ASEAN Economic Community: Shining light of the East


May 24, 2016

Ten countries in Southeast Asia are attempting to launch a single market for goods, services, capital, and labor, which has the potential to become one of the largest economies and markets in the world. Here are 12 things to know about the ASEAN Economic Community.

  1. The center of global economic gravity is shifting toward Asia. Within Asia, it is shifting toward the two giant economies of the People’s Republic of China and India. Their emergence as economic superpowers suggests that “economic size” bestows significant advantage in accelerating growth and fostering development.
    Source: ADBI. 2014. ASEAN 2030: Toward a Borderless Economic Community
  2. The Association of Southeast Asian Nations (ASEAN) is in the process of creating a single market and production base, called the ASEAN Economic Community, which will allow the free flow of goods, services, investments, and skilled labor, and the freer movement of capital across the region. This is envisioned to be in place by 31 December 2015.
    Source: 24th ASEAN Summit. 2014. Myanmar. Nay Pyi Taw Declaration
  3. If ASEAN were one economy, it would be seventh largest in the world with a combined gross domestic product of $2.4 trillion in 2013. It could be fourth largest by 2050 if growth trends continue.
    Source: Speech by ADB Vice-President Stephen Groff. 2014. Berlin, Federal Republic of Germany. ASEAN Integration and the Private Sector
  4. With over 600 million people, ASEAN’s potential market is larger than the European Union or North America. Next to the People’s Republic of China and India, ASEAN has the world’s third largest labor force that remains relatively young.
    Source: Speech by ADB Vice-President Stephen Groff. 2014. Berlin, Federal Republic of Germany. ASEAN Integration and the Private Sector
  5. ASEAN is one of the most open economic regions in the world, with total merchandise exports of over $1.2 trillion – nearly 54% of total ASEAN GDP and 7% of global exports.
    Source: ADBI. 2014. ASEAN 2030: Toward a Borderless Economic Community
  6. ASEAN is taking a more cautious approach to regional economic integration than Europe. In Asia, there is currently no serious consideration of a single currency.
    Source: ADB news release. 2015. An Increasingly Unified Asia Is Keeping an Eye on Greece
  7. The ASEAN Economic Community is founded on four basic initiatives: creating a single market and production base; increasing competitiveness; promoting equitable economic development; and further integrating ASEAN with the global economy.
    Source: ASEAN. 2007. Singapore. Declaration on the ASEAN Economic Community Blueprint
  8. ASEAN’s physical infrastructure is critical to the ASEAN Economic Community’s goal of establishing a single market and production base. Cross-border roads, power lines, railways and maritime development will help propel the community forward. This will boost existing and new value chains or production networks.
    Source: Speech by ADB President Takehiko Nakao. 2015. 19th ASEAN Finance Ministers’ Meeting. Kuala Lumpur, Malaysia 
  9. One of the challenges to the ASEAN Economic Community is bridging the perceived “development divide” between the older and economically more advanced members – Brunei, Indonesia, Malaysia, Philippines, Singapore, and Thailand, known as the ASEAN-6, and the four newer members – Cambodia (1999), Lao People’s Democratic Republic (1997), Myanmar (1997), and Viet Nam (1995).
    Source: ADB. 2013. The ASEAN Economic Community: A Work in Progress
  10. Some analysts believe that the ASEAN Economic Community will miss its December 2015 deadline because of the challenging requirements of economic integration, including changes to domestic laws and in some cases constitutional changes.
    Source: ADB. 2015. Realizing an ASEAN Economic Community: Progress and Remaining Challenges
  11. The flexibility that characterizes ASEAN cooperation, the celebrated “ASEAN way,” may hand member states a convenient pretext for noncompliance, according to one ADB report. How to enforce the accords remains an issue. Currently, the economic integration commitments lack sufficient mechanisms to ensure compliance.
    Source: ADB. 2015. Realizing an ASEAN Economic Community: Progress and Remaining Challenges
  12. ASEAN needs a plan beyond the ASEAN Economic Community to achieve the long-term development aspirations of its 10 member countries, according to an ADB study. This includes introducing structural reforms nationally and taking bold actions regionally to further deepen economic integration.
    Source: ADBI. 2014. ASEAN 2030: Toward a Borderless Economic Community

ASEAN Economic Community: Shining light of the East

by Dr. Munir Majid

http://www.thestar.com.my

THE level of interest in the ASEAN Economic Community (AEC) among the business community in the world at large has increased tremendously since its pronouncement at the end of last year.

While not discounting its imperfections, foreigners are more focused on the opportunities and promise of the single market and production base.

With 90% of global economic growth coming from outside the advanced economies, one can understand why. But there are also ASEAN’s particular strengths which attract attention.

Many are becoming increasingly aware of the size of the ASEAN economy (US$2.7 trillion, the seventh largest market in the world with over 620 million people). Beyond that, they also realise that its growth potential is very capable of achievement with the demographic dividend ASEAN will reap from its young population (60% under 35 years of age).

 The latter means a high level of productivity from a work force when a lot of the world would see an ageing population not part of the work force increasingly dependent on the resources of the economy.

The young population will also be a huge part of the growing middle class which, on the demand side, will drive the consumption of a multiplicity of goods and services.

The expectation that ASEAN will become the third largest economy in the world after China and India (or fourth if the European Union is counted as one economy before mid-century is therefore not seen as fanciful.

At the same time, the very disparity in economic development in Asean is also seen as an opportunity to bring up the less developed countries from a low base. Here, large infrastructure development needs are making a number of foreign businesses consider where they might be involved.

Estimates of annual ASEAN infrastructure development needs vary widely from US$ 60bil to US$ 600bil, depending on the definition of what is the base requirement, but the sectors most in need are quite clear: energy, transportation and telecommunications.

The countries farthest behind in infrastructure development are also obvious, with Indonesia requiring around US$ 500bil for the rest of the Jokowi administration and Myanmar estimated to need US$ 350bil into 2025.

Companies in countries not so fashionable in ASEAN economic thinking, such as Russia, are seriously examining the technology they can bring to ASEAN economic development, in areas such as renewable sources of energy, water treatment and modern construction materials.

One Russian company is looking at, in the first instance, developing business-to-business e-commerce with ASEAN to facilitate two-way trade.

