Cambodia-Vietnam Ties Turn 50


June 21, 2017

Cambodia-Vietnam Ties Turn 50

http://www.eastasiaforum.com

by  Vannarith Chheang, ISEAS-Yusof Ishak Institute

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Cambodian Prime Minister Samdech Hun Sen with Prime Minister Nguyen Tan Dung  of Vietnam (photo: Duc Tam/ VNA)

2017 marks 50 years of diplomatic relations between Cambodia and Vietnam. Both countries have organised a series of events to commemorate their time-honoured traditional friendship that is bound by strategic convergence, common vision and shared interests.

Over the past fifty years, the relationship ebbed and flowed with changing geopolitics and domestic politics in both countries before settling since 1979. Yet anti-Vietnamese sentiment in Cambodia — mainly driven by domestic politics — has constrained both countries from deepening their strategic partnership.

Cambodia’s opposition party tends to use ‘Vietnam threat’ rhetoric to gain popular support. In an attempt to delegitimise the governing Cambodian People’s Party (CPP) ahead of the upcoming elections, former President of the opposition Cambodia National Rescue Party has posted a series of short video clips explaining the roots of the CPP and its connections with the communist party of Vietnam. But Cambodian voters are increasingly concerned about their livelihood, social justice, good governance, human rights and environmental protection much more than the Vietnam factor.

There is political cost attached to strengthening bilateral relations with Hanoi, including potentially losing votes to the opposition. Despite this, the long-ruling CPP remains committed to maintaining and enhancing the Vietnam relationship for the sake of national and regional peace and development.

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A new bridge is now linking Vietnam and Cambodia after being inaugurated on April 24, 2017 by Vietnam Prime Minister Nguyen Xuan Phuc and his Cambodian counterpart Samdech Hun Sen. The Long Binh-Chrey Thom Bridge is built over the Binh Di River and connects the provinces of An Giang in South Vietnam with Cal Dal in Cambodia. It is 442 metres long and 13 metres wide and is designed to withstand speeds of 80km/h and allow cars to cross at a speed of 80 km/h.

It is clear that Cambodia is unable to enjoy peace and development without having good and stable relations with its immediate neighbours. Both countries understand that without sticking together under the ASEAN umbrella, their regional role and leverage will be weakened. As a result, Cambodia and Vietnam’s foreign policies have both focused on regional integration and community-building.

Cambodia and Vietnam also share the concern that rivalry between major powers is threatening regional peace and stability. Learning from their Cold War experience, they must stay united to survive and thrive.

In early 2017, Vietnam’s Prime Minister Nguyen Xuan Phuc visited Cambodia three times, including to attend the ground-breaking opening ceremony of Chrey Thom–Long Binh Bridge (connecting Cambodia and Vietnam), pay an official state visit and attend the World Economic Forum on ASEAN. Cambodia’s Prime Minister Hun Sen is planning to visit Vietnam later this month to commemorate 40th anniversary of his struggle against the Khmer Rouge regime. Such frequent high-level bilateral talks significantly contribute to nurturing political and personal trust, which are the foundations of the relationship.

Early in 2017 at the 4th Meeting on Cooperation and Development among the Border Provinces, both countries’ deputy prime ministers underscored the need to develop the Vietnam–Cambodia border area. They agreed to modernise infrastructure facilities, promote trade, investment, services and tourism and build border economic zones and markets.

Vietnam is now the fifth largest investor in Cambodia after China, South Korea, the European Union and Malaysia — it has invested in 183 projects with an aggregate value of US$2.86 billion. The investment projects target rubber plantations, telecommunications and banking. Vietnam is also Cambodia’s third largest trading partner with about US$3 billion over the last few years. They aim to achieve a US$5 billion trade volume in coming years. The planned construction of 116 warehouses at strategic border crossings between Vietnam, Cambodia and Laos — expected to be completed by 2035 — will improve trade flow between the two countries.

People-to-people connectivity between Vietnam and Cambodia has been markedly strengthened over the years. There are currently more than 400 Cambodian students pursuing their higher education at various universities and institutions in Vietnam. And Vietnamese are the largest group of tourists to Cambodia, accounting for 19 per cent of all visitors.

