July 23, 2014
The Guardian view on what the election of Joko Widodo will mean for Indonesia
The Guardian, Tuesday 22 July 2014 19.55 BST
July 23, 2014
The Guardian, Tuesday 22 July 2014 19.55 BST
July 22, 2014
Close to 500 people flooded the roads near the embassies of Russia, Ukraine and also the United Nations office in Kuala Lumpur today in a BN-organised demonstration to seek justice for the victims of the MH17 tragedy. Clad in black t-shirts which read “Justice 4 MH17″, the protestors also included members of several NGOs including right-wing NGO Perkasa, reports Malaysiakini.
Lest we forget about the plight of the Palestinians in Gaza who are victims of Israeli aggression. There must be justice for them too. We criticize Russia but we forget that the United States is supporting Israel and US weapons are being deployed in Gaza. Russia in turn supports the Bashir Al–Assad regime. What is the difference? It is the big power game of using proxies to fight their wars. Please listen to Chris Hedges in this video (below).–Din Merican
July 22, 2014
by Tan Sri Dr. Munir Majid@www.thestar.com.my
Malaysia should work in this alliance of states to bring this crime against humanity to the International Criminal Court (ICC). Malaysia has not signed the Rome Statute of the ICC, but has expressed interest to do so since March 2011. Malaysia should sign it now.
MOUNTING evidence points to Ukrainian separatist and Russian responsibility in the shooting down of MH17. And, indeed, video shots as clear as daylight show the Russian-supported rebels stealing and looting at the wreckage, tampering with and erasing evidence of the grisly deed, carrying away the black box – and unconscionably carting away and refusing to hand over the dead bodies for identification and decent burial.
Given our inability to strike back hard, the options Malaysia has in response to the downing of MH17 are limited to diplomatic and legal measures. To make these measures effective, the plan of action must be well prepared: form an alliance of victim nations and pursue the perpetrators vigorously.
The options Malaysia has, given limited power and influence, will be subjected to international geopolitical considerations and the vagaries of international legal process. However, it does not mean we are powerless to do anything except to confine ourselves to big, loud statements.
We can seek the support of kindred spirits to bring to justice the perpetrators who downed MH17 with the BUK (SA-11) surface-to-air missile. An alliance of victim na-tions, comprising countries such as the Netherlands and Australia, should be formed. States willing to support the investigation into the horrible act of terror, even if it was a mistake, should be engaged.
This alliance should be collecting its own evidence from now. It actions should not wait for an international investigation which looks unlikely to be unimpeded. The United Nations can condemn and call for an international investigation. These resolutions, as we know, are more often than not disregarded.
Free access to the area where the wreckage and mutilated bodies are strewn has been denied. Evidence from the crashed plane has been removed. Even if the black box would only register the explosion when the aircraft was struck and even if the BUK missile self-destructs on impact, there are voice and communications recordings which would be relevant. So why has the black box been taken away?
At the same time, people in the rebel-held territory of the Ukraine have looted the wreckage, the common crime of thievery following a heinous crime against humanity.
All these acts – from the firing of the missile to the removal of evidence to the denial of access to the looting – violate clear rules of international law. Even if it cannot be positively identified who fired the missile and rebels who have trespassed the law will not be released, the available evidence points the finger at Russia.
Russia provides the arms. Russia protects the rebels. Russia helps them violate international law and the sanctity of the victims. Russia calls the shots.The intercepted conversations, first on the firing of the missile and its aftermath and next on the removal of evidence and bodies at Russian behest should be tested for their authenticity.
When confirmed, it is good evidence to go by in the process of bringing the perpetrators to justice. American intelligence reports now show the trajectory of the missile and, subsequently, the transportation of remaining missiles back into Russian territory.
The Chicago convention of the International Civil Aviation Organisation (ICAO) provides clear rules on the conduct of investigation, on the safety of civil air flight and against the tampering of evidence.
The Ukrainian government, although it does not control the expanse of territory where the aircraft came down, has been making numerous statements about the removal of evidence and rebel use with Russian aid of the BUK missiles, which had downed at least two of its military aircraft. It should hand over what evidence it has.
In the case where Korean Airlines Flight KAL007 was shot down on September 1, 1983 by a Soviet SU-15 interceptor jet, the ICAO condemned the attack. The United States Federal Aviation Authority revoked the licence of the Soviet airliner Aeroflot to fly to and from the US, a denial that was not lifted until April 29, 1986.
Similar sanctions should be considered by ICAO, the US and other countries in the case of MH17 amidst the mounting evidence pointing at Russia and the consequences of its actions. There should be no fear to act against a country in the horrible wrong, which might otherwise not just get away with it but would conspire to violate further international norms of behaviour.
Vladimir Putin has brought Russia back to the Soviet Union days of lies and deceit, threat and bluster, coupled with his own megalomania. Putin is a bully, a thug world leaders find extremely difficult to deal with. At a meeting with Angela Merkel in 2007, his Labrador Koni was allowed in to unnerve the German Chancellor, who was bitten by a dog in the early years of her life.
The black arts operate at the Kremlin. It is little wonder that thuggish behaviour at the centre sends signals for drunken gangsterism among rebels Putin supports.
With KAL007, the Soviet Union suppressed evidence which was not released until eight years later, following the collapse of the communist regime. Now there is another regime seeking to resurrect that control of people, territories and information with no regard for the rights and lives of others. This is unacceptable.
Whatever evidence is available should be examined for the pursuit of civil damages for the acts of violation and denial. A group led by the Dutch, who suffered the most number of deaths in this act of terror, should be set up to pursue this line of action. Malaysia Airlines, whose reputation in the industry has been severely but unjustly damaged, should join in this effort to extract some measure of recompense.
More importantly, Malaysia should work in this alliance of states to bring this crime against humanity to the International Criminal Court (ICC). Malaysia has not signed the Rome Statute of the ICC, but has expressed interest to do so since March 2011. Malaysia should sign it now.
It can then join forces with states such as the Netherlands and Australia, who are signatories, to institute legal action against individuals and agencies in the Ukraine and Russia, who are also signatories.
Let’s be realistic. After the initial shock-horror reactions, states will return to tending to their own affairs to serve their own national interests and, in time, will not be so incensed by murderous violation of international safety, violation of laws, and acts of brazen and drunken thuggery.
Even now, despite his most welcome strong support and call for ASEAN solidarity with Malaysia, President Susilo Bambang Yudhoyono cannot be expected to put Indonesian interests second. Indeed his spokesman said Indonesian relations with Russia were excellent and there was no reason to disturb them.
The Chinese ambassador at the UN advised caution and not jumping to conclusions, as the Security Council issued a statement last Friday condemning the attack on MH17 and called, in hope more than expectation, for full, thorough and independent investigation.
It would have been a different statement if most of the passengers had been Chinese, or Chinese interests were damaged and at risk. This is the way of the world. Malaysia must look after its own interests.
When it is stated we want to bring the perpetrators to justice, we must be clear on how we might get there. We should be clear about the avenues open to us and about states sharing a common interest who can be persuaded to act with us. We should determine our options and how we might realise them.
We owe it (how often this is said) to the victims and to our national airline which has suffered so much, maybe fatally this time, to bring the perpetrators to justice. We must show these are not mere words that are uttered lightly. We have the duty to protect our citizens and to ensure safe passage of our vessels in accordance with international law and practices.
The downing of MH17 is a tragedy of horrific proportions. We grieve. But we must also do something about it to get at the evil perpetrators. It is a matter of national interest and honour.
Tan Sri Dr Munir Majid is Visiting Senior Fellow with LSE IDEAS, a centre for the study of international affairs, diplomacy and grand strategy. He is also chairman of CARI and Bank Muamalat. The views expressed here are entirely his own.
July 20, 2014
by Tony Gosling
Given a previous Malaysian flight’s mysterious disappearance it’s likely he was not the only boarding passenger who was a little nervous when he joked on social media, “If we disappear, this is what the plane looks like.”
Settling down on the flight then watching the moving map display on the seat in front, you might perhaps see the word ‘Ukraine’ edge its way across from the right of the screen. Would you not be a little uneasy in the knowledge that quite a lot of planes have been blown out of the skies there recently? That there’s a war on?
Check out David Cenciotti’s ‘Aviationist’ blog and you’ll see that 10 aircraft have been shot down in eastern Ukraine in recent weeks. Five MI-24 Hind and two MI-8 Hip helicopters, as well as military transport planes, one AN-2 and an AN-30. On July 8, the latest transporter, an Il-76 was shot down at Lugansk when the State Aviation Administration of Ukraine closed their airspace indefinitely to civilian aircraft. But why did the air traffic control regulators keep directing planes over eastern Ukrainian territory at higher altitudes?
Hindsight is a wonderful thing, but on any of hundreds of flights over Ukraine in the past month I might even have been tempted to tug the sleeve of one of the cabin staff. Asking them brusquely to get reassurance from the captain straight away that we would not be passing through the very airspace where so many planes had so recently been brought down.
So what was the plane doing there?
Malaysian Airlines was quick to point out that the Ukraine war zone had been declared ‘safe’ for them to fly over by the UN’s International Civil Aviation Organization (ICAO). Was this the same authority that was party to closing Europe and the North Atlantic for almost a week for Eyjafjallajökull’s ‘volcanic ash cloud’ drifting out of Iceland? Canceling the flights of around 10 million passengers? Yet they fail to close a war zone where they know ground-to-air missiles are flying around?
I do hope ICAO Regional Director Luis Fonseca de Almeida will apologize in person to all the victims’ families before he resigns and hands himself in for questioning. Of course, this is not the only arm of the UN and other parts of global governance to be failing, crippled, and where the people appointed to run it seem to be pliable stooges rather than independent-minded enough to be up to the job? Let’s hope too that the Malaysian authorities will heed the voices in their professions warning against relying too much on help from international bodies which may be used against them.
As for who’s responsible, it’s unlikely the shooting down was a random ‘pot shot’ by Ukrainian separatists who would have nothing to gain and only further isolate themselves by such an act. There are also doubts as to whether they have access to this sort of weapon system, more advanced than any that appears to have been used so far. Which is presumably why ICAO and Malaysian Airlines thought 30,000-foot high airliners were safe from shoulder-launched missiles.
Appearing on BBC TV’s Newsnight, weapon systems expert Doug Richardson said the relatively high altitude airliners fly at offers “no protection” from what he believes was probably a former Soviet ‘Buk’ missile, developed in the 1970s, that did the dirty deed.
Shot across bows of Russian presidential jet?
Then there is the proximity of the MH17 shoot-down to Russian President Vladimir Putin himself, who happened to be flying home, west to east, from Brazil. Russia’s equivalent to Air Force One, the Ilyushin-96 ‘Board One’ was roughly half-an-hour’s flying time, about 200 miles (320km), behind the Malaysian plane as it passed near Warsaw just before the doomed jet entered Ukrainian airspace, which the presidential jet avoided.