On the soft side – particularly with ASEAN’s young population – the greatest infrastructural need is for education and training. The more traditional investors in ASEAN, such as Britain, are looking at how they can address this beyond the conventional schools and universities.

Training in and introduction of new technologies in ASEAN are being mulled by many countries, particularly in Britain but also Russia. Creation of Artificial Intelligence in ASEAN for other markets as well is being looked at by one Russian company.

While not all this new interest in the ASEAN economic space has arisen from pronouncement of the AEC, that historic event last year has no doubt concentrated business minds on its promise and potential.

The United States, China, Europe and Japan no doubt have a long and abiding interest, but new interest among businesses in countries such as Russia is noteworthy. In August last year, the Russian and ASEAN economic ministers identified 57 new projects to be pursued.

The Russians now do not want just a roadmap. They want projects to be materialised.Of course, Russia has geopolitical reasons for wanting to develop trade and investment with ASEAN. At the Sochi summit this week with Asean leaders, after 20 years the Russian relationship with the region was raised to the level of a strategic partnership.

At the same time the Russians are drawing in the Eurasian Economic Union on their side of the partnership. They are also urging ASEAN to relate with the Shanghai Cooperation Organisation.

All this reflects the geopolitical factors for Russia’s desire to develop the relationship with ASEAN – their deteriorated relations with the West and the sanctions against them.

Russia therefore needs to look East. ASEAN is a bright star. Whatever the geopolitical motive however, Russian businesses would not want to come to ASEAN if there were no opportunity.

Without taking sides or being drawn into any alliances, ASEAN  should get engaged with diversification of economic relationships for its own benefit. Russia, for instance, has got some very advanced technologies that could compete with the usual suspects to provide good terms and choice.

The ASEAN promise is not limited to the region. The foreign interests looking at and wanting to come to ASEAN also see how the market would expand, and how having ASEAN as their base makes good business sense.

It is to be hoped ASEAN companies see this too, and might want to engage with them for their own further expansion.

Beyond ASEAN there is the Regional Comprehensive Economic Partnership (RCEP). Comprising ASEAN and six other countries – China, India, Japan, Korea, Australia and New Zealand – the expanded free trade area would comprise three billion people and over a quarter of global Gross Domestic Product, and is growing. An ASEAN base, with its already large market, can be a springboard to an even larger one.

In addition, the Trans-Pacific Partnership (TPP), often seen as in opposition to the RCEP, could very well work to be complementary. With a market size of over 40% of global GDP, the TPP already has four Asean countries committed to join, with three more mulling over it.

Again, an ASEAN base would be a good platform from which to penetrate that already huge TPP market. An irony would be if, say, a Russian company in partnership with a Malaysian one were to produce goods or services in our country destined for America.

That prospect would be a test of US commitment to free trade. But that is another story.

The story now is about ASEAN and its AEC, which is engaging a lot of foreign business interest, whether driven by geopolitical or purely commercial considerations. The promise foreigners see in it is something we in ASEAN must also see. It is good to want to ensure an optimal AEC, but we must make business decisions now, as others are making.

Obama’s Vietnam “Legacy” Trip: A Reality


May 23, 2016

Obama’s Vietnam “Legacy” Trip: A Reality 

By Greg Rushford

Air Force One touched down yesterday evening in Hanoi. The White House and influential Washington think-tank scholars are spinning President Barack Obama’s three-day Vietnam visit as a “legacy” moment, validating the president’s “pivot” to Asia. Expect much warm talk of how America is forging ever-closer economic- and security ties with a modernizing Vietnam. Expect the usual heartwarming television images of happy people -including peasants toiling in lush rice fields, wearing their iconic conical hats.

Don’t expect any admissions from Vietnamese Communist leaders of the suffering they continue to inflict upon some of their country’s best citizens. As former prisoner of conscience Cu Huy Ha Vu rightly notes, today’s Vietnam is “a kleptocracy.” Intrepid pro-democracy advocates stand in the way.

Courageous men like Dang Xuan Dieu, Ho Duc Hoa, and Tran Vu Anh Binh, three of Vietnam’s 100-plus current political prisoners. They languish behind bars, while some Washington insiders have averted their eyes.

Some of those insiders are Southeast Asian analysts who work inside the gleaming $100 million headquarters of the Center for Strategic and International Studies, just a few minutes from the White House – and who have undisclosed sidelines as business consultants. They know that to speak forthrightly on Vietnam’s shameful human rights record would threaten their easy access to senior communist officials. Their corporate benefactors who depend upon that political access to win lucrative business contracts in Vietnam could lose the big bucks.

Ernest Z. Bower President & CEO, Bower  Asia Group,  is widely recognized as one of the strongest proponents for close ties between the United States and Asia. In recognition of his work, the King of Malaysia has awarded him the Darjah Panglima Jasa Negara (PJN), pronouncing him holder of the title Datuk in Malaysia.  The president of the Philippines also awarded him the rank of Lakan, or Commander, for his service to the Philippines.  Ernie is currently the United States Chair of the Advisory Council on Competitiveness for the Vietnamese Prime Minister and serves on the boards of the Special Olympics, American Australian Education & Leadership Foundation, the Institute for Religion & Public Policy, the United States-New Zealand Council and the Board of Advisors of the United States-Indonesia Society.

Moreover, Vietnam’s Ambassador to the United States has a team of $30,000-a-month Washington lobbyists on his payroll. Their assignment is basically not to let awkward questions about political prisoners interfere with enhanced U.S.-Vietnamese commercial- and security ties, especially the sale of lethal weapons to fend off Chinese maritime intimidation.

One wonders what Dieu, Hoa, and Binh, locked away in their cells, would have to say – if they were free to speak. Dieu, a devout Catholic citizen journalist, has been imprisoned since 2011. He committed the “crime” of exercising free speech. Dieu has been living “in hell” – beaten, humiliated, and treated like a “slave” for refusing to wear a uniform with the word “criminal” – his brother has told Radio Free Asia. Hoa, also a blogger whose crime was his free speech, has been incarcerated since 2011. Binh, a songwriter, lost his liberty in 2012. His crime was writing music that offended the Communist Party. While Binh’s term is scheduled to end next year, Dieu and Hoa could languish behind bars until 2024.