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The  Neak Loeung Bridge located in the Prey Veng Province is 2,220 metres long, 13 metres wide and 37.5 metres above the water level. It will have two wide lanes for traffic. When completed it will facilitate trade between Cambodia, Vietnam and Thailand.

Looking ahead to the next fifty years, Cambodia–Vietnam relations will evolve in tandem with the speed of ASEAN community building. ASEAN provides institutional and diplomatic leverage for its member states to strategically manoeuvre and collectively hedge against major powers to minimise risks while maximising interests where possible. Collectively advocating for a rules-based regional order will help smaller countries like Cambodia and Vietnam to protect their legitimate interests.

To reduce ‘Vietnam threat’ perceptions in Cambodia, both countries need to promote engagement at all levels. Right now there is a lack of academic or intellectual dialogue between the two countries. Exchange programs among students, youth leaders, future leaders and community leaders need to be further promoted. Political parties in Cambodia should not use Vietnam for their own political gains — such a strategy is obsolete and does not fit into the evolving dynamics of ASEAN regionalism.

Differences over the management of the Mekong River and the South China Sea dispute need to be resolved the ASEAN way — through consultation and consensus. Cambodia and Vietnam might have different views on these complex issues, but they need to respect each other’s national interest and position without harming bilateral friendship and ASEAN unity.

Vannarith Chheang is a Visiting Fellow at ISEAS-Yusof Ishak Institute in Singapore

What is new in Gulf Area: We in ASEAN have seen it all


June 21, 2017

What is new in Gulf Area: We in ASEAN have seen it all, so learn from us about building Win-Win Strategic Partnerships to secure Peace, Stability and Development

by James M. Dorsey

Two competing visions of ensuring regime survival are battling it out in the Gulf.

To Saudi Arabia and the United Arab Emirates, the 2011 Arab popular revolts that toppled autocratic leaders in four countries and sparked the rise of Islamist forces posed a mortal threat. In response, the two countries launched a counterrevolution that six years later continues to leave a trail of brutal repression at home and spilt blood elsewhere in the Middle East and North Africa.

Virtually alone in adopting a different tack based on former emir Sheikh Hamad bin Khalifa Al Thani’s principle of “riding the tide of history,” Qatar, a monarchical autocracy like its detractors, Saudi Arabia and the UAE, embraced the revolts and wholeheartedly supported the Islamists. The result is an epic battle for the future of the region that in the short-term has escalated the violence, deepened the region’s fissures, and put the tiny Gulf state at odds with its larger brethren.</span

Ironically, an analysis of political transition in Southeast Asia during the last three decades would likely prove instructive for leaders in the Gulf. At the core of people power and change were militaries or factions of militaries in the Philippines, Indonesia and Myanmar that saw political change as their best guarantee of holding on to significant powers and protecting their vested interests.

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The Young People of ASEAN

In the Philippines and Indonesia, factions of the military partnered with civil society to show the door to the country’s autocrat (Suharto). In Myanmar, internationally isolated, the military as such opted to ensure its survival as a powerful player by initiating the process of change.

Sheikh Hamad, and his son and successor, Sheikh Tamim bin Hamad Al Thani, have adopted the principle set forward by Southeast Asian militaries and their civil society partners with one self-defeating difference: a belief that by supporting political change everywhere else they can retain their absolute grip on power at home.

In fact, if there is one fundamental message in the two-week-old Saudi-UAE-led diplomatic and economic boycott of Qatar, it is the recognition of the two countries’ ruling elites that they either thwart change at whatever cost or go with the flow. There are no half-measures.

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There is however another lesson of history to be learned from the Southeast Asian experience: change is inevitable. Equally inevitable, is the fact that unavoidable economic change and upgrading rather than reform of autocracy like Saudi Arabia is attempting with Deputy Crown Prince Mohammed bin Salman in the driver’s seat has a limited shelf life without political change.

