ASEAN-US Security Relations Moving to a New Level

Number 256 | April 15, 2014

ASEAN-US Security Relations: Moving to a New Level

by Mary Fides Quintos and Joycee Teodoro

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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 | 202.29

Stand Up for Democracy And Stand By Anwar Against Kelptocracy

March 7, 2014

Stand Up for Democracy,Freedom, Justice And Stand By Anwar Against Kleptocracy 

Stand Up for each other, Pakatan Rakyat.  Fight for freedom, democracy and justice. We have no option. Today’s Court of A Appeal decision makes Anwar the driving force for change in our country.  Let us not feel dejected. Our fight goes on against the dark forces of repression, arrogance, oppression; and like Badwawi’s supression, Najib will fall on the count of three.–Din Merican

by Josh

TDMBaruFor nearly 16 years now, Malaysian politics has been stuck in skullduggery just because one influential and popular individual by the name of Anwar Ibrahim was – and is – determined to challenge UMNO’s hegemony embodied by Mahathir Mohamad’s autocracy.

The sodomy issue is like a sword of Damocles that hangs forever over Anwar’s head. When he was acquitted for the first time over Sodomy II back in January 2012, some were quick to attribute the verdict to a restoration of judicial integrity. How premature the conclusion was, I would say.

Although there have been cases where justice was seen to be done, including a series of decisions against UMNO mouthpieces such as Utusan Malaysia and TV3, it would seem that the Judiciary remains very much beholden to the powers-that-be whenever the latter’s ultimate authority is severely challenged.

In other words, as long as the opposition adhered to the rules of the game laid down by UMNO and played its role within the permitted boundaries, it was allowed to survive but not to thrive.

Until, of course, the power of reformasi was unleashed by Anwar and turned the UMNO game upside down. Since then, the party that claims to represent the Malays has been fighting tooth and nail to stay relevant.

Still, neither Mahathir nor Najib Abdul Razak ever doubts the sodomy trump card that they have, alongside the advantages that UMNO holds as the ruling party. While Najib grudgingly accepted the not-so-splendid outcome of the 13th general election, he was privately relieved that more than sufficient time had been secured for him to say in power.

But Najib’s fortunes started to dwindle in no time as the costs of living were rising as a result of his hastily implemented economic measures.

At the same time, Mahathir and his cohorts cashed in on the increasingly discontents at the grassroots level by attacking Najib’s lacklustre performance, although the ex-dictator is never under the illusion that every act of defiance on his part is meant to soothe his immense grievances over his son’s failure to make it to UMNO’s top leadership.

So Najib was on the verge of repeating what Abdullah Ahmad Badawi had gone through – an ignominious exit that was.

Anwar-KajangAt this juncture, Anwar pre-empted Najib with the Kajang Offensive, seeking to regain the momentum that was clearly lost post-GE13.

All at a sudden, the public’s zeal for a regime change was aroused, posing a serious threat to UMNO’s legitimacy once again.

Should Anwar win big in Kajang, it would deal further blow to Najib’s diminishing authority within the party and nationwide.

Talk of reconciliation

Prior to this, there had been talk of reconciliation, with both sides of the political divides seemingly warming up to the idea.

I had chastised Anwar in no uncertain terms over the overtures that he had been making towards UMNO for the simple reason that the party that has ruined each and every public institution over the last 30 years and trampled on our national dignity time and again can never be trusted as a partner.

Then Anwar appeared to have changed his mind and decided to go on the offensive. But his Kajang strategy was interpreted by Najib as a betrayal on the consensus between them, which explains the rush to move the Sodomy II appeal forward to stop Anwar from getting closer to assuming a greater role in politics.

A calculative politician, Najib most probably decided to finish Anwar off by sending him to jail so that he gets to keep Putrajaya, while simultaneously appeasing Mahathir.

Yes, the Kajang Move has clearly backfired and one can go on arguing whether it was ethnical or justifiable from the very beginning. However, the very cruel reality remains that Umno is so arrogant and powerful that judges must disregard all the evidence and convict its opponents on the shakiest grounds.

Mahathir is the happiest man for now, but the country and the people will eventually pay for his and Umno’s perfidy unless a new generation of Malaysians are prepared to rise up against all the injustices.

The US is the Super-Snooper

October 31, 2013

The US is the Super-Snooper

by Hanin


The United States is running clandestine communications intelligence facilities at its embassies in Kuala Lumpur, Jakarta, Bangkok, Phnom Penh and Yangon.

The country is doing so by tapping telephones and monitoring communications networks from electronic surveillance facilities in US embassies and consulates across east and south-east Asia, according to information disclosed by intelligence whistleblower Edward Snowden.A top secret map dated August 13, 2010 lists nearly a hundred surveillance facilities worldwide, the map however, shows no such facilities are located in Australia, New Zealand, Britain, Japan and Singapore – the US’s closest allies.

Snoopy the SnooperSnoopy the Snooper

According to the map published by Germany’s Der Spiegel magazine today, a joint Central Intelligence Agency (CIA) – National Security Agency (NSA) group known as ” Special Collection Service” conducts the sweeping surveillance operation, as well as clandestine operations against specific intelligence targets.The map, which was initially published in full on Der Spiegel‘s website but subsequently replaced with a censored version, lists Special Collection Service facilities at 90 locations worldwide, including 74 manned facilities, 14 remotely operated facilities and two technical support centres.

The map confirms the global reach of US signals intelligence operations with special collection facilities located in most major capitals on every continent.Read the full story here

Obama’s “Déjà vu” Vietnam Diplomacy

August 29, 2013

Obama’s “Déjà vu” Vietnam Diplomacy

by Greg Rushford of The Rusford Report (08-23-13)

rushphotoA high-stakes diplomatic drama is playing out between the United States and Vietnam. While the focus is on enhancing bilateral economic ties in the ongoing Trans-Pacific Partnership negotiations, the economics are also related to broader security- and human rights issues. This article has some fresh news to report on what’s going on behind the scenes: What the ruling Politburo in Hanoi has decided about deepening its economic ties with the major powers. What Vietnamese President Truong Tan Sang and U.S. President Barack Obama had to say to each other during their July 25 White House meeting in the Oval Office. Who else was in the room — and why that was important.

There is also background information to report that sheds light on the intense pressures that U.S. Trade Representative Michael Froman has been bringing to bear on Vietnam, notably last week in Bandar Seri Begawan, Brunei. On August 22-23, Froman had private talks with his Vietnamese counterpart, Vu Huy Hoang, on the sidelines of the 19th round of the TPP trade talks, which are continuing this week in Brunei. Washington has been playing an intimidation game, pressuring Hanoi to accept an economic deal that is clearly not in Vietnam’s best interests — and just might get away with it.

But it’s not the hard news that captivates, but rather, the déjà vu feeling of another Us-Vthistorical turning point in U.S.-Vietnamese relations. On August 30, 1945 — 68 years to the day, it turns out, that the TPP’s 19th round of negotiations will conclude this Friday in Brunei — Ho Chi Minh wrote the first of several letters to U.S. President Harry Truman. Uncle Ho sought Truman’s support for Vietnamese aspirations to gain independence from French colonial rule. The letters went unanswered, as the Truman administration’s higher priority involved helping the French recover from the devastations of World War II.

“In historical terms, it was a monumental decision by Truman, and like so many that U.S. presidents would make in the decades to come, it had little to do with Vietnam herself — it was all about America’s priorities on the world stage,” historian Fredrik Logevall has observed in his acclaimed Embers of War. The concerns of more enlightened observers in the U.S. State Department and in the intelligence community, who worried about the consequences of getting on the wrong side of the battle against colonialism, were overridden.

Sang and Obama

When they met in the Oval Office last month, President Sang displayed a keen sense of history when he gave Obama a copy of one of Uncle Ho’s letters to Truman. Hanoi has good reason to worry that the top Obama White House priority, once again, is not really focused on the Vietnamese economy.

In the TPP trade talks, the White House has been fighting tooth and nail on behalf of the protectionist U.S. textile lobby — Obama’s loyal allies who have supported him in his two successful presidential races. The top priority of the (globally uncompetitive) U.S. mills is denying Vietnam more access to protected U.S. clothing and footwear markets in a TPP trade deal.

As in the late 1940s, a few enlightened U.S. diplomats (quietly) and intelligence officials (very quietly) have now let their concerns be known around Washington. But Washington’s seasoned Asia hands find themselves basically sidelined by the White House domestic political priorities, much as their predecessors were nearly seven decades ago.

Meanwhile, President Sang, on behalf of the ruling Politburo, had his own message to deliver to Obama last month.To better understand the nuanced blend current spot news and history, let’s begin with that White House meeting.

Spinning Oval Office diplomacy

When it comes to diplomacy, sometimes what the public sees is true — just not the whole picture. Consider the video that the White House posted on its website on July 25. Viewers see Sang and Obama meeting alone in the Oval Office, sitting in armchairs in front of a fireplace, each wearing appropriate dark power suits with muted ties. The image that the White House spinmeisters — who also put the video on You Tube — intended to convey recalls famous historical one-on-one diplomatic talks at the highest level: Nixon with Mao, or Roosevelt and Stalin.

But the Obama-Sang meeting was hardly a Roosevelt-Stalin like moment. It was a scripted, ceremonial occasion, typical of how American presidents have come to host visiting foreign dignitaries in recent years.

An unpublished photo shot by someone else in the room with a wide-angle lens shows that Sang had nine men in the Oval Office with him. Trade Minister Hoang was there, along with Agriculture Minister Cao Duc Phat and the head of Vietnam’s presidential office, Dao Viet Trung. Vietnamese Ambassador to the United States Nguyen Quoc Cuong also was present, as was Lt. Gen. To Lam. Gen. Lam is the deputy minister of Public Security, and formerly headed the ministry’s counter-intelligence department. Lam is also a member of the Communist Party’s Central Committee.

With so many watchers — not all of them necessarily loyal to President Sang’s own supporters in the Politburo — no Vietnamese President would be positioned to engage in substantive bargaining.

A sense of history

Perhaps the three most interesting Vietnamese officials present were the translator, Pham Xuan Hoang An; Foreign Minister Pham Binh Minh, and Colonel General Nguyen Chi Vinh, the deputy minister of national defense. These men carry a sense of history with them — and a longstanding serious professional interest in U.S.-Vietnamese diplomacy. To experienced Vietnamese watchers, the news that An, Vinh and Minh were in the Oval Office will convey a sense of Vietnamese seriousness.

Interpreter An’s father, Pham Xuan An, was perhaps the most important communist spy during the Vietnam War. An’s cover was as a reporter for western news outlets, including Reuters and Time magazine. This complicated man was made a general after the North Vietnamese victory in 1975. But then Gen. An was also detained in a camp for “reeducation” for a year, because he was suspected as being too close to the Americans.

In fact, An loved America (he helped one of the CIA’s most important assets escape when the communists took Saigon). But after the war, the spy explained to his American friends that his top priority had always been working for his country’s independence. An’s double life was the subject of Larry Berman’s fascinating Perfect Spy, published in 2007. Now, An’s son, translator Pham Xuan Hoang An, works in Vietnam’s consulate in San Francisco. Like his father, the younger An is a man who knows both countries very well.

While Colonel Gen. Nguyen Chi Vinh is hardly a household name in America, he is well known to Vietnamese watchers. His father, Gen. Nguyen Chi Thanh, was Vietnam’s second-ever general, after Vo Nguyen Giap. Gen. Thanh was the mastermind of the coordinated uprisings in nearly every major South Vietnamese urban center during the Tet Lunar New Year festivities in January of 1968. The Tet Offensive did not succeed in a military sense. But it is credited with being the proverbial last straw for the fed-up American public, which realized that the White House claims that the communists were on the verge of defeat were false.

Vinh is a member of the Communist Party’s Central Committee, and formerly headed the military intelligence department known (and feared) as Tong Cuc2. Veteran Hong Kong-based foreign correspondent Greg Torode has called Vinh Vietnam’s wily “Old Fox,” a man who is generally regarded as “Vietnam’s shrewdest strategic thinker.”

Vinh has been a key actor in Vietnam’s delicate balancing act involving major powers with security interests in the Pacific. He has been an important player in a variety of sensitive issues: countering Chinese intimidation in the South China Sea while simultaneously establishing military ties with Beijing; submarine and other weapons purchases from Russia; and also increasing U.S.-Vietnamese military cooperation. Vinh, who is well known in both Washington and Beijing, also showed up earlier this month for private talks with senior defense officials in Tokyo (who also have good reasons to worry about Chinese continuing aggressive moves in the Pacific).

Foreign Minister Pham Binh Minh also has a famous father. Nguyen Co Thach was Vietnam’s foreign minister from 1980 – 1991, where he worked unsuccessfully to normalize ties with the defeated Americans. Like his father, Foreign Minister Minh has a reputation as being keenly aware of the strategic importance of developing closer ties with the United States, by way of countering undue Chinese influence.

Minh related candidly at a Council of Foreign Relations event in 2011 that he had been full of “hatred” during the war, when as a child he endured the U.S. bombing of Hanoi. But ever since he joined the Vietnamese diplomatic service after the 1975 communist victory, Minh — like his father — has focused his own career upon finding ways to forge closer ties with Vietnam’s former war enemy.

Obama’s Diplomatic Team

While the July 25 Sang-Obama White House meeting was a tightly scripted affair, there was at least one moment of spontaneity, where Obama briefly reached out to strike a personal rapport with his Vietnamese guest. When U.S. and foreign “pool” journalists were admitted to the Oval Office for the usual photo opportunity, they shouted some questions to the two presidents. Obama ignored them, but was overheard whispering to Sang, “reporters are the same everywhere.”

A White House press aide declines to discuss who else was in the meeting on either the Vietnamese- or the American side. Pool reporters who were let in for the photo ceremony saw two U.S. officials besides National Security Adviser Susan Rice: Commerce Secretary Penny Pritzker, and U.S. trade negotiator Froman.