All three men are associated with the Viet Tan, a U.S.-based political party that is highly effective in using the social media to advocate democratic freedoms of speech and assembly. The Viet Tan reaches a wide audience, both inside Vietnam and in the Vietnamese diaspora. For its skilled high-tech advocacy, the Hanoi’s feared Ministry of Public Security brands Viet Tan as a “terrorist” organization.

Binh, Hoa and Dieu were amongst a group of 17 political prisoners who have been represented by Stanford law professor Allen Weiner, a former high-powered U.S. State Department official. Weiner won a United Nations panel determination that his clients – all either Viet Tan members, supporters or friends – had been unjustly imprisoned. While 14 of Weiner’s clients have been released, that’s unfortunately not quite a happy ending. “Some of those who have been released, however, continue to suffer severe harassment and intimidation at the hands of the Vietnamese security services,” Weiner reports. “They continue to pay a heavy price.”

That’s the sort of glaring injustice that no credible analyst of today’s Vietnam would want to downplay. Meet CSIS Asia analyst Murray Hiebert (pic  above)- a man who doesn’t deny that Vietnam has human rights issues, yet is careful never to use clear language that would anger senior Vietnamese officials.

Nine months ago, I brought Allen Weiner’s brave clients to Hiebert’s attention, asking if perhaps this would be an opportunity to highlight the injustice by holding a public forum. The CSIS analyst brushed off the inquiry – at the time I had not realized that CSIS has never held such an event. He also declined to say whether he agreed with Hanoi’s characterization of the Viet Tan as a “terrorist” organization.

(The White House and State Department are better informed than CSIS. Not only do they respect the Viet Tan for its peaceable advocacy, but Obama’s national security officials have maintained close ties with the Viet Tan leadership. Radio Free Asia reported that on May 17 representatives of the Viet Tan, along with other respected Vietnamese pro-democracy advocates including Boat People SOS and Vietnam for Progress, were briefed on Obama’s upcoming Vietnam trip in the White House on May 17.)

A few weeks ago, Hiebert once again did not respond to a request to be interviewed on the imprisoned Viet Tan supporters. I then tried to register for a May 17 press briefing that Hiebert and two other CSIS scholars held on the Obama visit. I had hoped to ask about Binh, Hoa and Dieu. But CSIS spokesman Andrew Schwartz – who also had not responded to a recent e-mail inquiry – denied me admission, asserting that the event was “oversubscribed.”

While the briefing room was indeed rather crowded, even full, according to people who were present, Schwartz found room for Vietnam Television. VTV is a Hanoi-controlled media tool that the Communist Party finds useful for spreading the party line. These days, VTV’s best “scoop” has been in warning Vietnamese independent journalists – and specifically the Viet Tan – to stay away from linking corrupt communist officials to a Taiwanese steel mill that somehow obtained environmental clearance to discharge toxic wastes into the sea, which has resulted in a massive fish kill.

(At the May 17 CSIS briefing, a Television Vietnam correspondent asked if the next American president would continue Obama’s “pivot” to Asia – which at least drew laughter. It is perhaps also worth noting that while “journalists” from Vietnam Television are welcome to peddle their propaganda in the United States, authorities in Hanoi continue to jam Radio Free Asia’s Vietnamese language service. And while the BBC is free to broadcast its English-language programs in Vietnam, the BBC’s celebrated Vietnamese Language Service frequently has run into problems.)

As it turns out, CSIS has a history of making life uncomfortable for guests at the think tank’s public events who might pose awkward questions. On May 24, 2015, former political prisoner Ha Vu angered the Vietnamese Ambassador to the U.S., Pham Quang Vinh, by asking how Vietnam justified persecuting its political prisoners. Vinh, visibly upset, retorted that Vietnam has no political prisoners – which was pretty rich, considering that at that moment, the ambassador was busy trying to avoid making eye contact with one of Vietnam’s most famous political prisoners.

Moreover, CSIS analyst Hiebert, who chaired the panel, did not challenge the ambassador’s absurd claim. (The CSIS event discussed a study on U.S.-Vietnamese relations that Hiebert had co-authored; that study had not disclosed that the Vietnamese government had secretly financed it, Hiebert subsequently admitted to me.)

And last July, Hiebert went to extraordinary lengths to accommodate Vietnamese security officials when Communist Party Secretary General Nguyen Phu Trong spoke at CSIS. Hiebert summoned a guard, escorting Dr. Binh Nguyen, a prominent Vietnamese-American physician, from the premises. Hiebert apologized to Binh, who had been invited, but said that the communist security officials insisted that she be ejected (for details see: How Hanoi Buys Influence in Washington, D.C., www.rushfordreport.com).

Turns out that there are other reasons to doubt Hiebert’s independence. While his official CSIS bio does not disclose it, Hiebert is also a senior advisor to a prominent business consultancy, the Bower Group Asia.

Conflicted interests

Hiebert’s boss at CSIS, Ernie Bower, runs the Bower Group Asia. “Our clients include the world’s best global enterprises,” the BGA website proclaims. “We understand the nexus between politics and economics.” Bower has more than 60 employees in his Washington, D.C. headquarters and in 21 Asian countries (including Vietnam). Another CSIS analyst, Chris Johnson, is a BGA managing director for China. Like Hiebert, Johnson does not disclose his business affiliations on his CSIS website.

Bower, who formerly chaired the CSIS Southeast Studies chair, responded angrily last year when I asked him which was his real day job: CSIS or his business consultancy. He said he was “saddened” that I had suggested he appeared to have conflicts of interest. But perhaps aware that others might also wonder, Bower now identifies himself on the CSIS website as a “non-resident” advisor. The chair remains vacant. CSIS spokesman Schwartz and John Hamre, the think tank’s CEO and one of Washington’s most acclaimed fundraisers, have not responded to persistent inquiries to explain the apparent conflicts.

Here’s how the conflict works:

At CSIS Hiebert has advocated the TPP trade deal. The Bower Group is actively seeking TPP business.

Hiebert has strongly contended that the U.S. lethal arms embargo on Vietnam has outlived its usefulness, and should be lifted. Lockheed, which wants to sell Hanoi its P-3 Orion and C-130 Hercules surveillance planes, has a seat on Hiebert’s CSIS board. So does Boeing, which has been peddling its P-8 Poseidon military surveillance aircraft in Hanoi. Imagine how the giant defense contractors would feel if the money they dole out to CSIS would be used to shine a spotlight on issues involving corruption and human-rights abuses in Vietnam.