Gulf autocrats marvel at China’s ability to achieve phenomenal economic growth while tightening the political reigns. It’s a model that is proving increasingly difficult to sustain as China witnesses an economic downturn, a failure to economically squash popular aspirations, and question marks about massive infrastructure investment across Eurasia that has yet to deliver sustainable results and has sparked debt traps and protest across the region.

The Southeast Asian lesson is that political change does not by definition disempower political elites. In fact, those elites have retained significant power in the Philippines, Indonesia and Myanmar despite radical reform of political systems. That is true even with the rise for the first time of leaders in Indonesia and the Philippines who do not hail from the ruling class or with the ascendancy to power in Myanmar of Aung San Suu Kyi, a long-persecuted daughter of the ruling elite, who has refrained from challenging the elite since winning an election.

The bottom line is that ruling elites are more likely to ensure a continued grip on power by going with the flow and embracing political change than by adopting the Saudi-UAE approach of imposing one’s will by hook or by crook or the Qatari model of playing ostrich with its head in the sand.

The Qatari model risks the ruling Al Thani family being taken by surprise when an inevitably reinvigorated wave of change comes knocking on Doha’s door. More ominous are the risks involved in the Saudi-UAE approach.

That approach has already put the two states in a bind as they struggle in the third week of their boycott of Qatar to formulate demands that stand a chance of garnering international support. Even more dangerous is the risk that the hard line adopted by Saudi Arabia and the UAE will fuel extremism and political violence in an environment starved of any opportunity to voice dissent.

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The ASEAN Way–Building Win-Win Strategic Partnerships to secure Peace, Stability and Development

The lessons of Southeast Asia are relevant for many more than only the sheikhdoms that are battling it out in the Gulf. International support for political transition in Southeast Asia produced a relatively stable region of 600 million people despite its jihadist elements in the southern Philippines and Indonesia, jihadist appeal to some elsewhere in the region, religious and ethnic tensions in southern Thailand and Myanmar, and deep-seated differences over how to respond to Chinese territorial ambitions in the South China Sea.

That support also ensured that the process of change in Southeast Asia proved to be relatively smooth and ultimately sustainable unlike the Middle East where it is tearing countries apart, dislocating millions, and causing wounds that will take generations to heal.

To be sure, Southeast Asia benefited from the fact that no country in the region has neither the ambition nor the ruthlessness of either Saudi Arabia or the UAE.

Southeast Asia also had the benefit of an international community that saw virtue in change rather than in attempting to maintain stability by supporting autocratic regimes whose policies are increasingly difficult to justify and potentially constitute a driver of radicalization irrespective of whether they support extremist groups.

Former US President George W. Bush adopted that lesson in the wake of 9/11 only to squander his opportunity with ill-fated military interventions in Afghanistan and Iraq, a flawed war on terrorism, and a poorly executed democracy initiative. The lesson has since been lost with the rise of populism and narrow-minded nationalism and isolationism.

Dr. James M. Dorsey is a senior fellow at the S. Rajaratnam School of International Studies, co-director of the University of Würzburg’s Institute for Fan Culture, and the author of The Turbulent World of Middle East Soccer blog, a book with the same title, Comparative Political Transitions between Southeast Asia and the Middle East and North Africa, co-authored with Dr. Teresita Cruz-Del Rosario and three forthcoming books, Shifting Sands, Essays on Sports and Politics in the Middle East and North Africa as well as Creating Frankenstein: The Saudi Export of Ultra-conservatism and China and the Middle East: Venturing into the Maelstrom.Image result for Learn from ASEAN embracing political change.

ASEAN’s strategic diplomacy underpins regional stability


June 19, 2017

ASEAN’s strategic diplomacy underpins regional stability

by Kishore Mahbubani, Dean, Lee Kuan Yew School of Public Policy, NUS

http://www.eastasiaforum.org/2017/06/18/aseans-strategic-diplomacy-underpins-regional-stability/

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Philippine President Rodrigo Duterte (R) stands next to Cambodia’s Prime Minister Hun Sen (L) during the opening of World Economic Forum on ASEAN in Phnom Penh on May 11, 2017.