As the Western powers’ anti-Russian sanctions are failing to bite and the Kiev government they back is losing on the ground, this may indicate a NATO motive for the attack. If so this sort of audacious act may also be an early test of loyalties by the West’s power elite of Britain’s new Foreign Secretary Philip Hammond and Defense Secretary Michael Fallon. The message being, “Watch that you don’t get any troublesome ideas of making your own minds up on the matter.”
The timing of the attack is intriguing too, being the day after a historic agreement Putin signed, along with Chinese president Xi Jinping, in the Brazilian city of Fortaleza to create a BRICS World Development Bank. Quite possibly the greatest challenge since Bretton Woods in 1944, to the dubious monopoly of the World Bank, was indeed signed on Wednesday by Brazil, Russia, India, China and South Africa.
For those that muse on the obsessive nature of those that spend their lives pursuing ever more money until the day they die, there is a shocking recent history of nations and their leaders coming to a sticky end that dare to oppose the global monopoly of the petrodollar, and that of the enforcers at the World Bank and IMF.
Iraqi President Saddam Hussein didn’t know what fate lay ahead when he announced in November 2000 that he was taking the first steps toward setting up a bourse, or oil exchange, which traded in euro rather than dollars. Two-and-a-half years later, weapons of mass destruction that didn’t exist had been ‘found’ in his country and the bombs were raining down, Saddam and his fellow countrymen was illegally invaded under orders from Messrs. Bush and Blair and the nation plunged into the sort of chaotic hell which is now spreading like a plague around the Middle East and from which one wonders if it will ever emerge.
Similarly when debt-free Libya’s Colonel Gaddafi and his shuttle diplomacy had secured agreement from enough African leaders to announce the creation of an African reserve currency, the African gold dinar, he found his country up in front of the United Nations Security Council on a fabricated charge of ‘bombing his own people’. On May 1, 2011, the weekend of William & Kate’s royal wedding in London, one of Gaddafi’s sons and three of his grandsons were blown to pieces in an airstrike and NATO began to bomb the country – blessed with the lowest infant mortality rate on the African continent – back to the Stone Age.
Although no ground troops were allowed by the UN, mercenaries were sent in, and on October 21, Gaddafi was finally executed with a bayonet up his backside. National governments in the West these days really do seem to have become an irrelevant side show when the power of the military dances to the tune of the unrestrained mega-resourced muscle of the IMF and its friends.
Why Malaysian Airlines?
‘To lose one plane may be regarded as a misfortune; to lose two looks like carelessness.’ Though it might seem trite to borrow from Oscar Wilde’s ‘Importance of Being Earnest’, is it really pure coincidence that both this and the March ‘disappearance’ of MH370 have been with unfortunate Malaysian jets? Neither appears to have been an ‘accident’, so could both be acts of aggression, acts of war against Malaysia? If so why, and by whom?
Malaysia is a genuinely independent nation torn between East and West. Like Ukraine and so many other medium-sized independent countries, Malaysia is finding it very difficult to stay independent. As the world inches towards what many believe may become an enormous world war, brought on by the collapse of capitalism, it is becoming increasingly impossible for small and medium-sized nations to remain independent. So yes, there is likely to be pressure on the Malaysian leadership to make alliances and this, perhaps, could simply be an attempt to intimidate, to force their hand.
It’s comforting to repeat that nobody wants an economic collapse and nobody wants a world war, but it wouldn’t be the first time that ruling elites have deployed these two chestnuts as a ‘double whammy’. Making a fortune out of a crash is easy when you can see it coming and, as well as being an archaic ‘human sacrifice’ to the old gods, war is the best way to distract everybody who might be thinking of locking you up. For anyone who dares to look, the evidence is there that the US decided to step up the projection of their already ruinous military power at the time of the 9/11 attacks, probably as a reaction to the waning power of the dollar.
As Staff Sergeant Jimmy Massey, part of Iraq Veterans Against the War and of the US chapter of Veterans For Peace, said when interviewed for Venezuelan State Television, “There are no rules, this is World War III. The rule book went out the window on September 11th..”
As a regular attendee at US Marine Corps intelligence briefings Jimmy was in a position to know rather more than the West’s public, media or politicians do about how far down the mission line covert policies of the White House and Pentagon have crept.
And here’s the rub. Malaysia are one of the world’s feircest opponents of the phoney ‘war on terror’, former Malaysian Federal Court judge Abdul Kadir Sulaiman even convening a tribunal in 2011 to try Bush and Blair for war crimes. Endorsed by former Malaysian premier Mahathir Mohamad the tribunal found: “Unlawful use of force threatens the world to return to a state of lawlessness. The acts of the accused were unlawful.” Malaysia has done what the UN and The Hague’s International Criminal Court dare not.
European and North American countries have realized too late in the day that only by keeping stiff exchange controls can they stay sovereign nations. Without them international finance capital will move in with infinite resources to destroy everything that stands in its way, from media to parliaments, nothing can withstand them. Even the courts now are finally about to be co-opted into the service of the tax evading transnational corporations should the secretly-negotiated Transatlantic Trade and Investment Partnership (TTIP) be signed later this year.
The courts will then be theirs to overturn any parliamentary decision the corporations don’t like, and they have been saving up lots and lots of cash to pay the very best lawyers in the world, to make sure they win.
No shortage of people who’ll shoot down an airliner for you
With the privatization of war in the West, points out UK charity War On Want, “repeated human rights abuses” are being “perpetrated by mercenaries, including the indiscriminate killing of civilians and torture. Unaccountable and unregulated, these companies are complicit in human rights abuses across the world, putting profit before people and fanning the flames of war.”
So if you want somebody to fight a nuclear war, conduct a massacre, or shoot down an airliner for you nowadays you can buy those services on the free market. The proliferation of private military companies since 9/11 suits the military industrial complex very nicely, thank you.
But how has the world come to the point where such companies have state protection and business is, quite literally, booming?
The problem again, is the global banking giants who have been shown in court, time and time again, to be hand in glove with the intelligence services and international drug cartels. Whether it’s Iran Contra with drugs flying one way and guns the other, or HSBC’s piffling $2 billion fine in 2012 for money laundering, they are not just criminals who are above the law, they are now shaping it in their own private interest.
It is not just the Asian, Pacific and South American power blocs they seek to control who will be watching them, but their own people, those they depend on to survive. With every evil act they think they’ve got away with, they are painting themselves into a corner as the Trans-Atlantic edifice they are trying to control crumbles beneath them.
The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.
July 20, 2014
This would be the cornerstone of his new administration – a radical approach in ‘soft diplomacy’. One designed to defuse tensions with America’s former adversary and pave the way for warmer ties. This was a monumental undertaking, but with a young and vibrant president now in the White House, it looked like it might actually have a chance of succeeding.
In Geneva in March 2009, we witnessed what appeared to be an initial thawing in relations between America and Russia. Secretary of State Hillary Clinton met with Foreign Minister Sergei Lavrov, and with the cameras of the world looking on, she presented him with a big red button made out of plastic.
The word ‘reset’ was prominently stenciled on it, accompanied by a Russian translation. However, in an unfortunate gaffe – perhaps an omen of things to come – Clinton’s aides had messed up the Cyrillic words on the button.
Instead of ‘perezagruzka’, which would have been the correct translation, the one that was used instead was ‘peregruzka’, which meant ‘overcharged’. It was an embarrassing mistake, but Lavrov appeared to be a good sport, laughing off the error.
Good start short-lived
Around the same time, President Obama noted that Vladimir Putin (below) had recently stepped down as President of Russia, and in his place, Dmitri Medvedev had ascended to the highest office in the land. Like Obama, Medvedev was a former academic and of a similar age.
Naturally enough, Obama perceived the new Russian President to be a transformational figure, and it was in that spirit that he wrote a secret letter and instructed a trusted aide to hand‑deliver it to Moscow. In the letter, Obama expressed a willingness to make American concessions in return for Russian goodwill.
In an age of wireless communication, this unorthodox approach was a throwback to simpler times. Nothing short of remarkable. In Malaysian culture, we might call this ‘giving face’.
In July 2009, Obama, encouraged by Medvedev’s optimistic reply, flew into Moscow for his first official visit to the nation. The two leaders met in congenial fashion. They seemed like a natural fit for each other. And a grinning Obama took the opportunity to solidify America’s commitment to a reset in relations with Russia. All in all, it looked like an unqualified triumph for hope and change. Not bad for a president who had been in office for barely six months.
Russian reset in tatters
Five years on, however, Obama’s Russian reset is in tatters, and the world we find ourselves in now is a far cry from that buoyant period. Since 2012, Vladimir Putin has regained presidential power, and he is currently pursuing an agenda of ultra-nationalist expansion. A former KGB officer in his youth, he has spent a lifetime perfecting the black arts of murder and intimidation.
As a result, Russia today has become a nightmarish country. It’s a place where free speech is crushed, political dissidents are assassinated, and government‑sanctioned thugs roam the streets, attacking everyone from homosexuals to foreign students.
Putin has placed the whole of Russia under his iron will, and he is now driven to expand its influence abroad. Soft diplomacy is not what runs in this man’s veins. Rather, he craves the aggressive projection of power, Soviet‑style. The invasion by proxy of Eastern Ukraine and the senseless shoot‑down of Flight MH17 serves as a testament to his vision.
While the world mourns this horrific tragedy, President Obama, for his part, is looking increasingly haggard. Right‑wing critics have savaged his attempt at soft diplomacy with Russia, calling it naive and idealistic. They claim it never should have been attempted in the first place. The Russians, it would seem, have perceived Obama’s overtures as a sign of weakness, and they have since exploited it to the fullest.
Malaysia blissfully ignorant
In Malaysia, most of us have remained blissfully ignorant of the storm that’s been brewing for the past couple of years. Even as Putin’s brand of ultra-nationalist fervour has taken hold, we have chosen to invest in the Russian aerospace, oil and gas industries. We have sent our children to study the Russian health sciences. And even after the crisis in Ukraine erupted, our political leaders did not respond with a note of protest. No one had the gumption to call a spade a spade.
But now, like it or not, we have been drawn into Vladimir Putin’s dysfunctional world order. It’s not what we asked for. It’s certainly not what we wanted. But innocent blood has been spilled; hundreds of civilians have been murdered with no warning.
And to make the atrocity worse, Putin loyalists have interfered with the site of the crash, making a fair and transparent investigation all but impossible. In this time of grief, we need to ask ourselves some hard questions. With the failure of soft diplomacy, who will now bring Putin’s Russia to account? Who will choose to look at the crime instead of averting their eyes?
JOHN LING is a Malaysian‑born author based in New Zealand. You can find out more about him and his work at johnling.net
July 14, 2014
by Josh Hong@www.malaysiakini.com
I once saw a picture at the German National Museum of Contemporary History in Bonn, the capital of the former West Germany. Dated July 4, 1954, it depicted a group of men with broken teeth, crutches and in worn-out clothes shouting for joy over West Germany’s victory at the FIFA World Cup Final.