Coca-Cola, a Bower Group client, got into Laos a few years ago, thanks to Ernie Bower’s understanding of “the nexus” between business and politics. Coke also has a seat on the CSIS Southeast Asia Board.

Chevron, another major CSIS benefactor, also has a representative on CSIS’s Southeast Asia board. Hiebert authored a November 2014 column for the Wall Street Journal defending Chevron in bitter litigation the oil giant had in Indonesia. In his column, Hiebert identified himself only as a CSIS analyst. Then Ernie Bower got busy on the Bower Group’s Facebook page, touting the Journal piece: “BGA’s Murray Hiebert provides much-needed analysis of the court case against Chevron in Indonesia” in the Wall Street Journal. [Full disclosure: I have been an occasional contributor to the Wall Street Journal’s Asian edition for more than two decades.]

In recent months, Hiebert has been quoted widely by major news outlets including CNN, Reuters, the Associated Press, Forbes, Politico, the Financial Times, the Washington Times, and the Voice of America – always only identified as a CSIS analyst. Readers would not know that Hiebert also works for a business consultancy. They would not know that corporations that fund Hiebert’s CSIS programs have serious financial interests at stake.

One wire-service report that quoted Hiebert about Vietnam’s new top leadership was picked up by the New York Times in April. This gave Ernie Bower another opportunity to twitter to his clients about how “BGA Senior Advisor Murray Hiebert” had made the pages of the Times.

And earlier today, CNN quoted Hiebert’s approving views of enhanced U.S. weapons sales to Vietnam, identifying him only as a CSIS scholar. Viewers were not aware that this “scholar” is funded at CSIS by major U.S. defense contractors, and has taken money from the Vietnamese government for co-authoring a study that called for the lifting of the U.S. weapons embargo to that country. Nor would viewers know that Hiebert also works for the Bower Group, which also touts its interest in facilitating arms deals.

A little digging illustrates how Bower mixes his CSIS affiliations with business. In 2014, for example, Bower opened some important doors in Washington to a Manila wheeler-dealer named Antonio “Tony Boy” Cojuangco. Tony Boy also sits on CSIS’s Southeast Asia board. Bower brought him to town as the head of an “eminent persons” group – such flattery can go a long way in certain Asian circles.

CSIS arranged appointments for the Filipino eminences in the White House, the Export-Import Bank, on Capitol Hill and of course at CSIS headquarters, where they had a scheduled appointment with the think tank’s president, John Hamre. That was during the day. That night, the Bower Group hosted a lavish dinner for Tony Boy and his associates at the posh Jefferson Hotel. Bower, Hiebert, Chris Johnson, and other CSIS/Bower Group operatives were present. To judge from photos I’ve seen, it was a good night all around, lubricated by bottles of Pomerol. (Hamre has not responded to repeated requests to comment. On the CSIS website, the CSIS head asserts that some unnamed journalists who have questioned CSIS ethical practices have ignored evidence to the contrary that he has provided.)

Agents of Influence

Speaking of influence peddling, if one looks closely, the Washington lobbyists on that $30,000-a-month retainer from Vietnamese Ambassador Vinh unwittingly illustrate how the official spin surrounding the Obama visit to Vietnam doesn’t tell the whole story.

The most recent foreign agent’s disclosure form that the Podesta Group has filed with the U.S. Department of Justice lists some of what the firm did to earn its $180,000 for the last six months of 2015. One is left wondering exactly what the lobbyists did to earn their keep.

The lobbyists disclosed only seven meetings, mostly with congressional aides. The only elected representative who met with Podesta representatives was Matt Salmon, an Arizona Republican who is retiring from Congress at the end of this year.

Rep. Salmon had already met with Vietnamese Ambassador Vinh earlier in the year and had been to Vietnam in May. The congressman already had supported an enhanced U.S.-Vietnam trade relationship.

Do the math: $180,000 for seven meetings. That’s about $25,000 a meeting, throwing in about 50 e-mails and five phone calls that the Podesta lobbying form mentions. David Adams, the Podesta lobbyist who has been working to facilitate the Obama visit to Vietnam this week, is a former close aide to Hillary Clinton when she was secretary of state. Asked what he had really done to each the money, Adams declined to comment.

This week, when the television screens show images of happy Vietnamese peasants with their conical hats, toiling in their rice paddies, think of David Adams. The average Vietnamese citizen would have to work 13 years to earn enough money to pay for just one $25,000 Podesta Group meeting with congressional aides.

From the days of French colonialism to the present Communist kleptocracy, the Vietnamese central government has always stolen from its poorest people.

Ambassador Vinh’s lobbyist Adams proudly styles himself as a part-time “gentleman farmer” in Virginia’s wine country. Wonder what those Vietnamese peasants would say, if they knew that their stooped labor is helping subsidize such a lifestyle?

ASEAN: Laos–What’s Next?


May 21, 2016

ASEAN: Laos–What’s Next?

by Oliver Tappe

From transforming urban landscapes to high-speed rail and Chinese investment, in Laos development can be a double-edged sword.

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In November 2015, the people of Vientiane and countless visitors celebrated the annual That Luang Festival, the largest religious festival in Laos.On the third day, the traditional game of tikhi, a kind of hockey (see Simon Creak’s excellent historical analysis of the ‘national game’ in his book Embodied Nation), was held between teams of government officials and local people.

According to a Vientiane Times article, the result of the match indicated the city’s fate in the year to come. A victory by the local people’s team would foretell 12 months of happiness and well-being for the citizenry. A win by the officials “was seen as an indication that the townsfolk would be fairly governed for the coming year, thus ensuring contentment whatever the outcome.”

 

It was a series of matches, and I did not follow all the results. That left me wondering what 2016 will bring for Laos: good governance, and/or prosperity?

In his speech on the occasion of National Day, only a few days later on 2 December, President Choummaly Sayasone made it clear that both would be the case. Forty years of rule by the Lao People’s Revolutionary Party allegedly witnessed social and economic development – though with the goal of leaving the ranks of Least Developed Countries by 2020 yet to be achieved. “The people’s democratic political system has been improved and strengthened consistently,” said the President.

