecessor, Megawati Sukarnoputri, is the daughter of the first head of state, Sukarno, who also ruled, under his “Guided Democracy”, in an authoritarian way. The first president after Suharto, Abdurrahman Wahid, was the scion of a leading religious family. Although these two were opposition figures, they still had connections with the largely military ruling class. The other candidate in this election, Prabowo Subianto, a former Special Forces General and a son-in-law of Suharto, was very much from that class. Joko Widodo is not. He comes from a humble background, working his way through school and then becoming a successful but middling businessman.

Indonesia managed its way out of the shipwreck of the old regime by a series of complex compromises between old and new, with the dangers of violence, separatism, parliamentary dysfunction and party proliferation very much in mind. These had destroyed Indonesian democracy in the 50s. There was no generalised purge. The problem was that too much of the old might survive, with only slightly reconstructed figures from Suharto’s “New Order” continuing to dominate, and service in the armed forces or membership of the intertwined business elite of those years continuing to be a qualification for power. The connections between old and new are by no means entirely hacked away. Prabowo may be gone, but Jokowi, as he is known, is the protege of Megawati and has as his vice-presidential running mate Jusuf Kalla, a former Chairman of Golkar, the old government party under the New Order. But there is nevertheless a sense that a new chapter has now begun in Indonesia.

Indonesia’s Decisive Moment


July 21, 2014

Indonesia’s Decisive Moment

by Farish A. Noor@www.nst.com.my

TOMORROW will mark the decisive moment when Indonesians will know who will be the country’s next president. The mood in the country — already anxious and tired after a long wait and a hard-fought contest — is one of anticipation and also concern about what will happen next.

Prabowo lawan JokowiIt is interesting to note that despite the fact that both candidates have refused to concede defeat, cracks have begun to show among some of their supporters already: Abdillah Toha, one of the founding leaders of the Peoples’ Trust Party (PAN), has appealed to the Prabowo Subianto-Hatta Rajasa camp to admit defeat and to accept the results, whatever the outcome may be.

Unfortunately, it is not likely that this stalemate will be resolved any time soon. For starters, the final margin between the two candidates proved to be much smaller than hoped for, by both sides.

The Joko “Jokowi” Widodo-Jusuf Kalla camp had signalled that it expected, and wished for, a lead of more than 10 per cent. This has not happened, and after the quick count results came in two weeks ago, it appeared that the lead enjoyed by Jokowi-Kalla’s camp was less than five per cent. A smaller number of quick count agencies suggested that the Prabowo-Hatta camp had gained the lead, but again, with a margin of less than five per cent.

Thus, there is the likelihood that whoever wins the race by tomorrow would have done so by the narrowest of margins and, thereby, opening up the opportunity for the other side to dispute the results and, perhaps, even take the matter to court. Hopeful though many political analysts are at the moment, it seems that tomorrow will not see a final, neat, clean conclusion to what has been a messy race.

Then, there is the question of how the new President of Indonesia will be able to gain support within the Peoples Assembly, or DPR. At the moment, the parties that dominate DPR happen to be aligned with Prabowo’s Gerindra and Hatta’s PAN. The Gerindra-PAN-led alliance totally dominates DPR at the moment, and should Jokowi-Kalla manage to win, the next president of Indonesia will be faced with the challenge of having to push for laws and reforms against what may well be a hostile assembly.

But, the uncertainty does not stop there, for the Gerindra-PAN alliance may also face its own internal difficulties if some of the parties aligned with it now decide to jump ship and hop over to PDI-P (Indonesian Democratic Party — Struggle)-led alliance. Over the past week, voices of discontent have emerged among the ranks of Golkar, in particular (that is currently part of the Gerindra-PAN alliance), where members have called for a serious rethinking of their current position. Golkar has never been in opposition, and should it turn out that Jokowi-Kalla wins after all, some of the leaders of Golkar have called for the party to join the ruling and winning coalition.

All this is taking place amid a society that has grown bored and tired with sensational politics, and where everyone seeks a quick and neat resolution. What is worrisome, however, is that already there is talk of parties sending out thousands of members and supporters to “safeguard” (mengamankan) the election results and announcement of the new president tomorrow. When analysts note that this may well be Indonesia’s most serious challenge and test so far, they were not exaggerating. Indonesia’s fate may well be decided by tomorrow, and the rest of ASEAN will feel the impact as well.

ASEAN political-security community challenges


July 13, 2014

ASEAN political-security community challenges

Munir Majidby Tan Sri Dr. Munir Majid@www.thestar.com.my (07-12-14)

 THE People’s ASEAN would not be a reality if the politics is not right – both the domestic political systems in which the people live and the wider regional order that underpins the peace, stability and prosperity of their lives.

Economic Growth and Political Rights

As ASEAN member states are increasingly discovering, the previous contention that economic growth andASEAN_logo_1 benefit will satisfy citizens without need to be over-excited about political rights, is wearing thin. That model does not work any more, if it ever did. Certainly, if nothing else, the ICT revolution and social media have provided a shared marketplace of experiences in political societies across the globe. It is no longer possible to pull the wool over people’s eyes. So state authorities have to get smart to it, whatever political system they profess.

In this connection, the notion of an ASEAN political-security community (APSC) is apposite. The APSC blueprint actually is hard to be faulted. Whoever writes these things, and those who adopt them, must really know what’s happening around them, even if they do not quite come along in action against their profession in words.

Read this: The APSC… ”will ensure that the peoples and member states of ASEAN live in peace with one another and with the world at large in a just, democratic and harmonious environment.” Some more: “The ASEAN states will offer democracy, rule of law and good governance, and will ensure respect for the promotion and protection of human rights and fundamental freedom”.

All good intention. However, even if this is all aspiration, it stretches credulity when it is observed how some states in ASEAN have stagnated as communist regimes, others have regressed into persecution and murder of minorities and workers, and yet another has introduced draconian religious laws.

APSC and Human Rights

Little wonder then that there is so much cynicism about, for example, the ASEAN Inter-Governmental Commission on Human Rights (AICHR) set up in 2009 under the auspices of the APSC “to promote and protect human rights.” Where in ASEAN, through the AICHR, are human rights being protected on their violation?

It is in their promotion that refuge is taken. Even so, the promotion is gentle. Go to the AICHR web-site and you will see many pictures celebrating numerous workshops to promote human rights. More ASEAN meetings while religious minorities are being persecuted and put to the sword in enough ASEAN member states.

These are all difficult situations to handle no doubt. ASEAN Foreign Ministers try to discuss the Rohingyas issue but Myanmar would not have it, and will only do so on a bilateral basis with states facing refugee problems as a consequence of its human rights violations. And it comes to pass.

Well, the UN Universal Declaration of Human Rights was adopted in 1948, and where has the world been? Rwanda-Burundi, Bosnia, Syria, Palestine… the list is endless and the suffering never-ending. So why pick on ASEAN? But, shall we say, ASEAN is talking about community-building and higher standards of commitments to good governance? Therefore, there is every reason to hold ASEAN to a better protection on human rights and treatment of citizens.

The laudable objectives of the APSC, and in the setting up of the AICHR, should not be left on the shelf as we approach the end of 2014. The blueprint itself provides for biennial review. This review process should be reported and be held in a more open fashion, with the participation of representatives of civil society, who must however appreciate the issues of state sovereignty and ASEAN cohesion.

The hard question is not how to put aspiration down in words but how to implement it in difficult situations and circumstances. That review process should come up with creative ideas of making the words turn into at least some action, at least in respect of protection of human rights, and not just kick the matter to long grass by having more workshops and meetings to study it.

ASEAN, China and South China Sea

South China Sea

When it comes to international relations and the wider regional order, the gap between verbal exhortation and actual action is just as wide. For the longest time, ASEAN behaved as if there was no serious situation arising from the South China Sea disputes. And when ASEAN got real about it, emboldened China would suggest, it was only after US intercession. This was not good for relations with China or for the resolution of the dispute.

While no doubt there is a grave threat of the outbreak of conflict, especially from various stand-offs between China and Vietnam, China with the Philippines, the damage already done is to China-ASEAN relations. These have been extremely beneficial economically for the region. Their further development could be retarded by this “spoiler”, not to mention the threat it poses to existing economic links.

Of course, if there was actual conflict, it is something else again. We will be in new territory of uncertainty, suspicion and fear which, as we know, are bad bedfellows for investment and economic activity.

Against these near existential threats, ASEAN has been reticent and not united in addressing the South China Sea disputes. Whereas, in the APSC blueprint, it is clearly stated ASEAN will seek full implementation of the Declaration of Conduct (DOC) of States of 2002 and the establishment of a binding code of conduct under the declaration in the South China Sea.

Has there been any urgency to achieve all this before matters came to a head, before America got more involved again in regional affairs and, yes, before China got more assertive with its claims? It could be charged that ASEAN’s desultory approach has carried a cost to the stability of the regional order.

ASEAN is, of course, not one unit, it is only inter-governmental, but it makes claims for itself and gives false hope of its effectiveness by proclaiming all sorts of things in so many words, including this blessed thing about ASEAN centrality in the regional architecture. These last six exact words are to be found word for word in the blueprint and, indeed, have been repeated countless times at diplomatic convocations where those who know very well this is not the case repeat it for ASEAN’s happiness.

The APSC blueprint has been too extravagant, especially measured against ASEAN inaction. Not just on the South China Sea, but also in other pronounced areas such as conflict resolution mechanisms and the pacific settlement of disputes in the broader context.

ASEAN-a great economic prospect but...

ASEAN is a great prospect, especially its economies. But the market does not buy on prospective earnings indefinitely. If that was the case, it would be buying Latin America which, in terms of total economic size (against ASEAN’s combined much touted 7th largest in the world) is three times the Indian or Russian economy, and almost as large as China or Japan.

The point is ASEAN does have great prospect, but it will not come of itself. There has to be a more realistic mission statement, better structure and management – and better managers. Then the prospective earnings ratio might even rise.

So there has to be a reset and a rethink about how ASEAN can improve performance against all its limitations. But not just among government leaders and officials. And not to be assigned to some council of elders who would come back some years later with a document even older. It has to be fresh and dynamic involving people with ideas from all levels of society.

Yes, ultimately the political leaders of the region would decide – based however on a good and realistic plan for the future of the People’s ASEAN.

 Tan Sri Dr Munir Majid, chairman of Bank Muamalat and visiting senior fellow at LSE Ideas (Centre for International Affairs, Diplomacy and Strategy), is also chairman of CIMB ASEAN Research Institute. The views expressed are entirely the writer’s own.

 

The Regional Octopus to merge with rivals to create mega Islamic bank


July 11, 2014

The Regional Octopus to merge with rivals to create mega Islamic bank

by Reuters-www.themalaysianinsider.com

OctopusCIMB Group Holdings Bhd is seeking to acquire two lenders to create the country’s biggest bank in a move that is likely to push larger rival Maybank and others in the region to bulk up too.