Pritzker, an Obama fundraiser from Chicago, is new to foreign affairs. Her Commerce Department is the agency that is widely resented in Vietnam for inflicting protectionist anti-dumping tariffs on the Vietnamese shrimp and catfish industries. And Froman, although also close to Obama, brings more of a domestic political focus to his job than genuine foreign policy experience. (Any diplomatic heavy lifting that was done would have been done a few blocks away from the White House, at Secretary John Kerry’s State Department. Kerry, a Vietnam War veteran, hosted the Vietnamese presidential delegation on July 24. He was in New York when the Vietnamese visitors met with Obama the next day.)Scripted or not, still, important signals were sent by both Presidents.

A Message from the Politburo

The Vietnamese delegation made it clear to Obama — as they had a day earlier in a meeting with trade negotiator Froman — that they were sincere about attaching a very high priority to advancing economic ties with the United States in the TPP negotiations, according to well-informed Vietnamese officials and also senior U.S. diplomatic officials who asked not to be identified.

Carlyle Thayer, a respected Vietnamese watcher who has excellent high-level connections in Hanoi, explains. Thayer, who is affiliated with the Australian Defense Force Academy, says he has seen a copy of an April 10 resolution drafted by the ruling Politburo, which has not yet been publicly released. “It makes economic integration with all the major powers Vietnam’s top priority, over all other forms of integration, including security,” Thayer reports.

In the Oval Office, President Sang stressed to Obama what Vietnamese officials have been saying for the last three years: that if the TPP negotiations are to succeed, Vietnam will need economic incentives — mainly substantial additional access to U.S. clothing- and footwear markets, which are currently encumbered with high tariffs. Vietnam’s main problem with the TPP is that for the same past three years, the White House has held up progress in the negotiations by refusing to make serious tariff-slashing offers.

White House press officials decline to discuss Obama’s response to Sang. For public consumption the two presidents agreed to put out a (bland) public statement noting that they would instruct their aides to do their utmost to complete the TPP by the end of this year. (The White House said the same thing last year, and also in 2011. Froman has been telling people that this time, the administration really means it.)

Signals from Washington

The White HouseWhat little detail is known about what Obama said during the meeting has been revealed by U.S. Ambassador to Vietnam David Shear, who spoke to a high-powered Vietnamese-American gathering in Washington, D.C.’s Virginia suburbs on August. 16.  Shear said that the Obama administration considers the TPP negotiations to be “extremely important.” But without “demonstrable progress on human rights” by Hanoi on human rights, “we will not be able to generate congressional support” for a TPP deal, the ambassador added.

Shear related that human rights had come up twice in the Obama-Sang meeting. The first, he said, was part of a general reference linking human rights as the key to enhanced economic and security ties.

According to the ambassador, the second reference to human rights came after Sang expressed Vietnam’s desire to purchase U.S. “lethal” weapons. “If you want to do that,” Shear said that Obama replied, “you’ve got to improve your human-rights practices.” (A full transcript of Shear’s remarks has not yet been posted on the U.S. embassy’s website.

As Hanoi’s human-rights record is currently being compared unfavorably to Vietnam’s Asian neighbors — even notorious Cambodia has held elections, while Myanmar has been busy freeing its political prisoners — Obama’s point is well taken. The Politburo must be asking itself these days what benefits the country is getting by continuing to imprison more than 160 peaceable political prisoners, whose “crimes” were merely exercising their rights to free political speech and peaceable assembly.

But the same Politburo members who are on the defense on human rights must also be asking why they should sign onto a TPP deal that would offer Vietnam dubious economic benefits.

Secret “21st Century” negotiations

Some parts of the TPP negotiations, to be sure, would clearly be aimed at boosting the Vietnamese economy. Vietnam has been struggling with the politically difficult task of reforming the country’s famously inefficient state-owned enterprises for some two decades.

Vietnam’s SOEs basically are secretive black holes and a drag on more than a third of the country’s economy. When the Obama White House spins the TPP deal as a “high-standard, 21st century” deal that will set an enviable template for trade in the Asia-Pacific region, SOE reforms come immediately to mind.

But other than the self-serving slogans, the White House has been refusing to explain to the watching publics any details of what the Vietnamese are being asked to do. Ironically, the White House is demanding that the Vietnamese economy become more open to market-oriented economics, while classifying what that might entail as a state secret.

Enter “Yarn Backward”

What Hanoi wants most in the TPP is for the United States to slash its high tariffs on imported footwear and clothing. There is a sort of role reversal here. The commies in Hanoi are pressing for free-market access to protected American markets. The Americans are demanding state control. The economic notion is called “yarn forward,” but the economics are hardly forward looking.

As I’ve previously reported, the French 19th century colonialists required that their Vietnamese subjects supply the mother country with textiles. Such imperial preference schemes supported France’s economic domination of Indochina — and inspired Vietnam’s independence movement.

Now the Americans are demanding the same sort of arrangement in the TPP. Vietnam would only qualify for duty-free treatment on its clothing- and footwear exports to the United States if it bought yarn and fabrics from another TPP country — translation: from the declining mills in the U.S. South, not non-TPP countries like China.

It doesn’t take an economics degree to see the flaws. Nobody — beyond insular-looking U.S. mills that long ago lost their competitive edge in global markets — pretends it makes economic sense. Why would any White House pressure the likes of Levis or Gap to buy their (heavy) denim from U.S. suppliers and ship it across the Pacific to Southeast Asia? Why would Obama even think of trying to force giant underwear manufacturer Hanesbrands to stop supplying its Vietnamese manufacturing from Hanes’ established suppliers in China or Thailand? Why would any White House insist that it has the right to disrupt the global supply chains of such respected major American corporations?

U.S. Trade Representative Froman has refused repeated requests to explain exactly why “yarn forward” would be in Vietnam’s best economic interests.

I have also asked U.S. Ambassador Shear if he was able to point to any economicDavidShear benefits to Vietnam in the yarn forward notion. Shear has been put in the diplomatically awkward position of defending the White House position on yarn forward to the Vietnamese. Shear declined to defend yarn forward’s economic rationale publicly. The ambassador referred the question back to trade negotiator Froman, who again declined comment.

[Ambassador Shear has a reputation as a thoughtful diplomat, albeit something of a team player. His deliberate non-answer could be interpreted as a diplomatic wink, conveying his distaste for the whole business. In private meetings with U.S. corporate executives, Shear has toed the Obama line, but his body language has suggested his discomfort.]

Meanwhile, the White House has been demanding that American clothing manufacturers turn over confidential information on how their global supply chains operate. Intimidated, the companies have mostly knuckled under. The Office of the U.S. Trade Representative even has a special web site for the companies to divulge their business secrets to the government. This access to the private proprietary data has given Froman and his aides the means to instruct the domestic industry where it can source their materials (the U.S. South) and where they can’t (China).

The American clothing importers are now scrambling behind the scenes to receive special exemptions for themselves from the White House. The corporate lobbyists are looking to protect at least parts of their global supply chains from White House interference.

Of course, even with the limited TPP carve-outs that the feds may grant, the rules would always still be subject to sudden change, depending upon unpredictable bureaucratic whims. The American companies could stop the whole business if they had the nerve to stop groveling — which they have never quite summoned in previous U.S. trade negotiations.

China Bashing

The White House unconvincingly denies that the TPP is part of an anti-China economic encirclement strategy. Yarn forward was first included in the U.S. preferential trade deal with Mexico in the early 1990s, and then to other Latin American countries. The idea then, as now, was to hold back Chinese and later, other Asian imports.

It has failed. The rules are so cumbersome that only about 17 percent of Latin American trade goes through the “yarn forward” rules. Companies mostly prefer to pay the tariffs rather than suffer the paperwork.

Relief for Africa

When the Africans were negotiating the Africa Growth and Opportunity Act with the United States in the 1990s, the congressional Black Caucus vehemently objected to yarn forward rules because the principle offended them. Congressmen like Charles Rangel, a Democrat who represents New York’s Harlem neighborhood, fumed that yarn forward reeked of colonialism. Moreover, Rangel protested, such rules were even racist. Consequently, the AGOA trade deal allows the Africans to buy their cotton and other fabrics from China, or anywhere, as long as the final clothes are “cut and sewn” in Africa. In the TPP negotiations, anything short of clean “cut and sew” rules for clothing would hold back Vietnam’s export potential.

Another bitter irony for Vietnam: These days Rep. Rangel and other African-American lawmakers are lobbying for Obama to force upon Vietnam the same yarn-forward rules they formerly attacked as colonial and racist. And Central American countries like the Dominican Republic, who aren’t in the TPP and want to keep Asian competitors at bay, are also piling on Vietnam.

Michael FromanUndeterred, in Brunei last week, trade negotiator Froman still insisted that strict yarn forward rules remained at the “core” of what the U.S. wants in the TPP. He continued to withhold from the public any real details of what was in the TPP, other than the spin that it would be a “high standard, 21st Century” trade template.

The smart money would bet that the Vietnamese will end up swallowing hard and accepting a watered-down TPP deal, giving them modest increased market access for shoes and clothes, while making minimal market-opening concessions to the Americans. Call that TPP Light.

But perhaps the shrewd Politburo operatives in Hanoi, or at least enough of them, have the same sort of determination as did their fathers’ generation. After all, the Vietnamese negotiators should understand that Obama is the one who needs a TPP deal most. Could the American president really allow the TPP to fail, just because the Vietnamese want to sell Americans more pairs of underwear, blue jeans, and sneakers?

Talk about a déjà vu feeling. In the 1940s, President Truman ignored prescient warnings from U.S. intelligence and diplomatic officials that it would be a big mistake for the United States to get on the wrong side of the struggle against colonialism. Now, President Obama pays little heed to warnings that it is unwise to risk important trade talks with Vietnam — and America’s standing in Asia — for parochial domestic politics.

Some people never seem to learn their history.

Say NO to TPPA–Press Release

August 24, 2013

Say NO to TPPA–Press Release




Pertubuhan-pertubuhan yang menganggotai BANTAH TPPA dengan ini menyeru kepada 12 Negara yang menyertai Trans Pacific Partnership Agreement (TPPA) untuk menolak sebarang usaha ke arah Penjajahan Korporat terhadap warga Asia Pasifik dan berusaha untuk melindungi, mengekalkan dan mempromosi sistem perdagangan yang benar-benar bebas, adil dan selamat di antara negara-negara yang terlibat.

Kami menggunakan istilah Penjajahan Korporat untuk merujuk Regim TPPA, kandungannya dan proses perlaksanaannya kerana kepentingan gergasi-gergasi korporat sangat jelas telah mempengaruhi peruntukan-peruntukan kontroversi di dalam perjanjian ini dan kerajaan-kerajaan pula telah ditekan dan dipaksa untuk menerimanya.

Sekali lagi, gabungan Bantah TPPA menyeru kerajaan – kerajaan yang menyertai TPPA untuk menolak sebarang usaha menundukkan rakyat dan negara ini dengan perangkap ekonomi yang tersembunyi di balik tabir oleh syarikat-syarikat transnational Amerika.

Ia adalah satu perjanjian mudarat yang akan memberi kesan kepada kedaulatan negara, memperjudikan kesejahteraan ekonomi, dan akan menyebabkan kesusahan dan penderitaan kepada rakyat negara ini.

Mengkhianati niat tulen kerajaan-kerajaan dan rakyat negara-negara berkenaan untuk meneruskan perdagangan antarabangsa yang adil dan kerjasama ekonomi yang bermanfaat ke arah pertumbuhan ekonomi yang kukuh, kestabilan dan kesejahteraan bersama.

Kami, rakyat Malaysia mewakili semua kaum, budaya, kepercayaan, kepentingan, pekerjaan, kerjaya dan dagangan dengan ini mengumumkan bahawa kami tidak akan menerima dan dengan tegas menolak sebarang keputusan perundingan TPPA jika pandangan, kebimbangan dan tuntutan kami tidak dilibatkan dengan cara yang sepatutnya.





23 Ogos 2013

TPPA: Kudos to Prime Minister Najib

August 18, 2013

TPPA: Kudos to Prime Minister Najib

by BA Hamzah, DSDK

NajibKudos to Prime Minister Najib Razak for taking pre-emptive measures on the controversial Trans-Pacific Partnership Agreement (TPPA). The Cabinet’s decision is a soft reminder to the Ministry of International Trade and Industry (MITI) to be more sensitive to the aspirations of the rakyat.MITI is accountable to the Cabinet, which in turn is answerable to the rakyat.

The Cabinet has set the litmus test for Malaysia joining the TPPA: favourable terms for those affected by the Treaty. The ball is now back in MITI’s court, which must now make sure the Treaty benefits Malaysians.

It would have been a different narrative if, for example, the MITI negotiators were to first consult some experts in trade and investment policy and the affected parties before taking on the “big boys”. [Five of the TPPA members have GNP per capita above US forty-thousand dollars; US$12,000 for Brazil and US$5,000 plus for Malaysia].

One trade expert that MITI should forthwith consult is the Cambridge- educated, former USM colleague and Penang- based columnist for The Star Martin Khor.

Had it held its belated “Open House” much earlier and long before Tun Mahathir and others criticised the TPPA, MITI would not have to go through this wrenching soul searching process. A few of us including my good friend and blogger, Dato’ Din Merican and I are concerned with MITI’s defensive style, which has inevitably dented its credibility. MITI should not behave like an ostrich burying its head in the sand.

Members of the public are not privy to the negotiations. While we put our trust in MITI, we also expect it to do rigorous homework. Now, we know that a comprehensive study has not been completed and that no cost-benefit study in two critical areas was conducted.

We can only hope that the results of these studies will be made public as the rakyat has every right to know what is in store for them. MITI is not empowered to act without the consent of Parliament, which represents us, the people.

Whether the MITI Open House on August 1 was an afterthought orDatuk-Seri-Mustapa-Mohamed otherwise, the session was a welcome opportunity to “exchange” views. Unfortunately the forum turned out to be an unusual exercise in public relations. At that session, MITI merely restated its position that everything was overboard. Of course, as expected, it promised to bring the expressed concerns for further discussion.