Try imagining a world where the Middle East is at peace. The thought seems almost inconceivable. Imagine a world where Israel and Palestine, two nations splintered from one piece of territory, live harmoniously. Impossible? This is what Malaysia and Singapore accomplished. After an acrimonious divorce in 1965, they live together in peace.

Imagine a world where Egypt, the most populous Islamic country in the Middle East, emerges as a stable and prosperous democracy. Impossible? Then ask yourself how it is that Indonesia, the most populous Islamic country in Southeast Asia—with more than four times as many people as Egypt—has emerged as a beacon of democracy. Egypt and Indonesia both suffered from corruption. And both experienced decades of military rule, under Hosni Mubarak in Egypt and Suharto in Indonesia.

Yet Egypt remains under military rule while Indonesia has emerged as the leading democracy in the Islamic world. What explains the difference? The one-word answer is ASEAN. ASEAN’s success in practising strategic diplomacy over the past 50 years has been one of the most undersold stories of our time.

If one were looking around the world to find the most promising region for international cooperation, Southeast Asia would have been at the bottom of the list. Home to 240 million Muslims, 130 million Christians, 140 million Buddhists and 7 million Hindus, it is the most diverse region in the world. In the 1960s, when ASEAN was formed, the region had garnered a reputation as ‘the Balkans of Asia’, due to its geopolitical rivalries and pervasive disputes.

Today, ASEAN is more important than ever. It has become more than an important neutral zone for great-power engagement. Its success in forging unity in diversity is a beacon of hope for our troubled world.

As the ASEAN dynamic gained momentum and the organisation moved towards creating hundreds of multilateral meetings a year, the Southeast Asian region became more closely connected. Webs of networks developed in different areas of cooperation, from trade to defence.

ASEAN camaraderie has defused many potential crises in the region. One shining example of the success of ASEAN’s strategic diplomacy occurred in 2007. In August that year, the world was shocked when monks in Yangon were shot during street protests after the unexpected removal of fuel subsidies led to a drastic overnight rise in commodity prices. Since ASEAN had admitted Myanmar as a member in 1997, there was pressure on ASEAN countries to make a statement criticising these shootings.

As an ASEAN member state, Myanmar had two options. It could have vetoed an ASEAN joint statement or disassociated itself from such a statement. Then there would have been a statement among the remaining nine countries criticising Myanmar. Many, including the nine other ASEAN foreign ministers, expected this to be the outcome.

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ASEAN–Building Strategic Partnerships for Peace, Stability and Development

To their surprise, Myanmar’s foreign minister, Nyan Win, agreed that all 10 countries, including Myanmar, should endorse the statement. This was a truly remarkable decision—the statement said that the ASEAN foreign ministers ‘were appalled to receive reports of automatic weapons being used and demanded that the Myanmar government immediately desist from the use of violence against demonstrators’.

In short, even when there were sharp disagreements between Myanmar and its fellow ASEAN countries, Myanmar decided that sticking with ASEAN was preferable to opting out. Clearly the ASEAN policy of engaging the military regime in Myanmar with strategic diplomacy had succeeded. This story of engagement almost reads as a foil to the EU’s disastrous policy of isolating Syria.

ASEAN’s ability to foster peace extends outside its member states. In an era of growing geopolitical pessimism, when many leading geopolitical thinkers predict rising competition and tension between great powers—especially between the United States and China—ASEAN has created an indispensable diplomatic platform that regularly brings all the great powers together. Within ASEAN, a culture of peace has evolved as a result of imbibing the Indonesian custom of musyawarah and muafakat (consultation and consensus).

Now ASEAN has begun to share this culture of peace with the larger Asia Pacific region. When tensions rise between China and Japan and their leaders find it difficult to speak to each other, ASEAN provides a face-saving platform and the right setting to restart the conversation. In particular, ASEAN has facilitated China’s peaceful rise by generating a framework that moderates aggressive impulses. In short, ASEAN’s strategic culture has infected the larger Asia Pacific region.