CIMB, the nation’s second-largest bank, is likely to offer an all-stock deal to buy RHB Capital Bhd and Malaysia Building Society Bhd although details have yet to be hammered out, a source familiar with the matter said

The three banks confirmed today they had obtained approval from Bank Negara Malaysia to begin merger talks.

The “three parties have entered into a 90-day exclusivity agreement to negotiate and finalise pricing, structure, and other relevant terms and conditions for a proposed merger of the three entities and the creation of a mega Islamic bank,” the three banks said in a statement.

The statement came after shares in all three banks were suspended on Thursday pending an announcement. Shares will resume trade on Friday. The proposal comes ahead of a planned partial integration of Southeast Asian economies that is due to begin by the end of next year, with countries in the 10-nation alliance keen to build national champions to bolster their banking systems.

CIMB has been the most acquisitive of Malaysia’s banks and a deal would be the last major move by CEO Datuk Seri Nazir Razak, brother to the Prime Minister, before he relinquishes the helm in September after 15 years.

A successful deal would see CIMB’s assets climb to RM614 billion, 6% bigger than Malayan Banking Bhd (Maybank), and could help with pricing power in an intensely competitive domestic market.

“We believe that we can structure a value creating combination between our three groups and that is worth taking the next steps,” Nazir told employees according to an internal memo.

“I would urge everyone to look forward to the possibility of a significant scale change for us overall, but specially in Malaysia and Singapore, with the caveat that we have only just begun negotiations.”

But some analysts warned CIMB may pay too much and that there could be too much overlap between CIMB and RHB – the nation’s No. 4 bank, as they have similar portfolio mixes and strengths. RHB and Malaysia Building Society have a combined market capitalisation of around US$9 billion (RM28.5 billion), almost half of CIMB’s US$19 billion market value.

“We opine that such a merger could be value destructive to the merged entity given the degree of operational and revenue duplications between CIMB and RHB Capital,” brokerage UOB KayHian said in a client note.

Representatives for CIMB did not respond to requests for comment while RHB said there was no further update at this stage. Representatives for Malaysia Building Society were not immediately available for comment.

A deal would make CIMB the fourth-largest bank in the Association of Southeast Asian Nations (ASEAN) after Singapore’s three biggest lenders. By comparison, the largest, DBS Group Holdings, has assets of US$337 billion.

CIMB's Nazir3Malaysia’s Top Banker in ASEAN

Nazir is the architect of the bank’s expansion over the past decade that saw it buy domestic rival Southern Bank, the Asia equities and investment banking business of RBS as well as lenders in Indonesia and Thailand.

A new deal is bound to heap pressure on Maybank to acquire a rival too, analysts said, with some speculating that Public Bank Bhd could fall within its sights.

“Maybank might want to take over Public Bank, which compared to RHB Capital, is much better in terms of asset quality, and is well-managed and well-capitalised. This makes Public Bank a vulnerable target,” said Ei Leen Tan, an analyst with Affin Investment.

A key player in any acquisition by CIMB of its two smaller rivals will be the Malaysian state pension fund, Octo2the Employees Provident Fund (EPF). It owns 41.3% of RHB and 65% of Malaysia Building Society. The fund also owns a 14.5% stake in CIMB, according to Thomson Reuters data.

Another will be Abu Dhabi-based Aabar Investment which bought a 25% stake in RHB for RM10.80 per share in 2011 – regarded as a particularly high valuation.

Both CIMB and Maybank walked away from a deal to buy RHB in 2011 after failing to secure support from Aabar. The state fund currently owns nearly 22% of RHB. The EPF said in an email it would not be able to comment on the matter as it is very preliminary in nature and specific details are still pending.

A spokesman for Aabar said it doesn’t comment on any of its investments.While plans for ASEAN integration are widely expected to suffer delays, bankers and analysts expect more deals done as the banks from Singapore, Malaysia and Indonesia prepare for a more competitive landscape.”This will give impetus to other countries in the region to think of something similar,” said a M&A banker who advises on bank deals. – Reuters, July 10, 2014.

Malaysia in 2014–a perspective from Singapore


June 30, 2014

Malaysia in 2014–a perspective from Singapore

MALAYSIA-SINGAPORE-DIPLOMACYFor Singapore, due to history, geography, demography, economy and recent political experiences, Malaysia has perpetually been its lynchpin concern and preoccupation. In the past, S Rajaratnam, the Republic’s first foreign minister, had described Singapore’s relations with Malaysia as ‘special’ and there is nothing to suggest that this has changed in anyway.

If anything, the ‘specialness’ has been intensified and further reinforced due to a whole array of factors, not least being the imperatives of national, regional and international economics. A weakening United States, an assertive China, an unstable Thailand and a new nationalistic leader in Indonesia can change the political and security architecture in the region to the detriment of both states and hence, their bilateral ties.

In the 1950s and 1960s, culminating in Singapore’s expulsion from Malaysia in August 1965, the emotive dimension of Singapore’s view of Malaysia was dominant. Even though this has largely dissipated, it is not totally absent. Still, the pragmatism with which both states have moved forward is definitely a milestone achievement in bilateral ties in Southeast Asia.

For Singapore, continuity rather than change remains its key perspective on Malaysia. This was especially true after the May 2013 general elections where the Barisan Nasional (BN: National Front) was returned to power albeit with a weaker majority. Still, Prime Minister Najib, the United Malays National Organisation (UMNO) and the BN are in power and that is what matters even though the winds of change must also be disconcerting. The disquiet would be more, not so much from the economic aspect as it would be from the rising racial and religious polarisation of Malaysia in the last few years that was brought to the forefront during the last general elections. The ‘Allah’ issue has not been helpful and the recent firebombing of a church in Penang has merely raised the ante of what this will mean for Malaysia and possibly, even multiracial and multi-religious Singapore.

All that aside, the single most important development of late has been the rising warmth in Singapore-Malaysia bilateral ties under Lee Hsien Loong and Najib Tun Razak. While past imperatives of history, geography and demography remain relevant, most dominant in the new narrative has been the personal warmth of the two prime ministers and the strategic nature of their bilateral ties.

Most of the past issues have been addressed or settled such as relocation of Customs and Immigration Complex, land reclamation and even water. Most importantly, has been the breakthroughs that both leaders have made vis-à-vis two issues, namely, the resolution of the Tanjong Pagar Railway Station and the land exchange deal as well as Singapore’s support for the Iskandar Development Project in Johor. Other positive developments in ties include the holding of annual leader’s retreats, re-establishment of links between both countries’ stock exchanges, Malaysia’s agreement to sell electricity to Singapore, the agreement to build high speed train link from Kuala Lumpur to Singapore, the amicable post-Pedra Branca technical talks to resolve legacy issues over the islands’ dispute and finally, the establishment of a Singapore consulate in Johor Baru.

ST-Iskandar

If there is one key factor that has brought bilateral ties to a new height, it is the cooperation in the Iskandar Project. Not only is the Singapore Government supporting investments in the project through Government-linked companies such as Temasek Holding but also playing an important role in encouraging the private sector to invest in the project. Additionally, thousands of Singaporeans are expected to be permanently based in the Iskandar region and Johor as a whole, bringing interdependence to a level that was never seen before. To that extent, Iskandar has been the key game changer in Singapore-Malaysia bilateral ties of late.

The breakthrough in bilateral ties was a function of a number of factors. First, the decision by both sides to adopt a new approach to bilateral ties in order to garner win-win results. Second, the personal warmth of the top leaders was extremely helpful. Third, the calculation of the mutual benefits that would be gained by both sides in view of the increasing regional and global competition. Fourth, over the years, there has also been increasing economic interdependence with Singapore as one of the top investors in Malaysia over the last two decades or so. Two-way trade and investments are among the highest between the two states. Fifth, there is also the realisation of increasing security indivisibility of both states. Finally, the ideological pragmatism of both sides has also helped in boosting bilateral ties.

While Singapore expects Malaysia in 2014 to have a largely ‘normal’ year barring any unexpected events – all the more to be the case as the UMNO annual assembly has opted for status quo – the Republic is also mindful of the many uncertainties that can unexpectedly crop up to affect bilateral ties. While 2014 can expect the warming of ties to continue, this cannot be taken for granted. First, the warm ties of two prime minister, both of whom are sons of two former prime ministers  who were not close, may not survive personalities if a more nationalistic prime minister takes over in Singapore or Malaysia. Second, tensions could surface if the promised cooperation proves futile or produces one-sided benefits, say in Iskandar Project. Finally, growing domestic tensions in Malaysia, especially among the Malay and Chinese communities in Johor or in Malaysia could spill over into Singapore-Malaysia relations.

Hence, for Singapore, while Malaysia in 2014 is expected to continue ‘good business as normal’, there are also potential minefields that might explode, and hence, the need for caution. ‘Special relations’ are important but can never be taken for granted, and this also holds true of Singapore’s view of Malaysia in 2014.

Bilveer Singh is associate professor at the Department of Political Science, National University of Singapore, adjunct senior fellow at the S Rajaratnam School of International Studies and President of the Political Science Association of Singapore. 

Roaring on the Seas


June 19, 2014

Taipei, Taiwan

The Opinion Pages | EDITORIAL

Roaring on the Seas

Few aspects of China’s dynamic emergence as a global power have generated as much insecurity and danger in its neighborhood as its mounting campaign to control the South China Sea, a vital waterway for international commerce. On Wednesday, at a high-level meeting in Hanoi, China’s top diplomat scolded his Vietnamese hosts for complaining about an oil rig that Beijing planted in early May in waters that Vietnam claims, as its own.

Chinese Naval ShipsChina’s Blue  Water Navy in the South China Sea

The sharp back-and-forth represented one of the lowest points in relations between the two countries since a brief territorial war in 1979, and it added to worries in Washington and elsewhere about Beijing’s continued bullying in energy-rich waters that not only Vietnam but other small Asian nations lay claim to.

he sharp back-and-forth represented one of the lowest points in relations between the two countries since a brief territorial war in 1979, and it added to worries in Washington and elsewhere about Beijing’s continued bullying in energy-rich waters that not only Vietnam but other small Asian nations lay claim to.

In addition to installing the rig, Beijing’s efforts to assert sovereignty over the many specks of rock dotting the South China Sea now includes a novel twist: the piling of sand on isolated reefs and shoals to create what amount tonew islands in the Spratly archipelago.

Vietnam, the Philippines and other Southeast Asian nations that also claim sovereignty in the Spratlys have watched this island-building with growing alarm, but despite their protests — and a strongly worded statement last month by Defense Secretary Chuck Hagel condemning China’s “destabilizing, unilateral actions” in the South China Sea — Beijing is showing no intention of changing its ways.