Knowing what we want is half of the picture. Getting what the Cabinet has mandated is a challenge that our negotiators must live up to. Will the “big boys” continue to listen to our pleas and woes? Is it not too little too late to renegotiate the terms when the clock has started ticking? What is the fate of million Malaysians whose livelihood depends on the state-owned–enterprises (SOEs) and small- and- medium enterprises (SMEs) once the TPPA comes into operation, for example?

Many thousand poor Malaysians suffering from cancer, AIDS and myeloid leukaemia who depend on cheaper generic drugs have reasons to smile after the Cabinet made a decision that it would not agree to any provision in the Treaty that limits access to affordable medicine and healthcare.

Under the TPPA rule on intellectual property right, only patented drugs are allowed. With regard to this, the Indians are more fortunate following a recent Supreme Court decision that rejected a patent for a cancer drug; the cheaper generic version costs only US$165; the would- be- patented drug costs US$2,666 a month!

Renegotiating issues like jurisdiction in the investor-state dispute settlement mechanism, status of government procurement policies, status of state-owned enterprises, policies on financial services including capital controls, and the impact of intellectual property rights on the cost of medicine and healthcare, is, in my view, difficult at this late stage.

The multinationals are using the TPPA to rewrite the rules of international trade and financial services. The multinationals are determined to rein in the role of state enterprises and promotion of local small and medium private companies, which they allege have been blocking access to markets in Third World countries.

The role of the state as actor in international relations will likely to be eroded under the TPPA trade-imposed regime; the multinational companies have supplanted their role. The fear in some quarters that the state can no longer exercise sovereign immunity over certain trade -related issues is quite justified.

NajibWith the multinationals in the driver’s seat, anti-smoking pictures or slogans like “smoking is bad for your lungs”, “that second hand smoke kills” or “smoking leads to cancer” will no longer be allowed. Governments can be sued for displaying these slogans!

Whether PM Najib Razak will call- off the unpopular TPPA depends on many factors–external and domestic. Externally, withdrawing from the TPPA will not endear KL to Washington especially when Malaysia is hosting President Obama in October. Domestically, it depends on how much the Treaty will affect his chances of retaining UMNO Presidency in the upcoming UMNO General Assembly slated for October, too. On balance, however, when push comes to shove, the latter will have the final say.

On TPPA: MITI responds

August 14, 2013

COMMENT by BA Hamzah: Judging from the statements of prominentBA Hamzah cabinet Ministers over the TPPA it would seem that Malaysia is now more determined to be a member. More so after Tun Mahathir has openly criticised the treaty for its lack of transparency and unfavourable content.

The TPPA is likely to be debated at the forthcoming UMNO General Assembly in October alongside Pak Lah’s latest “The Awakening”. Don’t be surprised if a few were to thumb the table with late Barry Wain’s book on Mahathir: The Malaysian Maverick: Mahathir Mohammad in Turbulent Times.

Anything under the sun is possible at an UMNO meeting including belacan that Malaysia, under the TPPA, can market to Brunei. Of the twelve, Brunei has the tiniest market. The population of Brunei is one third of Kuala Lumpur. What can we sell to Brunei except for belacan?

Malaysia’s membership of the TPPA is likely to be about UMNO politics as it is about free trade. Well it is not really free trade, as it also talks about financial services. Under the proposed TPPA, Malaysia can no longer introduce capital controls in the event of another Soros type currency speculation. The TPPA is also about state-owned–enterprises (SOEs) and small- and- medium enterprises (SMEs), which have been consciously developed over the years for specific reasons. These two will come under scrutiny.

One Minister has suggested that the TPPA would rein in corruption among Government officials. I have not figured out how this can be achieved, presumably through the proposed intervention in Government procurement policies. It will indeed be a miracle if the TPPA mechanism can rein in rampant corruption in Malaysia.

Without the SOEs, SMEs and Government contracts, not only Malays will suffer. Every one who depends on the Government for business will have to bite the bullet too. It may put an end to the New Economic Policy, which is supposed to favour the Bumiputeras.That’s not a bad outcome since it puts end to crony capitalism and political patronage. But it also means an end to the policy of restructuring the society, the other pillar of the NEP, to eradicate poverty irrespective of race.

Who drives the TPPA? MITI says the decision is by consensus, so it is on auto-pilot mode. Interesting!. Scratch the surface slightly, you will find that the train is auto-piloted by large American multinationals like the tobacco companies and pharmaceutical giants.

Forget about educating Malaysians on the hazards of smoking under the TPPA agreement. Displaying anti-smoking pictures or captions like “smoking is bad for your lungs”, “that second hand smoke kills” or “smoking leads to cancer” is unfair form of trade.

Under the TPPA, Big tobacco companies must be permitted to sell cigarettes, irrespective of the health hazard of smoking.It is OK if it kills people, as long as it fairly traded!

The impact on healthcare is going to be steep for Malaysians who cannot afford patented drugs. Under the TPPA rule on intellectual property rights, only original, patented drugs are allowed. Generics are not.

Imagine those suffering from AIDs and myeloid leukaemia, which need cheaper generics to stay alive.

The Supreme Court in India has done a service to the poor by recently rejecting a patent on a cancer drug that costs a US$2,600 a month. Now Indian drug makers can continue to sell the same drug for US$165 a month. Fortunately for Indians, India is not party to the TPPA.

On the surface, TPPA is designed to benefit the wealthy. The poor must continue to endure and suffer because of bad policies. MITI should have a  heart for the poor Malaysians suffering from cancer and myeloid leukaemia.

MITI should listen to the voices of the educated and well-informed members of the civil society too. It would seem that it is adamant in pushing the agenda. Whose agenda is it? Is a regime agenda? Or should MITI be more concerned with the poor rakyat who voted for the regime?

Fair representation is a key element in a functioning democratic system. Politicians are elected to represent the people and Government officials are mere civil servants whose primary duty is to serve the rakyat. In this particular case, MITI must put the interest of the common people above regime loyalty.

Regime comes and goes; the rakyat stay.

How much of the TPPA is about geopolitics? Plenty. Ten TPPA members are allies, near allies or client states of America: Australia, Canada, Chile, Japan, Mexico, Peru, Singapore and Vietnam.This can probably explain why China is not invited. All eleven have FTAs with the US. Malaysia does not. 

Arguably, the TPPA augments the US military policy of pivoting to the East targeting at China. Since when has Malaysia moved into the US policy orbit of containing China, which is currently our largest trading partner?

The TPPA is a rich-man club, going by the GNP per capita. Except for Malaysia, Mexico, Peru and Vietnam, the GNP per capita of seven other countries are above forty-thousand US dollars; thirty eight thousand for New Zealand and twelve-thousand for Brazil.

Datuk-Seri-Mustapa-MohamedThe majority of Malaysian rakyat want Tok Pa (Dato Seri Mustapha Mohamed) and MITI to first resolve favourably the fate of small and medium scale enterprises, jurisdiction issue in the investor-state dispute settlement mechanism, status of government procurement policies, status of state-owned enterprises, policies on financial services including capital controls, and deal with the impact of intellectual property rights on the cost of medicine and healthcare before moving ahead with the TPPA.

The rakyat will not accept any fait accompli decision. The days when the top can impose their will on ordinary Malaysians are over.

On TPPA: MITI responds

MITI-MalaysiaMPORTANT INITIATIVE: Country’s GDP set to improve, while its goods and services will reach a wider market, says MITI

THE Trans-Pacific Partnership Agreement (TPPA), an initiative to establish a free trade agreement (FTA) between 12 countries – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam – will see a market of 800 million people and combined gross domestic product (GDP) of US$27.5 trillion (RM89.1 trillion).

The agreement covers new elements such as competition, labour, environment, government procurement and intellectual property rights. The International Trade and Industry Ministry (Miti) has put together a Q&A (question and answer) to address public concerns and fears about the ongoing talks.

Here are the excerpts from Part One:

Question: What is the rationale of joining the TPPA negotiations?

Answer: The government views the TPPA as an important initiative as Malaysia seeks to expand market access opportunities, enhance its competitive advantage and build investor confidence. The comprehensive study conducted by the United Nations Development Programme (UNDP) also identified several major economic benefits to Malaysia, including welfare gains of 1.46 per cent and higher wages for skilled and unskilled labour by 2020, in addition to improved GDP growth due to greater market access among member countries.

The successful conclusion of the TPPA will form a huge market of 800 million people with a combined GDP of US$27.5 trillion. This far surpasses Malaysia’s limited domestic market of 29.5 million people and a GDP of US$300 billion.

According to a simulation study done by the Peterson Institute of Economics in June last year, by 2025, Malaysia will benefit with an increase in gross national income by RM26.3 billion and increase in exports of RM41.7 billion.

Admittedly, the government is aware of the challenges and controversies surrounding the TPPA because unlike other FTAs, it is comprehensive and covers more areas of interest, which would naturally invite more public opinion and debate. The government appreciates all views expressed on the TPPA and will continue to engage the stakeholders and NGOs for inputs and feedback.

Question: What are the benefits of TPPA for Malaysia?

Answer: Consultations with various stakeholders prior to joining TPPA negotiations have revealed an increasing request from Malaysian companies for more open markets and trade facilitative measures. There are increasing numbers of Malaysian companies becoming global investors and they require a level of predictability that can be guaranteed effectively through binding agreements like FTAs.

Concurrently, there is also interest from foreign companies from non-TPPA countries that are exploring Malaysia as a base for their operations as the hope to enjoy the benefits of the TPPA. The combination of greater market access for Malaysian products and services under the TPPA and the continued inflow of foreign investments will create a powerful catalyst in driving Malaysia’s economic transformation agenda.

With TPPA, Malaysia will become an integral part of the greater economic integration within the Asia- Pacific region. It will also significantly enhance Malaysia’s engagement with important trading partners such as the US, Canada, Mexico and Peru. As a member of TPPA, Malaysia will also be able to increase it participation in the regional supply and value chains and facilitate access for Malaysian products and services into bigger markets.

Question: What are the challenges of the TPPA for Malaysia?

The government is aware of the many benefits and the challenges involved. For instance, government procurement is one of the new elements in TPP, which was never part of the FTAs that Malaysia has signed. This is one strategic area the government is negotiating cautiously, after taking into consideration feedback from stakeholders, particularly on the concern of safeguarding the interest of local enterprises and the Bumiputera commercial and industrial community.

Intellectual Property Rights (IPR) is another difficult area. One of the main concerns on IPR revolves around access to affordable medi-cine and healthcare as well as longer protection term which might delay manufacturing of generic drugs.

Malaysian negotiators will continue to negotiate an outcome that will give Malaysians access to affordable medicine and healthcare.

Question: What will happen if Malaysia does not join the TPPA?

Answer: The TPPA offers Malaysia an opportunity to be part of a consumer market with 800 million people. Abandoning the TPPA negotiations now would mean allowing other countries to set the terms of agreement without considering Malaysia’s interests and concerns. Acceding to the TPPA later would result in Malaysia having to accept the rules, disciplines, terms and conditions decided by others.

By not joining the TPPA, Malaysia would be at a disadvantage in terms of seeking bigger and better market access for its products and services. The impact of that disadvantage will be even more significant should countries like China, Indonesia and other competitors decide to join later.

Once realised, the TPPA will result in a huge consumer market for Malaysian goods and services. Market access to 800 million people is not an opportunity we can afford to miss, especially since we are an open economy highly dependent on international trade. In an increasingly competitive global environment, our absence will make Malaysia less attractive as an investment destination, compared with those that are TPPA members. As investors avoid Malaysia, this could result in fewer opportunities for job creation.

Question: Who is in charge of the TPPA negotiations?

Answer: The cabinet has mandated MITI to coordinate Malaysia’s participation in the TPPA negotiations. MITI acts as the chief negotiator but other ministries and agencies will lead the working groups for areas under their responsibility. (See Table 1).

With the mandate from the cabinet, the lead ministries and agencies involved are focused on safeguarding Malaysia’s best interest in the ongoing negotiations. Before every negotiating round, the cabinet is briefed on all issues, and for the necessary mandate to be given to all negotiators.

Question: Was there a lack of consultation in forming Malaysia’s position in TPPA?

Answer: The government admits more consultations could have been carried out. In this regard, MITI has made many statements assuring the public that consultations have been carried out by negotiators in their respective fields.

It had also organised a TPPA open day on August 1 to update the public and the media on issues surrounding TPPA, to clear misconceptions about it and to hear the public’s concerns about it.

MITI welcomes the establishment of a bipartisan caucus in Parliament. Its minister had met and briefed the caucus on developments and issues concerning the matter. The caucus provided constructive inputs to the government.

It must be noted that inputs and feedback from industry associations, interest groups and business chambers play a key role in the formation of Malaysia’s negotiating positions. To illustrate a point, Malaysia’s position in the negotiations on government procurement, led by the Finance Ministry, strongly reflects the concerns of stakeholders, the Bumiputera business community and state-owned enterprises (SOEs) as well as that the small and medium enterprises (SMEs).

Malaysia has also maintained the rights of all states on matters related to land and water. On SOEs, Malaysia’s position is determined by the Finance Ministry and Khazanah Nasional Bhd.

The government will continue to engage all stakeholders. In addition to the open day, MITI met the Coalition to Act Against the TPPA Malaysia on August 6 and discussed ways to enhance engagement with stakeholders. Miti welcomes feedback and opinion from all parties regarding the TPPA.

Question: Why the secrecy in TPPA negotiations?

Answer: While the negotiating texts have never been made public as negotiations are ongoing, the government has and will continue to share its negotiating position with relevant stakeholders during the consultation sessions.

A level of confidentiality is required for two main reasons: (a) regulations and the evolving process of negotiations and rules surrounding TPPA oblige negotiators to maintain confidentiality of the negotiating texts and (b) negotiators advancing the interests of Malaysia, strategically do not want to publicly disclose their bargaining positions to ensure the best outcome during the negotiations.