One of the miracles of the Asia Pacific is that significant great-power conflict prevented, even though there have been enormous shifts of power among the great nations in the region. Of course, the reasons for this lack of conflict are complex. ASEAN’s neutrality, which helps the organisation retain its centrality in the region, is one factor in keeping the region stable and peaceful.

This is why it is important that in the growing Sino–US geopolitical competition, both sides should treat ASEAN as a delicate Ming vase that could easily break. US and Chinese interests will both suffer if ASEAN is damaged or destroyed—delicacy in dealing with ASEAN is critical for both sides.

ASEAN is far from perfect—its many flaws have been well documented, especially in the Anglo-Saxon media. It never progresses in a linear fashion, often moving like a crab, taking two steps forward, one step backwards and one step sideways. Viewed over a short period, progress is hard to see. But despite its many imperfections, in a longer view, ASEAN’s forward progress has been tangible. In these interesting times, ASEAN’s policies and practices of strategic diplomacy deserve appreciation and study by the global community.

Kishore Mahbubani is dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore and co-author of The ASEAN Miracle

An extended version of this article appeared in the most recent edition of East Asia Forum Quarterly, ‘Strategic diplomacy in Asia’.

Managing The Trump Phenomenon with Prudence


June 17, 2017

Managing The Trump Phenomenon with Prudence

by Jorge G. Castañeda

https://www.project-syndicate.org/columnist/jorge-g–casta-eda

Professor Jorge G. Castaneda was Mexico’s Secretary of Foreign Affairs from 2000-2003, after joining with his ideological opponent, President Vicente Fox, to create the country’s first democratic government. He is currently Global Distinguished Professor of Politics and Latin American and Caribbean Studies at New York University, and is the author of The Latin American Left After the Cold War and Compañero: The Life and Death of Che Guevara.

Trump’s domestic opponents should be careful what they wish for, and America’s allies should try to find a way to engage with his administration more effectively. Like it or not, the world’s best option is to ensure that the next three and a half years are as successful – or at least as resistant to disaster – as possible.–Jorge G. Castaneda

The world’s view of US President Donald Trump’s administration is changing for the worse. In fact, the chaos and controversy that have marked Trump’s short time in office have deepened doubts, both inside and outside the United States, about whether his presidency will even survive its entire four-year term.

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Europe’s perspective was articulated most clearly by German Chancellor Angela Merkel. After a contentious NATO summit and a discordant G7 meeting, she concluded that the US, under Trump, can no longer be viewed as a reliable partner. “The times in which we could rely fully on others,” she stated pointedly, “are somewhat over.”

Merkel’s statements were driven partly by disagreement between Trump and Europe on climate change, trade, NATO (particularly Article 5, its collective defense clause, which Trump refused to endorse), and relations with Russia. But disagreement on such issues reflects divisions within Trump’s own administration, raising questions about who, if anybody, is actually in charge.

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White House Director of Strategic Communications Hope Hicks, chief of staff Reince Priebus, chief strategist Steve Bannon and policy adviser Stephen Miller | Getty

Consider Trump’s decision to withdraw the US from the Paris climate agreement. The move was advocated by Trump’s chief strategist, Steve Bannon, and his speechwriter, Stephen Miller. But Secretary of State Rex Tillerson, as well as Trump’s daughter, Ivanka, and his son-in-law, Jared Kushner – both of whom are official White House advisers – also may not have supported withdrawal from the accord, despite Tillerson’s public defense of his boss’s decision.

Trade is another internally disputed issue. Bannon opposes the existing order of global openness, as does Peter Navarro, who heads the White House National Trade Council. Secretary of Commerce Wilbur Ross supports open trade, but not without reservation. Similarly, US Trade Representative Robert Lighthizer would prefer bare-knuckle negotiations to disruption, though he is already in a spat with Ross.

On NATO and Russia, Tillerson has echoed Trump in pressuring the Alliance’s European members to increase their defense spending. But he has also taken a harder line on Russia than Trump, calling for a strong and united approach by the US and Europe. While National Security Adviser H.R. McMaster agrees with Tillerson in theory, turf battles between the two posts’ occupants – a time-honored tradition – have already begun.