For Choummaly and the Party-State leadership, the last four decades appear a success story, a win-win situation for government and people, as represented by the auspicious tikhi game.

At present, ‘development’ manifests itself as a rapid transformation of Vientiane’s urban landscape and its rural outskirts. Construction sites for new roads and massive buildings dominate the municipality.

Chinese and Vietnamese investors have joined the current land run in Laos, one scandalous example being the grounds of the old National Museum, which will have to make way for a Chinese hotel complex (as will the National Library across Nam Phu Square). Thousands of Vietnamese labour migrants flock to the project sites, operating in a legal grey zone with the usual 30-day visa (and various additional “fees” for local authorities and police). They keep the border checkpoint at the Friendship Bridge busy with their frequent visa runs.

Visitors are struck by huge buildings suddenly appearing where there were rice fields before. The That Luang Marshes – traded with Chinese investors for a stadium on the occasion of the 2009 Southeast Asian Games – provide a surreal impression with their apparently over-scaled building projects.

 

Another “special achievement” (according to Choummaly) will be the new railroad crossing the country from Vientiane to the Chinese border as part of China’s ambitious Kunming-Singapore railway project.

The groundbreaking ceremony was held on National Day, of all days, with Somsavat Lengsavad – also responsible for the notorious Golden Triangle special economic zone in northwest Laos – acting as the real strongman of Lao PDR.

The scale of the project is stunning: 427 kilometres of rails, including 72 tunnels a totalling 183km; an estimated workforce of 100,000 (hardly to be recruited among the Lao population); and 150 hectares of land in Vientiane reserved for the new train station (for more detail see here and here).

All this will suffice to raise concerns among the Lao population, not least because of previous ‘development’ projects that often entailed land appropriation with only meagre and belated compensation.

Increasing state debt is another reason for scepticism. From the estimated costs of the railway project of US $6 billion, Laos will take a share of 480 million, which in 2013 would have made up more than 20 per cent of the country’s Gross Domestic Income!

China will provide an equivalent loan, to be covered by five potassium concessions. Potassium is in great demand as fertiliser for the Chinese agricultural sector. However, world market prices plummeted recently, so that Chinese companies will have to dig over quite a lot of soil to cover their costs.

Since large potassium reserves are located in the Vientiane Plain – densely populated and critical for wet-rice production – we can expect further dispossession and problems with wastewater and salinisation. The impending devastation of fertile soil in Laos for the export of Chinese fertiliser will be a sad irony.

Moreover, infrastructure and mining projects are important drivers of deforestation in Laos. It is no coincidence that the huge amount of illegal timber exported in recent years corresponded with an increase in Chinese and Vietnamese investments in mining, agriculture, forestry and hydropower in Laos.

In October 2015, a leaked, unofficial World Wildlife Fund report caused some commotion when calling attention to the rampant illegal logging going on in Laos – not uncommonly related to concessions where the respective companies extend their assigned logging areas far beyond the concession borders and into natural preservation areas.

In some cases, more than 90 per cent of the logging happened illegally. According to the WWF’s estimates, ten times more timber crossed the Lao-Vietnamese border than the official harvest in Laos.

Despite a logging ban issued in August 2015 by the Lao government, reports of trucks transporting timber across the border to Vietnam continue to raise concerns about ongoing deforestation. Logging in Laos – with 96 per cent of the total harvest exported to Vietnam and China – is largely uncontrolled, and includes protected species.

The Food and Agriculture Organization’s recent estimation of a 69.9 per cent forest cover – by taking a generous >10 per cent canopy density as vantage point – is certainly not very helpful for raising awareness of deforestation. Official data from Laos (>20 per cent canopy density) suggest a forest cover of about 40 per cent only.

All these data have to be taken with a pinch of salt, anyway, since they include tree plantations (like rubber) and regenerated (and even yet-to-be regenerated) woodland. Yet, it is evident that well-stocked forests with canopy closure of more than 70 per cent are rapidly disappearing, especially in southern Laos. Forest quality, in general, has also deteriorated in the last couple of decades, with dense forest having declined from 29 per cent in 1992 to 8.2 per cent in 2002.

It is hard to believe that illegal logging on such a scale could be possible without the collusion of Lao authorities. And it is very likely that the forest along the planned railroad track from Luang Namtha to Vientiane will disappear in a flash.

Who will benefit from these first results of the huge railway project? Probably not the local population in the Lao uplands. Some 3,058 hectares of land will be reserved for the project, with 50 meters on each side of the track fenced for security reasons – and deforested for sure. Somsavad’s  statement that the railroad will yield economic growth of 32 per cent, and be used by 4 million Lao passengers sounds bizarre (remember: Laos’ population is around 7 million).

Rather, the railroad will serve Chinese economic and geopolitical interests, not least given the immense corresponding Chinese investment in Thailand for the connection from Nongkhai to Bangkok (and further south towards Kuala Lumpur, Malaysia, and Singapore).

Land grabbing, deforestation, and pollution will continue to disquiet the population of Laos. However, open criticism of the Lao government is rare, the disappearance of Sombath Somphone three years ago remaining a constant warning for any civil society actor. Not surprisingly, the Lao government refused to include the ASEAN People’s Forum (APF) in the ASEAN summit to be held in November 2016.

Among the official justifications given for not organising a meeting of Southeast Asia civil society organisations were the lack of preparation time and insufficient funding. In addition, a Lao spokesperson asserted that “foreigners would like to use the ASEAN Peoples Forum to criticise ASEAN governments, and ASEAN governments do not agree”, and that Laos could not guarantee the safety of “extremist” activists. This is alarming news for any civil society actor within Laos and beyond.

The first thing in 2016, though, is the next Party Congress where – as usual – little shifts in the central committee will fuel speculations about rifts within the Lao political elite. Certainly tensions between influential families exist, mainly related to their respective business interests – everyday staple for gossip among citizens and expats in Vientiane.

Yet it can be expected that the ruling Party will maintain its disciplining function and be careful to negotiate individual economic claims to uphold the illusion of a strong, united leadership. Again emphasis will be put on the solidarity between Party-State and the and the “Lao multiethnic people” for the goal of future prosperity.