The Spratly Islands are uninhabited and of no economic value in themselves. But the archipelago covers rich fishing grounds and is believed to harbor large oil and gas reserves, and China could claim an exclusive economic zone within 200 nautical miles of each of the three or four islands it is creating. The new islands, projected to reach 20 to 40 acres in area, would also serve the projection of Chinese military power by providing bases for surveillance and resupply.

China insists that the Spratlys, Paracels and other islands have always belonged to China. But Vietnam also claims sovereignty, and parts of them are claimed by the Philippines, Malaysia and Brunei. In 2002, the Association of Southeast Asian Nations and China signed a Declaration on the Conduct of Parties in the South China Sea, agreeing to resolve territorial disputes “without resorting to the threat or use of force.” That declaration is not legally binding, and China has argued that Vietnam and the Philippines have already developed some facilities in the islands, though without adding acreage.

The real problem, in any case, is not the muddled question of sovereignty, but the way China appears to believe that its expanding military and economic power entitle it to a maximalist stance in territorial disputes. Certainly the smaller nations abutting the South China Sea are no match for China in a fight, but the fear and anger that China’s aggressive actions have generated among its maritime neighbors, and the tensions they have raised with Washington, hardly seem to be in Beijing’s interest, or in keeping with the image China’s president, Xi Jinping, tried to project when he said in Paris in March that “the lion that is China has awoken, but it is a peaceful, amiable and civilized lion.”

That is not the lion now roaring over the waters of the South China Sea, threatening the stability and security that have benefited, above all, China. That is all the more reason for Beijing to heed the 2002 declaration’s call for self-restraint in activities that would complicate disputes or disturb the peace.

Asia’s Resilience


June 4, 2014

Asia’s Resilience

by  (Tan Sri) Dr. Zeti Akhtar Aziz, Governor, Bank Negara Malaysia

ASIA has weathered the global financial crisis and its aftermath with a resilience that it built steadily over the past decade. Today, that resilience is again being tested as a significant transition takes place in the global economic and financial landscape.

Zeti, BN GovernorAs the recovery in the major advanced economies strengthens, the end of unconventional monetary easing in these economies is inevitable. While the prospect of a return to more conventional monetary policy reflects improved economic conditions, it has been accompanied by heightened volatility, with spillovers to the emerging market economies.

Asia, with highly open economies and globally connected financial systems, is not insulated from these external developments. The region will benefit from the global recovery, and its strength and resilience will help it navigate this more volatile international financial environment.

 Managing  the  TRANSITION

Monetary policy normalisation will present a challenging transition. Following the indications of a potential US Federal Reserve scale-back in quantitative easing (its term for unconventional monetary policy) in May last year, emerging market economies experienced large reversals of capital flows.

Within eight months, about a quarter of the capital that had flowed into those economies during the preceding four years had reversed. Several economies experienced significant exchange rate depreciation and a decline in equity and bond prices.

Nonetheless, macroeconomic and financial stability in Asia was preserved. Financial intermediation — the linking of savers and borrowers — was not interrupted, and creditworthy households and businesses had continuous access to financing. Economic activity in the region remained broadly unaffected by these volatile financial conditions.

This is the result of its strong economic fundamentals and sound banking systems, reinforced by improved governance and risk-management practices, and enhanced regulatory and supervisory oversight.

Sources of financing are also more diversified following efforts to increase the size and offerings in the capital markets.

Economies in the region have generally maintained favourable external positions — with flexible exchange rates, high international reserves and less reliance on short-term external funding. Many Asian economies also have the policy space and flexibility to implement countercyclical measures.

Since 2009, several Asian economies have also introduced preemptive measures to address the buildup of financial imbalances arising from the capital inflows, which have contributed to strong credit growth, high household debt and rising property prices in the region.

Measures included limits on maximum loan duration and adjustment of loan-to-value ratios for property purchases, fiscal measures, such as higher transfer taxes and revisions to real property gains taxes.

Policymakers recognised that such measures would help address domestic vulnerabilities. Efforts have also taken to strengthen macroeconomic fundamentals, with greater focus on the current account and fiscal balances. Some economies eased export rules, such as taxes and hedging regulations, while the management of foreign exchange liquidity was improved to strengthen their external position.

Tax and subsidy reforms were also undertaken to reduce government deficits and debt, and improved governance and medium-term fiscal targets enhanced the credibility of the measures.

The policy approach in several Asian economies is gradual, sequenced and targeted. This approach promotes orderly adjustments and corrections in the affected sectors. Policymakers can also monitor the impact of these policies and preserve flexibility.

While national policies help strengthen domestic fundamentals, they are insufficient to maintain resilience in an increasingly integrated global economic and financial environment.

Regional cooperation has, therefore, been enhanced, especially in the areas of cross-border surveillance and integrated crisis management, to address risks to regional macroeconomic and financial stability preemptively.

Multilateral arrangements to support a country in a liquidity crisis, such as the Chiang Mai Initiative Multilateralisation (CMIM), as well as trade financing and settlement arrangements, will enhance the region’s ability to weather the more challenging environment. Frameworks are also in place for information sharing and collective policy response when a crisis is imminent.

Potential for GROWTH

 Since 2000, with the exception of the 2009 crisis year, Asia has grown at an annual rate of 7.5 per cent, accounting for 44 per cent of global growth. Home to 60 per cent of the world’s population, the region is a significant source of revenue for many global corporations.

In part, this was achieved through more balanced and diversified sources of growth, which essentially took place on two fronts.First, the economies increasingly grew as a result of domestic demand. Second, within that domestic demand, the growth drivers shifted from the public to the private sector.

While Asia’s trade with economies outside the region has doubled since 2000, intra-Asia trade has tripled. More than 55 percent of Asia’s exports are now to countries within the region. Similarly, intraregional investment activity has also increased significantly.

In the future, the region’s growth potential will be sustained by several fundamental factors. Asia’s demographic advantage is a key economic asset. During this decade, a young middle-class population has emerged, and it is growing in number and in affluence. The increase in consumption demand and the greater investment activity will thus anchor the growing importance of domestic demand in Asia.

In addition, Asia’s diversity will continue to support regional economic integration. The region comprises economies at different stages of development that are endowed with a range of rich natural resources. Because development needs in the region are vast, there is ample opportunity for further trade and investment linkages which will garner benefits from outside regional borders.

Importantly, financial institutions and markets will become significantly better integrated in the medium term. This will facilitate more efficient intermediation of funds within Asia through more effective recycling of surplus savings for productive investments.

With one of the highest savings rates in the world, Asia has the capacity to meet the region’s vast financing needs with the right institutional arrangements.

To further unlock the region’s growth potential, reforms to generate sustainable, quality and inclusive growth are also important. Efforts to improve social safety nets, pensions, healthcare, education and financial inclusion are being intensified. These efforts contribute to more balanced growth and maintain social cohesion.

At the same time, growing consumption will place demand pressures on limited resources. The policy agenda must, therefore, address environmental damage, pollution and climate change, for example, through sustainable financing.

Importantly, growing interdependence will present both benefits and risks. The challenge is to ensure that regional collective action, particularly the institutional arrangements for policy coordination, is evolving in line with the rapid global financial and economic integration.

 Asia’s  FUTURE

Asia’s resilience has withstood a major global financial crisis and its aftermath. As the world transitions to a new environment characterised by moderate growth, slower global trade, and greater uncertainty and volatility, Asia’s response has been preemptive, marked by increased flexibility and greater foresight.

A resilient Asia will benefit the global economy by being a vibrant growth centre and a stabilising force in the global financial system.

Equally important, Asia’s contribution can transcend economic progress and financial stability in the global policy landscape with the right representation on the global forums.

 

Dyana lost narrowly in the Battle for Teluk Intan ?


June 1, 2014

Dyana lost narrowly in the Battle for Teluk Intan

by Dr. Ong Kian Ming@www.themalaysianinsider.com

As expected, the Teluk Intan by-elections was a very closely fought affair. In the end, the turnout of 67% was not sufficient for the DAP to maintain this seat, losing by a razor thin majority of 238 votes. In fact, before the results of the last polling station was returned to the DAP operations centre, our candidate, Dyana Sofya, was still ahead by 25 votes. Unfortunately, the last polling station, Sungai Bugis, also happened to be an UMNO stronghold which we lost by a majority of 263 votes.

Is this true ?

Is this true ?

It was always going to be a bold and risky strategy on the part of the DAP to field Dyana as a young, female Malay candidate. I had highlighted these risks earlier when I wrote about why Dyana should be considered as the underdog in this contest [1].  In this earlier statement, I outlined two possible scenarios – one more positive, one more scenario – under which DAP would win or lose this seat. Unfortunately, the more negative scenario came to pass.

The Chinese support for DAP decreased by 15% from 85% in GE2013 to 70% in this by-election which was the most pessimistic projection. This was somewhat surprising given the positive response that the campaign was receiving from the Chinese voters including the mammoth ceramah on the final day of the campaign. The Indian support for DAP decreased by 10% from 62% in GE2013 to 52% in this by-election, again the most pessimistic projection.

If there was a silver lining to this campaign, it would be the slight increase in Malay support of 3% from 25% in GE2013 to 28% in this by-election. In 6 Malay majority polling stations, the DAP experienced small increases in the overall support ranging from 0.7% to 3.4%, an encouraging sign given that we were not expecting the Malay support to increase.

teluk-intan-lean-towerIn analysing and interpreting these by-election results, care needs to be taken to separate the short term and more local factors at play in this by-election versus the more national and longer term issues.

At the local level, the race and place of birth of both candidates, the promise of a Ministerial position for the BN candidate if elected, the fact that this by-election will not have any impact on the overall balance of politics at the national level, the usual pouring in of goodies by the BN and promises for more development that happens during a by-election and the relative lack of interest in this contest that led to a lower turnout rate were all contributory factors to the DAP’s defeat. These factors may not have as big of an impact at the national level in the context of a general election.

At the national level, the possible impact of the hudud issue especially among the Chinese community, the lack of resonance of the Hindraf and Hindraf-related issues such as the resignation of Waythamoorthy as Deputy Minister and the appeal of Pakatan Rakyat in other similar constituencies – ethnically mixed, semi-urban with many developmental needs and relatively poor internet access – are all issues which need to be pondered over by the PR national leadership.

Some specific questions which need to be raised include the following:

First, will turnout in the next general election be as high as GE2013 especially if voters are turned off by the problems affecting Pakatan Rakyat such as the disagreement over hudud, problems in party elections, leadership issues within Pakatan in the state of Selangor, the Allah and the Malay bible issue, just to name a few? There is no guarantee that these problems will not escalate leading up to the next general election and if so, many voters may choose not to come back to vote. The lower turnout which partly caused DAP to lose Teluk Intan may be replicated in many other such seats.