Such infighting has raised concerns far beyond Europe. As one Latin American foreign minister told me recently, “Apparently everybody is fighting with everybody over everything.” Add to that the investigation into the Trump campaign’s relationship with Russia, as well as the administration’s plummeting approval ratings, and it is easy to understand why some are doubting whether they should bother to engage with Trump at all. Mexico’s President Enrique Peña Nieto has postponed meeting with Trump indefinitely, and other countries, too, are placing ties with the US on hold.

With a premature end to Trump’s presidency becoming less farfetched by the day, it is worth asking how it could come about. There are three possibilities.

The first and best-known route is impeachment: a majority in the House of Representatives would indict Trump for “high crimes and misdemeanors,” and a two-thirds majority in the Senate would convict him, removing him from power. Such an outcome – which would require the support of 20 Republican representatives and 18 Republican senators, plus all Democrats in both houses – remains highly unlikely. But everything could change if the investigation into Russia’s attempts to influence the 2016 election and the possibility of collusion with Trump’s campaign reveals a smoking gun.

The second option, per Section 4 of the 25th Amendment to the Constitution, would require the vice president and the cabinet or Congress to declare the president “unable to discharge the powers and duties of his office.” This seems even more unlikely than impeachment, unless some of Trump’s behavior – like his middle-of-the-night tweets or private rants against his aides (most recently, Attorney General Jeff Sessions) – clearly indicates neurological dysfunction or psychopathology.

The third option, which some have called the “Nixonian solution,” is the most intriguing. In 1974, President Richard Nixon resigned before Congress could vote to impeach him. Weeks later, Nixon’s successor Gerald Ford granted him a full and unconditional pardon for all possible crimes.

In Trump’s case, such a resignation could be spurred by the desire for a similar pardon. While Trump cannot be indicted on criminal charges while president, he can be prosecuted for illegal behavior after he leaves office.

Moreover, both Kushner, who has been accused of attempting to set up a back channel for secure communication between the White House and the Kremlin, and Ivanka would be subject to prosecution if they were found to have engaged in illegal communications or activities with Russian agents or officials. Trump’s two eldest sons, who run his business empire, may also be liable for misdeeds. If this threat becomes salient, Trump may prefer to resign and secure a pardon for all involved, rather than endure an impeachment process that may well end with him losing the presidency anyway.

But while Trump’s opponents might like to remove him from power, any of these scenarios could be highly damaging to the US and the rest of the world. American participation, if not leadership, is indispensable to international cooperation in areas like global trade, climate action, and responses to all manner of crises, whether natural, humanitarian, or nuclear. Moreover, Trump’s isolationism doesn’t imply US irrelevance or passivity; a distracted or disrupted America could be much worse.

Given this, Trump’s domestic opponents should be careful what they wish for, and America’s allies should try to find a way to engage with his administration more effectively. Like it or not, the world’s best option is to ensure that the next three and a half years are as successful – or at least as resistant to disaster – as possible.

Asian Development Bank at 50 and Japan’s puzzle


June 16, 2017

Asian Development Bank at 50 and Japan’s puzzle

by Dr. Titli Basu

http://www.asiaforum.org

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ADB President Takehiko Nakao

Competition for infrastructure financing is heating up in Asia. China is investing billions in mega-infrastructure projects under President Xi’s Belt and Road Initiative (BRI) as well as designing new financing mechanisms beyond the Bretton Woods institutions. Against this backdrop, the Asian Development Bank (ADB) now faces the challenge of reforming itself and remaining competitive as it commemorates its 50th anniversary.

 

In the face of growing Chinese investment, Japan has stepped up its game through Prime Minister Abe’s Extended Partnership for Quality Infrastructure and by further augmenting the ADB’s role in catering to the infrastructure appetite of emerging economies.

As the ADB debates its ‘Strategy 2030’,which will be in place by 2018, it must facilitate institutional and organisational reforms necessary to maintain its relevance. As Obama administration’s and Japan’s attempts to steer the initial debate on the AIIB failed to stop US allies from joining the China-led bank,the need to reform existing Bretton Woods institutions, including the ADB, has intensified.