Mindful of the public feedback, the Miti minister will put this issue on the agenda of the forthcoming TPP Ministerial Meeting in Brunei.

Question: Why rush TPPA by October this year?

Answer: As in all negotiations, there is a need to work towards a target date to conclude negotiations. It should be noted that the Trans Pacific Partnership Leaders Statement issued on November 12 2011, in Honolulu, clearly called on the negotiating teams to continue talks with other Asia-Pacific partners that have expressed interest in joining the TPPA in order to facilitate their future participation. TPPA leaders have set an October target for substantial conclusion of the negotiations.

However, this is not a definitive deadline for the conclusion of the TPPA as the parties involved are still negotiating on a number of sensitive issues. It is in Malaysia’s best interest that TPPA is concluded in a manner that benefits the people.

Question: Why is China not in the TPPA?

Answer: The position of all TPPA members is for this agreement to be a building block for the Free Trade Agreement of the Asia Pacific (FTAAP), which will encompass all the Asia-Pacific Economic Cooperation (Apec) economies, of which China is also a member. Membership in TPPA is voluntary. Every APEC member, including China, is free to decide when to join TPPA.

China is a very important trading partner to Malaysia. As such, Malaysia certainly welcomes China into the TPPA.

Can ASEAN Bloom for 50 Years More?

July 26, 2015

MY COMMENT: The future of ASEAN depends on the people of Southeast AsiaDin Merican (2). The question that we need to address is the issue of relevance of ASEAN in our daily lives, especially its capacity to promote regional economic integration and ensure that big power rivalry (between China and the US and no longer ideology) does not upset peace and stability in our region.

Right now I see ASEAN as an ineffective top driven organisation where there is more talk than action. Take case of the haze which is adversely affecting Malaysia and Singapore. Even human rights abuses in some member states are never discussed by ASEAN Leaders at their summit meetings. Perhaps, this is because of their own dismal record on human rights. There is also no development fund to speak of which can be used to provide funds to the new members of ASEAN. I am less optimistic about ASEAN than Dr Hamzah, given its track record so far. -Din Merican

Can ASEAN Bloom for 50 Years More?

by Dr BA Hamzah

BA HamzahThe Minister of International Trade and Industry, Dato  Seri Mustapha Mohamad, got me off-footed with his recent remarks on the lack of awareness among those surveyed by the ASEAN Secretariat (New Straits Times,19 July). On closer examination of the Report ‘Surveys on ASEAN Community Building Effort, 2012’, the situation is not that gloomy if we are thinking of celebrating ASEAN’s Golden Jubilee in 2017.

However, a centennial celebration for ASEAN in 2067 is a guess as wild as anybody can make. After all, predicting ASEAN’s future or destiny is a very delicate job even for an accomplished clairvoyant. William Shakespeare reminds us “it is not in the stars to hold our destiny but in ourselves”.

In “Vanished Kingdoms”, Professor Norman Davies of Oxford reminds us that power is transient. He writes, “Sooner or later all things come to an end. … All states and nations, however great, bloom for a season and are replaced.”

It is no small feat for ASEAN to have bloomed for almost fifty years; the League of Nations lasted only for thirty- nine years. Will ASEAN face the same destiny as the European Kingdoms in Norman Davies book or the League of Nations, in 2067? Your guess is as good as mine.

Some leaders are overtly obsessed with keeping the ASEAN experiment alive forever. As a product of the 1967 generation, like many, having enjoyed the peace dividends, I am appreciative of ASEAN. I was witness to the many crises in the region before the founding fathers summoned their morale courage to design ASEAN as regional political security architecture of peace in Southeast Asia.

The region went through crisis after crisis, some spilled over into neighbouring states. The Sukarno-inspired Confrontation against Malaysia, for example, forced some of us to join the military. The American war in Indochina has scarred in its proud history.

I have the impression that the successful ASEAN experiment to establish a political security community has lulled us, made us complacent and ignorant of a dark past in regional history. ASEAN was formed primarily for political and security reasons. Today, while acknowledging the value of political co-operation, the leaders put more emphasis on economic and cultural linkages.

Despite a successful experiment in regionalism, should present leaders continue to indoctrinate and compel the immediate generation to seduce the generations of 2067, for example, to keep ASEAN intact? Are we not being over presumptuous to suggest that what is good for the goose is also good for the gander?

Is it ethical to impose our values on them? Should the current generation decide on the destiny of ASEAN in 2067? Winston Churchill puts it elegantly when he said, “the empires of the future are the empires of the minds.” Of course, the minds of the future generations will have to determine, in this case, what they wish to do with ASEAN.

The Chinese have a saying; if you are planning for one year, plant rice; if you are planning for a decade, plant trees. If you are planning for one hundred years, invest in education. In Churchillian sense, education is about moulding critical minds. Education that broadens the minds of citizens is critical to the destiny of ASEAN. All ASEAN countries should educate, not indoctrinate, their citizens on the importance of ASEAN for regional security, trade and for cultural exchange.

Quo vadis ASEAN, in a new geo-political environment? The US, China, India and Japan under Abe-san, have returned to the region. The footprint of their rivalries is everywhere, in the South China Sea and in the Straits of Malacca.

In a transformed regional geo-political outlook, the strategic value of ASEAN has declined. With the big powers back in the region, competing for influence and primacy, and the proliferation of new regional security and economic institutions, ASEAN has lost its centrality and near monopoly over regional security.

Regional maritime security, for example, is now subject to very intricate power play between the external powers and client states. If leaders do not read the tea leaves properly, we will become pawns in big power games, once again.

The future of ASEAN in 2067 is for the generations to decide. They may wish to be part of the larger community like the East Asia Community. We can only hope they will decide wisely. They may wish to ponder over George Santayana’s dictum that “Those who do not learn from history are doomed to repeat it”.




TPPA: Malaysia is NOT for Sale

July 23, 2013

MY COMMENT: Why the rush to get this TPPA signed andSAM_0358 sealed in time for the forthcoming visit of President Barack Obama  to Malaysia en route to Brunei.There are a number of provisions in the TPPA that are detrimental to Malaysia’s interest.

MP Shahrir Samad, the evergreen politician from Johor Baru, had suggested that we should have a bi-partisan group reflecting diverse interests in Malaysia to look at the TPPA thoroughly. His advice should be followed. We must prepare for the future but we must never compromise on our future. The MITI Minister must convene such a group. Our negotiation team is strengthened if  it comes to the table with the people’s support. Strange as it may seem, nobody in officialdom has explained the secrecy surrounding TPPA. –Din Merican 

TPPA: Malaysia is NOT For SALE

by  Dato’ Dr. R.S.McCoy@

In reality, the Trans-Pacific Partnership is not an equal partnership that stands for mutual gain. Essentially, it is a one-sided, legally-binding agreement which protects and enhances the economic interests of investing foreign transnational corporations, particularly from powerful countries such as the United States, and enables them to undermine a weaker country’s sovereignty and democratic foundations in the pursuit of their profits.–Dato Dr. R.S McCoy

COMMENT: It is critically important for the people and government of?????????????? Malaysia to think very carefully about the opaque, American-led Trans-Pacific Partnership Agreement (TPPA) and to recognise it for what it is.

Ostensibly, it is a multilateral trade liberalisation agreement among 11 countries – Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States of America and Vietnam.

In reality, the Trans-Pacific Partnership is not an equal partnership that stands for mutual gain. Essentially, it is a one-sided, legally-binding agreement which protects and enhances the economic interests of investing foreign transnational corporations, particularly from powerful countries such as the United States, and enables them to undermine a weaker country’s sovereignty and democratic foundations in the pursuit of their profits.

The Trans-Pacific Partnership Agreement (TPPA) is made up of 29 chapters, but only five are about trade. The other 24 chapters deal with sensitive issues, such as patents, copyright, intellectual property, transparency, labour, development, government procurement and the environment, among others.


Exclusive negotiations have been going on in secret since 2008. And yet, 600 US business corporations have direct access to the deliberations. The only way in which information seeps out is through leaks.

In the event of a dispute, the TPPA empowers the investor to sue a host government in an international court, under an Investor-State Dispute System (ISDS). For Malaysia, it will represent a return to the yoke of neo-colonialism, 56 years after Merdeka.

In the distant past, disputes over foreign investments were resolved either through the host country’s domestic judicial system or through government-to-government negotiating processes.

Today, in the TPPA, foreign investor protection, through enforcement of an ISDS, threatens to undermine independent national justice systems and fundamentally shift the balance of power in a manner that detracts from the fair resolution of legal disputes.

ISDS tribunals essentially fail to meet the fundamental principles of due process, consistency and transparency, common to the Malaysian legal system.

‘Greater rights for foreign investors’

In the TPPA, the substantive rights of the foreign investor have been expanded significantly through creative, elastic interpretations of the new language of current investment treaties, which are skewed heavily in favour of the economic interests of transnational corporations at the expense of the public interest, national autonomy and state sovereignty of the host country.

More than that, this system of the free market often grants foreign investors greater rights and privileges than those enjoyed by local investors under the laws and constitution of the host country.

There are numerous examples of how sovereign states have suffered from the legal entanglements of such trade agreements.

In the recent case of Chevron vs the government of Ecuador, an order by an arbitral tribunal forced the executive branch of the Ecuador government to violate its constitutional separation of powers and halt the enforcement of a ruling by an appellate court.

In June 2012, in the case of the Railroad Development Corporation (RDC) vs the Republic of Guatemala, under the Central Free Trade Agreement (Cafta), the tribunal ruled that the US$11.3 million award in favour of the RDC was further enhanced by a court order to pay compound interest, dating back to the time when RDC first challenged government action.

Investor-state tribunals have constructed wide interpretations of the minimum standard of treatment language and the related fair and equitable treatment standard, proposed for the TPPA, which will hold governments liable for an array of actions that meet the customary international law standard of denial of justice.

Tribunals have generated theories of investor expectations that have led to awards being granted simply because governments have altered policies of general application in response to changing circumstances, such as financial crises, or in response to public demands when environmental and other laws are violated.

Some of these interpretations have placed the economic interests of transnational corporations over and above the sovereign right of states to regulate and govern their own affairs.

Malaysian political parties, professional organisations and civil society groups have been quick to point out the pitfalls and traps set by the TPPA.

Hold government to promise

The legal profession in many countries has raised serious concerns about the Investor-State dispute arbitration provisions, proposed in the TPPA, pointing out that such a regime could undermine justice systems and the fair resolution of legal disputes.

It is a legitimate concern of foreign investors that they have access to an open and independent judicial system for dispute resolution in the host country.

It is therefore up to the Malaysian government to convince foreign investors that Malaysia’s judiciary is independent and impartial and that there is no justification for such a stringent dispute settlement system.

For example, the TPPA will strengthen the power of profit-laden pharmaceutical companies to challenge a country’s health policies on patents and generic drugs.

Many studies have shown that trade agreements with the United States or Europe have led to escalating drug prices, following strict patent rules on the sale of cheaper generic drugs and the consequent use of more expensive branded drugs.

During 2002–2006, enforced secrecy of data interrupted the introduction of cheaper generic versions of 79 percent of medicines released by 21 multinational drug companies. Such policies will drive up the cost of health care in an unacceptable way.

The TPPA will also enable the tobacco industry to challenge government policies and  laws on smoking and tobacco control, enacted to implement obligations under the World Health Organisation Framework Convention on Tobacco Control.

Incredibly, the governments of Uruguay and Australia are being sued by Philip Morris for their “plain packaging” regulations. But in its TPP negotiations, the government of Australia has asserted its support for the rule of law and has refused to accept or submit to the powers bestowed upon such a system of dispute settlement.

The Malaysian government must follow Australia’s example and reject the TPPA as it stands.

Datuk-Seri-Mustapa-MohamedInternational Trade and Industry Minister Mustapa Mohamed has given a reassurance that the views and opinions of opposition parties and non-governmental organisations have been taken into account to protect the country’s interests.

Mustapa has promised that “if the agreement is detrimental to our sovereignty, we will not sign the TPPA” and that “the people’s views and that of national interest will surely be considered.”

The people of Malaysia must hold him to that promise, but not before there is a wider, open public debate. What better way to do that than having the TPPA debated meaningfully and openly in civil society forums and in Parliament?

There must be no secret negotiations or secret agreements. Transparency and accountability are imperative. Malaysia is not for sale or for exploitation.

DR RONALD McCOY is a former President of the Malaysian Medical Association and International Physicians for the Prevention of Nuclear War.

Unjust Muslim rulers mask economic folly

July 16, 2013

Unjust Muslim rulers mask economic folly

By Hossein Askari

Hossein_Askari_2009_IMG_0982_460x200The global media almost never questions the religious credentials of politicians and rulers around the world. Reporters should ask all Muslim rulers a simple question. If you are a devout Muslim, how come you are oppressive, unjust and wealthy?

While I agree that a person’s religion should be almost always a private matter between the person and his or her God, I think it is different when that person is head of state and professes a religious belief, when he touts it to garner votes or political support, and especially when he runs a country where there is no separation of religion and state. To be fair and upfront about my interest in this, it is broadly the case in many Muslim countries in the Middle East and the religion in question is Islam.

To anyone who is familiar with the Islam of the Quran and of the life of the Prophet Mohammad, a devout Muslim is not simply a person who professes that there is only one God with Mohammad as his messenger, prays, fasts, gives alms, and goes to Mecca. These somewhat mechanical actions though important are eclipsed by the one thing that is at the foundation of the Islamic faith – justice. A devout Muslim must be just in all that he or she does and oppose injustice wherever it is.

Important signs of injustice include: oppression, unequal opportunities for individuals to develop and realize their dreams, highly skewed income and wealth distribution, opulence alongside poverty, and environmental degradation and resource depletion that compromise God’s gift for future generations. In short, while upholding the unity of Allah’s creation, a Muslim should do whatever it takes to promote social and economic justice.