Second, will Pakatan Rakyat be able to develop a convincing message to other constituencies like Teluk Intan which are semi-urban and are more likely to be convinced by promises of development rather than messages to combat corruption and to get rid of race based politics in this country? These are seats where Pakatan are either vulnerable incumbents e.g. Beruas, Bakri, Raub, Bukit Gantang, Kluang, Kuala Kedah, just to name a few or where BN are vulnerable incumbents e.g. Bentong, Cameron Highlands, Labis, Bagan Serai, just to name a few. A different and complementary strategy to what Pakatan has been doing at the national level may be needed in order for PR to defend and win these kinds of seats.

Third, will Pakatan be able to capitalize on its image as a coalition that is more appealing and attractive to the younger generation and therefore younger voters? There is no question that PR has more appealing and credible younger parliamentarians compared to the BN. But the youth vote is fickle and can easily swing to the BN. The challenge for Pakatan is to provide the necessary platform for young leaders, especially young Malay leaders, to present creative ideas and credible policies to convince the younger voters that they are better placed than BN to lead the country into the future.

We saw a glimpse of this in Dyana’s campaign in Teluk Intan. The amount of excitement and interest which she generated at the national level especially among young Malays was, dare I say, unprecedented. Because of Dyana’s candidacy, UiTM students were talking about the DAP and not necessarily in a negative manner! A Malaysian student in Oxford wrote about why younger Malays are abandoning UMNO, using Dyana as an example [2].  Marina Mahathir praised Dyana’s for being able to think and write for herself [3].  At the local level, Dyana received a tremendous reception from among kids and also young people where-ever she went. While most of them were not voters, they will be voters in the near future and young leaders such as Dyana are much better positioned to win them over.

image

The battle for Teluk Intan may have been lost by the DAP but by attempting this move to break down racial and gender barriers, new ground has been paved. I am confident that after this by-election, more young Malays would look at DAP as a possible avenue for political activism. I am confident that more young people would support Pakatan’s cause to move away from race-based politics. Pakatan’s challenge is to lead the way forward and not look back. – June 1, 2014.

Notes:

1. http://ongkianming.com/2014/05/27/press-statement-why-dyana-sofya-is-the-underdog-in-teluk-intan/

2.http://www.themalaymailonline.com/opinion/yasmin-disney/article/dyana-and-umno-why-are-young-malays-abandoning-the-party

3. http://www.themalaymailonline.com/malaysia/article/she-can-think-she-can-write-she-can-articulate-marina-mahathir-says-of-smar

*Dr. Ong Kian Ming is the DAP election strategist and the MP of Serdang.

 

On Thailand’s military coup


May 26, 2014

Thailand’s military coup: Stamping populist expectations and rising demands by status quo powers

by Dr Farish M.Noor@http://www.nst.com

farish-a-noorTHE news of the military takeover in Thailand has caught some observers by surprise, though it should not. For those who reside in Bangkok and who have been observing the escalation of violence on both sides of the political fence there, it was just a matter of time before a higher authority steps in and arrests the cycle of violence and confrontation that has taken the country to the brink.

However it should be noted that despite the particularities of the Thai case, there are also some underlying structural similarities between what has been happening in Thailand and what is happening in other parts of the ASEAN region as well. It can be summed up by one word, namely “populism”.

The anti-Chinese demonstrations that have erupted in parts of Vietnam, the anti-Chinese sentiments in the Philippines, the growing call for economic nationalism and the threat to nationalise all foreign capital assets in Indonesia, etc, are all symptoms of the same thing, namely a form of populist politics that seems devoid of ideological moorings and trajectory, but which has mass appeal to an undefined mass base of voters.

That such populism can be used as a vehicle for political mobilisation and as political capital by politicians is self-evident; but it can also lead to unfortunate outcomes such as the violence and killings we have seen in Bangkok and parts of Vietnam recently.

In the case of Thailand, the military takeover is basically an attempt by the status quo powers to hold back the tide of populist expectations and rising demands that were let loose during the time of Thaksin Shinawatra.

Thaksin’s opponents who are equally opposed to his sister Yingluck — whom theyYingluck regard as little more than a proxy-puppet of Thaksin — seem worried that the rising expectations of the poor and disenfranchised may eventually threaten their own safe comfort zones and jeopardise their own standards of living. Yet notwithstanding their enmity towards Thaksin, the question remains: Why hasn’t the Thai middle-class elite emulated Thaksin’s ways and policies, in order to dent his own advance and win back the support of the people?

Thaksin was a divisive figure to many, but he did get some things right: His populist policies included healthcare to the poor, communicating with the masses and explaining his policies, introducing a “mobile government” where government meetings were held in other parts of Thailand outside Bangkok — and thus bridging the rural-metropole divide, etc.

 It has to be said that many of these policies were indeed smart, and perhaps needed too. So why didn’t the middle-class elites learn a lesson from Thaksin’s rise?

My own concern is that among a number of middle-class urbanites, the fear of populism has less to do with the fear of crass nationalist politics intoxicating emotional people, but rather the fear of the unwashed masses who are seen as reminders of the earlier underdeveloped past.

This is something I have seen so many times, in the capitals of Asia where the globally-connected elite have the tendency to look down upon the poor and the rural folk whom they are happy to exploit in their sweatshops or employ as lowly-paid domestic help, but who show no empathy whatsoever with their fellow citizens.

In such a case, the gap between the urban centre and the rural periphery is no longer simply a geographical one, but a moral one as well. It would be only a matter of time before a charismatic leader comes along, and mobilises the masses in the name of a new nationhood that is more inclusive and representative, and from that starting point social revolutions may well follow.

Nemanja Seslija Photography T: +61415065664 E: info@nemanjaseslija.com W: www.nemanjaseslija.comBangkok’s elite may stand aghast at Thaksin’s rise, but they need to also ask themselves how a man like him managed to bring together so many of the rural poor and working classes, and also why they failed to do the same.

As populism manifests itself across the Southeast Asian region, and increasingly becomes the norm in the conduct of domestic politics, it is imperative that politicians and policymakers take a less Machiavellian attitude towards the masses, and recognise that in this age of global communication and connectivity, societies can be mobilised faster and easier, and have higher demands, too.

Thaksin’s success was due to his uncanny ability to anticipate these changes and turn them to his advantage, but any politician who has the public’s interest in mind can do so, too.

The worry at the moment is that with Thailand’s politics now being put in a “pause” phase, these populist demands will not go away, but will simply be silenced momentarily. That still leaves Thai policymakers — whoever they may be — with the challenge of developing an inclusive national narrative that does not alienate the masses, or worse still keep things on the boil.

Asia’s tomorrow has come–PM Najib Tun Razak


May 24, 2014

Asia’s tomorrow has come

by Dato Seri Najib Tun Razak, Prime Minister of Malaysia

http://www.nst.com.my (05-23-14)

RISING ASIA’: This is the full text of Prime Minister Datuk Seri Najib Razak’s keynote address at the Nikkei’s 20th International Conference on The Future of Asia in Tokyo yesterday (May 22, 2014)

PM NajibPrime Minister Datuk Seri Najib Razak delivering a speech at the Nikkei’s 20th International Conference on the Future of Asia in Tokyo yesterday. Najib says theLook East policy will move into a second phase, focusing on high technology and highly skilled workers. AFP pic

I am honoured to join you today. This is the second time I have spoken at the Future of Asia conference, and it is wonderful to be back in Japan. Under Prime Minister Abe’s leadership, the Japanese economy has burst back into life, with strong early promise. Now, Japan looks set to usher in a new period of sustained growth,  and set a new standard for reform.

Abenomics–Resurgance of Japan

Japan’s reputation for economic leadership is well-known and well-deserved. In the early 1980s, under Prime Minister Mahathir’s leadership, Malaysia began a ‘Look East’ policy, turning to Japan and Korea for inspiration, helping to train the next generation of Malaysian students and businesses leaders in the East Asian way.

Not only has the Look East policy continued under my tenure, but in line with our transformation programme for Malaysia, it’s moved into a second phase, focusing on high technology and highly skilled workers — helping us move our economy up the value chain, and onto high-income status.

Back in the 1980s, things were different. Asia was rising, but the truly explosive growth was still to come. The emergence of the ‘Tiger’ economies, and the reforms in China, showed the world that something was stirring in Asia. It was the 1980s that the phrase ‘Asian Century’ was coined. But for many observers, Asia was still tomorrow’s story.

Tomorrow has come to Asia (and Malaysia)

Tomorrow has come. Economically and politically, Asia is now at the heart of world affairs. The most populous region on earth is also one of the most dynamic, and increasingly, one of the more contested.

Remarkable economic development has focused global attention on Asia’s prospects. When the recent financial crisis shook confidence in established markets, more companies, and countries, began to ‘look East’.This growing sense of economic momentum has also raised the geopolitical stakes, as emerging and established powers vie for influence in Asia.

This trend shows no sign of abating. Within 20 years, Asia is set to account for more than 40 per cent of global gross domestic product (GDP), and 60 per cent of the world’s middle class. This phase of growth will be accompanied by growing global stature, influence, and interest. We must come to terms with life in the spotlight.

Asia’s economy will remain in focus; our internal dynamics under the microscope. There will be, InsyaAllah, no return to Asia’s age of isolation. We are one of the new centres of gravity in a newly multipolar world.

For the Asians of tomorrow, what matters is how we respond to this scrutiny; whether we build strong and sustainable economies, or simply inflate more bubbles. Whether we show security leadership, or allow internal tensions to derail the peace upon which prosperity depends.

That is what I would like to talk about today — the challenges to Asia’s economy and security, and how we can respond. Let me start with the economy. There are a number of trends that will determine Asia’s continued success. The first is economic integration: the removal of trade barriers, and cooperation on monetary and fiscal policies.

According to McKinsey, in 2012, cross-border trade accounted for a third of global GDP. By 2025, that figure could reach half. In the past 20 years, emerging economies have more than doubled their share of cross-border goods, services and finance, but are still lagging far behind developed markets.

For Asian economies, integration offers significant benefits, including the ability to negotiate together. It can increase the power of middle nations, and raise living standards for all. It can help developing nations climb the ladder, and ensure fewer citizens are left behind, as common standards and entry requirements filter back into domestic policy.

I believe Asian states must look to build stronger, more lasting economic connections — both within our region, and with the outside world. That is why I strongly support the push to create a single market in Southeast Asia. The ASEAN Economic Community will support jobs and growth for more than half a billion people, and help ensure Southeast Asia’s growth spills across into all member states.