The ADB remains under the control of Asia’s traditional regional actors including Japan and the United States with 15.6 percent shareholding each in 2016. There is a need to revisit this approach and create more space for emerging economies in the bank’s governance structure. China, India and Indonesia have 6.4 percent, 6.3 percent and 5.4 percent of shareholdings respectively in 2016. As the US-led international economic order has failed to reflect the shifting alignments, the ADB must grow in order to respond to the varying needs and ambitions of its developing member countries.

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While international attention was focused on Beijing’s recent Belt and Road Forum (BRF) on 14–15 May, a week earlier Japan celebrated the ADB’s 50th anniversary in Yokohama. Since infrastructure financing often translates into expanding geo-political influence, Japan has committed US$40 million over a two year period to a high-technology fund to support the application of innovative solutions throughout the project cycle of ADB-financed and administered sovereign and non-sovereign projects.The fund will be effective by July and will focus on critical areas including climate change, smart grids and renewable energy.

Two years ago, weighing the impact of the AIIB, Abe designed the Partnership for Quality Infrastructure and argued that Japan in cooperation with the ADB will provide ‘high-quality and innovative’ infrastructure and pledged US$110 billion over five years — a 30 percent increase from earlier funding. At the Yokohama meeting, Japan called for promoting infrastructure projects to be the mainstay of ADB operations and to further muster private sector financing together with public-private partnerships.

In February 2017, the ADB estimated that Asia will need US$26 trillion for infrastructure from 2016–2030.Economic rationale dictates that the ADB has enough space to operate alongside new development banks while addressing the infrastructure financing gap. ADB has adjusted with new realities and opened up to co-financing with the AIIB. The two banks signed a memorandum of understanding aimed at strengthening cooperation including co-financing in May 2016. They are co-financing the National Motorway M-4 Project in Pakistan, each financing 36.6 percent individually of the total project cost of US$273 million. ADB has approved co-financing with AIIB in Bangladesh and Myanmar.

In the run up to the BRF, ADB President Takehiko Nakao argued the merits of cooperating with the BRI design. While Japan’s national leadership refrained from attending the summit, Liberal Democratic Party (LDP) secretary general, Toshihiro Nikai and the Keidanren chief, Sadayuki Sakakibara were both present. This decision has been shaped by larger geo-political and geo-strategic variables. President Trump’s evolving Asia policy, fluidity in US–China relations and the North Korea conundrum are making Japan weigh up its options carefully.

AIIB membership has expanded since its inception. Japan has learnt it the hard way during the initial AIIB membership debate about the demerits of non-engagement and losing the opportunity to shape decisions from within. The United States and Japan are the only two G7 countries that kept out of the AIIB. At a time when BRF witnessed representation from over hundred nations and domestic debate over the AIIB is intensifying in Japan, Tokyo needs to revisit its stance on the China-led bank on one hand and drive the debate to facilitate pertinent reforms in ADB on the other.

For 50 years, the ADB has worked towards inclusive economic growth, environmental sustainability and regional integration. It’s lending focuses on infrastructure, education, environment, health, financial sector and so on. In 2016, the bank approved US$17.5 billion in financing, disbursed US$12.5 billion and attracted US$13.9 billion in co-financing. While it has fuelled Asia’s growth, garnering resources for infrastructure, poverty mitigation and supporting financial inclusion will remain ADB’s priorities.

Developing its lending capacity, the bank has merged the Asian Development Fund with the Ordinary Capital Resources. Moving ahead, ADB has agreed on a new procurement design and is firming up on delivering knowledge solutions and facilitating innovation and integration of high-level technology in projects.

The call for re-evaluating ADB’s voting rights is not new. Critics argue that present international institutions should permit space to developing nations and that failure to do so will hurt the relevance of these institutions.The emerging economies have long argued for representative governance, rationalising operations, easing the ADB’s internal processing time and encouraging public-private partnership investments. Japan must take the lead to facilitate governance reforms against the backdrop of AIIB and other new multilateral development banks. Failure to implement internal reforms will impact the ADB’s influence.