The West Germans had just barely recovered from the horrific World War II, and Hungary had been widely tipped to win the title. Still, West Germany went on to claim the crown as a dark horse, and the game is known historically as ‘Das Wunder von Bern’ (‘the Miracle of Bern’; Bern is the Swiss capital where the final was held).
The 1954 World Cup was particularly meaningful to West Germany for several reasons: it was the first time that Das Lied Der Deutschen (the Song of the Germans) was played at an international sporting event since the end of WWII, signifying the return of the country into the world community, while defeating the then communist-ruled Hungary was hailed as an ideological triumph.
Two decades later, West Germany was showered with greater global recognition when it hosted the 1974 World Cup and was crowned champion. If 1954 symbolised West Germany’s international acceptance, 1974 probably took on a greater significance in that the country demonstrated proudly to the world its reemergence as an economic power, rising from the ashes of the catastrophic Nazi regime (which hosted the 1936 Olympics in Berlin), preceded also by the 1972 Olympics.
It was most ironic that, while Britain and France, the two WWII victors, were mired in incessant labour strikes as industrial production came to a virtual halt, West Germany’s economic development and standard of living continued to improve by leaps and bounds.
Then came the eventful autumn of 1989, when the Eastern Blocs were on the verge of drastic revolution. Many East Germans drove their Trabants right up to the Berlin Wall and demanded that the gates be opened.
When their calls went unanswered, they took out sledgehammers and chisels and started dismantling the wall themselves, and the (in)famous wall did come tumbling down within weeks. Welcoming the Ossis was not only the far advanced Volkswagen produced by the Wessis, but also the abundantly available commodities in the shops in West Berlin.
When West Germany beat Argentina to claim the World Cup title on July 8, 1990, East German fans erupted in euphoria publicly for the first time. Three months later, East and West Germany became history.
Rebranding the country
When the reunified Germany hosted the 2006 World Cup, the German government at the time made use of the opportunity to rebrand the country as a Land of Ideas (Land der Ideen), seeking to promote to the world Johann Wolfgang von Goethe, Beethoven, philosopher Jürgen Habermas and many other modern achievements alongside football.
It represented a conscious effort on the part of the Germans to remind the international community that, having faced up to historical issues squarely, it was time that Germany should be free to celebrate its achievements for and contributions to the world.
The reunified Germany failed to win the World Cup in 2006, but many a European country was impressed with a new Germany that was not only confident and forward-looking, but also warm and hospitable, so much so that the British tabloids, usually relishing in insulting Germany with WWII references, toned down their wording and English fans could be seen waving the German flag during the semi-final between Germany and Argentina.
Now that Germany has once again made it to the final, the question whether the reunified country will win a historic World Cup is again in the mind of many, for a win on this coming Sunday (Brazilian time) would go a long way in affirming Germany’s coming of age, and I wish them all the best.
After all, no other competition arouses one’s nationalistic sentiment and sharpens political differences more than football – with the exception of an actual war. Seen in this light, what Germany destroyed last Tuesday was not just Brazil’s world status as a land of football, but it’s very national identity as well.
For historical reasons, the Germans are not used to overt symbols of nationalism, but it does not mean they should tolerate idiotic insults such as Bung Mokhtar’s ‘Hitler tweet’ in the wake of Germany’s thumping victory over Brazil. It is outrageous because no other countries have demonstrated so much goodwill and sincerity in dealing with historical baggage as Germany, especially when the country has shown no signs of relenting in pursuing justice for the victims.
Bung Mokhtar’s brainless tweet is more than a personal gaffe because it exposes the quality (or the lack thereof) of UMNO politicians. The fact that he continues to be a wakil rakyat is an utter shame to Malaysia.
NOTE: Germany defeated Argentina 1-0 in extra time on Sunday July 13, 2014 in Rio . It was thriller. witnessed by Chancellor Angela Merkel and a strong contingent of German fans while the rest of the world witnessed a spectacle of great sportsmanship and fine football. –Din Merican
JOSH HONG studied politics at London Metropolitan University and the School of Oriental and African Studies, University of London. A keen watcher of domestic and international politics, he longs for a day when Malaysians will learn and master the art of self-mockery, and enjoy life to the full in spite of politicians.
July 13, 2014
by 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 and 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
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.
July 9, 2014
July 7, 2014
It is an honor to deliver the inaugural Michel Camdessus Central Banking Lecture. Michel Camdessus served with distinction as governor of the Banque de France and was one of the longest-serving managing directors of the International Monetary Fund (IMF).
In these roles, he was well aware of the challenges central banks face in their pursuit of price stability and full employment, and of the interconnections between macroeconomic stability and financial stability. Those interconnections were apparent in the Latin American debt crisis, the Mexican peso crisis, and the East Asian financial crisis, to which the IMF responded under Camdessus’s leadership. These episodes took place in emerging market economies, but since then, the global financial crisis and, more recently, the euro crisis have reminded us that no economy is immune from financial instability and the adverse effects on employment, economic activity, and price stability that financial crises cause.
The recent crises have appropriately increased the focus on financial stability at central banks around the world. At the Federal Reserve, we have devoted substantially increased resources to monitoring financial stability and have refocused our regulatory and supervisory efforts to limit the buildup of systemic risk. There have also been calls, from some quarters, for a fundamental reconsideration of the goals and strategy of monetary policy. Today I will focus on a key question spurred by this debate: How should monetary and other policymakers balance macroprudential approaches and monetary policy in the pursuit of financial stability?
In my remarks, I will argue that monetary policy faces significant limitations as a tool to promote financial stability: Its effects on financial vulnerabilities, such as excessive leverage and maturity transformation, are not well understood and are less direct than a regulatory or supervisory approach; in addition, efforts to promote financial stability through adjustments in interest rates would increase the volatility of inflation and employment. As a result, I believe a macroprudential approach to supervision and regulation needs to play the primary role. Such an approach should focus on “through the cycle” standards that increase the resilience of the financial system to adverse shocks and on efforts to ensure that the regulatory umbrella will cover previously uncovered systemically important institutions and activities. These efforts should be complemented by the use of countercyclical macroprudential tools, a few of which I will describe. But experience with such tools remains limited, and we have much to learn to use these measures effectively.
I am also mindful of the potential for low interest rates to heighten the incentives of financial market participants to reach for yield and take on risk, and of the limits of macroprudential measures to address these and other financial stability concerns. Accordingly, there may be times when an adjustment in monetary policy may be appropriate to ameliorate emerging risks to financial stability. Because of this possibility, and because transparency enhances the effectiveness of monetary policy, it is crucial that policymakers communicate their views clearly on the risks to financial stability and how such risks influence the appropriate monetary policy stance. I will conclude by briefly laying out how financial stability concerns affect my current assessment of the appropriate stance of monetary policy.
Balancing Financial Stability with Price Stability: Lessons from the Recent Past
When considering the connections between financial stability, price stability, and full employment, the discussion often focuses on the potential for conflicts among these objectives. Such situations are important, since it is only when conflicts arise that policymakers need to weigh the tradeoffs among multiple objectives. But it is important to note that, in many ways, the pursuit of financial stability is complementary to the goals of price stability and full employment. A smoothly operating financial system promotes the efficient allocation of saving and investment, facilitating economic growth and employment. A strong labor market contributes to healthy household and business balance sheets, thereby contributing to financial stability. And price stability contributes not only to the efficient allocation of resources in the real economy, but also to reduced uncertainty and efficient pricing in financial markets, which in turn supports financial stability.
Despite these complementarities, monetary policy has powerful effects on risk taking. Indeed, the accommodative policy stance of recent years has supported the recovery, in part, by providing increased incentives for households and businesses to take on the risk of potentially productive investments. But such risk-taking can go too far, thereby contributing to fragility in the financial system.1 This possibility does not obviate the need for monetary policy to focus primarily on price stability and full employment–the costs to society in terms of deviations from price stability and full employment that would arise would likely be significant. I will highlight these potential costs and the clear need for a macroprudential policy approach by looking back at the vulnerabilities in the U.S. economy before the crisis. I will also discuss how these vulnerabilities might have been affected had the Federal Reserve tightened monetary policy in the mid-2000s to promote financial stability.
Looking Back at the Mid-2000s
Although it was not recognized at the time, risks to financial stability within the United States escalated to a dangerous level in the mid-2000s. During that period, policymakers–myself included–were aware that homes seemed overvalued by a number of sensible metrics and that home prices might decline, although there was disagreement about how likely such a decline was and how large it might be. What was not appreciated was how serious the fallout from such a decline would be for the financial sector and the macroeconomy. Policymakers failed to anticipate that the reversal of the house price bubble would trigger the most significant financial crisis in the United States since the Great Depression because that reversal interacted with critical vulnerabilities in the financial system and in government regulation.
In the private sector, key vulnerabilities included high levels of leverage, excessive dependence on unstable short-term funding, weak underwriting of loans, deficiencies in risk measurement and risk management, and the use of exotic financial instruments that redistributed risk in nontransparent ways.
In the public sector, vulnerabilities included gaps in the regulatory structure that allowed some systemically important financial institutions (SIFIs) and markets to escape comprehensive supervision, failures of supervisors to effectively use their existing powers, and insufficient attention to threats to the stability of the system as a whole.
It is not uncommon to hear it suggested that the crisis could have been prevented or significantly mitigated by substantially tighter monetary policy in the mid-2000s. At the very least, however, such an approach would have been insufficient to address the full range of critical vulnerabilities I have just described. A tighter monetary policy would not have closed the gaps in the regulatory structure that allowed some SIFIs and markets to escape comprehensive supervision; a tighter monetary policy would not have shifted supervisory attention to a macroprudential perspective; and a tighter monetary policy would not have increased the transparency of exotic financial instruments or ameliorated deficiencies in risk measurement and risk management within the private sector.
Some advocates of the view that a substantially tighter monetary policy may have helped prevent the crisis might acknowledge these points, but they might also argue that a tighter monetary policy could have limited the rise in house prices, the use of leverage within the private sector, and the excessive reliance on short-term funding, and that each of these channels would have contained–or perhaps even prevented–the worst effects of the crisis.
A review of the empirical evidence suggests that the level of interest rates does influence house prices, leverage, and maturity transformation, but it is also clear that a tighter monetary policy would have been a very blunt tool: Substantially mitigating the emerging financial vulnerabilities through higher interest rates would have had sizable adverse effects in terms of higher unemployment. In particular, a range of studies conclude that tighter monetary policy during the mid-2000s might have contributed to a slower rate of house price appreciation. But the magnitude of this effect would likely have been modest relative to the substantial momentum in these prices over the period; hence, a very significant tightening, with large increases in unemployment, would have been necessary to halt the housing bubble.2 Such a slowing in the housing market might have constrained the rise in household leverage, as mortgage debt growth would have been slower. But the job losses and higher interest payments associated with higher interest rates would have directly weakened households’ ability to repay previous debts, suggesting that a sizable tightening may have mitigated vulnerabilities in household balance sheets only modestly.3
Similar mixed results would have been likely with regard to the effects of tighter monetary policy on leverage and reliance on short-term financing within the financial sector. In particular, the evidence that low interest rates contribute to increased leverage and reliance on short-term funding points toward some ability of higher interest rates to lessen these vulnerabilities, but that evidence is typically consistent with a sizable range of quantitative effects or alternative views regarding the causal channels at work.4 Furthermore, vulnerabilities from excessive leverage and reliance on short-term funding in the financial sector grew rapidly through the middle of 2007, well after monetary policy had already tightened significantly relative to the accommodative policy stance of 2003 and early 2004. In my assessment, macroprudential policies, such as regulatory limits on leverage and short-term funding, as well as stronger underwriting standards, represent far more direct and likely more effective methods to address these vulnerabilities.5
Recent International Experience
Turning to recent experience outside the United States, a number of foreign economies have seen rapidly rising real estate prices, which has raised financial stability concerns despite, in some cases, high unemployment and shortfalls in inflation relative to the central bank’s inflation target.6 These developments have prompted debate on how to best balance the use of monetary policy and macroprudential tools in promoting financial stability.