What does this mean in practice? Islam is a rules-based religion. Many of these rules, such as equality before the law, must be institutionalized. Good institutions are at the core of a flourishing Muslim society. A Muslim must follow the rules, do what he or she can to make other Muslims to do the same, and if Muslims fail as individuals, then the state must step in to address the problem(s).

In a sense, the state (the ruler) has to be more responsible and rule-compliant than individual Muslims. Rulers must establish good and efficient institutions, especially the rule of law, efficient markets, sound contract and business laws and regulations, structures that impede corruption and discrimination, and encourage good business practices, etc. In turn, the state gains legitimacy in a Muslim country by upholding the laws and justice, while being just and following the rules itself. What does all this mean for Muslim rulers?

Rulers must not rule by force. They should have popular support and must be answerable to the community. And as we have said above, they must be “better” Muslims than the average Muslim in obeying and enforcing the rules of the religion in a country where there is not separation of religion and state. If a ruler is oppressive, then Muslims must confront him.

mubarak-bushRulers must live simply. They must not have opulent lifestyles and hoard wealth. They should live as the poorest member of society so that they feel what it is like to be deprived.

Rulers must develop economies that afford all members of society an equal opportunity to succeed and develop. This means equal access to a good education, healthcare, basic nutrition and job opportunities. This does not, however, mean equal incomes and of wealth. Allah did not choose to create all humans with equal abilities. So it is natural that incomes will be different.

But differences in income and wealth must not be large. The more fortunate must pay an income (khums) and a wealth (zakah) tax discretely to help the disadvantaged. And if there is still a wide gap in wealth or if there is poverty, individuals must do more; and if the opulence and poverty continue to co-exist, rulers must step in to correct the imbalance.

Thus a ruler must create the required conditions and institutions for individuals to develop and flourish and live by example the life of an exemplary Muslim.

Society and the state (rulers) must provide a dignified life for the disabled and others who cannot provide for themselves.

Rulers, including all of society, are agent-trustees of God on this earth. They must preserve the environment (God’s gift to humans of all generations) and replace what depletable resources (such as oil) they use so that future generations enjoy the same. I don’t mean replacing oil with oil, but oil underground is a part of society’s capital stock; its depletion could be compensated by capital of other forms.

Now, you be the judge. Look across North Africa and the Middle East – all the way from Morocco through Afghanistan – and judge rulers by these simple indicators that no Muslim could deny are the basic teachings of Islam. Are these rulers: representative, fair, and just; are they providing equal opportunities for all, developing good institutions, living simply, eradicating poverty, and preserving the environment and compensating for depleted natural resources?

A more appropriate question might be, is there even one Muslim ruler in North Africa and the Middle East that satisfies these simple requirements?  The answer is an undeniable no. Every single one of these rulers is oppressive and unjust and enjoys opulence at the expense of society.

Why acknowledging this obvious fact is so important is that it is at the heart of understanding why these are failed societies with a great deal of exclusion and resentment, why foreigners are also a part of the problem, and why simple regime change (revolution) by itself will achieve little if anything. Let me provide a brief summary here.

In the past, foreigners as colonialists and neo-colonialists exploited many of these countries (oil over the past 100 or so years). More recently, about 40 to 50 years ago, foreigners recognized that it was more practical to support corrupt rulers, prop them up, and collaboratively exploit their countries. What foreigners profess – democracy and the rule of law – is not what they practice. This has kept unjust rulers in power.

Foreigners – their corporations, financial institutions and influential individuals – benefit, and corrupt unjust rulers enrich themselves, their families and cronies, all at the expense of societies in these countries. And when rulers are overthrown and another ruler assumes power, he (and his cronies) very quickly repeats what the previous ruler did with foreign support. Quite an impregnable chain!

Nouri Al-MalikiBesides garnering foreign support, oppressive and corrupt rulers have simultaneously also exploited all historic divisions – ethnic, religious, sectarian, tribal – to garner domestic backing. Today, the favored historic dispute is sectarian – namely the Sunni-Shia split. The flames are everywhere. Iraq, formerly under the Sunni Saddam Hussein, is now under a Shia government. Saddam portrayed the Western efforts to overthrow him as a sectarian struggle, as if he were a devout Sunni Muslim leader fighting the enemies of Islam – and now Iraqi Prime Minister Nouri al-Maliki excludes Sunnis from government because the Sunnis would come to power and repeat their exclusionary and brutal policies against Shia.

But this Sunni-Shia split is no longer about who should succeed the Prophet Mohammad (something that happened nearly 1,400 years ago). Instead it is about power and control over economic resources. Saddam Hussein was no devout Sunni Muslim. He used this historic dispute to create a division of us against them. If they come to power they will deprive us of resources. So we have to exclude and deprive them.

This has played out in Syria, Bahrain, Saudi Arabia, Iran, and elsewhere. Conflicts, no matter what their diverse origins, evolve into a conflict over power and control over resources. Rulers exploit divisions for support and self-enrichment.

Revolutions and regime change, no matter where – Tunisia, Egypt, Syria, Libya, Yemen and still to come in other countries of the region – will achieve little unless they are accompanied by institutional development and a reversal of the detrimental role of foreigners.

For meaningful change and turnaround, the Middle East needs just rulers and governments who develop good institutions. Foreigners should stop their exploitation and practice what they profess. Even then, the process will take time. It will be in fits and starts. But it is time to acknowledge the fundamental problems and start down the process of building just societies.

Hossein Askari is Professor of Business and International Affairs at The George Washington University. He formerly served on the Executive Board of the International Monetary Fund. His numerous publications include Conflicts and Wars: Their Fallout and Prevention (Palgrave Macmillan, 2012). This article draws on work for his two most recent books, available later this year: Collaborative Colonialism: The Political Economy of Oil in the Persian Gulf (Palgrave Macmillan, to be published September 19, 2013) and Conflicts in the Persian Gulf: Origins and Evolution (Palgrave Macmillan, to be published November 7, 2013).

(Copyright 2013 Asia Times Online (Holdings) Ltd. All rights reserved

Martin Khor on TPPA

July 15, 2013

Global Trends by MARTIN KHOR

What to expect in TPPA talks

Martin-Khor-Global-Trends-1The nature and effects of free trade agreements has become a topic of public discussion, especially with the round of talks of the Trans Pacific Partnership Agreement (TPPA) about to take place in Malaysia (in Kota Kinabalu, Sabah).

Not much is known about the TPPA drafts. But with some of its chapters leaked on the Internet and since much of the TPPA is likely to be similar to bilateral FTAs that the United States has already signed, we can have a good idea of its main points.

As can be expected, there are many contentious issues to consider, especially for developing countries like Malaysia.

On Trade

On trade itself, the TPPA countries will have to remove tariffs on almost allMITI's Mustapha Mohamedproducts coming from one another. Perhaps only one or two products can still be protected. The main implication is that local producers and farmers would have to compete with tariff-free imports from other TPP countries.

Ironically, agricultural subsidies which is the main trade-distorting practice of developed countries like the United States, have been kept out of the TPPA, thus depriving developing countries of what would have been their major gain.

On Services and Investments

On services and investments, we can expect the TPPA countries to be pressured into opening all their industrial and services sectors.Exclusion of any sector will have to be listed and this is subject to negotiations.

In the investment chapter (0f TPPA),the country will have to commit not only to liberalise the entry of foreign companies but also to protect the foreign investors’ rights in an extreme way that goes far beyond what is recognised in national laws and courts. For example, the foreign investor includes any person or company who has an asset (factory, land, shares, contract, franchise, intellectual property, etc). “Fair and equitable treatment” to be given to them has been interpreted in past cases to include a standstill on (no changes in) regulations.

Thus any new law or change to existing laws and regulations that a foreign investor claims will affect its future revenues can be challenged in an international tribunal for monetary compensation. The regulations could be economic, social, health and environment related.

TPP countries have agreed to allow foreign companies to sue governments in any international court( usually ICSID, based in Washington DC) for compensation. Expropriation is defined as not only confiscation of property (for eample, nationalisation) but also reduction of revenues due to regulatory changes.

These investor-state disputes can cause countries a lot. A court award an American oil company USD2.3 billion (RM7.1 billion) against Ecuador’s government in 2012. Indonesia is being sued for USD2 billion (RM6.2 billion) for withdrawing a contract that a state government made with a British oil company.

Government procurement

The TPPA will also open up government procurement, with foreigners being allowed to bid on similar terms as locals for goods, services and projects above a threshold value. Existing preferences for local companies will be affected,as will be the ability to use government spending to boost the domestic economy and as a major social and economic policy instrument.

Since government procurement contracts are considered investments, the foreign supplier can sue the government at an international tribunal by claiming unfair treatment including a renegotiation of contract.There is also  a sub-chapter on state owned enterprises (SOEs). The United States and Australia are proposing disciplines on the operation of SOEs in which the government has a share.

syedalialattas0903This would restrict the state to state’s ability to government to govern or manage government-linked companies, or provide incentives and preference. For Malaysia, this would affect the New Economic Policy programmes and activities, which are deemed  to be discriminatory . This would also have  serious implications  for developing countries whose success is based on the role of the state in the economy and on public-private partnership.

On Intellectual Property

The chapter on Intellectual Property has generated public debate because it obligates the TPP countries to have IP laws far beyond WTO rules. Longer patent terms and restriction of the state’s policy freedom to promote generic medicines are expected to raise the prices of medicines and other pharmaceutical products.

Tight copyright rules would affect dissemination of knowledge including books. periodicals and journals and digital information.Local producers in industry may find it more difficult to upgrade their technologies and local farmers could have less access to agricultural inputs including seeds.

There are many benefits to foreign investors and companies. Local companies would lose a lot of their present preferences and incentives. They cannot stake a claim to “fair and equitable treatment”  or sue the government in a foreign court, like a foreign company can.

Naturally, there are pros and cons to any agreement. Any potential gain for a country in exports or investments  should be weighed against potential loss to domestic producers, and especially the loss to the government in policy space and potential payout to foreign investors claiming compensation.

TPPA Round 18 in Kota Kinabalu: Mounting Concern over its Negative Impact

July 12, 2013

TPPA Round 18 in Kota Kinabalu: Mounting Concern over its Negative Impact

by Josh Hong@

TPPAThe 18th round of the Trans-Pacific Partnership Agreement (TPPA) will kick off in Kota Kinabalu, Sabah, starting Monday. While the details of the world’s potentially largest trade pact remain shrouded in secrecy, discontented voices in Malaysia are becoming louder by the day.

This week alone, at least two members of Parliament,Charles Santiago and Ong Kian Ming, have raised their concerns over the TPPA’s negative impacts. Nurul Izzah Anwar, too, has previously made her voice heard in this regard.

Santiago, for instance, warns that there could be a sharp rise in medicalong-kian-ming-sept2 costs following the signing of the TPPA due to intellectual property rights. Of greater significance is Ong’s (right) position on the TPPA, as the Serdang MP is a PhD holder from an American university, and his past silence on the American invasion of Iraq back in 2003 did give rise to speculations that he was somewhat sympathetic to the Bush Administration at the time.

In fact, Ong’s track record shows clearly that, prior to joining politics, he had hardly spoken out on issues that affected the average folk. More importantly, Ong has never been known as a centre-left figure ill at ease with neo-liberal economic globalisation. Seen in this light, his rather critical remark that the Najib government is rushing the Washington-initiated TPPA through in order to “please President Barrack Obama” is raising eyebrows indeed.

Whether Ong’s caustic view reflects his ideological conversion or just a means to gain political mileage remains to be seen. What is not to be disputed is that the manner in which the United States is bulldozing the TPPA results through, over protests not just in Malaysia, but around the globe. The Obama administration now aims to finalise the document by October this year – barely three months from now.

In a recently-issued joint statement, several health-related NGOs explain that, while “generic medicines save lives by preventing, curing and managing non-communicable and communicable diseases for all Malaysians, especially the lower-income and marginalised groups”, the TPPA would however “reduce access to these affordable medicines”.

And the statement is categorically opposed to “US demands for longer and stronger patents on medicines and medical technologies that are essential to save Malaysian lives”. Breast cancer and HIV patients would be exposed to greater risks should the TPPA be signed.

Indeed, successful TPPA negotiations will create what critics say is a “mega-treaty” that will compel the signatories – Malaysia being a potential partner – to adopt laws and regulations that would invariably favour big corporations in the decades to come.

Conglomerates salivating at SE Asia’s resources

As I have argued before, South-East Asia is rich in natural resources at which global conglomerates continue to salivate.

Despite the Malaysian government’s refusal to reveal the actual details of negotiations, it is gathered that areas under discussion include restrictions on sale and manufacture of genetically modified crops and foods, purchase of drugs and medicines, intellectual property protection in music, computer programmes and the digital media (which could affect domestic entertainment industries), and other resources such as mining and logging (think Sabah and Sarawak, for example).

And British Petroleum, Wal-Mart, Microsoft, Apple and Warners and Sony are said be among the likeliest beneficiaries following TPPA.

Given that Malaysians consume a large portion of generic medicines which are far more affordable than their patented alternatives, the grave concern over price hikes in medical products is certainly not misplaced.

Even the International Federation of Library Associations and Institutions has questioned as to whether the TPPA would make storing library materials costlier. The treaty that is ostensibly about trade could extend the duration of copyrights up to 120 years after the death of the author, which could lead to libraries having to remove references or works that are already digitised – to the detriment of fair access to knowledge.

Shahril SamadWhile the focus of Malaysia’s bumiputra business communities is largely on whether or not the TPPA would force them to be open for wider and stiffer competition, more crucial is the issue that the trade pact could have repercussions on all segments of Malaysian society. When medical costs go up while general knowledge becomes more expensive to come by, it is Malaysians at large who stand to lose, not just the bumiputras.