Trans-Pacific Partnership and Integration for Economic Growth

In an interdependent global economy, the benefits of greater cooperation extend far beyond Asia’s borders. Malaysia looks forward to the completion of the Trans-Pacific Partnership on terms acceptable to us. The TPP will strengthen our ties with the wider world; as will the Regional Comprehensive Economic Partnership, which will bring three of the largest economies into the world’s largest trading bloc.

For governments and businesses, trade agreements such as these often have a visible logic. We see the negotiations unfold, often over years. We see the compromises that are made, and the benefits that are secured.

The risk of public disaffection can grow. In an age of increasing integration, we must ensure we take people with us — explaining the process and describing the benefits more clearly. Education and engagement can help address public concerns, and win support for agreements that can unlock growth and create higher paying jobs.

To prevent the build-up of risk, we must also ensure reforms to our financial and regulatory regimes keep pace with innovation in the financial sector. In the next decade, Asia’s financial sector is projected to grow by 50 per cent, accounting for almost a third of global banking sector assets. Yet, as the International Monetary Fund points out, Asia’s financial integration is not keeping pace.

As Asian firms ‘build out’ beyond their borders, and Asian investors seek new opportunities, they will be bound more closely into the global economy. There will be new regulatory challenges, such as the growth of shadow banking, and new problems of scale. As Asian capital stretches into other emerging markets, financial supervisors must be ready to address a much wider range of cross-border risks.

Focus on the reforms needed at home

We must also focus on the reforms needed at home. As the Hong Kong Monetary Authority has pointed out, despite a considerable pool of savings, and strong inflows of capital, some Asian infrastructure projects struggle to attract investment due to political, legal and governance risks. Stronger credit, risk management and corporate governance norms can make it easier to secure foreign capital. These must be complemented by a commitment to institutional reform to boost business and public confidence.

These reforms must be undertaken with an eye on the big picture: Asia’s changing role in the world economy. For many years, emerging Asia’s development model was based on a trade surplus with rich-world markets. But rebalancing is under way, as our nations grow richer and our labour costs rise. Some Asian economies are focused on building domestic demand — laying the foundations for more independently sustainable growth.

Alongside macroprudential policies, this approach will help cushion us from the near-term problems, such as the ongoing effects of sluggish growth in established markets, the withdrawal of United States stimulus, whilst also preparing our economies for the next phase of development. They will pave the way for Asia to play a greater role in shaping the global financial architecture, for the ultimate benefit of our citizens. Such structural changes take time and commitment. They can be socially disruptive. But the reward is a stronger and more secure economic future.

The Challenge of Inequality

The second trend we must come to terms with is inequality.Over the past few years, the growing gap between rich and poor in developed economies has become a pressing policy issue. This is not just the battle cry of the Occupy Wall Street protesters: many research institutions have pointed to the corrosive effect of structural inequality.

A little inequality encourages individuals to work hard and innovate; but an unequal system creates hollow economies, where wealth and opportunity are kept for the few, at the expense of the many. Excessive inequality has serious, and avoidable, effects on health, education and life outcomes. When soaring GDP outstrips living standards, people feel they do not have a stake in their nation’s economic success. That, in turn, undermines social progress and threatens stability.

With rapid growth at a time of globalisation and technological change, emerging Asia is particularly exposed to widening inequality. Over the past two decades, eight out of 10 Asians found themselves living in areas where income inequality is rising, not falling. Whilst inequality has narrowed in emerging regions such as Latin America, it has widened in Asia. As the Asian Development Bank has pointed out, had inequality stayed static, an extra 240 million people would have been lifted out of poverty.

Behind the headline growth figures, it is clear that Asia’s future success depends on broader and more diverse economic development. For Asia to truly prosper, we must give our citizens greater equity, as well as greater equality. Again, this will not be easy. Even the most successful economies have struggled to tackle inequality. There is no straightforward solution. But there are a number of things we can do.

We must invest more in public goods such as education and health: increasing access to quality education and narrowing the divide between urban and rural health outcomes. It means strengthening social safety nets and deploying targeted subsidies that support the poor at the point of need. It means encouraging the private sector to do its part, with corporations providing labour with flexibility, training and support. And, it means building more balanced economies, with higher quality jobs and more even growth spread across sectors.

Fight Against Corruption

It also requires a lasting commitment to the fight against corruption. Corruption suppresses meritocratic opportunity, undermines social cohesion and eats away at people’s confidence in the state. Tackling corruption is not the work of a year, or even a decade; but it can and must be done. Government procurement should be reformed to introduce open bidding, bringing transparency to a process often blighted by graft. Strengthening independent anti-corruption institutions, and increasing prosecutions for both bribe takers and bribe givers, can help change attitudes — even when corruption is deeply rooted.

Responding to these two trends — integration and inequality — will be critical. The changes I have spoken about will not always be easy; they require the investment not just of resources, but of political will. Difficult conversations will be had; in my country, for example, where income inequality remains a concern, we are working to find the right balance between affirmative action and individual opportunity.

With courage and foresight, however, we can deliver a stronger economic future for Asia. But, this future will not be assured unless we deliver the security and stability on which economic success depends.

To do so, we must manage our own rising influence, whilst responding to more intense outside interest in Asian security matters. We must make headway on non-state threats such as terrorism and piracy, and act on the ‘new security’ issues such as climate change. And, we must prepare to play a new leadership role in global security issues.

Rise in Asian military power must deliver peace

First and foremost, we must ensure the rise in Asian military power delivers peace, not instability.Over the past decades, Asia’s strong economic growth has obscured a military build-up that is almost as strong. In 1988, Asian defence spending constituted eight per cent of global military expenditure. By 2012, that figure had risen to 20 percent. In the last 25 years, overall military expenditure has grown by 187 per cent.

Countries have every right to defend themselves. But regular arms replacement programmes aside, this trend indicates deeper concerns about security and conflict — concerns that could swiftly become self-fulfilling. To address this risk, we should reject the siren song of competitive armament, and seek wherever possible to strengthen the multilateral and diplomatic ties that check instability.

We should also redouble our commitment to negotiation. Confronted with complex disagreements between states, Asia must place its trust in diplomatic solutions. We should heed the fundamental principles on which good diplomacy is conducted: sovereign equality, respect for territorial integrity, peaceful settlement of disputes and mutual benefit in relations.

And, we must affirm our commitment to rule-based solutions to competing claims. International law, and not economic or military coercion, should guide the resolution of disputes over resources. I also believe Asia can explore ways to make a bigger contribution to global security challenges.On non-proliferation, for example, the Association of Southeast Asian Nations has adopted a comprehensive treaty, the Southeast Asian Nuclear Weapon-Free Zone.

We should also make a concerted effort to implement and enforce strategic trade controls to cut the risk of dual-use goods.Our regional agreement on piracy is cited as a strong example of regional cooperation by the International Maritime Organisation, which seeks to replicate it elsewhere. The same principles — of sharing information and building capacity – could be applied to anti-terrorism initiatives, which, despite some successes, have sometimes lacked the coordination needed to be truly regional.

Peacekeeping and Conflict Resolution

On peacekeeping and conflict resolution, Asian nations are already ramping up their involvement in the promotion of global peace. Malaysia, which has already played an active role resolving regional conflicts, is bidding for a non-permanent seat on the United Nations Security Council for 2015-2016. Japan has made peace-building one of its main diplomatic priorities, South Korea has markedly increased its peacekeeping and post-conflict work, and many ASEAN nations, such as Vietnam, which will join UN operations next year, are looking to play a more active role.

This is driven partly by pragmatism: we have seen from the rise of nations that growth in influence and hunger for resources can bring new tensions, and exacerbate old ones. But it is also about acknowledging that with rising influence comes rising responsibility; that for Asia to continue to prosper in a stable global security environment, we must play our part not just in the enforcement of international norms, but in their creation, too.

By laying the foundations for greater Asian engagement in the international security agenda, and preparing our economies for more integrated and sustainable growth, we are recognising that our position in the world is changing.

As we leave behind the era of single hyperpower dominance, as the global economy becomes more connected and as nations converge around democratic market liberalism, a broader policy approach is needed. Today, more than ever, consensus, cooperation and constructive engagement are the basis for success.

Thirty years after it was proposed, the Asian century is upon us. By reforming at home, and assuming a greater international role, we can ensure it brings stability, prosperity and growth.

China rebuffing ASEAN’s Quest for a binding code of conduct (COC) on the South China Sea


May 17, 2013

China rebuffing ASEAN’s Quest for a binding code of conduct (COC) on the South China Sea

by Dr. BA Hamzah @www.nst.com.my

THE ASEAN summit in Nay Pyi Taw, Myanmar, has just ended with the usual pomp and circumstance. Some heads of government were visibly exasperated with fresh feuds in the South China Sea and their failure to bring order to the “Maritime Heartland”.

Scs

At Nay Pyi Taw, all eyes were on China, the Middle Kingdom, for rebuffing ASEAN’s proposal for a binding code of conduct (COC) on the South China Sea. The negotiation for the COC started since the Declaration on the Conduct of Parties was adopted in Phnom Penh in 2002. While a mechanism to manage order at sea remains pressing, from Beijing’s perspective, the COC is a bridge too far, unnecessary and giving it just enough rope.

Besides this, the fissures within ASEAN on the COC have not impressed China. Vietnam and the Philippines are very vocal. The other claimants are more conciliatory. The non-claimant states are happy to go along with the COC to keep ASEAN together.

ASEAN should know that China is determined to dominate the South China Sea as its “own internal lake”, akin to the “Yankee Lake” that the United States established in the Caribbean to keep rivals out in the early 20th century.

In my view, China is no longer eager to embrace the COC. A weaker China was more willing to let ASEAN play the China card. Hence, it lulled ASEAN into thinking that it would play ball with the COC. Today, the card has changed hands.

A more confident China, which believes it has geography and history on its side, now takes things in its stride. Worse, China believes that the COC is a pretext by some claimant parties to engage stronger external parties (read: the US) in a proxy war. As an example, within days of signing an Enhanced Defence Cooperation Agreement (EDCA) with Washington, Manila is involved in a massive US-led war game, involving more than 5,000 troops near Scarborough Shoals that is occupied by China since April 2012.

From Beijing’s perspective, the joint military exercise is threatening and runs counter to the earlier assurance by US President Barack Obama that the EDCA was not to counter or contain China. If China is not the threat, who is?

China believes geopolitics is also on its side. At the global level, its rise comes at a time when its biggest rival, the Frugal Superpower (after Michael Mandelbaum), is limping and retreating home. America’s decline results from strategic overstretch and costly military misadventures.

China is now more emboldened as US soldiers continue to recuperate from operational fatigue. Despite the EDCA and policy to rebalance forces to East Asia, China believes the US is less likely to put more fresh boots on the ground.