As President Choummaly puts it: “The trust of our people in the new regime and future of the nation has been lifted to new heights.”

Oliver Tappe is a senior researcher at the Global South Studies Center at the University of Cologne, Germany.

Forty years of Lao PDR: what’s next?

We Bicker: TIME to think as Malaysians and live to together in unity and harmony?


May 17, 2016

We Bicker: TIME to think as Malaysians and live to together in unity and harmony.

Message to Nazri Aziz, Azalina Othman Said, Hadi Awang,  Harussani Zakaria, Ridhuan Tee Abdullah, and Keruak et.el

Shaun Liew

http://www.malaymailonline.com

West and East Malaysians have been bickering through social media, face-to-face conversations, and so on. But if they want the same thing, why are they fighting with each other?

Some needs and desires are universal: no matter who we are, there are things we all need. Food, when we’re hungry. Accountability, when promises are broken. Rest, when we are overworked. Honour, when we work. Love, when we are not loved. And fairness, when there is none.

West and East Malaysians want the same thing. Equity, when there is discrimination. Malays, to tolerate non-Malays, and vice versa. Sarawakians and Sabahans, to live as well as Peninsulars, and vice versa. Non-Bumiputeras, to be recognised as equals like the Bumiputeras, by the federal government. And for East Malaysians, to be recognised by the federal government, as deserving of development and the good life, like West Malaysians. Why then are we in each other’s way?

Sarawakians have given power to those which the West have tried to rid of. Peninsulars think this ridiculous: why give power to the same government, when to them, nothing has been done?

Because Sarawakians have seen change, enough change, to vote for the same government. Peninsulars do not understand what these changes mean to Sarawakians; they ridicule them instead. Sarawakians understandably feel unjustified; but they too do not understand what their actions mean for Peninsulars.

Peninsulars want a fair and accountable government, just like Sarawakians. But they have not seen once since independence. They want Barisan Nasional out, while Sarawakians are keeping them in.

 

The West vs East bickering is simplistic, and should go past the way we label each other. This is inherent even in casual jokes.

“You live on trees right? Or are there buildings there? I’m sorry you must have never heard of the word ‘buildings’.”

“It’s all your fault lah, the West Malaysians!”

If the East continues to blame the West for underdevelopment, if the West continues to blame the East for being foolish enough to vote Barisan Nasional, then there is no room for productive debate or mutual understanding.

If we continue to discriminate, all debates will halt at the labels we have ― that he knows Maths well because he’s Chinese, or she received a scholarship offer because she’s Malay. We would fail to understand anything correctly ― that he’s good in Math because he worked hard after his parents emphasised how mathematical ability is easily transferred. Or that she received a scholarship offer because the government would like to uplift Malays by rationing scholarship offers based on race, in addition to her undeniably determined attitude.

This, we cannot understand if we are simplistic because our problems are not. Like underdevelopment and poverty, a problem for both Peninsular and East Malaysia. It’s mostly a problem in the rural areas, but even in the urban areas there are urban squatters, foreign workers, and those just hovering above the poverty line ― all of them labelled by the majority of society as unproductive, lazy and undetermined. It’s also mostly a Malay and indigenous problem, with pockets of Chinese and Indians.

Both West and East Malaysians are guilty of simplifying the truth ― and we need to look deeper. If Sabah and Sarawak voted for the opposition, does that mean BN’s reign is over? No. Because in Peninsula itself there are still many poor states, Malay-dominated with pockets of poor Chinese and Indians, who would vote for UMNO. And they vote for Muslim parties too, because Islam is part of many Malays’ identity.

Apply this to our society’s main problems: economic status associated with race. If Malays are poor and the Chinese are rich, I should give advantages to Malays, right? Then how far can a race-based policy that favours Bumiputera groups go? Would rich Malays benefit more than the majority of Malays? Would politicians grant certain groups special rights in order to trade benefits with each other, but not give them to the greater good?

This is why the solutions we need are even more complicated ― and they require debate beyond labels. This is also why involvement in policymaking is so important: we need to help each other, sure! But we need to do it in a way that’s best for everyone, and not just a few insiders.

The anger of West and East Malaysians after the Sarawak state elections ― in the form of cheap insults and deliberate stereotyping ― is sorely misdirected. We need to delve into the specifics and ask questions that we don’t usually tolerate ― and tolerate them with grace.

If basic infrastructure is what the East are lacking, ask why the West has so much of it. If racial and religious tolerance is what Peninsulars are lacking compared to Sarawakians, ask who is stoking intolerance, fear, and supremacism. If Chinese students feel they need to work much harder than Malays to get into local universities, ask who decides this allocation and why. If Sarawakians want Sarawak for themselves, ask who took their rights and natural resources away in the first place.

No matter how many questions there are, and no matter how specific they get, we all still want the same thing. Fairness, democracy, accountability, transparency, a fulfilling life. But we can’t understand this unless we go past labels to explore the deepest, most serious problems of our time. Beyond labels, we can see that we are all the same, that we desire to be equal, that we wish to be respected, as the complicated, diverse individuals we are, shaped by the complicated, diverse questions we wish to answer.

The cheap insults and simplified excuses must end now. We must delve into the specifics, the complicated, the uneasy. Then we can go forward. We all want the same thing anyway.

* This article was written by an Associate Editor from CEKU, the editorial arm of the United Kingdom and Eire Council of Malaysian Students (UKEC).

 

The Philippines and the Politics of Failure


May 16, 2016

COMMENT: Let us respect the choice of the Filipino people, although we may not agree their choice. Donald Trump too  can be chosen as the next US President over Hillary Clinton. I prefer the former Secretary of State, but Mr. Trump who is blunt and business like could be the first Republican President after 8 years of Obama’s liberal politics. So let the American voters decide on the man or the woman they want.

It is just a reflection of the times. Everywhere we look today be they be in France, Poland, Austria, Sweden and even Germany, right wing politicians are increasingly popular because voters expect leaders to be tough on law and order, ISIS terrorism,  and national security. Governments with liberal agendas have failed and that is why The Bern is giving Hillary a rough time in the primaries.

Both articles are negative about the Filipino President-elect.  Both tend to judge what Mr. Duterte on the basis of his past as Mayor of Davao City when both Asia Sentinel and Bunn Nagara know that running a country is not the same as being a city mayor.