In view of this, the proposal by Shahrir Abdul Samad, the Johor Baru MP, to form a cross-party parliamentary caucus so as to put the TPPA negotiations under the closest scrutiny is more than welcome indeed. Didn’t Najib himself say time and again that the era when “the government knows best” was over? It is high time he put his word into action by ending all the secrecy around the TPPA come Monday.

Rushford comments on Obama’s Pivot towards Asia

July 3, 2013

Rushford comments on Obama’s Pivot towards Asia

by Greg Rushford @ The Rushford Report

BHObamaLet’s cast a gimlet eye on President Barack Obama’s “pivot” toward Asia.

Viewed from important Asian capital cities — Tokyo and Bangkok, Manila and Hanoi, Dacca and Phnom Penh, also Jakarta —the pivot is looking more like a half-pivot. The first half involves U.S. security ties to Asia. The Pacific Command — with its U.S. Seventh Fleet, the Fifth Air Force, and its Special Operations Forces — has been keeping the Pacific, well, pacific, for more than a half-century. In that sense, there is nothing especially new to the Obama pivot, except perhaps the spin. But give the White House credit for supporting officials in the State Department and the Pentagon, as they have been tending to America’s traditional diplomatic and security relationships.

But the same White House has failed to connect U.S. trade policies to the political-military part of the pivot. A search for a coherent U.S. trade policy for the region turns up a series of unconnected ad hoc policies. To the extent there is a common thread, it involves Washington’s familiar double standard. The White House demands that U.S. trading partners summon the political will to open their markets to American exports. But when the foreigners ask for enhanced access to U.S. markets, a tone-deaf Washington barely listens. While this is certainly not a game that Obama invented, it’s fair to say that on his watch, U.S. trading partners are no longer much interested in dancing to the superpower’s tune.

That’s sure not the way the White House wants its Asian policies to be perceived. In a speech to the Asia Society delivered in New York on March 11, Obama’s national security adviser, Tom Donilon, asserted that the pivot — which he preferred to call a “rebalancing” — has been fostering enhanced U.S. security and economic ties with Asia. The next day in Washington, Obama reiterated his administration’s claims that the Trans-Pacific Partnership (TPP) trade negotiations — the centerpiece of his trade policies in Asia — involves defining new “high standards” that will modernize international trade and “generate billions of dollars in trade and millions of jobs” in the 21st Century.

But as our mini-tour of key Asian capitals helps illuminate, the U.S. rhetoric appears at variance with economic facts on the ground. Already, the consequences of shortsighted U.S. trade policies that provide incentives for Asian trading partners to leave Uncle Sam on the sidelines are showing up.

Thailand, for instance, is a longtime U.S. security ally. But the White House has not worked seriously to welcome the Thais into the Trans-Pacific Partnership preferential trade negotiations. As presently constituted, a successful TPP would divert trade flows away from important Asian countries like Thailand.

When Obama met with Prime Minister Yingluck Shinawatra in BangkokYingluck and Obama on November 18, 2012, Yingluck’s declared interest in joining the TPP talks wasn’t even on the agenda, the Thai leader told reporters in Bangkok. In a November 19 joint press release with Yingluck, Obama said that “we’ll work together as Thailand begins to lay the groundwork for joining high-standard trade agreements, such as the Trans-Pacific Partnership.” Translation from the diplomatic politesse: it ain’t gonna happen anytime soon.

Meanwhile, Thailand’s business community is divided on the wisdom of strengthening trade ties with America anyway. The Thais already have cut their own preferential trade accords with China and New Zealand, and are also working to liberalize regional trade within Asean.

In the absence of meaningful TPP talks with the Americans, Yingluck has now decided instead to negotiate another Thai trade deal with the more reliable European Union. So have the Japanese.

Japanese Prime Minister Shinzo Abe is pressing a reluctant Obama White House to stop blocking his country’s entry into the TPP negotiations. Meanwhile, Abe is also talking to the Chinese and South Koreans about creating a three-way Seoul-Beijing-Tokyo trade axis.

Next stop: Tokyo.

The “chicken tariff” does Tokyo

On the security front, the good news is that U.S.-Japanese ties remainAbe-Obama solid. And the importance of the U.S.-Japanese security alliance should never be underestimated. There is no more important military alliance for either country. The U.S.-Japan alliance has been marked with new energy on the Obama watch, thanks to mutual concerns over contentious Chinese-Japanese maritime disputes over islets in the East China Sea that, while uninhabited, are rich in fish and potentially so for oil and gas. Give the Obama White House credit for understanding the importance.

But for more than two years, Obama and his top international economic policy aide, Mike Froman — the man who has been doing the most to set U.S. trade policies — have been cool to Japanese participation in the TPP.  One would think the White House would have been eager to welcome Japanese participation. After all, without Japan — the world’s third largest economy — the TPP is small ball. While readers will have seen various breathless press accounts that tout the TPP as a “blockbuster” of a trade deal, it is far from that.

The US already has preferential trade deals with Singapore, Australia, NajibChile, Canada, and Mexico. Nor is the White House eager to liberalize those accords in the TPP negotiations (such as opening the door to increased imports of Australian sugar, a subject which the Americans have so far refused even to discuss). The remaining TPP negotiating partners are four smaller, if admirable, economies: Brunei, Malaysia, Vietnam, and New Zealand. Is that what a “blockbuster” of a trade deal looks like? China, Australia, New Zealand, Japan — they all have, or are discussing, preferential trade arrangements with the entire Association of Southeast Nations.

Consider one of the most important reasons for the White House reluctance to welcome America’s most important Pacific ally into the TPP. This has nothing to do with so-called cutting edge, gold standard, state-of-the-art 21st Century trade rules. It’s all about old-fashioned tariffs. And one protectionist tariff in particular illustrates the White House focus.

Enter the Detroit auto lobby. Ford, General Motors and Chrysler fear they would lose domestic market share to the Japanese in a TPP deal that would get rid of the U.S. 25 percent tariff on imported trucks. Defending that tariff — mainly with Japan, but also regarding Thailand, where foreign auto transplants have set up shop —has become a top White House priority.

The problem is that there has never been any economic justification whatsoever for the 25 percent U.S. tariff on trucks. That tariff dates to late 1963 and a decision made during an unrelated trade spat of that era by President Lyndon Johnson (when Barack Obama was barely two years old).

Angry that the Europeans weren’t buying enough American chickens, Johnson retaliated by imposing the 25 percent tariff rate on trucks — a tenfold increase from the normal 2.5 percent U.S. tariffs on cars. The so-called “chicken tariff” was aimed at punishing Germany’s then-popular exports of the hippie-era vans. To repeat: to this day, nobody in the United States government has ever pretended that the chicken tariff had any economic merits.

Moreover, the protectionist truck tax has “worked” over the decades much as the U.S. trade embargo against Cuba has succeeded in ousting the Castro brothers. Toyota and other Japanese automakers — who weren’t competitive threats during Lyndon Johnson’s time — simply have gotten around the tariff by producing their trucks in U.S. states like Texas, where tariffs can’t be applied. Detroit and the United Autoworkers remain furious that the Japanese have created a non-unionized (and well-paid) segment of the “American” auto industry. Obama now has become the eighth American president after Johnson to defend the economically indefensible tariff.

But wait, it gets worse. For another example of how shortsighted auto policies risk Uncle Sam’s increasing marginalization, let’s head to Jakarta.

Indonesia: driving on without the Americans

Indonesia, where Obama lived for several years as a youngster, wasSBY and Obama supposed to be the beneficiary of enhanced Washington-Jakarta trade ties. Nobody’s talking like that now. Obama has shown no interest in including Southeast Asia’s biggest economy in the TPP. Nor have the Indonesians — who have recently fallen into the trap of economic nationalism — indicated they much care what the Americans think.

Channel NewsAsia, a Singapore-based television news organization that is widely watched throughout the region (and beyond, thanks to; reported on March 17 that Indonesia hits imported autos with a 40 percent tariff. Yet Toyota, Nissan, Mitsubishi, and Daihatsu “supply around 95 percent of Indonesia’s car market,” the report noted. No wonder. Japanese auto imports, thanks to a preferential trade deal Japan has with Indonesia, are duty free.

The rightly concerned European Union is talking with the Indonesians about a preferential trade deal with the Indonesians “to allow European firms to compete on a level playing field” there, the report added.

ASEAN is also busy negotiating new trade rules that will facilitate the auto trade across Southeast Asia.

Meanwhile, the Obama White House, having put all of its negotiating chips in the TPP basket, is left on the outside. China, which has already cut its own preferential trade deal with ASEAN — as well as Australia and New Zealand — is well-positioned to further deepen trade ties with Indonesia also.

Next stop: Manila — to see more missed American trade-policy opportunities to be generous to an old friend.

The next Asian tiger

Perched along key Pacific trading routes, the Philippines — population approaching 100 million, the world’s third largest English-speaking populace — is rich in what economists call “human capital.” So relations with Manila would be important to any American president, even if the former U.S. colony weren’t one of America’s oldest treaty allies.

To its credit, the Obama White House has encouraged the Pentagon and Barack Obama, Benigno Aquinothe State Department to strengthen existing political-military relations with the government of President Benigno Aquino III, who was elected in 2010. Dubious Chinese claims to parts of the South China Sea that are clearly within Philippine waters have also underscored the continued importance of close U.S.-Philippine security ties. (Policy paralysis is not only an American disease, to be sure. One wonders if China’s new leadership appreciates the fact that Beijing’s clumsy maritime provocations would remind any Philippine government of the importance in sticking close with their historic friends the Americans.)

Once Asia’s second-largest economy, after only Japan, for most of the last half century the Philippines — mired in cancerous corruption and inward-looking economically — has conspicuously lagged behind its neighbors. But now, Aquino has gotten his country on the move, sparked by a crackdown on corruption that former U.S. diplomat John Forbes admiringly calls “truly unprecedented in scope.”

(Forbes is the principal author of Arangkada, a publication of the Joint Foreign Chambers of the Philippines ( Arangkada, which means “move twice as fast” in Tagalog, is full of solid economic prescriptions for what the former “sick man” of Asia can do to become economically healthy again.)

Indeed, under Aquino’s leadership, the Philippines has come out of intensive care.

Philippine GDP growth last year was 6.6 percent and is projected to top 7 percent this year — the highest in Southeast Asia. Construction cranes dot Manila’s skyline. The area just north of Manila that once housed major U.S. military bases at Clark Field and Subic Bay is booming. Clark International Airport — where more birds used to land than airplanes just a few years ago— has taken off, with passenger arrivals skyrocketing from 50,000 in 2004 to 1.3 million last year. Korea’s Asiana, Malaysia’s Air Asia, Hong Kong’s Dragonair, are flying passengers to the Philippines from all over Asia. Emirates will launch daily flights from Clark to Dubai later this year. For anyone looking at the beneficial advantages that happen when foreign investments that foster Philippine economic growth are welcomed, this is it.

Indeed, the former American bases have become models of the benefits of attracting foreign investment. Yokohama Tires and Texas Instruments have billion-plus dollar investments at Clark; Samsung also has an important semiconductor operation there. Korea’s Hanshin has the world’s fourth-largest shipyard at Subic Bay. In their Cold-War heyday, the former U.S. bases employed perhaps 40,000 Filipinos. Now, under Philippine management, the number of jobs in Clark-Subic corridor has shot up more than fourfold — more than 160,000. I don’t think there has been a better time for the Philippines than today,” says Dennis Wright, a dynamic former U.S. Navy captain who is now developing a $3 billion industrial park at the former Clark Field for a group of Kuwaiti investors.

Aquino, as mandated by the Philippine constitution, has one six-year term that will expire in 2016. Now is the time, the reformers stress, for urgency in locking in as many reforms as possible. After 2016, Aquino’s successor could well be another politician mainly interested in lining his (or her) own pockets.

Here’s where the half-pivot part comes in. While the White House has supported enhanced U.S.-Philippine security ties, Washington has not put serious energy into deepening trade ties.

The Obama administration has not welcomed the Philippines into the TPP negotiations. The European Union is interested in negotiating a preferential trade agreement with the Philippines; the White House is not. Washington has no present plans to engage Manila seriously to promote trade liberalization anytime before 2016, when neither Obama nor Aquino will be in office.

The Filipinos have noticed. Last September, speaking to an influential audience in Washington that was convened by the U.S.-Philippines Society and the respected Center for Strategic and International Studies, Finance Secretary Cesar Purisima lamented that his country was not wanted in the TPP. That trade deal as presently constituted, including some Asian countries and ignoring others, the secretary explained, would distort regional trade flows and thus “hinder” the laudable goal of promoting genuine trade expansion.

Meanwhile, where the Philippines is concerned, the USTR is in full “enforcement” mode.

On March 28, the USTR’s trade police will preside over a hearing into complaints of labor-rights abuses from 2001– 2007 that were perpetrated on former President Gloria Arroyo’s watch — murders of union organizers, and such. The implied threat is that if President Obama personally determines that Aquino has not been diligent enough by way of cleaning up the mess he inherited, Obama could yank the Philippines’ duty-free privileges pursuant to the Generalized System of Preferences program.

That would, of course, be ridiculous. After all, Aquino has put Arroyo — who never lost her GSP privileges when she ran the Philippines — under house arrest while she faces graft charges. Aquino’s Labor Secretary, Rosalinda Baldoz, is widely respected for her integrity and dedication in addressing the Arroyo-era abuses. Nobody, either at the USTR, or with the International Labor Rights Forum, which filed the original complaint, wants or expects Obama to humiliate Aquino. The Philippines has been “making progress” on labor-rights,” notes Jeff Johnson, who heads the International Labor Organization’s Manila office.

Why would the USTR be holding such a hearing that by its nature is demeaning to an important American ally? While it’s tempting to blame the bureaucrats, the trade cops are essentially playing out their intended roles of “enforcement” oversight that Congress mandated in the GSP legislation. Countries like the Philippines that sign up for the GSP program must agree to submit themselves to such oversight from Washington, notwithstanding the indignities. That’s one of the main reasons why the U.S. Congress likes the GSP program — there is always an implicit understanding that economic privileges granted, can also be taken away. And no American president has ever complained that the generous GSP program is also a diplomatic lever that can always be pulled, if necessary to keep allies in line.