For example, Canada, Switzerland, and the United Kingdom have expressed a willingness to use monetary policy to address financial stability concerns in unusual circumstances, but they have similarly concluded that macroprudential policies should serve as the primary tool to pursue financial stability. In Canada, with inflation below target and output growth quite subdued, the Bank of Canada has kept the policy rate at or below 1 percent, but limits on mortgage lending were tightened in each of the years from 2009 through 2012, including changes in loan-to-value and debt-to-income caps, among other measures.7 In contrast, in Norway and Sweden, monetary policy decisions have been influenced somewhat by financial stability concerns, but the steps taken have been limited. In Norway, policymakers increased the policy interest rate in mid-2010 when they were facing escalating household debt despite inflation below target and output below capacity, in part as a way of “guarding against the risk of future imbalances.”8 Similarly, Sweden’s Riksbank held its policy rate “slightly higher than we would have done otherwise” because of financial stability concerns.9 In both cases, macroprudential actions were also either taken or under consideration.
In reviewing these experiences, it seems clear that monetary policymakers have perceived significant hurdles to using sizable adjustments in monetary policy to contain financial stability risks. Some proponents of a larger monetary policy response to financial stability concerns might argue that these perceived hurdles have been overblown and that financial stability concerns should be elevated significantly in monetary policy discussions. A more balanced assessment, in my view, would be that increased focus on financial stability risks is appropriate in monetary policy discussions, but the potential cost, in terms of diminished macroeconomic performance, is likely to be too great to give financial stability risks a central role in monetary policy decisions, at least most of the time.
If monetary policy is not to play a central role in addressing financial stability issues, this task must rely on macroprudential policies. In this regard, I would note that here, too, policymakers abroad have made important strides, and not just those in the advanced economies. Emerging market economies have in many ways been leaders in applying macroprudential policy tools, employing in recent years a variety of restrictions on real estate lending or other activities that were perceived to create vulnerabilities.10 Although it is probably too soon to draw clear conclusions, these experiences will help inform our understanding of these policies and their efficacy.
Promoting Financial Stability through a Macroprudential Approach
If macroprudential tools are to play the primary role in the pursuit of financial stability, questions remain on which macroprudential tools are likely to be most effective, what the limits of such tools may be, and when, because of such limits, it may be appropriate to adjust monetary policy to “get in the cracks” that persist in the macroprudential framework.11
In weighing these questions, I find it helpful to distinguish between tools that primarily build through-the-cycle resilience against adverse financial developments and those primarily intended to lean against financial excesses.12
Tools that build resilience aim to make the financial system better able to withstand unexpected adverse developments. For example, requirements to hold sufficient loss-absorbing capital make financial institutions more resilient in the face of unexpected losses. Such requirements take on a macroprudential dimension when they are most stringent for the largest, most systemically important firms, thereby minimizing the risk that losses at such firms will reverberate through the financial system. Resilience against runs can be enhanced both by stronger capital positions and requirements for sufficient liquidity buffers among the most interconnected firms. An effective resolution regime for SIFIs can also enhance resilience by better protecting the financial system from contagion in the event of a SIFI collapse. Further, the stability of the financial system can be enhanced through measures that address interconnectedness between financial firms, such as margin and central clearing requirements for derivatives transactions. Finally, a regulatory umbrella wide enough to cover previous gaps in the regulation and supervision of systemically important firms and markets can help prevent risks from migrating to areas where they are difficult to detect or address.
In the United States, considerable progress has been made on each of these fronts. Changes in bank capital regulations, which will include a surcharge for systemically important institutions, have significantly increased requirements for loss-absorbing capital at the largest banking firms. The Federal Reserve’s stress tests and Comprehensive Capital Analysis and Review process require that large financial institutions maintain sufficient capital to weather severe shocks, and that they demonstrate that their internal capital planning processes are effective, while providing perspective on the loss-absorbing capacity across a large swath of the financial system. The Basel III framework also includes liquidity requirements designed to mitigate excessive reliance by global banks on short-term wholesale funding.
Oversight of the U.S. shadow banking system also has been strengthened. The new Financial Stability Oversight Council has designated some nonbank financial firms as systemically important institutions that are subject to consolidated supervision by the Federal Reserve. In addition, measures are being undertaken to address some of the potential sources of instability in short-term wholesale funding markets, including reforms to the triparty repo market and money market mutual funds–although progress in these areas has, at times, been frustratingly slow.
Additional measures should be taken to address residual risks in the short-term wholesale funding markets. Some of these measures–such as requiring firms to hold larger amounts of capital, stable funding, or highly liquid assets based on use of short-term wholesale funding–would likely apply only to the largest, most complex organizations. Other measures–such as minimum margin requirements for repurchase agreements and other securities financing transactions–could, at least in principle, apply on a marketwide basis. To the extent that minimum margin requirements lead to more conservative margin levels during normal and exuberant times, they could help avoid potentially destabilizing procyclical margin increases in short-term wholesale funding markets during times of stress.
Leaning Against the Wind
At this point, it should be clear that I think efforts to build resilience in the financial system are critical to minimizing the chance of financial instability and the potential damage from it. This focus on resilience differs from much of the public discussion, which often concerns whether some particular asset class is experiencing a “bubble” and whether policymakers should attempt to pop the bubble. Because a resilient financial system can withstand unexpected developments, identification of bubbles is less critical.
Nonetheless, some macroprudential tools can be adjusted in a manner that may further enhance resilience as risks emerge. In addition, macroprudential tools can, in some cases, be targeted at areas of concern. For example, the new Basel III regulatory capital framework includes a countercyclical capital buffer, which may help build additional loss-absorbing capacity within the financial sector during periods of rapid credit creation while also leaning against emerging excesses. The stress tests include a scenario design process in which the macroeconomic stresses in the scenario become more severe during buoyant economic expansions and incorporate the possibility of highlighting salient risk scenarios, both of which may contribute to increasing resilience during periods in which risks are rising.13 Similarly, minimum margin requirements for securities financing transactions could potentially vary on a countercyclical basis so that they are higher in normal times than in times of stress.
Implications for Monetary Policy, Now and in the Future
In light of the considerable efforts under way to implement a macroprudential approach to enhance financial stability and the increased focus of policymakers on monitoring emerging financial stability risks, I see three key principles that should guide the interaction of monetary policy and macroprudential policy in the United States.
First, it is critical for regulators to complete their efforts at implementing a macroprudential approach to enhance resilience within the financial system, which will minimize the likelihood that monetary policy will need to focus on financial stability issues rather than on price stability and full employment. Key steps along this path include completion of the transition to full implementation of Basel III, including new liquidity requirements; enhanced prudential standards for systemically important firms, including risk-based capital requirements, a leverage ratio, and tighter prudential buffers for firms heavily reliant on short-term wholesale funding; expansion of the regulatory umbrella to incorporate all systemically important firms; the institution of an effective, cross-border resolution regime for systemically important financial institutions; and consideration of regulations, such as minimum margin requirements for securities financing transactions, to limit leverage in sectors beyond the banking sector and SIFIs.
Second, policymakers must carefully monitor evolving risks to the financial system and be realistic about the ability of macroprudential tools to influence these developments. The limitations of macroprudential policies reflect the potential for risks to emerge outside sectors subject to regulation, the potential for supervision and regulation to miss emerging risks, the uncertain efficacy of new macroprudential tools such as a countercyclical capital buffer, and the potential for such policy steps to be delayed or to lack public support.14 Given such limitations, adjustments in monetary policy may, at times, be needed to curb risks to financial stability.15
These first two principles will be more effective in helping to address financial stability risks when the public understands how monetary policymakers are weighing such risks in the setting of monetary policy. Because these issues are both new and complex, there is no simple rule that can prescribe, even in a general sense, how monetary policy should adjust in response to shifts in the outlook for financial stability. As a result, policymakers should clearly and consistently communicate their views on the stability of the financial system and how those views are influencing the stance of monetary policy.
To that end, I will briefly lay out my current assessment of financial stability risks and their relevance, at this time, to the stance of monetary policy in the United States. In recent years, accommodative monetary policy has contributed to low interest rates, a flat yield curve, improved financial conditions more broadly, and a stronger labor market. These effects have contributed to balance sheet repair among households, improved financial conditions among businesses, and hence a strengthening in the health of the financial sector. Moreover, the improvements in household and business balance sheets have been accompanied by the increased safety of the financial sector associated with the macroprudential efforts I have outlined. Overall, nonfinancial credit growth remains moderate, while leverage in the financial system, on balance, is much reduced. Reliance on short-term wholesale funding is also significantly lower than immediately before the crisis, although important structural vulnerabilities remain in short-term funding markets.
Taking all of these factors into consideration, I do not presently see a need for monetary policy to deviate from a primary focus on attaining price stability and maximum employment, in order to address financial stability concerns. That said, I do see pockets of increased risk-taking across the financial system, and an acceleration or broadening of these concerns could necessitate a more robust macroprudential approach. For example, corporate bond spreads, as well as indicators of expected volatility in some asset markets, have fallen to low levels, suggesting that some investors may underappreciate the potential for losses and volatility going forward. In addition, terms and conditions in the leveraged-loan market, which provides credit to lower-rated companies, have eased significantly, reportedly as a result of a “reach for yield” in the face of persistently low interest rates. The Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation issued guidance regarding leveraged lending practices in early 2013 and followed up on this guidance late last year. To date, we do not see a systemic threat from leveraged lending, since broad measures of credit outstanding do not suggest that nonfinancial borrowers, in the aggregate, are taking on excessive debt and the improved capital and liquidity positions at lending institutions should ensure resilience against potential losses due to their exposures. But we are mindful of the possibility that credit provision could accelerate, borrower losses could rise unexpectedly sharply, and that leverage and liquidity in the financial system could deteriorate. It is therefore important that we monitor the degree to which the macroprudential steps we have taken have built sufficient resilience, and that we consider the deployment of other tools, including adjustments to the stance of monetary policy, as conditions change in potentially unexpected ways.