The US is too preoccupied with Europe to bother about the Pacific. The situation in Ukraine will keep the US busy with Russia. Besides, Washington cannot afford to antagonise Beijing, as it needs China to moderate Iran’s increasing influence in the Middle East, as well as keeping peace in Africa.

The COC is an agreement between ten states against one. Its asymmetrical nature does not bode well for China. It drags in the non-claimant parties, with whom China has no territorial quarrel. The fissures or cracks between the claimant states and non-claimant states (visible in Phnom Penh in 2012 and evident in Myanmar this year, another non-claimant state), have weakened the ASEAN initiative.

ASEAN must not be too pushy over the COC or it may lose its raison d’etat. When Asean was formed in 1967, its original mission was very clear: to keep peace among the member states. Today, there is a danger that the internal fissures may undermine ASEAN’s mission, strategic relevance and centrality.

Dr. Hamzah,

Do we really need a binding code of conduct on South China Seas, since China is already a signatory to the Treaty of Amity and Cooperation in SEA?–Din Merican

CHINA: INSTRUMENT OF ACCESSION TO THE TREATY OF AMITY AND COOPERATION IN SOUTHEAST ASIA

WHEREAS the Treaty of Amity and Cooperation in Southeast Asia, which was signed on 24 February 1976 in Bali, Indonesia, was amended by the First and Second Protocols Amending the Treaty of Amity and Cooperation in Southeast Asia, which were signed on 15 December 1987 and 25 July 1998, respectively;

WHEREAS Article 18, Paragraph 3, of the aforesaid Treaty as amended by Article 1 of the aforesaid Second Protocol provides that States outside Southeast Asia may also accede to the Treaty with the consent of all the States in Southeast Asia, namely Brunei Darussalam, the Kingdom of Cambodia, the Republic of Indonesia, the Lao People’s Democratic Republic, Malaysia, the Union of Myanmar, the Republic of the Philippines, the Republic of Singapore, the Kingdom of Thailand and the Socialist Republic of Viet Nam; and

WHEREAS all the States in Southeast Asia have consented to the accession of the People’s Republic of China;

NOW, therefore, the People’s Republic of China, having considered the aforesaid Treaty as amended by the Protocols, hereby accedes to the same and undertakes faithfully to perform and carry out all the stipulations therein contained.

IN WITNESS WHEREOF, this Instrument of Accession is signed by the Minister of Foreign Affairs of the People’s Republic of China.

DONE at Bali, Indonesia, on the Eighth Day of October in the Year Two Thousand and Three.

41

 

Thailand: A Coup by any other name…


May 9, 2014

Thailand: A Coup by any other name…

http://asiapacific.anu.edu.au/news-events/all-stories/coup-any-other-name……#.U2y7e1f1KQJ

by Belinda Cranston and James Giggacher.

Dismissal of Thailand Prime Minister smacks of attempted constitutional coup, says ANU expert.

yingluck-shinawatra_4It’s been six months in the making, but Thailand Prime Minister Yingluck Shinawatra has finally been pushed from her precarious perch of power.

The Southeast Asian nation’s Constitutional Court dismissed Ms. Shinawatra and nine cabinet ministers for abuse of power on Wednesday. The court found Ms Shinawatra guilty of abusing her authority by replacing Thailand’s security chief with a relative in 2011.

The decision comes after months of sustained protest by Thailand’s opposition led by Suthep Thaugsuban, and his army of Yellow Shirt supporters. Pro-government supporters, inlcuding the Red Shirts are planning mass rallies over the weekend.

They claim that the country’s legal system is being unfairly used to topple the elected government. Dr John Blaxland, a Thai politics expert from the ANU College of Asia and the Pacific, agrees.

“This is essentially an attempted constitutional coup,” he said. “This is the courts deciding to overthrow an elected government that protests have failed to overthrow. And that the military refuses to overthrow, because the military knows that if they intervene, the consequences could be cataclysmic.The military knows that it could be strained to breaking point by overtly taking sides.”

Thailand has been undergoing sustained political turmoil since Ms Shinawatra’sNiwatthamrong Boonsongphaisan brother Thaksin, was deposed as Prime Minister in a 2006 military coup amidst allegations of corruption. Blaxland added that the current government – popularly elected in February to only have the result nullified and be installed as ‘caretakers’ – hangs by a thread.

Not all ministers had been dismissed in Wednesday’s ruling and Ms Shinawatra had been replaced as Prime Minister by Commerce Minister, Niwatthamrong Boonsongphaisan. He’s taken the mantle from Yingluck as her brother Thaskin’s proxy,” Blaxland said.

“But this saga is far from over.There is another wave of constitutional effort to remove this government on its way through the national anti-corruption commission, which is stacked with anti-Shinawatra forces,” he said.Thailand is due to go to the polls on 20 July. Whether that date is a democratic horizon too far, remains to be seen.

Malaysia: One Year after GE 13, lost in sea of politiking


May 6,2014

Malaysia: One Year after GE 13, lost in sea of politiking

Bridget-Welsh-2by Bridget Welsh@http://www.malaysiakini.com

COMMENT: Today marks the one year anniversary of the historic 13th General Election. This election was pivotal in the country’s history as the incumbent BN coalition held onto power, with the Opposition calls for ‘change’ unfulfilled.

Scholars have highlighted the fundamental shifts in the power of UMNO, the imbalance of the opposition parties, the rise in influence and political awakenings of East Malaysia and the electoral irregularities, among many profound structural changes.

In other ordinary ways, Malaysian politics has also changed, with greater cynicism, insecurities and anger more prominent in public life. This is across the political divide. News reports feature troubling reports of increased racial tensions, political polarisation and continued shortcomings in governance.

This article highlights some of the ongoing dynamics in contemporary Malaysian political life, which are both worrying and offer promise ahead.

Hisham, Najib, and Muhiyuddin MH370 Heroes

There is no question the last year has been a difficult one for Malaysia.  Globally, the country came under the full glare of the international spotlight in what arguably will be the story of the year – the loss of MH370. Now everyone in the world knows where Kuala Lumpur is, and the seas and oceans around it.

The persistence of this issue in international headlines for over two months is a reminder of the lack of closure for the families of loved ones on board the missing plane and the country as a whole.

Malaysia has been blessed historically by a comparative lack of crises but MH370 shows the need for better preparation and the need to learn. What is of concern in the failure to properly release even the preliminary investigation report of the tragedy is an apparent unwillingness to acknowledge mistakes and strengthen the country’s responses in future.

The context of post-GE13 contributes to this childish stubbornness to embrace improvements. Political wrangling and insecurities are dominating the terrain, with those in power obsessed in staying there and those in the opposition myopically focused on getting there.

Even one year later, the country is still electioneering, with the focus on power rather than the people. This is perhaps one of the most serious losses of GE13 – a distancing of the interests of citizens and political leaders.

Even basic needs are being ignored, as evident by the water rationing. This issue is being used in a seemingly never-ending political game of blaming and one-upmanship. When will the federal and government leaders sit down and figure out a proper solution to the country’s water shortages? The sense one gets is: when the dams freeze over.

The impression is statesmanship is sorely lacking. It is not only MH370 that is missing. Some of this is a product of Prime Minister Najib Razak doing a disappearing act when a controversial issue emerges. When he reappears – usually well after an issue has evoked tensions and frustrations – his interventions are too little too late.

Power at all cost

For its part, the opposition has continued focusing on bringing out the country’s problems, with little attention to solutions to these problems. Many of their messages are often stale, and returning to old solutions. Their main goal aims at changing the government, a refrain that only perpetuates the sense among ordinary citizens that leaders are focused on power, not people. Quality leadership is lost in the sea of politicking.

This void has been enhanced by the loss of important national leaders from political 1Malaysialife, from the tragic deaths of Karpal Singh and Irene Fernandez to the quiet voices of Abdullah Ahmad Badawi and other leaders who can bridge the divided communities.

This lack of statesmanship is enhanced by the fact that both political sides are wracked in ongoing internal struggles for power.

For UMNO, united it its desire to hold onto power at any cost, Najib continues to navigate challenges inside his party, led by none other than his mentor, Dr Mahathir Mohamad.

While the current premier appears to have neutralised any immediate challenge, the sense of competition for position is ongoing in UMNO, with shifts in positions a constant dynamic.

Najib has proved adept at managing the levers of this party with offers of projects, contracts and other rewards regularly used as appeasement. The reality is that Najib and his associates continue to watch their backs, distracted from governing.To accommodate the need for funds, Najib has opted to implement the Goods and Service Tax (GST), a measure that has widespread public opposition as shown in recent polls.

While some recognise the need to improve the country’s revenue position, especially given the rising debt the country is absorbing and questions arising from that debt (as shown in the 1MDB scandal), ordinary people are only seeing the impact of rising inflation on their already strained finances.

UMNO knows that the GST has the potential to be its death knell – a reason it is doing everything it can to break up the opposition through hudud and other religiously divisive issues and the use of institutions such as the Judiciary to marginalise political opponents and parties alike.

UMNO rightly fears that the GST will undercut the base of its political support, effectively betraying its base by imposing a higher cost of living and greater suffering. In their fancy cars behind guarded houses, they have lost perspective, unaware of even the price of kangkung.

Hudud returns–PAS Kelantan

If UMNO is violating its promise of rising incomes and improved welfare, the Opposition has also moved down the road of disillusionment. This is occurring with PAS’ Kelantan government’s call for hudud.

pas-keadilan-untuk-semuaIn GE13 the Opposition offered the promise of a multiracial country, a place for everyone under the Malaysian sun. The exclusionary path of Kelantan PAS has already lost the trust of non-Malays as shown with recent polling, as decades of trust building have evaporated. Many non-Muslims feel a sense of betrayal.

The party has effectively signaled that it is no longer interested in being a leader of the nation as a whole, but appears focused on securing its base in the rural heartland, especially in Kelantan where its performance under the new state leadership has been lackluster.

Its public rationale is that the move is for political power, to win support among Muslims. History has shown in that when PAS opts for a more exclusionary path, it is punished at the polls as occurred in 1986 and 2004.

By turning to religious law before better governance and the welfare of the broader community, Kelantan PAS has taken a path that is appealing to its core and distancing itself from the middle ground, especially younger voters.

More attention could be centred on deliverables, increasing jobs and welfare in the state to allow Kelantanese the means and opportunities to stay away from the crimes hudud is supposed to prevent. As shown in Egypt, the party would be better served by working on providing jobs and raising incomes, but this lesson appears not to be have been absorbed.

As in UMNO, party divisions in PAS have contributed to this undemocratic move. There appears to be ongoing positioning people in the party, especially by those that did not do well in the party polls last November.

While clearly provoked by UMNO, PAS has taken a parochial, exclusionary route that not only threatens the Opposition Pakatan Rakyat coalition, but has the potential to tear at the fabric of Malaysian society in a way that will only bring greater tensions and conflict.