The GSP program isn’t particularly generous to the Philippines anyway. To cite just one example: Philippine canned tuna exports are not eligible for the duty-free treatment, as they are politically “sensitive.” The sensitivity involves American Samoa, which is an American territory.

Official U.S. policy has long discriminated against Asian tuna exporters like the Philippines, Thailand, and Indonesia. The Asian tuna exporting countries face protective U.S. tariffs of up to 12 percent. But American Samoa, because it is officially U.S. territory, can export its canned tuna to the U.S. mainland duty free. Without the protective tariffs, the Samoans could not compete. (For further details, see: Charlie the Tuna’s Troubles in Pago Pago, July 12, 2010, posted on

Obama inherited the economically indefensible U.S. tuna tariffs from his predecessor, George W. Bush, who inherited them from his predecessors.  Bush rebuffed Gloria Arroyo when she sought their removal. It’s safe to say that Obama will also kick the tuna-tariff can down the road.

Onto Dacca, Phnom Penh, and Hanoi

Speaking of unjust American tariff barriers that U.S. presidents have passed along to their successors, who defend them more or less automatically, let’s head to the final three Asian stops, beginning with Dacca.

Obama and YunusBangladesh will also be in the dock at tomorrow’s USTR enforcement hearing. Unlike the Philippines, Obama really is considering yanking Dacca’s GSP preferences. And no wonder, considering Bangladesh’s dismal record over the years of cracking down on human rights abuses in its garment industry. The latest tragedy happened just last November, when at least 112 clothing workers were killed in a factory fire that should never have been allowed to happen.

But hold on. Garments and footwear are not eligible for duty-free treatment in the GSP program, anyway. (That decision that dates to President Richard Nixon and his national security adviser, Henry Kissinger, who framed the original political blueprint for GSP in the 1970s. Nixon and Kissinger faced a U.S. textile lobby that had considerable political clout in those days. Now Obama has the old protectionism still running on autopilot — even though very few items of clothing and footwear are still made in the U.S. and the diminished U.S. textile lobby no longer has the votes to defeat important trade legislation.

As viewed by developing countries that have women who want to sew their way out of poverty, the high U.S. tariffs — hovering generally around 12 percent, but which can be more than twice that for some items — are cruel.

Bangladesh’s exports to the U.S. totaled $4.9 billion last year. Of that, $4.4 billion was clothing, and thus not eligible for GSP. Put another way, 91 percent of what Bangladesh sells to the United States is excluded from the GSP’s duty-free privileges, notes Washington trade analyst Edward Gresser. “This not particularly generous,” he observes.

Gresser further points out that while U.S. tariffs hit poorer countries’ exports of clothing and footwear hard, the higher-end products that wealthy European countries sell to the United States — airplanes, electronics, automobiles and such (except for trucks) — face low tariffs. Last year, for example, Cambodia and Bangladesh exported $7.6 billion in goods to the United States, mostly clothing. These exports faced U.S. tariffs of 16.9 percent and 15 percent, respectively. U.S. Customs collected combined Cambodian and Bangladeshi tariffs amounting to $1.1 billion. German exports to the U.S. totaled $96 billion, and were taxed at only 1.4 percent — amounting to just $1.4 billion. This is “unfair” to two of the world’s most impoverished countries, Gresser reasons. No comment from the White House.

Does it make sense for Obama to take away Bangladesh’s GSP benefits when more than 90 percent of that country’s exports to the U.S. aren’t in the GSP program? Ask the Cambodians about such things.

When Bill Clinton was president, Cambodia agreed with the demands brought by U.S. organized labor to open its sweatshops to international labor inspections. It worked. Today, the International Labor Organization, through its Better Factories Cambodia program ( conducts vigorous and effective oversight of that country’s garment industry.

Yet even though the Cambodians have done everything they could to meetObama and Hun the demands of the AFL-CIO, neither Obama nor his predecessors since Clinton, has been willing to give Cambodian clothing and footwear exports duty-free treatment. The Obama White House — now in its fifth year — has consistently refused to take questions on the subject.

Yes, Dacca ought to agree to open its sweatshops to ILO inspections. But from Dacca’s point of view, why should they, since the Americans wouldn’t give them any economic carrots for doing such anyway?

There’s a lot more of the same, as we end the tour in Hanoi.As with the Philippines, the Obama administration is working with Vietnamese authorities — who also have good reason to fear Chinese aggressive moves in the South China Sea — to strengthen security ties. While Washington has welcomed Vietnam’s participation in the TPP trade talks, those negotiations have stalled.

It’s a familiar story to regular readers of this journal (see: Imperial Preferences, In short, the White House has held up the TPP negotiations by stonewalling Vietnamese requests to be granted more market access to the high-tariff U.S. clothing- and footwear markets. (The most recent protectionist move that Washington has inflicted upon Vietnam: hiking anti-dumping tariffs on imports of Vietnamese catfish (called Basa, or Tra, in Vietnamese) a whopping 79 percent, per kilo. Top leaders in Hanoi are very angry, because they have reason to believe that the U.S. Commerce bureaucrats deliberately crunched the numbers to punish Vietnam’s seafood industry — hardly for the first time.)

If there is a hint of more positive news to report, it’s that the more enlightened segments from the U.S. business community are becoming more outspoken about the need for a more effective U.S. trade policy.

Let’s end our tour back in Washington, D.C. by noting some basic insights offered by Rick Helfenbein and Harold McGraw III.

Helfenbein is the vice chairman of the American Apparel and Footwear Association. “For those of us engaged in the pursuit of trade, and for those of us who believe that a robust trade policy is essential to the enhancement of the U.S. economy, the last four years have been disappointing,” he recently wrote in an internal AAFA publication. “Both the Obama Administration and the U.S. Congress have demonstrated that talk about trade policy is simply a form of floating non-productive rhetoric, despite the positive economic growth that comes from achieving a robust trade policy.
It makes one wonder as to how such a worthy group of elected officials can work so hard at talking a good game, yet fail to perform.”

McGraw, also one of of Washington’s most influential figures on the trade scene, chairs the Emergency Committee for American Trade. President Obama “should lead by example,” McGraw wrote in a March 7 op-ed column for Politico. “Unfairly restricting access to our market sends the clear message to other governments that they can do the same. Regressive U.S. tariffs on clothing and footwear, trade restrictions on sugar and dairy products and other barriers end up imposing significant costs on U.S. businesses and consumers and must be addressed,” the ECAT leader added.

“We can’t ask others to let us fully access their markets when we don’t let them fully access ours.”

Meanwhile, perhaps Obama might reflect upon the irony that because he has not connected the economic side of his Asian pivot to the political-military side, U.S. economic ties throughout the region could diminish on his watch.


Rules for Thinking with Tech

June 19, 2013

MY COMMENT: Welcome to the World of smart and tech savvy kids. Old dinogeezers like me are passe. Why? First technology scares me. Maybe at my age, I have become a slow learner tech wise. That makes me fearful of computers and gadgets. Trust them, No. I prefer to rely on my common sense and inborn faculties, flawed as they may be. I imagine what happens when we are overly dependent on computers and related technology for doing business and accessing information when the system breaks down or keeping in touch with family, friends and associates.

I have experienced  situations when the system break downs in my friendly bank. The staff will apologise profusely, but the bottom line is that I can’t do business with the bank until the system is restored. It could take a few hours or days to sort out the bugs. What happens? Second, how to deal with information overload and you can’t separate fact from fiction. Read the ‘wrong’ stuff, you end up getting screwed up with your thinking.

As in all things, we must not be overly dependent on technology. People to people contact remains the most reliable way of communicating. It reminds us that we are human, not some robot devoid of personal and social skills. Educators beware. Pers0nal and social skills development must remain the priority. My friends, CLF and Frank, Hamzah may have something to say on technology and its uses. –Din Merican

Rules for Thinking with Tech

by Annie Murphy Paul (06-17-13) <>

Is technology making us stupid—or smarter than we’ve ever been? Author Nicholas Carr memorably made the case for the former in his 2010 book The Shallows: What The Internet Is Doing To Our Brains. This fall we’ll have a rejoinder of sorts from writer Clive Thompson, with his book Smarter Than You Think: How Technology Is Changing Our Minds For The Better.

My own take: technology can make us smarter or stupider, and we need to develop a set of principles to guide our everyday behavior, making sure that tech is improving and not impeding our mental processes. Today I want to propose one such principle, in response to the important question: What kind of information do we need to have stored in our heads, and what kind can we leave “in the cloud,” to be accessed as necessary?

The answer will determine what we teach our students, what we expect our employees to know, and how we manage our own mental resources. But before I get to that answer, I want to tell you about the octopus who lives in a tree.

In 2005, researchers at the University of Connecticut asked a group of seventh graders to read a website full of information about the Pacific Northwest Tree Octopus, or Octopus paxarbolis. The Web page described the creature’s mating rituals, preferred diet, and leafy habitat in precise detail. Applying an analytical model they’d learned, the students evaluated the trustworthiness of the site and the information it offered.

Thinking in a Digital World
Their judgment? The tree octopus was legit. All but one of the pupils rated the website as “very credible.” The headline of the university’s press release read, “Researchers Find Kids Need Better Online Academic Skills,” and it quoted Don Leu, professor of education at UConn and co-director of its New Literacies Research Lab, lamenting that classroom instruction in online reading is “woefully lacking.”

There’s something wrong with this picture, and it’s not just that the arboreal octopus is, of course, a fiction, presented by Leu and his colleagues to probe their subjects’ Internet savvy. The other fable here is the notion that the main thing these kids need—what all our kids really need—is to learn online skills in school. It would seem clear that what Leu’s seventh graders really require is knowledge: some basic familiarity with the biology of sea-dwelling creatures that would have tipped them off that the website was a whopper (say, when it explained that the tree octopus’s natural predator is the sasquatch).

But that’s not how an increasingly powerful faction within education sees the matter. They are the champions of “new literacies”—or “21st century skills” or “digital literacy” or a number of other faddish-sounding concepts. In their view, skills trump knowledge, developing “literacies” is more important than learning mere content, and all facts are now Google-able and therefore unworthy of committing to memory.

There is a flaw in this popular account. Robert Pondiscio, executive director at the nonprofit organization CitizenshipFirst  (and a former fifth-grade teacher), calls it the “tree octopus problem”: even the most sophisticated digital literacy skills won’t help students and workers navigate the world if they don’t have a broad base of knowledge about how the world actually operates. “When we fill our classrooms with technology and emphasize these new ‘literacies,’ we feel like we’re reinventing schools to be more relevant,” says Pondiscio. “But if you focus on the delivery mechanism and not the content, you’re doing kids a disservice.”

Indeed, evidence from cognitive science challenges the notion that skills can exist independent of factual knowledge. Dan Willingham, a professor of psychology at the University of Virginia, is a leading expert on how students learn. “Data from the last thirty years leads to a conclusion that is not scientifically challengeable: thinking well requires knowing facts, and that’s true not only because you need something to think about,” Willingham has written. “The very processes that teachers care about most—critical thinking processes such as reasoning and problem solving—are intimately intertwined with factual knowledge that is stored in long-term memory (not just found in the environment).”

Just because you can Google the date of Black Tuesday doesn’t mean you understand why the Great Depression happened or how it compares to our recent economic slump. And sorting the wheat from the abundant online chaff requires more than simply evaluating the credibility of the source (the tree octopus material was supplied by the “Kelvinic University branch of the Wild Haggis Conservation Society,” which sounded impressive to the seventh graders in Don Leu’s experiment). It demands the knowledge of facts that can be used to independently verify or discredit the information on the screen.

There is no doubt that the students of today, and the workers of tomorrow, will need to innovate, collaborate and evaluate, to name three of the “21st century skills” so dear to digital literacy enthusiasts. But such skills can’t be separated from the knowledge that gives rise to them. To innovate, you have to know what came before. To collaborate, you have to contribute knowledge to the joint venture. And to evaluate, you have to compare new information against knowledge you’ve already mastered.

So here’s a principle for thinking in a digital world, in two parts: First, acquire a base of fact knowledge in any domain in which you want to perform well. This base supplies the essential foundation for building skills, and it can’t be outsourced to a search engine.

Second: Take advantage of computers’ invariant memory, but also the brain’s elaborative memory. Computers are great when you want to store information that shouldn’t change—say, the date and time of that appointment next week. A computer (unlike your brain, or mine) won’t misremember the time of the appointment as 3 PM instead of 2 PM. But brains are the superior choice when you want information to change, in interesting and useful ways: to connect up with other facts and ideas, to acquire successive layers of meaning, to steep for a while in your accumulated knowledge and experience and so produce a richer mental brew.

That’s one principle for thinking in a digital world; over the next few months I’ll be introducing others. Now, your turn: Have you discovered any rules for using your mind in a world full of technology?

Malaysian Government Critic Faces DDoS Attack

April 12, 2013

Malaysian Government Critic Faces DDoS Attack

Sarawak Report exposed an international propaganda campaign. The attack comes a few weeks before the election, from Buzzfeed

Malaysia’s Prime Minister Najib Razak. Image by Bazuki Muhammad / Reuters

WASHINGTON — A website critical of the Malaysian government is down on Thursday in what its owner says is a denial-of-service attack.

Sarawak Report, run by British investigative journalist and Clare Rewcastle Brown, has been taken offline. So has Radio Free Sarawak, an AM radio program Brown founded.

Brown, whose brother-in-law is former Prime Minister Gordon Brown, wrote on Sarawak Report’s Twitter and Facebook that her sites had been the victims of a denial-of-service attack. She didn’t immediately respond to a request for comment.

Sarawak Report broke the story in 2011 of a London-based public relations and television production firm, FBC Media, being paid to produce propaganda for the Malaysian government, which was aired as editorial content on the BBC and other major international television networks. That effort was part of a covert propaganda campaign that also made its way into the onto American online outlets.