In closing, the policy approach to promoting financial stability has changed dramatically in the wake of the global financial crisis. We have made considerable progress in implementing a macroprudential approach in the United States, and these changes have also had a significant effect on our monetary policy discussions. An important contributor to the progress made in the United States has been the lessons we learned from the experience gained by central banks and regulatory authorities all around the world. The IMF plays an important role in this evolving process as a forum for representatives from the world’s economies and as an institution charged with promoting financial and economic stability globally. I expect to both contribute to and learn from ongoing discussions on these issues.
1. The possibility that periods of relative economic stability may contribute to risk-taking and the buildup of imbalances that may unwind in a painful manner is often linked to the ideas of Hyman Minsky (see Hyman P. Minsky (1992), “The Financial Instability Hypothesis (PDF),” Working Paper 74 (Annandale-on-Hudson, N.Y.: Jerome Levy Economics Institute of Bard College, May)). For a recent example of an economic model that tries to explore these ideas, see, for example, Markus K. Brunnermeier and Yuliy Sannikov (2014), “A Macroeconomic Model with a Financial Sector,” American Economic Review, vol. 104 (February), pp. 379-421. Return to text
2. For a discussion of this issue encompassing experience across a broad range of advanced economies in the 2000s, including the United States, see Jane Dokko, Brian M. Doyle, Michael T. Kiley, Jinill Kim, Shane Sherlund, Jae Sim, and Skander Van Den Heuvel (2011), “Monetary Policy and the Global Housing Bubble,” Economic Policy, vol. 26 (April), pp. 233-83. Igan and Loungani (2012) highlight how interest rates are an important, but far from the most important, determinant of housing cycles across countries (see Deniz Igan and Prakash Loungani (2012), “Global Housing Cycles,” IMF Working Paper Series WP/12/217 (Washington: International Monetary Fund, August)). Bean and others (2010), examining the tradeoffs between unemployment, inflation, and stabilization of the housing market in the United Kingdom, imply that reliance on monetary policy to contain a housing boom may be too costly in terms of other monetary policy goals (see Charles Bean, Matthias Paustian, Adrian Penalver, and Tim Taylor (2010), “Monetary Policy after the Fall (PDF),” paper presented at “Macroeconomic Challenges: The Decade Ahead,” a symposium sponsored by the Federal Reserve Bank of Kansas City, held in Jackson Hole, Wyo., August 26-28). Saiz (2014) suggests that about 50 percent of the variation in house prices during the 2000s boom can be explained by low interest rates, and finds that it was the remaining, “non-fundamental” component that subsequently collapsed–that is, the interest rate component was not a primary factor in what Saiz terms “the bust” (see Albert Saiz (2014), “Interest Rates and Fundamental Fluctuations in Home Values (PDF),” paper presented at the Public Policy and Economics Spring 2014 Workshops, hosted by the Harris School of Public Policy, University of Chicago, April 8). Return to text
3. The notion that tighter monetary policy may have ambiguous effects on leverage or repayment capacity is illustrated in, for example, Anton Korinek and Alp Simsek (2014), “Liquidity Trap and Excessive Leverage (PDF),” NBER Working Paper Series 19970 (Cambridge, Mass.: National Bureau of Economic Research, March). Return to text
4. See, for example, Tobias Adrian and Hyun Song Shin (2010), “Liquidity and Leverage,” Journal of Financial Intermediation, vol. 19 (July), pp. 418-37; and Tobias Adrian and Hyun Song Shin (2011), “Financial Intermediaries and Monetary Economics,” in Benjamin Friedman and Michael Woodford, eds., Handbook of Monetary Economics, vol. 3A (San Diego, Ca.: Elsevier), pp. 601-50. For a study emphasizing how changes in the response of monetary policy to financial vulnerabilities would likely change the relationship between monetary policy and financial vulnerabilities, see Oliver de Groot (2014), “The Risk Channel of Monetary Policy (PDF),” International Journal of Central Banking, vol. 10 (June), pp. 115-60. Return to text
5. This evidence and experience suggest that a reliance on monetary policy as a primary tool to address the broad range of vulnerabilities that emerged in the mid-2000s would have had uncertain and limited effects on risks to financial stability. Such uncertainty does not imply that a modestly tighter monetary policy may not have been marginally helpful. For example, some research suggests that financial imbalances that became apparent in the mid-2000s may have signaled a tighter labor market and more inflationary pressure than would have been perceived solely from labor market conditions and overall economic activity. Hence, such financial imbalances may have called for a modestly tighter monetary policy through the traditional policy lens focused on inflationary pressure and economic slack. See, for example, David M. Arseneau and Michael Kiley (2014), “The Role of Financial Imbalances in Assessing the State of the Economy,” FEDS Notes (Washington: Board of Governors of the Federal Reserve System, April 18). Return to text
7. For a discussion of macroprudential steps taken in Canada, see Ivo Krznar and James Morsink (2014), “With Great Power Comes Great Responsibility: Macroprudential Tools at Work in Canada,” IMF Working Paper Series 14/83 (Washington: International Monetary Fund, May). Return to text
8. See Norges Bank (2010), “The Executive Board’s Monetary Policy Decision–Background and General Assessment,” press release, May 5, paragraph 28. Return to text
9. See Per Jansson (2013), “How Do We Stop the Trend in Household Debt? Work on Several Fronts,” speech delivered at the SvD Bank Summit, Berns Salonger, Stockholm, December 3, p. 2. Return to text
10. For a discussion, see Min Zhu (2014), “Era of Benign Neglect of House Price Booms Is Over,” IMF Direct (blog), June 11. Return to text
11. These questions have been explored in, for example, International Monetary Fund (2013), The Interaction of Monetary and Macroprudential Policies (PDF) (Washington: IMF, January 29). Return to text
12. The IMF recently discussed tools to build resilience and lean against excesses (and provided a broad overview of macroprudential tools and their interaction with other policies, including monetary policy); see International Monetary Fund (2013), Key Aspects of Macroprudential Policy (PDF) (Washington: IMF, June 10). Return to text
13. See the Policy Statement on the Scenario Design Framework for Stress Testing at Regulation YY–Enhanced Prudential Standards and Early Remediation Requirements for Covered Companies (PDF), 12 C.F.R. pt. 252 (2013), Policy Statement on the Scenario Design Framework for Stress Testing. Return to text
14. For a related discussion, see Elliott, Feldberg, and Lehnert, “The History of Cyclical Macroprudential Policy in the United States.” Return to text
15. Adam and Woodford (2013) present a model in which macroprudential policies are not present and housing prices experience swings for reasons not driven by “fundamentals.” In this context, adjustments in monetary policy in response to house price booms–even if such adjustments lead to undesirable inflation or employment outcomes–are a component of optimal monetary policy. See Klaus Adam and Michael Woodford (2013), “Housing Prices and Robustly Optimal Monetary Policy (PDF),” working paper, June 29.
Thanks to Matthew Goldman. For reaction to Chair Janet’s Speech read this:
July 7, 2014
Colin Powell put it clearly and succinctly:”If you break it, you own it.” America broke Iraq. America owns Iraq. This is how the rest of the world sees it. This is also why the world is mystified by the current Obama-Cheney debate. Both these camps are saying, “You did it.” Actually both the camps should say, “We did it.”
The tragedy about this divisive debate is that America is missing a great opportunity to reflect on a big and fundamental question: why is America so bad at the simple task of invading and occupying countries? Surely, the American invasion and occupation of Iraq will go down in history as one of the most botched operations of its kind. America spent $4 trillion, lost thousands of American lives and millions of Iraqi lives, and at the end of the day, achieved nothing. Since the failure was so catastrophic, why not at least try to learn some valuable lessons from it? There are at least three lessons that scream for attention.
The first lesson is the folly of good intentions. Let’s be clear about one thing: >Americans are not evil people.They do not conquer countries to rape, pillage and loot. Instead, they conquer countries to help the people. President George W. Bush’s goal was to set up a stable, functioning Iraqi democracy, not to set up an American colony in perpetuity. The British colonial rulers of Iraq in the early twentieth century would have been totally mystified by these good intentions. And they would have been even more flummoxed by the methods used to achieve these good intentions. For example, the British would preserve local institutions, not destroy them.
The last successful American occupation was the occupation of Japan. MacArthur wisely preserved Japanese institutions-including Emperor Hirohito, despite his role in the war. By contrast, America destroyed both Saddam’s army and his Ba’ath party at the beginning, thereby condemning the occupation to failure. Some Americans believed they could manage Iraq because American governance was inherently superior.
Paul Bremer (wearing his big boots) assumed he could rule Iraq effortlessly with his big boots, without ever being aware that his big boots were culturally offensive. This American trait of supreme self-confidence in running other societies is not new. When I lived in Phnom Penh in 1973-74 forty years ago, I witnessed firsthand how a young, inexperienced American diplomat would walk into the offices of the Cambodian Economic Minister and give him daily instructions from Washington, DC on how to run the Cambodian economy.
What was the result of this? The Cambodian leaders felt powerless to govern their own society. There is a paradox here. One strength of American culture is that it empowers people. But when America takes over another society, it disempowers it. This happened in Iraq, too. So after the disastrous management of Cambodia and South Vietnam and of Afghanistan and Iraq, Americans should absorb one painful lesson: because Americans are full of good intentions, they are incapable of occupying other countries. America should get out of this business completely. Even the UN does a better job of managing countries in transition.
The second lesson is to avoid over reliance on the American military.Obama said it well:”Just because we have the best hammer, does not mean that every problem is a nail.” Future historians of the American century will spend a lot of time scratching their leads over a difficult conundrum: how did the relatively peaceful people of America become so trigger-happy in their external adventures?
The simple lesson of Iraq and Afghanistan and of Cambodia and South Vietnam is that guns alone do not work. This is why the recent American debate about Syria is so bewildering. Both sides were debating one question-to bomb or not to bomb Syria? But bombing would have solved nothing. And it was equally unwise for America to make a unilateral announcement on August 18, 2011 that “Assad must go”. Almost three years later, he is still in office.
All debates in America inevitably become black and white. Assad is black. His opponents must be white. Therefore, kill the bad guys-this appears to be the only solution. In many parts of the Middle East the choice is between black and black (or, more accurately, between various shades of grey). To bring “peace”, America will have to learn to deal with and shake hands with people who are not American boy scouts.
All this leads to the obvious third lesson: strengthen American diplomacy. Let me start with one painful fact obvious to many in the rest of the world: American diplomacy has deteriorated. In my thirty-three-year career with the Singapore Foreign Service from 1971-2004, I witnessed this firsthand. The reasons for deterioration are obvious. Organizations attract young talent when they can promise the best jobs at the end of their hardworking and dedicated careers. But if all that a young American diplomat can aspire to after three decades of service is to be the Ambassador to Ouagadougou or Kabul (with London and Paris being completely out of the equation), why stay on?
One counterargument I have heard is that the strong American private sector makes up for the weak public sector. A weak State Department, for example, is compensated by strong think tanks. This is true, but it creates a deeper mystery: how can America have the best strategic think tanks and strategic thinkers and yet have the worst strategic thinking in invading and occupying other countries? So this is the time for Americans to have the obvious epiphany: America should get out of the business of invasion and occupation. Four decades of failure have provided enough evidence to prove that the American people are far too good to do this job.