In falling for Umno’s bait, DAP has also escalated tensions. The Opposition is now struggling to move away from zero-sum politics, as ordinary Malaysians look on in dismay or glee depending on their side of the political divide.

Kelantan PAS’s exclusionary path severely weakens the Opposition’s ability to represent the nation, as does Najib’s similarly divisive move to implement an unpopular policy that will erode his political base, sharpen class and generation divisions (as the young are the most affected), and has the potential to deepen the trend that has featured in Najib’s tenure – the continued politicisation of political institutions to maintain political power, from the Election Commission to the judiciary.

Concerns are particularly acute in that both PAS’ and UMNO’s moves place strain on the ability of institutions to govern fairly for all Malaysians. Pressures are already clearly evident. The rule of law especially is being challenged, with now multiple incidents of the police failing to uphold judicial decisions.

Wake-up call from youth

Given the worrying trajectories, is there any reason for hope? Increasingly the frustrations of citizens have featured centre stage, with the silent majority deafened from the political noise – much of it lacking decency and direction. The answer is a yes, but one couched in realism and caution.

GST Rally
The GST rally last week was full of young people urging change signals the expansion of a political awakening in Malaysia. GE13 did not mark the end of this process, but rather served as a marker for new paths and patterns of engagement.

Neither side did a good job of mobilising young Malaysians as shown in the split voting patterns among younger voters, but nevertheless the youth are finding their voice. The anti-GST rally was less about one side or another of the divide, but a loud wake-up call for fairer governance, one in which a younger generation is now leading.

Amidst the 50,000 crowd are leaders for the future, joined by a growing cohort of younger leaders in the political divide that are putting forward important issues such as education, security and the Rule of Law.

It is important to note that amidst the politicking are voices that are indeed focusing on meaningful issues and appear less obsessed about who is holding what position, be in the chief ministership of Selangor or a cabinet post.

My faith lies most with the young in Malaysia, who along with the sage wisdom of leaders who were socialised in the post-Mahathir era and national oriented civil society leaders, are speaking out and engaging important issues. They offer light in the darkness of the current political scene.

In 2008, I wrote that Malaysians were ahead of their politicians. I also wrote that change would not be a linear process. We continue to see these observations in current political life.

The opposition has the responsibility to move beyond focusing on attaining power and developing capacity to solve the nation’s problems by working together and forming a shadow cabinet. Even Cambodia’s Opposition coalition that has refused to sit in parliament due to election irregularities have one. If the opposition is going to focus on its divisions it might as well get out of the business for running for national office.

For Najib, who has yet to become the label of reformer he has portrayed himself to be, Malaysians are awaiting your reforms, meaningful changes. Your clock is ticking, and already half of the country have decided you have passed your prime. Many in the other half were on the streets last week.

Malaysians on the whole deserve better than they have at the moment, and are rightly frustrated by the exclusionary turns of their leaders, but the fact that they are speaking out and sending clear messages of dissatisfaction offer promise, even if it is less promising than many hope for.

DR BRIDGET WELSH is Associate Professor of Political Science at Singapore Management University. She can be reached at bwelsh@smu.edu.sg .

 

Democracy gets short shrift from Obama in Malaysia


May 3, 2014

American Enterprise Institute (AEI)

Soft power is not the same as doing nothing: Democracy gets short shrift from Obama in Malaysia

by Paul Wolfowitz (05-01-14)

Paul WolfowitzNot mentioned in this fawning account in today’s Washington Post of Obama’s “comfort and personal connections” in Southeast Asia, is the signal failure of his visit to Malaysia, where he refused to meet with the leader of the Malaysian democratic opposition.

President Obama, like all American presidents in recent history, meets routinely with opposition leaders in democratic countries like the UK and Germany and even in some not so democratic ones, such as Burma, where he met with Aung San Suu Kyi, a very important meeting given the key role that she plays in determining that country’s future.

najibobamaGood buddies

Yet the President, using the thin excuse of scheduling difficulties, refused to meet with Anwar Ibrahim, the leader of the Malaysian opposition coalition which managed, despite blatant fraud and vote rigging in last year’s election, to gain 52% of the popular vote (a margin which was reduced by gerrymandering to only 40% of the seats in parliament). That alone would seem to warrant a meeting by the President of the United States with the leader of the opposition.

Moreover, in this case there is the additional consideration that Mr. Anwar is now being persecuted by the government, as he has been for many years, on trumped-up charges of sodomy.

After Anwar was initially acquitted on the most recent charges, the government appealed the acquittal, as it can do in Malaysia. It made an unusual ad hoc appointment of a member of the ruling UMNO party, a Mr. Shafee Abdullah, who has litigated numerous high-profile cases for UMNO, as a lead prosecutor to appeal the acquittal. In addition to that obvious conflict of interest, Mr. Shafee was present at a meeting in 2008 between the Anwar’s accuser and Prime Minister Najib, just a few days before the original charges were brought, a meeting which the government first denied and then later admitted.

Not surprisingly, with this appeal the government succeeded in overturning the acquittal. The resulting conviction, a few months ago, came just in time to prevent Anwar from running for the position of Chief Minister of Malaysia’s most important state. If that conviction is upheld after Anwar’s current appeal, he faces the prospect of many years in jail.

A meeting by Obama with the leader of the Malaysian opposition would have sent a powerful message of US support for the majority of Malaysians – and probably a much larger majority of young Malaysians – who long for peaceful, democratic change in their country, one of the Muslim-majority countries that is perhaps most ready for a transition to real democracy.

Moreover, with such a meeting, President Obama could have supported with his personal prestige the pieties that he uttered, at his joint press conference with Prime Minister Najib, about the need for countries that want “to be successful in the 21st century” to “respect rule of law. . . freedom of speech…the right of opposition to oppose even when it drives you crazy, and freedom of assembly.”

Instead, the President called Prime Minister Najib a “reformer” and stood by silently while Najib claimed falsely that the action against Anwar is not an action by the government but rather “an action taken by an individual . . . and under the eyes of the law, even if you’re a small man or a big man, you have equal justice.” The absurdity of this last claim is evident in the fact that one of the very few people ever to be tried under Malaysia’s sodomy law – in the 77 years since the British colonial rulers introduced it – is the popular leader of the opposition.

anwar_ibrahim_susan_riceAnwar Met National Security Advisor Dr. Susan Rice

Instead, President Obama delegated the meeting with Mr. Anwar to National Security Advisor Susan Rice. According to the official White House report of that private meeting, Rice told Anwar “that the United States has followed his case closely, and that the decision to prosecute him and the trial have raised a number of concerns regarding the rule of law and the independence of the courts.”

Good words, but they would have been much more valuable if they had been uttered in public and by the president himself. And even more powerful would have been the symbolism and substance of a presidential meeting. Instead, by refusing to meet with him, the president appears to be sending a green light to the Malaysian government, whether he means to or not, that it can continue its legal persecution of the opposition leadership without meeting any serious American objection.

One would like to hope that the warm public atmosphere is actually a way to obtain real results in private. President Reagan did that, with conspicuous success, in the case of the Pentecostalist asylum-seekers in Russia and in the case of opposition leader Kim Dae Jung in South Korea.

Perhaps such hope is not vain. Anwar himself is said to be very pleased with the statement issued by the White House after his meeting with Susan Rice and pleased that he had a chance for the first time to make his case directly to a senior White House official. Perhaps the refusal of the president to meet with Anwar was part of some private understanding with the Malaysian government that it would do the right thing. Or perhaps, having finally understood the gravity of the situation, the White House will pressure the Malaysians not to embarrass President Obama on the heels of his visit.

One can hope for that outcome. But if, instead, the railroad of Malaysian “justice” proceeds on track to its unhappy destination, that will be bad not only for Mr. Anwar personally, but also for Malaysian democracy and for America’s reputation in Malaysia, particularly with the future generation of young Malaysians.

If that happens, it will be one more example, and a particularly tragic one, of this American president failing to use the “soft power” of his unusual international popularity to produce important concrete results for human rights and democracy.

Cambodia Realigns Its Foreign Relations


May 1, 2014

Cambodia Realigns Its Foreign Relations

Facing political opposition and diminished Chinese support, Hun Sen government seeks greater regional integration

barack-obama-and-hun-senPresident Barack Obama and Prime Minister Hun Sen Of Cambodia

Cambodia’s foreign relations map has undergone dramatic shifts in the past six months. In the aftermath of Cambodia’s elections in July 2013, Beijing promptly recognized the results and congratulated Prime Minister Hun Sen and his ruling Cambodian People’s Party for their victory.

However, as anti-government protests led by the opposition Cambodia National Rescue Party grew in the weeks that followed, with protesters condemning the elections as fraudulent and calling on Hun Sen to step down, China has since largely remained silent and kept the prime minister at arm’s length.

At the same time, the Cambodian government in the past few months has moved to consolidate its relations with Vietnam following several years of deteriorating ties between the two neighbors. Phnom Penh made this move despite the anti-Vietnamese sentiment in Cambodia fed by Opposition Leader Sam Rainsy that has gained traction since the elections.

An ongoing political crisis and China’s apparent hedging on Hun Sen are behind this emerging geostrategic realignment.

Hun Sen is struggling to deal with growing opposition to his rule and grievances from the public on labor rights and governance at a time when Cambodia is at a critical political and economic crossroads. The country is seeking to become more integrated with the rest of Southeast Asia and the world in the years ahead. Cambodia’s youth are increasingly more educated and exposed to democratic norms and the outside world.

Hun Sen, whose strong-arm tactics largely worked in the past, now faces what is perhaps the most serious challenge to his rule in decades and is seeking outside recognition to boost his domestic legitimacy. The truth is, even if his party manages to win the next elections, Hun Sen must continue to deal with growing demands for greater transparency, better rule of law and more democracy.

China, until recently Cambodia’s most important patron, has not been willing to offer Hun Sen much political backing. While the two governments continue to maintain high-level meetings and exchanges, there has been a shift in Beijing’s policy toward Cambodia. Shortly after Hun Sen announced he would not step down in the face of opposition-led protests, an article in China’s state-controlled Xinhua in late December quoted Khmer analysts calling for national referendum on whether to organize new elections.

Chinese leaders probably will not give Hun Sen the cold shoulder anytime soon, but they seem to be charting a middle course and slowly moving away from their past policy of wholeheartedly endorsing his government.

The social and political changes taking place in Cambodia have not been lost on Beijing. Chinese leaders could be hedging their bets on Cambodia’s political future to avoid the kind of strategic blunders they made in Myanmar in recent years. Beijing long threw its support to Myanmar’s military regime and was taken unaware by the sweeping reforms President Thein Sein launched in 2011. Chinese leaders did not begin to face up to the new political reality in Myanmar until Thein Sein suspended construction of the multibillion dollar Chinese-backed Myitsone dam.