It’s unclear who carried out the attack, though the incident is taking place in a moment of heated political rhetoric: the Malaysian general elections are set to take place on May 5. The governing party led by current Prime Minister Najib Razak has been in power for 56 years, but faces a stiffer challenge this time around from the Opposition, led by Anwar Ibrahim — a main target of the propaganda campaign.

Book Review: ‘Engineers of Victory,’ by Paul Kennedy

February 9, 2013

War Machines

Engineers of Victory,’ by Paul Kennedy

By Michael Beschloss
Published: February 8, 2013

Engineers of VictoryThe historian Daniel Boorstin once complained to me about the Smithsonian Institution’s decision in 1980 to delete the final two words from the name of its Museum of History and Technology. Boorstin had a point.

Scholars of other fields do often tend to underestimate the influence of technology. Although most of us know that World War II brought us radar, the literature of that titanic conflict is by no means exempt from this phenomenon. For instance, the biographer Joseph P. Lash subtitled his 1976 wartime account of Franklin Roosevelt and Winston Churchill “The Partnership That Saved the West,” in response to which I once heard a British scholar carp, “If Lash is right, then why did all those scientists and intelligence officers and factory workers bother working so hard?”

With this fresh and discursive new work, the Yale historian Paul Kennedy, best known for his widely debated “Rise and Fall of the Great Powers,” published in 1987, calls attention to the way “small groups of individuals and institutions” surmounted seemingly insuperable operational obstacles to enable Roosevelt, Truman, Churchill and Stalin ultimately to grasp the laurels for an Allied triumph.

“Engineers of Victory” achieves the difficult task of being a consistently original book about one of the most relentlessly examined episodes in human history. Unlike most studies of the war, this one is not primarily about politics, generalship or battlefield glories. References to the Big Three are few. Instead, like an engineer who pries open a pocket watch to reveal its inner mechanics, Kennedy tells how ­little-known men and women at lower ­levels helped win the war.

Kennedy concentrates mainly on the European theater and on Allied Paul Kennedyprogress during the period from early 1943, when Hitler’s Admiral Doenitz sank 108 Allied vessels in a single month, provoking fears that England would be starved of essential bunker fuel, to the almost fantastic summer of 1944, when British and American troops scrambled onto Festung Europa. By Kennedy’s telling, a number of concurrent accomplishments spelled the difference between victory and, if not defeat, then, at least, a struggle that might have dragged on past 1945, with countless additional casualties.

The first was ensuring that Allied convoys could cross the Atlantic without being sunk by Germans. As Kennedy acknowledges, this was the first war in which sea power’s success was decided by air power, so part of the solution was cranking out airplanes (especially long-range bombers). But vital too were innovations like the Hedgehog, a forward-firing ship-­mounted mortar (devised by an idiosyncratic British unit called “Wheezers and Dodgers”), and the Leigh Light, which exposed German U-boats that were surfacing at night to recharge batteries so that British bombers could do their deadly work. In contrast with the cadre of popular and scholarly authors who since the 1970s have written, often breathlessly, about glamorous code breakers, Kennedy is skeptical of Bletchley Park’s importance, because the intelligence operation known as Ultra “could do only so much.”

Command of the air over Germany was seized only when American squadrons arrived to augment the Royal Air Force, upend the existing British doctrine of restricting attacks to nighttime and demand pinpoint bombing of specifically identified German military and industrial targets. The zenith of Allied accomplishment in the air, of course, was D-Day 1944, when a previously unimaginable 11,590 planes were sent aloft. “There had been nothing like it in world history,”

bomber-Heinkel-he-111-bomber-german-LuftwaffeKennedy writes, “nor has there been since. . . . There was no chance for the completely diminished Luftwaffe to do anything except lose more and more of its planes and pilots whenever they rose into the air.” Kennedy goes on to describe how the Allies stopped the ferocious blitzkrieg assaults of 1939 to 1942 by deploying “stronger, tougher and better-equipped forces (with panzers, bazookas, mines, better tactical aircraft)” in concert with the western thrust of the Soviet Army, aided by their T-34-85, which Kennedy calls the “most all-round battle tank” of the war.

Victory in Europe before the summer of 1945 also required the Allies to make hasty progress in perfecting the art of amphibious warfare. After World War I, Kennedy notes, with “a badly defeated and much-­reduced Germany, in a badly damaged and scarcely victorious France and Italy, and in an infant Soviet Union, there were many thoughts of war, but none of them involved the projection of force across the oceans.” The disheartening debacle of the one-day Allied trial effort in August 1942 to breach the Atlantic Wall with a raid against the modest German garrison at Dieppe, France, provided crucial lessons that led directly to the world-­important success on D-Day two years later.

Kennedy shows how wise the Allies were to restrain themselves from invading France until their commanders and troops had gained more experience in amphibious landings and until control of the Atlantic had been secured. He insists that D-Day could have been a rout but for the fact that by mid-1944, British, American and Canadian warriors — from the top down — had transformed their organization into a smoothly functioning apparatus, refined their means of gathering intelligence and designed the now-­famous “bodyguard of lies” that misled the Nazis about when and how the Allies would invade Europe.

Succinctly covering the Pacific theater, Kennedy illuminates some of theB-29_Enola_Gay_w_Crews main tools that enabled United States forces to make their slow progress across the ocean in order to bomb Japan — new fast carrier groups, new fighters like the F6F and bombers like the B-29, as well as the American submarine service and the 325,000 enlisted members of the Navy’s construction battalions, the “Seabees,” which by the end of the war had erected $10 billion worth of military infrastructure around the world.

While Kennedy rightly elevates the importance of technology and those much-too-­unheralded bands of Allied innovators, on a grander scale he fully appreciates that “the winning of great wars always requires superior organization,” which “will allow outsiders to feed fresh ideas into the pursuit of victory.”

An ingredient badly missing from the centralized systems of imperial Japan and Nazi Germany was the willingness, demonstrated again and again by top Anglo-American military and political leaders, to share power with those of more modest rank who had greater expertise in tackling a particular problem and who were closer to the action. Kennedy notes that even the dictatorial Stalin “began to relax his iron grasp once he understood that he had a team of first-class generals working for him.”

Although occasionally prolix and repetitive, Kennedy’s volume is an important contribution to our understanding of World War II, and it sets a high standard for historians writing about other conflicts by reminding us to keep a close eye on technology. The curious reader may well finish this book and wish that scholars would pay more attention to how much American setbacks in lesser wars like Korea and Vietnam might have been influenced by gaps in our technological mastery.

Michael Beschloss, the author, most recently, of “Presidential Courage,” is writing a history of American presidential leadership in wartime.

A version of this review appeared in print on February 10, 2013, on page BR15 of the Sunday Book Review with the headline: War Machines.

Nordic Countries: Lessons in Good Governance

February 2, 2013


The secret of their success: Good Governance and Pragmatism

The Nordic countries are probably the best-governed in the world

Nordic Countries

CECIL RHODES ONCE remarked that “to be born an Englishman is to win first prize in the lottery of life.” Today the same thing could be said of being born Nordic. The Nordic countries have not only largely escaped the economic problems that are convulsing the Mediterranean world; they have also largely escaped the social ills that plague America. On any measure of the health of a society—from economic indicators like productivity and innovation to social ones like inequality and crime—the Nordic countries are gathered near the top (see table).

Why has this remote, thinly populated region, with its freezing winters and Swedenexpanses of wilderness, proved so successful? There was a time when most of its population would have unhesitatingly praised their government, which for most of the 20th century meant the social democrats in one of their various national guises. The government had provided the people with cradle-to-grave welfare services, rescuing them from the brutal life of their 19th-century forebears, and stepped in to save the capitalist economies from their periodic crises.

But free-marketers have poked holes in the pro-government explanation and offered a powerful alternative. In the period from 1870 to 1970 the Nordic countries were among the world’s fastest-growing countries, thanks to a series of pro-business reforms such as the establishment of banks and the privatisation of forests. But in the 1970s and 1980s the undisciplined growth of government caused the reforms to run into the sands. Free-marketers put the region’s impressive recent performance down to its determination to reduce government spending and set entrepreneurs free.

NorwayGovernment’s role in improving equality is also being questioned. Andreas Bergh, of Sweden’s Research Institute of Industrial Economics, argues that the compression of Swedish incomes took place before the arrival of the welfare state, which was a consequence rather than a cause of the region’s prosperity—and almost killed the goose that laid the golden eggs.

This special report has supported some of the free-marketers’ arguments. The Nordic countries had got into the habit of spending more on welfare than they could afford and of relying more on a handful of giant companies than was wise. They are right to try to trim their states and make life easier for business. But it would be wrong to ignore the role of government entirely.

The Nordic countries pride themselves on the honesty and transparency of their governments. Nordic governments are subject to rigorous scrutiny: for example, in Sweden everyone has access to all official records. Politicians are vilified if they get off their bicycles and into official limousines.

The Nordics have added two other important qualities to transparency: pragmatism and tough-mindedness. On discovering that the old social democratic consensus was no longer working, they let it go with remarkably little fuss and introduced new ideas from across the political spectrum. They also proved utterly determined in pushing through reforms. It is a grave error to mistake Nordic niceness for softheadedness.

Pragmatism explains why the new consensus has quickly replaced the old one. Few Swedish Social Democratic politicians, for instance, want to dismantle the conservative reforms put in place in recent years. It also explains why Nordic countries can often seem to be amalgams of left- and right-wing policies.

Pragmatism also explains why the Nordics are continuing to upgrade their model. They still have plenty of problems. Their governments remain too big and their private sectors too small. Their taxes are still too high and some of their benefits too generous.The Danish system of flexicurity puts too much emphasis on security and not enough on flexibility. Norway’s oil boom is threatening to destroy the work ethic.

It is a bad sign that over 6% of the workforce are on sick leave at any one time and around 9% of the working-age population live on disability pensions. But the Nordics are continuing to introduce structural reforms, perhaps a bit too slowly but stolidly and relentlessly. And they are doing all this without sacrificing what makes the Nordic model so valuable: the ability to invest in human capital and protect people from the disruptions that are part of the capitalist system.

Getting to Denmark

Most of the rich world now faces the same problems that the Nordics facedDenmark in the early 1990s—out-of-control public spending and overgenerous entitlement programmes. Southern Europe needs a dose of Nordic tough-mindedness if it is to get its finances under control. And America needs a dose of Nordic pragmatism if it is to have any chance of reining in entitlements and reforming the public sector.

The Nordics are hardly blushing violets when it comes to advertising the virtues of their model. Nordic think-tanks produce detailed studies in English about how they reformed their states. Nordic politicians fight their corner in international meetings and Nordic consultants sell their public-sector expertise around the world. Dag Detter played a leading role in restructuring the Swedish state’s commercial portfolio in the 1990s, representing more than a quarter of the business sector. He has since advised governments in Asia and across Europe.

FinlandYet it is hard to see the Nordic model of government spreading quickly, mainly because the Nordic talent for government is sui generis. Nordic government arose from a combination of difficult geography and benign history. All the Nordic countries have small populations, which means that members of the ruling elites have to get on with each other. Their monarchs lived in relatively modest places and their barons had to strike bargains with independent-minded peasants and seafarers.

They embraced liberalism early. Sweden guaranteed freedom of the press in 1766, and from the 1840s onwards it abolished preference for aristocrats in handing out top government jobs and created a meritocratic and corruption-free civil service. They also embraced Protestantism—a religion that reduces the church to a helpmate and emphasises the direct relationship between the individual and his God. One of the Lutheran church’s main priorities was teaching peasants to read.

The combination of geography and history has provided Nordic governments with two powerful resources: trust in strangers and belief in individual rights. A Eurobarometer survey of broad social trust (as opposed to trust in immediate family) showed the Nordics in leading positions (see chart below). Economists say that high levels of trust result in lower transaction costs—there is no need to resort to American-style lawsuits or Italian-style quid-pro-quo deals in order to get things done. But its virtues go beyond that. Trust means that high-quality people join the civil service. Citizens pay their taxes and play by the rules. Government decisions are widely accepted.


The World Values Survey, which has been monitoring values in over 100 countries since 1981, says that the Nordics are the world’s biggest believers in individual autonomy. The Nordic combination of big government and individualism may seem odd to some, but according to Lars Tragardh, of Ersta Skondal University College, Stockholm, the Nordics have no trouble reconciling the two: they regard the state’s main job as promoting individual autonomy and social mobility. Any piece of Nordic social legislation—particularly the family laws of recent years—can be justified in terms of individual autonomy.

Universal free education allows students of all backgrounds to achieve their potential. Separate taxation of spouses puts wives on an equal footing with their husbands. Universal day care for children makes it possible for both parents to work full-time. Mr Tragardh has a useful phrase to describe this mentality: “statist individualism”.

Nordic people take this attitude to government with them when they go abroad. In the 19th and early 20th centuries some 1.3m people, a quarter of the Swedish population at the time, emigrated, mostly to the United States. America created an entire genre of jokes about “dumb Swedes” and their willingness to obey rules. These dumb Swedes created the best-governed enclaves in America, such as Minnesota. Even today Americans with Nordic roots are 10% more likely than the average American to believe that “most people can be trusted”.

Size isn’t everything

Economists frequently express puzzlement about the Nordic countries’ recent economic success, given that their governments are so big. According to a professional rule of thumb, an increase in tax revenues as a share of GDP of ten percentage points is usually associated with a drop in annual growth of half to one percentage point. But such numbers need to be adjusted to allow for the benefits of honesty and efficiency.

The Italian government, for instance, imposes a heavy burden on society because the politicians who run it are mainly concerned with extracting rent rather than providing public services. Goran Persson, a former Swedish Prime Minister, once compared Sweden’s economy with a bumblebee—“with its overly heavy body and little wings, supposedly it should not be able to fly—but it does.” Today it is fighting fit and flying better than it has done for decades.