*Kishore Mahbubani is Dean of the Lee Kuan Yew School of Public Policy, NUS, and author of The Great Convergence: Asia, the West, and the Logic of One World, which was listed by the Financial Times in its ‘Books of the Year’ list, 2013.
July 4, 2014
RSIS presents the following commentary China’s James Shoal Claim: Malaysia the Undisputed Owner by B.A.Hamzah. Kindly forward any comments or feedback to the Editor RSIS Commentaries, at RSIS Publication@ntu.edu.sg.
No. 122/2014 dated 1 July 2014
Malaysia owns James Shoal, a submerged feature that is within its continental shelf. Being one thousand nautical miles from Hainan, James Shoal is outside the continental shelf of China; it is also outside the continental shelf of Taiwan, Vietnam, the Philippines, Brunei and Indonesia.
JAMES SHOAL, a feature that is permanently 22 metres (66 feet) under water in the South China Sea, should not have attracted public attention regionally but for geopolitics and ignorance of international law. Malaysians have been alarmed by recent reports of vessels of the People’s Republic of China Liberation Army (Navy), gathering and celebrating above the feature on more than one occasion.
China cannot appropriate any submerged features that are not part of its continental shelf and in its Exclusive Economic Zone (EEZ). James Shoal is more than 1,000 nautical miles (nm) from Hainan, well outside China’s Exclusive Economic Zone (EEZ) and not part of its continental shelf.
James Shoal and International Law
The whole affair could have been quietly resolved if the PLA Navy commanders acknowledged the international law governing a permanently submerged feature, embedded to the continental shelf of a coastal state. Unlike islands, rocks and low-tide elevations, permanently submerged features, cannot generate any maritime zone under international law.
Islands are entitled to a belt of territorial sea, continental shelf and EEZ. Low-tide Elevations (LTEs), on the other hand, belong to the state in whose territorial sea they are located. LTEs can be used to draw the state’s baseline if they are located within its 12 nm territorial sea.
International law defines continental shelf as a natural extension of a country’s landmass to a distance of 200 nm (maximum 350 nm). Drawn from the mainland or any of its islands in the South China Sea, the continental shelf of China is well short of James Shoal. Similarly, contrary to some suggestions, James Shoal is also not part of the extended continental shelf of Vietnam, the Philippines or Taiwan.
In May 2009, Vietnam and Malaysia put up a Joint submission on the Extended Continental Shelf to the UN Committee on the Limit of Continental Shelf (CLCS) whereby Vietnam acknowledged that James Shoal is not part of its extended continental shelf.
James Shoal is 500 nm from Pagasa Island in the Spratlys that the Philippines has occupied since 1971. The Shoal is more than 400 nm from Itu Aba, an island that Taiwan has occupied since 1956. James Shoal is also outside Brunei’s extended maritime zone which the 2009 Letter of Exchange Brunei had with Malaysia attested to. In 1969, Malaysia and Indonesia signed a Treaty on the continental shelf, off Tanjung Datu, Sarawak, which has placed James Shoal on the Malaysian side.
Contiguity not an issue
James Shoal, located 63 nm from the nearest base point (Batuan Likau) on Sarawak coast, is embedded in the continental shelf of Malaysia and within its EEZ. Although the feature is nearer to Malaysia, Kuala Lumpur’s ownership of James Shoal is not premised on geographical contiguity but on customary international law. In the Island of Palmas (or Miangas) (United States v. The Netherlands), Arbitral Award, 1928 Judge Huber stated, “it is impossible to show the existence of a rule of positive international law” on contiguity to “the effect that islands situated outside territorial waters should belong to the state”.
China claims James Shoal is within the disputed nine-dash line boundary which China has drawn, incorporating close to ninety percent of the South China Sea, and overlapping with the maritime domains of five other states (Brunei, Indonesia, Malaysia, Philippines, Vietnam) as well as Taiwan.
Some experts believe China did not even know of the existence of James Shoal as a submerged feature when it drew the controversial nine-dash line maritime boundary over it in 1947/1948. After all, China was not the first state to conduct any physical survey of the maritime area. Besides, there is no evidence that China discovered and administered the feature.
The British discovered James Shoal
The British discovered the Shoal and its two nearby features (Parsons’ Shoal and Lydie Shoal) in the early 19th Century via many of its surveys. James Shoal first appeared on the British Admiralty Chart in the 1870s; China renamed the feature (as Tseng Mu Reef) circa 1947/1948 (1912 in some documents), when it published the nine-dash line.
The only possibility for China to “acquire” the feature, according to some experts, is via cut- and-paste method. While the international law recognises five traditional methods of territorial acquisition, the cut- and- paste method is not one of them.
The 1982 United Nations Convention on the Law of the Sea (UNCLOS) and 1958 Geneva Convention on the Continental Shelf (Malaysia and China subscribe to both Treaties) stipulate, “The rights of a costal state over the continental shelf do not depend on occupation, effective or notional, or in any express proclamation”. In other words, Malaysia does not have to do anything under UNCLOS to own the submerged feature that is embedded on its continental shelf.
Malaysia’s extensive activities on James Shoal
This notwithstanding, Malaysia has effectively asserted its jurisdiction over its continental shelf including the areas in and around James Shoal, Parson’s Shoal and the Lydie Shoal. As in nearby Laconia shoals, where currently a large chunk of Malaysia’s hydrocarbon resources comes from, the entire area has been explored for gas and oil.
The activities of the Malaysian authorities, which are extensive, peaceful, continuous and public in nature, include the construction and maintenance of a light-buoy on nearby Parsons Shoal on a 24/7 basis; daily patrolling and policing of the area by the Royal Malaysian Navy and the Malaysian Maritime Enforcement Agency; and undertaking economic activities like exploration for and production of hydrocarbon resources on a sustained basis.
Under international law, such display of peaceful and continuous activities over a long period is tantamount to establishing a titre de souverain (acts of the sovereign). This legal principle is critical in determining ownership of disputed islands, rocks and low tide elevations and by inference, submerged features on continental shelf.
The International Court of Justice (ICJ) and International Arbitration have applied this principle on numerous occasions. Two recent ICJ Cases on territorial disputes, decided on this principle, involved Malaysia with Indonesia (Case concerning sovereignty over Pulau Ligitan and Pulau Sipadan) and Indonesia (2002) and Malaysia with Singapore (Case concerning sovereignty over Pedra Branca and Pulau Batu Putih (2008).
In sum, the activities of the Malaysian authorities (effectivité to some) are by themselves sufficient to demonstrate that Malaysia is the bona fide owner of James Shoal.
BA Hamzah is a lecturer at the Department of Strategic Studies, National Defence University, Malaysia. He contributed this specially to RSIS Commentaries.
Japan’s Cabinet Seeks Changes to Its Peace Constitution – Issues New “Interpretation” of Article Nine
By Andrew L. Oros
Japan’s Prime Minister Shinzo Abe addressed his nation at a 6pm press conference on July 1 to announce a much-anticipated Cabinet decision to reinterpret a constitutional prohibition related to Japan’s military forces working together with other states, setting the stage for a series of changes to Japanese law when its parliament reconvenes in the fall.
Protestors opposing this effective change to Japan’s constitution–which has never been formally revised since its implementation in 1947–have gathered in front of the Prime Minister’s official residence all week. An estimated 5,000 protestors gathered outside the prime-time press conference where the prime minister argued that the reinterpretation did not represent a fundamental departure in nearly 70 years of Japanese security policy, but rather was a modest update to current policy in response to a changing international security environment.
He repeatedly touted Japan’s postwar identity as a “peace state” (heiwakoku), arguing that now is the time for Japan to make a greater international contribution to international peace–in line with the national security strategy released by his government in December 2013 that called for Japan to make “proactive contributions to peace” internationally.
The issue of “collective self-defense”–engaging in military action with allied states even if your state itself is not directly threatened–has been a topic of debate in Japan all year. Japanese government policy for over half a century has been that although all states have an inherent right to engage in collective self-defense, as rooted in long-standing practice of international law, Japan would refrain from exercising that right in deference to Article Nine of its postwar constitution, which forbids the use of force to settle international disputes.
Prime Minister Abe has long argued that Japan should engage in collective self-defense activities with like-minded states, both together with its alliance partner the United States as well as with other states and through United Nations peacekeeping operations. Abe’s coalition partner in government, the New Komei Party, has been opposed, however. As a result, the issue was set aside during the first year of Abe’s return to power in December 2012.
Critics of the Abe government argue that this decision is rushed, is taking place without debate in Japan’s parliament, and that no elected leader has the right to reinterpret the constitution. There is widespread misunderstanding about the power of this cabinet statement, however: it does not have the force of law.
Only legislation passed by Japan’s parliament has the force of law–and, indeed, this was one of the subjects of Abe’s 10-minute prepared statement to the nation: that his government would be creating a team to draft bills to establish the necessary legislation to submit to the Diet for its deliberation. Still, the cabinet statement does reflect unanimity among the cabinet, which includes one member from the New Komei Party. It took months of negotiation and substantial compromises by Abe to achieve this support, leading to a much watered-down mandate to exercise the right of collective self-defense only in highly constrained circumstances and even then only using the minimum necessary force to restore the peace.
The Abe government prepared 15 examples to share with the nation illustrating situations where it saw Japanese security at risk due to Japan’s decision not to exercise its right of collective self-defense, which Abe debuted in an earlier televised prime-time press conference in May. Famously pointing to a sketch of a mother holding a small child while fleeing hostilities, Abe explained cases such as the challenges of evacuating Japanese nationals from a war zone, or Japan’s need to cooperate in de-mining critical sea trade routes in the event an enemy were to lay such mines (as happened in the 1991 Gulf War). In fact, the most likely cases where Japan would exercise collective self-defense are together with its only formal military ally, the United States.
It was announced last October that the two states seek to formally revise their 17-year-old guidelines for defense cooperation by the end of 2014, making a decision on the issue of collective self-defense time sensitive. The two states’ goals of cooperating to combat cyber threats and to improve defenses against ballistic missiles both require a pre-commitment from Japan to work together with the militaries of other states, even in cases where it is not clear that Japan itself is being attacked. In addition, the long-standing fear of a new outbreak of hostilities on the Korean Peninsula would also put great pressure on Japan to offer assistance to US and South Korean military forces–even if Japan itself was not directly attacked, something prohibited under the prior cabinet interpretation of the Japanese constitution.
This new policy on collective self-defense should thus be seen, in part, as a way to show Japan’s commitment to the US-Japan military alliance–and to seek to secure US commitment to the alliance in the wake of growing Japanese concerns about China’s designs on the remote and uninhabited Senkaku Islands that Japan administers but China claims (and which China calls Diaoyu), and that Japan would need the United States military to help protect in the event of hostilities.