As part of its new policy, China is engaging different actors in Myanmar’s emerging political scene, from parliamentary speaker Shwe Mann and army chief Min Aung Hlaing to opposition leader Aung San Suu Kyi. Chinese leaders who have largely given Thein Sein the cold shoulder are now considering an official invitation for Aung San Suu Kyi to visit China. Neither President Xi Jinping nor Premier Li Keqiang made a stop in Myanmar during their diplomatic blitz across Southeast Asia in 2013. Interestingly, Cambodia was not included in that itinerary either, despite being a staunch ally and a popular investment destination for Chinese businesses.

Meanwhile, relations between Vietnam and Cambodia have blossomed during the past few months. Hanoi has provided Hun Sen with much needed outside recognition and a boost to his legitimacy. In late December, Hun Sen visited Vietnam ahead of the 35th anniversary of the ouster of the Khmer Rouge by Hanoi’s troops, and Vietnamese leaders lavishly congratulated him for his role in rebuilding Cambodia.

Two weeks after Hun Sen’s trip, Vietnam’s Prime Minister Nguyen Tan Dung visited Cambodia, where the two leaders co-chaired a bilateral trade and investment conference – the largest since 2009 – and pledged to boost economic ties in banking, finance, agribusiness, tourism and telecommunications. At the end of 2012, Vietnamese businesses had invested around $3 billion in nearly 130 projects in Cambodia, making Vietnam one of the country’s top foreign investors. China, in comparison, invested a total of $9.17 billion in the country between 1994 and 2012.

Hanoi is closely watching the political turmoil in Cambodia, but still jumped at the chance to patch up ties with Phnom Penh following several years of irritation over border demarcation and Cambodia’s siding with China over the South China Sea disputes. In the foreseeable future, Hanoi still has an interest in sustaining regime stability in Cambodia and the ruling party’s grip on power given how overtly anti-Vietnamese Sam Rainsy has shown himself to be.

For instance, Rainsy has recently declared that Vietnam is encroaching on Chinese territory in the South China Sea, in the same fashion that he alleges the nation is grabbing Cambodian territory.

Offering Hun Sen political support when he most needed it, as well as strengthening bilateral economic ties, seemed like a logical choice for Vietnamese leaders. Hanoi is also concerned about the increasingly anti-Vietnamese rhetoric among the Cambodian population. Launching the new Cho Ray Phnom Penh Hospital, a joint venture between Vietnam’s Saigon Medical Investment and Cambodia’s Sokimex, was perhaps an effort to soften anti-Vietnamese sentiment through joint cooperation in the health sector.

But realistically, Hanoi’s support alone is insufficient to assure Cambodia’s and Hun Sen’s autonomy among foreign powers. Beijing’s noncommittal stance in recent months might also have prompted Hun Sen to look for support beyond his traditional patrons. For instance, he shrewdly used Japanese Prime Minister Shinzo Abe’s visit to Cambodia in November 2013 to boost his domestic legitimacy – by asking Abe for advice on electoral reforms – and his position vis-à-vis China.

Hun Sen and Abe issued an unusual statement on bilateral maritime security cooperation, underscoring the need to settle disputes peacefully and according to international law. The two countries agreed to boost military ties, with Japanese experts, including those from Japan’s Self-Defense Forces, expected to provide training to Cambodian military personnel for future United Nations peacekeeping operations. And in stark contrast to what happened at the ASEAN Regional Forum in Phnom Penh in 2011, Cambodia did not object to tabling a discussion on China’s Air Defense Identification Zone over the East China Sea during the Japan-ASEAN summit in Tokyo in December 2013.

Cambodia is evolving quickly, both politically and economically, and it remains to be seen whether Hun Sen can retain power for several more election cycles. Beijing’s new strategic calculus in Cambodia has suddenly left Hun Sen feeling vulnerable, at least for the moment. This has prompted Hun Sen to work to boost his standing among other regional actors, particularly Japan, Vietnam and ASEAN, by offering them his support on issues of contention with China such as territorial disputes in the East and South China seas.

(Murray Hiebert is senior fellow and deputy director of the Sumitro Chair for Southeast Asia Studies at the Center for Strategic and International Studies (CSIS) in Washington, DC. Phuong Nguyen is a research associate with the CSIS Sumitro Chair.)

ASEAN-US Security Relations Moving to a New Level


 
east-west-center-asia-pacific-bulletin
Number 256 | April 15, 2014
ANALYSIS

ASEAN-US Security Relations: Moving to a New Level

by Mary Fides Quintos and Joycee Teodoro

Chuck Hagel -The United States has just completed hosting a three-day forum with the ten ASEAN Defense Ministers in Hawai’i, fulfilling US Secretary of Defense Chuck Hagel’s invitation to his ASEAN counterparts during last year’s Shangri-La Dialogue in Singapore. The agenda of the US-ASEAN Defense Ministers’ Forum included a roundtable discussion on humanitarian assistance and disaster response (HA/DR), site visits to the National Oceanic and Atmospheric Administration’s (NOAA) Pacific Tsunami Warning Center and the USS Anchorage–an amphibious transport dock ship designed to respond to crises worldwide–and discussions on various pertinent security issues in the region.

The US-ASEAN Defense Ministers’ Forum marked the beginning of Secretary Hagel’s ten-day trip to Asia which included visits to Japan, China, and Mongolia and is his fourth official visit to the region in less than a year, all part of the ongoing US rebalance policy to Asia. This event was the first meeting that the US hosted, as previous gatherings were conducted on the sidelines of the ASEAN Defense Ministers’ Meeting (ADMM) Retreat and ASEAN Defense Ministers Meeting-Plus (ADMM-Plus) Summit.

The US-ASEAN Defense Ministers’ Forum was conducted under the ambit of the ADMM-Plus which was established in 2007 to serve as a venue for ASEAN to engage with eight dialogue partners–Australia, China, India, Japan, New Zealand, South Korea, Russia, and the United States–in promoting peace and security in the region. To date, ADMM-Plus has established five working groups for practical cooperation covering maritime security, counter-terrorism, humanitarian assistance and disaster management, peacekeeping operations, and military medicine.

This most recent meeting was held amid another wave of tensions on the Korean Peninsula and in the South China Sea. For ASEAN, a recent water cannon incident near Scarborough Shoal involving Filipino fishing vessels and Chinese Coastguard ships, the standoff at Ayungin (Second Thomas) Shoal again between the Philippines and China, and China’s naval exercises at James Shoal which is claimed by Malaysia are all issues of concern.

Indonesia’s strengthening of its military presence in the Natuna Islands which China included in its nine-dash line is another indication of the increasing insecurity and instability in the region. The meeting provided a good opportunity for informal dialogue on the overall security environment in Asia and the possible implications of developments in Ukraine for the principles of sovereignty and territorial integrity within the international order. It also served as an opportunity for the United States to reemphasize that it can be relied upon by ASEAN members in supporting the peaceful settlement of disputes in accordance with international law and in upholding the freedom of navigation and overflight in the region.

With regard to humanitarian assistance and disaster response, Typhoon Haiyan in the Philippines Hishamuddin Husseinlast year and the ongoing search for Malaysia Airlines Flight 370 has demonstrated the lack of capacity of individual ASEAN countries or ASEAN as a bloc to immediately respond to a crisis. Not disregarding the efforts made by the governments of the Philippines and Malaysia, these incidents highlighted the need for the participation of other states particularly in terms of sharing of expertise, technology, and information. The US-ASEAN Defense Ministers’ Forum explored areas where cooperation in these areas can be further strengthened. It was a reiteration of the need for multilateral cooperation in non-traditional security challenges that do not respect territorial boundaries.

The increased frequency of high-level visits by US officials to Asia, the provision of resources to its allies in the region, the reallocation of military hardware, along with ongoing military activities demonstrate that the US intent is to have a closer engagement with the region over the long term. These actions are also manifestations of the US commitment to Asia despite fiscal restraints and the looming crises in other regions where the US is also expected to be involved.

Moreover, they send a strong signal that the United States remains the region’s security guarantor regardless of doubts on its capacity to perform that role. However, the US-led hub-and-spokes alliance security model can be perceived as an act of containment against a particular country, hence the importance that bilateral alliances are supplemented by a multilateral institution that is open and inclusive such as ASEAN in shaping the regional security architecture.

The conclusion of the first US-initiated US-ASEAN Defense Ministers’ Forum highlights the growing importance of ASEAN to the United States, especially if the event becomes more institutionalized. The message is that the United States views ASEAN as a central and strategic player, not only in the US rebalance to Asia but more importantly in the building of a strong and credible regional security architecture for the Asia-Pacific.

The move by the United States to actively engage ASEAN in its rebalance also shows the maturation of ties between them. By acknowledging ASEAN as an important regional actor, the relationship between the two has clearly been elevated. This also raises a key point with regard to respecting ASEAN’s centrality in the region. Economic power and military size notwithstanding, major powers need to recognize that any credible regional security architecture must include ASEAN.

These deliberate and sustained efforts involving ASEAN in devising the region’s security architecture are clear manifestations that the United States is actively engaging more actors in the region for maintaining peace and stability. More importantly, by involving ASEAN, there is the added assurance that the region’s security environment will work under a framework that is not dominated by a single power.

ASEAN, for its part, should see changes in the regional security environment as both opportunities and challenges. While ASEAN has been successful in engaging the major powers in the region, its centrality must continuously be earned. First, it needs to maintain unity amid differences; it should not be influenced by any external actor that seeks to advance its national interests at the expense of regional interests. ASEAN members must learn how to pursue their respective interests not only through national strategies but also through regional unity.

As a community, ASEAN is expected to act as a bloc championing the group’s interests and not only those of the individual member-states. Second, there should be greater commitment to cooperation not only in HA/DR but also in other non-traditional areas of security. Non-traditional security challenges are often transnational in scope and include multiple stakeholders. ASEAN must continuously enhance regional cooperation and coordination in times of crisis, although individual countries must also develop domestic capacity to respond to security challenges.

ASEAN should start addressing this deficit now otherwise institutional mechanisms will remain only on paper. These challenges will force ASEAN to build and improve on its usual practices and move beyond its comfort zone, in the long run benefitting the bloc as it matures institutionally.

About the Authors: Ms. Mary Fides Quintos and Ms. Joycee Teodoro are both Foreign Affairs Research Specialists with the Center for International Relations and Strategic Studies at the Philippines Foreign Service Institute.

The views expressed here belong to the authors alone and do not reflect the institutional stand of the Philippines Foreign Service Institute. Ms. Quintos can be contacted at fides.quintos@gmail.com and Ms. Teodoro at joyteodoro@gmail.com.

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