The role of the President of the Philippines is demanding since it means defending the national interest and pursuing a foreign policy that emphasizes the Philippines’s role in  ASEAN, and managing its relationship with the United States in connection with the  South China Sea dispute, and  his country’s handling of the Sabah claim visa-a-vice Malaysia. Mr. Duterte should also worry about the need to fight rampant corruption, terrorism and piracy, and manage the economy which has benefited from the policies of President Benigno Aquino III .

Bunn Negara (above), Senior Research Fellow of the Institute of Strategic and International Studies Malaysia, he conveniently comments–even in his personal capacity– on the politics of the Philippines.  It is easy to write about it but he is unable to proffer his views critically on what is happening in Malaysia where the Najib administration, his UMNO kleptocrats and public officials have been mismanaging the economy  since 2009. Bun Nagara should be asking Najib what kind of country he is running.

Prime Minister  Najib Razak achieved the rare distinction in ASEAN and around the world for politics of race and religion, rampant corruption–The Economist recently ranked Malaysia as the second most corrupt nation in the world–and abuses of power including being caught red handed transferring public money into his personal bank account (some RM2.6 billion)  and  messing up the financial affairs of 1MDB, the national sovereign fund, which has defaulted on some of its Malaysian Government guaranteed bonds.

Like all analysts associated with the Najib Administration, he is afraid to speak the truth about Prime Minister Najib’s corruption and abuses of power. Yet he has the audacity to comment on the new Philippine administration whose President has yet to be inaugurated.–Din Merican   

The Philippines and the Politics of Failure – Asia Sentinel | Asia Sentinel

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President Rodrigo Duterte. If this is the next leader of the Philippines, as early results from Monday’s election portend, one has to wonder how it came to this. The country seems condemned to dwell on the past in the form of both leaders and issues while its political elite – in this case the blah figure of Mar Roxas – clings to an egotistical belief in itself to the detriment of common sense.

If, as is possible with the race too close to call, Ferdinand “Bongbong” Marcos, Jr., son of the former dictator,  triumphs for Vice President over reform-minded Leni Robredo, the country would have confounded reason.

 Vice President Ferdinand Marcos Jr.

Duterte, an ailing and bizarrely misogynistic advocate of vigilante justice, built his reputation in the years after Davao City emerged from a dirty war between communist rebels and the government that turned the metropolis into a frightening ghost town after dark. Duterte became the avenging mayor a generation ago, apparently allowing the killing of rebels and criminals in staggering numbers. He now promises to do the same for the entire country, only targeting crooks rather than communists.

This may tap into a well spring of public anger not unlike the voters following Donald Trump in the US, but the reality is that murder with impunity has long been a hallmark of the Philippines system, with Police often backing the assassins on behalf of powerful politicians. One shudders to think what sort of hit list Duterte may have in mind.

And in an even stranger instance of impunity and mass amnesia, Bongbong Marcos is contending for the Vice Presidency (the two posts are elected separately in the Philippines, a strange constitutional anomaly that adds to an already dysfunctional political system) almost exactly 30 years after his thieving father and mother were ousted from power. Bongbong, a man whose chief accomplishment is his last name, has the once-reviled Marcoses back in the center ring, continuing a Marcos versus Aquino family battle that dates back to the 1950s.

All this is happening after six successful years of President Benigno Aquino III, whose father was murdered while President Marcos was in power and whose mother pushed the erstwhile dictator and his flashy wife out the door. Investors like what has been happening under Aquino, growth rates are robust and the country has seemed, yet again, poised to fulfill a portion of its potential.

Bad boys all

But it is the same old Philippines apparently, where politics is a blood sport among families and demagogues like Duterte can inflame the anger of the perennially disenfranchised majority.

There seem to be three main reasons for the sad news from the polls. First, the unelectable Manuel “Mar” Roxas II, darling of the Aquino camp and a dull elitist in the eyes of the public, refused to give up his guaranteed-to-fail quest for the presidency, thus splitting the “sane” vote with Grace Poe, who may be a largely unknown quantity but at least appears reasonable and fairly clean. “Everything good they did, they have ruined with their egos,” said a Filipino friend in summing up the failed political instincts of Aquino and Mar.

Second, Aquino’s Liberal Party, seemingly convinced that only it can lead the country, also massively underestimated Duterte by focusing instead on bringing down current Vice President Jejomar Binay, who became an also ran in Monday’s voting. But even the scandal-riddled Binay is at least an adult, a brilliant tactical politician who would likely have made a competent, if ethically challenged President.

The past revisited

But the factor that seems to stand out the most is the alienation of voters from power in the Philippines. These citizens, still largely ruled by a clutch of feudal families with Spanish surnames like Roxas, may vote for the name “Aquino,” as they did six years ago, because it is familiar and Corazon Aquino was widely seen as a woman of almost divine virtue. But they may also swing to the promise of vengeance for unspecified grievances as they appear to have done in the case of Duterte and as they did the last time this kind of thing happened, in 1998, when movie star and populist drunk Joseph Estrada succeeded the country’s last competent President, Fidel Ramos.

That this time around the rise of the thuggish Duterte is accompanied by the almost surreal return of the Marcos family to near the pinnacle of power, is as dismal a result as one could conjure up for the Philippines. One might think back thirty years and imagine this could have been different had the justice system functioned with enough courage and professionalism to convict the elder Marcos of one of his many apparent crimes. But Cory Aquino had no desire to see Marcos punished other than by exile and in the Philippines crime usually goes largely unpunished, especially when it is committed on a grand enough scale by a powerful family.

And now what? In the case of Estrada, the elites of Makati were so deeply embarrassed by his shenanigans with women and the bottle that they helped engineer a church-backed coup to put him in his place in 2001. That led to nine years of instability and decline under Gloria Arroyo’s scandalous presidency. With Bongbong potentially waiting in the wings under a President Duterte, just getting the military to help back yet another “People Power” may not be so simple.

Given that the Philippine ruling class – and it is a ruling class, make no mistake – sees elections as nothing more than an inconvenient distraction, we can now brace ourselves for conspiracy theories and dire scenarios. If activist and lawyer Robredo, whose late husband was a rising star in the Aquino cabinet when he died in a 2012 plane crash, hangs on to her slim lead for the No. 2 spot, it will be seen as a victory of sorts for reason and the drums will start beating for her to replace Duterte.