The new policy should also been seen as part of a set of initiatives of the Abe government to re-craft Japanese military activities as the sort of conduct any “normal” state engages in without suspicion. In this sense, it is part and parcel of his broader efforts to move beyond the criticism of Japan’s militarist past and to a new status quo where Japan’s “proactive contributions to peace” are welcomed on the contemporary international stage. The policy also should be understood at face value: as a way to address potential security contingencies Japan may face in the future.
The Abe government is correct about international law: that all states inherently possess the right of collective self-defense. But his public statements belie the substantial change in policy that Japan choosing to exercise this right would represent. Critics over-state the significance of the cabinet statement, however. Nothing has yet been changed in Japanese law, and even if new laws are passed in the fall based on this cabinet statement, the agreement within the ruling coalition places substantial barriers on Japan exercising this right in the years to come. Abe has thus not yet realized his dream of Japan becoming a “normal” state–and based on the scale of criticism both at home and abroad about this policy push, it will take many more years of policy evolution to achieve this goal.
About the Author
Dr. Andrew L. Oros is an Associate Professor of Political Science and International Studies at Washington College in Chestertown, Maryland and Adjunct Fellow at the East-West Center in Washington. He is author of Normalizing Japan: Politics, Identity, and the Evolution of Security Practice and can be contacted via email at firstname.lastname@example.org.
The East-West Center promotes better relations and understanding among the people and nations of the United States, Asia, and the Pacific through cooperative study, research, and dialogue.
Established by the US Congress in 1960, the Center serves as a resource for information and analysis on critical issues of common concern, bringing people together to exchange views, build expertise, and develop policy options.
The Asia Pacific Bulletin (APB) series is produced by the East-West Center in Washington.
APB Series Editor: Dr. Satu Limaye, Director, East-West Center in Washington
APB Series Coordinator: Damien Tomkins, Project Assistant, East-West Center in Washington
The views expressed in this publication are those of the authors and do not necessarily reflect the policy or position of the East-West Center or any organization with which the author is affiliated. For comments/responses on APB issues or article submissions, please contact email@example.com.
East-West Center | 1601 East-West Road | Honolulu, HI | 808.944.7111
East-West Center in Washington | 1819 L Street, NW, Suite 600 | Washington, DC | 202.293.3995
July 2, 2014
The life of a diplomat, as the laity sees it, is one of glittering cocktails parties, spacious residences in leafy exclusive neighborhoods, and being pampered in MAS first-class cabins, all paid for by taxpayers.
This was the mid-1980s when China was undergoing, as per the chapter title, transformational changes under Deng Xiaoping. To be bored or have ample free time at such a period reflected more on the caliber of our diplomats generally rather than on Kamil Jaafar’s talent, ability, or diligence.
It was commendable for Kamil to learn Mandarin. It would have been even more impressive had he done it before being posted there. There was (and is) no lack of opportunities for learning that language in Malaysia. Granted, the Malaysian Chinese accent may be way off the Beijing variety, nonetheless the basics remain the same.
Kamil Jaafar is privileged to have been given the great opportunity and responsibility to guide the young nation. There are many others, but most are content to spend their retirement collecting lucrative GLC directorship fees and hitting golf balls. Malaysians owe Kamil a huge debt of gratitude for having taken time and effort to recollect his experiences so others could benefit.
Maximal Recollection, Minimal Reflection
Kamil’s memoir, competently written, spans a career of over three decades. He retired in 1996 as the top civil servant in the Foreign Ministry, and then continued on as Special Envoy. He covers vast expanse of water. However, as any scuba diver would tell you, the world underneath is even more rich, challenging and fascinating. Skimming the surface may get you far but at the price of missing this wonderful universe below. Stating it diplomatically, Kamil’s memoir has maximal recollection but at the expense of thoughtful reflection.
On the rare occasions when he does pause, Kamil is astute and penetrating, revealing much. Recalling a meeting between Prime Minister Mahathir and Chairman Deng, Kamil noted the large spittoon which Deng used only three times during the entire encounter. Kamil congratulated Mahathir, deeming the meeting a success, at least by that criterion. Deng may be a transformational leader of the biggest country, but in mannerisms he was just another coolie. Diplomatically spun, Deng remained faithful to his plebian origin.
During Abdullah Badawi’s tenure as Foreign Minister, Kamil felt like his ministry was under the Prime Minister’s Department. That reveals volumes as to Abdullah’s capability and contribution. Apparently Abdullah was satisfied if not reveled in being sidelined.
Abdullah was a special guest at the book’s launching. He obviously had not read the book, or if he did, missed that subtle but devastating jab. Or I could be over reading that passage.
In a post-publication interview Kamil related how tough he was with his subordinates. I wish he had been equally frank and tough on his political superiors. Did he see any parallel between Abdullah’s performance as Foreign Minister and Prime Minister? As for the other dozen or so foreign ministers Kamil served under, none merited more than just a few bland lines penned in passing. Most were skipped entirely. Perhaps that said it all.
Of all the Prime Ministers, only Mahathir did not serve concurrently as foreign minister. Yet Kamil devotes more ink to him than to anyone else. His adoration for Mahathir is unbridled, and evident throughout the book. Yet when Kamil lamented on the poor English of our young diplomats and how that handicaps them professionally, he fails to make the connection. Mahathir is most responsible for this sorry state, first as Minister of Education and later as Prime Minister.
Mahathir appointed Kamil Secretary-General of the Foreign Ministry; I reckon that has much to do with this uncritical appraisal. As for that promotion, Kamil recalled his colleagues urging him to decline it, in deference to the incumbent who had been at it for only six months. That reveals the destructive culture of the civil service, this tunggu geleran (patiently waiting your turn), like landing planes at a busy airport. That, more than anything else, is responsible for the anti-meritocratic norms of the civil service. There is no such thing as “fast tracking.”
Kamil rationalized his acceptance thus: “I dare not go against the Prime Minister’s decision.” I would have preferred had he asserted that he could do a better job. False modesty is hard to conceal while the genuine form is overrated. Besides, a senior civil servant should never fear of going against his political superior if that is the wise thing to do.
Kamil had a brief and less-than-laudatory paragraph on Prime Minister Hussein Onn, recalling a meeting involving a sensitive issue related to a neighboring country. Kamil and his counterparts in the Home Ministry including its Minister, Ghazali Shafie, had concocted a nefarious scheme the nature of which was not revealed. When they finished briefing Hussein, he became visibly angry and reprimanded them.
“What you are doing is a bottomless pit. You cannot do to others what you do not want others to do to you,” Kamil quoted Hussein, who ordered an immediate halt. Kamil did not describe his or Ghazali’s reaction to this dressing down.
Hussein was not known to be a decisive leader but on that occasion when he most needed to be, he was. That brief anecdote epitomized Hussein’s integrity and fair-mindedness. I remind readers that the odious phrase “cronyism, corruption and nepotism” entered the popular Malaysian lexicon only after Hussein left office. As an aside, he was not cited in the index, perhaps an honest slip.
John Kenneth Galbraith, Kennedy’s political-appointee Ambassador to India, wrote in his Ambassador’s Journal that Kennedy read his (Galbraith’s) dispatches because they were a joy. I assume that most diplomatic communications are not, consumed as they are with being detached and laced with bureaucratese as well as bewildering acronyms. They are also written so as not to offend anyone.
Kamil no longer needs to be deferential to his former superiors. He should have been critical of their performances. He should go beyond lamenting the current sorry state of Malaysia and analyze the “who, what, where, when, why and how.” Which leaders were most culpable for our nation not growing up? If luminaries like Kamil shy away from this crucial responsibility, then by default it would fall on the tin kosong jaguh kampong (empty tin-can village champions). And the nation would be the poorer for that.
Proposed Diplomat’s Assignment
Kamil recalled how as a young diplomat he was clueless as there was no one to guide him. Now having reached the pinnacle of his career, he put forth few ideas to guide his young successors, except for them to improve their English. That in itself reveals volumes on the state of our foreign service.
To fill this void, I share with our diplomats, young and old, this advice, the one my late father gave me before I left for Canada back in 1963. Observe the country and its people, he counseled me, be perceptive of and receptive to your new environment. Heed the wisdom of our culture, Alam terkembang di jadikan guru (Let the expanding universe be your teacher), echoing Wordsworth’s “Let nature be your teacher.”
In particular my father asked me to ponder this question: Why was it that Canada was offering those generous scholarships to young Malaysians and not Malaysia to Canadians?
Tailoring it to our diplomats, I would advise them thus. Study one feature of your host country that is worthy of our emulation, or conversely, the one to avoid falling into. Our Third Secretary in Venezuela could learn how that country successfully used music to empower poor children and produce superb youth orchestras as well as many accomplished young conductors. Our High Commissioner to Nigeria would warn us of the fate that awaits Malaysia if it does not get a handle on corruption, while that to Pakistan, the dangers if religious extremists were to get the upper hand.
With that assignment tagged onto their regular duties our diplomats, novice and seasoned, would never again complain of their posting “being routine and humdrum,” or having “ample free time.” Thus occupied, they would not likely get themselves into mischief or otherwise embarrass the nation.
June 27, 2014
by Dr. Lim Teck Ghee, Centre for Policy Initiatives (June 15, 2014)
It is exceptional for one hero to emerge during one’s life time. But two? Unbelievable but yes – this unprecedented happening is taking place right now which makes this an amazing time to be a Muslim in Malaysia.
Riding to the rescue of the rudderless masses – confused by the arrival on our shores of huge numbers of gays, lesbians, dog lovers, Cadbury munchers and other purveyors of polluting and ‘haram’ consciousness and deeds secretly slipped in through our porous land and sea boundaries by western neo-colonialist agents bent on bringing the Golden Chersonese back into the sphere of Christian-Zionist influence – are two heroes and warriors of Islam.
Their war to ensure Islamic supremacy is not only against threats emanating from outside the country. The more dangerous threats are embedded deep within our midst in the form of munafik, pengkhianat, pendatang, penceroboh, Cinabengs, kaki botol, pariah dogs, kiasus,liberals and even moderates. Taking advantage of the Christian and western financed anti-Muslim internet media, these devilish elements intent on destroying the fabric of Muslim society have emerged from the Satanic darkness to spread lies and ply their propagandist filth of moderation, democracy, equality and human rights to the unsuspecting Muslim population.
Who are these two warriors whose names should forever be emblazoned in the pages of Islamic history in our country? They are Ahmad Zaik Abdullah Rahman (left) and Mohd. Ridhuan Tee. This extraordinary pair may have come from differing backgrounds but they complement each other perfectly in their uncompromising philosophies.
Ahmad Zaik’s stand is based on “Malays stand united; Islam reigns supreme”. Riduan Tee, a Chinese convert to Islam, cannot wave the Malay flag so easily. His slogan? “Muslims stand united; Islam reigns supreme”?