 It did not have to be this way and if blame has to be apportioned, it lies pretty squarely with Aquino and his bestie Mar. Now the world will again look on in disbelief at all this, wondering what the heck is wrong with the Philippines. We also wish we knew the answer to that question.

Bunn Nagara: Let Real Test Begin for The Philippines

FROM almost nowhere, a dark horse candidate sweeps past his fancied political rivals to surge towards the coveted national leadership.

Loud, brash, crude, insensitive but irrepressibly popular, his unorthodox manner and disturbing pledges threaten as much as excite. Clearly, he has touched enough raw nerves to ensure constant media focus on him and his campaign.

Defying simple and standard labelling, allegations of financial impropriety, including tax evasion, fail to faze the defiant and abrasive candidate who continues to accumulate grassroots, anti-establishment support.

The apparent success of his campaign is a test of both his political acumen and the democratic system that had enabled it.

Thailand had that moment with Thaksin Shinawatra, and the US is undergoing it with Donald Trump. One week ago the Philippines embarked on that path by electing Rodrigo “Rody” Duterte as President.

Exactly what kind of government will such a personality make? Is his bite really as bad as his bark, and is that as bad as others have said it to be?

The answers are still imprecise as the political character of the new President himself continues to evolve, not least in relation to the realities of the day.

There has been no shortage of warnings and alarm over Duterte’s pronouncements, or casual comments, on due legal process and democratic accountability. Along with many others, outgoing President Benigno Aquino III has sounded those warnings. But since Duterte’s detractors include his political opponents, the warnings lack the credibility they need.

How has a once-unfancied candidate turned voters around so much while defying virtually all conventions? Such “mysteries” will remain unresolved and unresolvable as long as the political establishment itself refuses to take stock of the underlying realities.

Duterte’s popular appeal to get tough on crime and criminals resonated with the people. If previous Presidents had been as convincing in the task, or his rivals as persuasive in promising to do it better, his candidacy might have been in the balance.

Another important aspect of Duterte’s popularity is his direct and unabashed style. His loudness and unpolished manner only helped to authenticate the apparent honesty of his content and delivery.

In contrast, the middle-class special interests that his rivals had become identified with were a disabling liability. So when Duterte championed the poor, in a society where the poor still needed championing, he came away with greater credibility than the other aspirants.

Yet another edge that he held over his rivals as a candidate was that he was an outsider. As with Trump and Thaksin, that made his attacks on a gridlocked establishment weighed down by sleaze more plausible.

In time he may develop his own brand of sleaze, especially after he concentrates power at the expense of independent critiques and accounting, but voters have decided to leave that for another day.

On polling day itself, Duterte could still have been stopped if his two closest rivals, Mar Roxas and Grace Poe, had joined forces. Aquino had said as much in a last-ditch effort to derail Duterte’s campaign.

Opinion polls had placed Duterte some 10 percentage points ahead of Roxas, and slightly more in front of Poe. With their popularity combined in a joint campaign, they could have defeated Duterte by up to 10 percentage points instead.

Philippine election campaigns are typically rich in the personal character of the candidates, with little difference in ideologies. They also bear a trademark personal scramble for votes at the expense of virtually everything else.

Among the allegations against Duterte during the campaign was his alleged link to “Joma” (Jose Maria) Sison, the former university professor and head of the Communist Party of the Philippines.

That could have worked to cut the appeal of his pro-poor message, or so his rivals seemed to have hoped. But again, the allegation failed to work.

So an almost “teflon” Duterte continued to campaign effectively and won. Once more, his defeated rivals need to reflect on how they had also been culpable in neglecting the plight of the poor.

Now that Duterte’s victory has become a fait accompli for the rest of the country, critics and opponents alike are resigned to pondering his, and also their, next moves.

There is a universal assumption that however radical a candidate may be, as incumbent he tends to mellow. Already Duterte and his team have encouraged this thought.

Soon upon becoming the “Presumptive President,” Duterte indicated that he would model his Cabinet after the politically correct line-up of arch-liberal and conservative target Justin Trudeau, Prime Minister of Canada.

Trudeau’s Cabinet is described as gender-sensitive and ethnically diverse, the supposed antithesis of Duterte’s rough and chauvinistic image. The mellowing of Duterte had begun.

And what of the hardened criminals for whom Duterte was supposed to be the worst nightmare? The President-elect would now consider building maximum security prisons for them as in the US.

It is a far cry from the random mass murder of suspects and convicts he is said to have promised, or threatened. More mellowing can be expected on other fronts, along with protrayals of Duterte as a flip-flopper.

The market seems to have picked up on signs of a maturing Duterte presidency to be. Confidence is returning to the incoming political leadership after a brief period of doubt, as the peso remains strong.

Besides, how could any business community be averse to promises of heavier doses of law and order? Businesses would be ecstatic if a leader could make good on pledges to make the proverbial “trains run on time.”

On his part, Duterte is smart enough to understand that the national economy is the make-or-break factor for any leadership. Brazil, among others, is a showcase of how economic fortunes can determine the fate of leaders regardless of anything else.

However, Duterte and all that he represents is still untested on foreign relations. He has so far issued conflicting signals on how he would deal with an assertive China on disputed territory in the South China Sea.

For the Philippines, the issue concerns more than China as it also involves the US and Manila’s security treaty with Washington. Adding weight to the matter is a Duterte presidency’s inheritance of the legal tussle that the country has brought on with China.

Dealing effectively and satisfactorily with the issue demands a degree of perspicacity, nuance and sensitivity that has seemed elusive to Rody. But stumbling over it can also spell disaster for the new government.

It cannot be an issue that Duterte’s government would want out of choice, as an additional burden to having to tackle various domestic challenges at the same time. Yet it is something that no government in Manila’s position can avoid addressing.

This, and how the Philippines will now position itself on the claim to Sabah territory among descendants of the erstwhile Sulu sultanate, will test Duterte’s statesmanship to the hilt. It can be assured that such matters will be watched closely by much of the rest of the world.

Bunn Nagara is a Senior Fellow at the Institute of Strategic and International Studies (ISIS) Malaysia. The views expressed are entirely the writer’s own.