Imprisonment of the mind is the greatest scourge faced by humanity, especially by Muslims. Not only are these two warriors in a mission to cleanse the country of its unsavoury anti-Muslim minority, but they are also intellectual giants fighting ignorance and helping to rewrite the course of development in the country by less violent means. Clearly a ‘speak loudly and carry a big stick’ strategy. Ahmad Zaik’s accomplishments include a 64 page book, ’30 Soal Jawab Melayu Sepakat Islam Berdaulat’. In this incredibly slim but profound volume, he is able to provide answers rooted in classical Islamic knowledge to all the burning issues of Malays, Muslims and Malaysia.
It is difficult, if not impossible, to think of any other book that has had such an impact on the Malay reading world. It is noteworthy that the book’s forward was written by Deputy Prime Minister and Deputy UMNO President Muhyiddin Yassin and and launched by Minister in the Prime Minister’s Department Jamil Khir Baharom, both Islamic warriors too, though of lesser stature, despite their higher political status.
Blockblaster Film Issue and Plagiarism Non-Issue
Incidentally the book also serves as a ‘bible’ to the Isma clubs being established all over the world. At last count, there were over Isma clubs in over 25 counties so that it should not be long before “30 Soal” makes it to the international best sellers list. Also rumour has it that the much castigated and misunderstood director of the Tanda Putera film, Shuhaimi Baba is of the opinion that the book has the makings of a major cinematic hit in the Muslim world; and that she is the right person to bring it to the Islamic green screen.
This is an incredible opportunity for FINAS, JAIS, Khazanah, etc.to provide funding for a noble cause which can only add lustre to Malaysia’s Muslim credentials. Besides, it will provide the catalyst to the establishment of an Islamic film industry in Malaysia to take down the decadent and Islamic soul destroying Hollywood empire build by Jewish money. I am sure our Saudi colleagues will want to joint venture with us; but even if they do not want to, we have the petro dollars to make this happen.
But our bureaucracy needs to hurry up. Rumour also has it that Ahmad Zaid has already turned down a similar offer from the Malaysian financiers of the Hollywood film, The Wolf of Wall Street. This was despite the concession apparently made that no partial nudity will be shown in the film – not even of uncovered arms and legs. If this rumour is true, it is yet another mark of the purist Islamic character of this remarkable ustaz for whom fortune and fame appear to have little or no meaning – just the pursuit of the jihad. On a lighter note, female fans of this formidable warrior have swooned over his hirsute chest revealed in recent photos but this, I am assured, is due to his sharp sartorial style rather than any latent exhibitionist tendencies.
In comparison, Ridhuan Tee (right) has been more prolific in his literary output and can be considered to be the intellectual star in UMNO’s media empire. Because he is so prolific at churning out masterpieces of Islamic commentary in his weekly column (and this is in addition to his formidable academic output), detractors have claimed that some of his work has been plagiarised from other sources. Obviously, intellectual giants are fair game for ultra kiasu hate mongers. There is in fact no need for Prof. Madya Ridhuan to respond to the allegation of plagiarism. After all, it is not a word or concept that is found in the Malay or Muslim dictionary; neither is it taken seriously by our universities. In fact, we can consider it a”haram”western word and concept with bad intentions, aimed at devaluing and demeaning our local scholars who are increasingly being exposed to the best Islamic tradition.
Saudi Influenced or Malaysianized Islam
What next for our Islamic warriors? There is one pressing issue to be resolved before achieving the paradise on earth that they envisage for Muslims and Islam in the country. Is it fundamentalist Shaf’i Islam that they are advocating or are they intent on creating a new form of Islam? A form analogous to Wahhabi Islam in doctrine and in liturgy, but purely Malay or at least (for Riduan Tee’s sake) purely Malaysian Muslim. This notion would be revolutionary for Malaysia: that a new Malayanised Islam open to converts in Malaysia, but at the same time aggressive, racist and exclusive, is being created before our very eyes. If this is their intention, clearly the patron saint of the new Islamic movement should be none other than Dr. Mahathir, the country’s number one Muslim convert.
Meanwhile, there have been suggestions that the duo should be honoured with state or federal honours – minimally dato-ships or even tansri-ships. Other suggestions have included appointments to higher positions and monetary and other material awards from a grateful Ummah in the way that the best koranic readers were rewarded in the annual national contests which, unfortunately, has been abandoned for reasons totally unfathomable.
All in good time quite soon surely, but perhaps the most appropriate honour for now– especially since their mission here is nearly complete – is to send them on a flight out to fight the enemies of the Muslim world where they least expect it – Antarctica?
June 25, 2014
In 1969, the night before a Wellesley College senior named Hillary Rodham gave a commencement address that would draw national attention, she was introduced to Dean Acheson, the legendary former secretary of state who had come to campus for his granddaughter’s graduation. “I’m looking forward to hearing what you have to say,” Acheson told Rodham. At the time, many in the country were looking forward to hearing what Acheson had to say. He had just put the finishing touches on “Present at the Creation,” his landmark memoir that would come out a few months after his encounter with the young Rodham, providing a seminal portrait of his role in helping Harry S. Truman forge a new national security architecture at the outset of the Cold War.
Forty-five years later, Hillary Rodham Clinton has delivered a memoir about her own time in the job Acheson once occupied. But “Hard Choices” is no “Present at the Creation.” Where Acheson offered a bracing, at times blunt, account of his four years as secretary of state — he eviscerated his wartime predecessor, Cordell Hull, and titled one chapter about Congress “The Attack of the Primitives Begins” — Clinton has opted for a safe and unchallenging volume, full of bromides and talking points.
To its credit, Clinton’s memoir is serious, sober and substantive. What it is not is revealing. Taking the reader along on her journey representing the United States as President Obama’s top diplomat, she provides a sophisticated analysis of many of the world’s most complicated hot spots, but no analysis of one of the world’s most complicated political figures. We learn about the progress of Botswana and the challenges facing the Democratic Republic of Congo, but we learn little about Hillary Clinton.
To compare “Hard Choices” with “Present at the Creation” may be unrealistic. Acheson was done with his career and wrote for history. Clinton is not and has not. Much as we may yearn for her to pull back the mask after more than two decades on the national stage, that’s hardly a practical expectation for someone with the Oval Office still on her to-do list. So perhaps it’s more fitting to compare her memoir not with the diplomatic histories of other secretaries of state but with the pre-campaign books of other would-be presidents. In that context, “Hard Choices” stands a cut above. It certainly demonstrates a greater mastery of the world than, say, “The Audacity of Hope,” by Barack Obama, or “A Charge to Keep,” by George W. Bush.
No fair-minded reader could finish this book and doubt Clinton’s essential command of the issues, whatever one might think of her solutions for them. She roams widely and delves into war and peace, terrorism and Russia, economic development and women’s rights. She knows the players and the history. If nothing else, she implicitly makes the case that if she were to occupy the Oval Office there would be no need for the kind of on-the-job training in foreign policy required by the last three presidents, including one she happens to know well.
Hers is a cold-eyed view of international affairs. “Our relationship with Pakistan was strictly transactional,” she writes, “based on mutual interest, not trust.” The administration’s demand that Israel stop building settlements “didn’t work.” And the desire to abandon autocrats like Egypt’s Hosni Mubarak was unwise: “Were we really ready to walk away from that relationship after 30 years of cooperation?”
In some ways, we do learn about one side of Clinton, the earnest wonk genuinely absorbed by the environmental and health implications of cookstoves in the developing world. When she devotes three pages to Mongolia, it’s because she finds each of the places she visits fascinating in its own way, as anyone who has traveled with her knows. Indeed, she devoted three pages to Mongolia in her last book, “Living History,” about her time as first lady. But she gives little sense of the other side of the Clinton story, of the politics and the ambition that drove her to the verge of the presidency. She discusses how her husband ordered missile strikes on Qaeda camps in Afghanistan in 1998 without mentioning that it happened just after he admitted his affair with Monica Lewinsky and she was making him sleep on the couch. She gives little sense of the darker corners of Hillaryland, as her aides took to calling her world — a world characterized at times by feuding courtiers who vie with opponents, reporters and one another.
Even when she flavors the narrative with a little revelation, the portions are stingy. She got into “a shouting match” with Leon Panetta, then the C.I.A. director, over a proposed drone strike, but doesn’t say which one, who prevailed or why she dissented. She supported the military operation in Libya over the objections of Vice President Biden and Robert Gates, then the defense secretary, but doesn’t take us into the Situation Room to hear the debate. Indeed, much to the relief of the White House, she stays resolutely away from the sort of candor that marked Gates’s own recent memoir. In his book, for instance, Gates reported that he and Clinton tried unsuccessfully to get rid of Karl Eikenberry, the ambassador to Afghanistan, and Douglas Lute, the White House coordinator for Afghanistan. “I’ve had it,” he quoted her saying. Clinton makes no mention of that. When she discusses internal debates, her adversaries are often vaguely described as “some of the president’s advisers.” There’s no score-settling here.
While Gates entitled his memoir “Duty,” Clinton might have called hers “Dutiful.” Every box that needs checking has been filled. Latin America? Check. Benghazi? Check. The book demonstrates that in at least one way she’s ready to be president — it amounts to a 600-page State of the Union address, in which every constituency and every issue receives due mention.
Clinton traveled to 112 countries as secretary of state, more than any of her predecessors, and she seems determined to cite each one of them. (The index lists 105, but missed some she mentions, like Belarus, Brunei and Nepal.) At times, “Hard Choices” feels like the book you might have gotten by picking up your iPhone and asking Siri to write a politically safe memoir. “All the set-piece speeches and procedural mumbo-jumbo can often be deadly boring,” she concedes at one point.
If “Living History” left readers wanting to know more about the author’s relationship with the 42nd president, this new book leaves us wanting to know more about her relationship with the 44th. Unlike Acheson, Clinton had the challenge of forging a partnership with the man who beat her for the presidential nomination and then asked her to serve in his cabinet. By all accounts, she did a remarkable job of overcoming that history, and yet she doesn’t tell us how she did it or dwell on whatever personal or political trade-offs must have been involved.
Barack Obama is a peripheral figure in “Hard Choices.” Meeting with him just after their nomination battle was “like two teenagers on an awkward first date,” she allows, without much elaboration. He “took me to the woodshed” over impolitic comments by her special envoy to Egypt after he left office, she writes, without letting us hear Obama’s voice. They disagreed at pivotal moments — on cutting Mubarak loose, on arming Syrian rebels — but she mentions them only gently.
Clinton’s overarching philosophy as secretary of state seems primarily to involve engagement and hard work, the idea that showing up is as important as any treaty or ideology. Perseverance matters. Sometimes this pays off, as with the pressure campaign that eventually forced Iran to slow its nuclear program, temporarily at least. At times, though, this approach seems maddeningly inconclusive, as when Clinton works two mobile phones in the back of a car to hold together a peace deal between Armenia and Turkey, only to have it fall apart again later. She finds solace in the hope that someday the groundwork she laid will yield the breakthroughs that eluded her.
Rather than putting in place a new foreign policy, as Acheson did, Clinton portrays her tenure as a transition period and herself as just one runner in a relay race, passing along the baton. Acheson won a Pulitzer Prize for his memoir. Clinton seems to have a bigger prize in mind.
June 19, 2014
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.
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.
June 9, 2014