Developing Asian nations will be the beneficiaries of this race for infrastructure financing. Productive competition will diversify emerging economies’ options to choose the most favourable financing terms. Long-term, this will support the larger purpose of empowering emerging Asian economies to augment national growth and enhance Asia’s ability to compete in the global economy.

Titli Basu is an Associate Fellow at the Institute for Defence Studies and Analyses (IDSA), New Delhi.

ASEAN at 50: Challenges and Opportunities for Cambodia


April 18, 2017

ASEAN at 50: Challenges and Opportunities for Cambodia

by Kimkong Heng

http://ippreview.com/index.php/Blog/single/id/406.html

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In August 2017, ASEAN (the Association of Southeast Asian Nations) will be 50 years old. ASEAN was established on August 8, 1967 in Bangkok by the five founding member countries, namely Indonesia, Malaysia, the Philippines, Singapore, and Thailand. The major aims for the birth of ASEAN were to encourage economic cooperation, promote regional peace and stability, and create platforms for mutual assistance and collaboration in economic, social, cultural, technical, educational and administrative areas. The concepts of non-interference in one another’s internal affairs, and the peaceful settlement of interstate disputes are, among others, the fundamental principles to which ASEAN tries to adhere.

Throughout these 50 years, ASEAN has both faced challenges and at the same time enjoyed prosperity as it weathered many storms in its own region, the larger Asia-Pacific region, and the global arena. Cambodia, which will celebrate her eighteen years in ASEAN late this April, has had to confront the challenges and seize the available opportunities this regional group has had to offer. To informally commemorate the 50th anniversary of ASEAN and to toast Cambodia’s 18th birthday in ASEAN, this article will examine the potential challenges and opportunities Cambodia, a small state and the youngest ASEAN member, has experienced and will likely experience in the immediate and distant future.

Fifteen years ago, a Cambodian scholar predicted that Cambodia would face three categories of challenges while it was trying to secure its place in the regional association. In the short-term, during its preparation for ASEAN membership, Cambodia would face many obstacles including its lack of human and financial resources, poor legal framework, and weak institutional organization. In the medium- to long-term, Cambodia would have to address economic, diplomatic, and financial challenges, as well as tackle challenges related to national prestige, borders, sovereignty, legal and institutional framework reform, and lack of strategic thinking.

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Cambodia at Sunrise–Calm, Serene and Captivating

Over a decade later, many ASEAN observers and commentators also saw challenges which lay ahead for Cambodia as she prepared to join the ASEAN Economic Community (AEC). Sowath Rana and Alexandre Ardichvili, for example, listed six main human resource development (HRD) challenges Cambodia would face as it joined the AEC in 2015, including the education and employment mismatch, higher education challenges, technical and vocational education and training challenges, HRD challenges in the private sector, limited awareness and engagement in ASEAN and AEC processes, and technology infrastructure challenges.

Amongst all the challenges, however, this article argues that the strategic challenge — mediating ASEAN and China over the South China Sea issue — is Cambodia’s greatest challenge at present. Cambodia has been criticised twice for her decision to ally herself with China and block ASEAN from issuing joint communiqués which criticize China for her assertiveness and expansionist policy in the South China Sea. With the South China Sea dispute still on the horizon, Cambodia is likely to face this strategic challenge again because this small state cannot afford to lose China for ASEAN or vice versa.

Cambodia has taken advantage of her ASEAN membership to salvage her once non-existent relations with ASEAN member states and ASEAN Dialogue Partners.

Although Cambodia is not one of the claimant states involved in the South China Sea conflict, her membership in ASEAN puts her in a difficult position to help settle the disagreement between her ASEAN counterparts and her closet ally, China. Thus, it is a big challenge for Cambodia to strike a good balance in her endeavors to help mediate between the conflicting parties. As China is described and seen as Cambodia’s most trustworthy friend and largest provider of aid, loans, and grants, the possibility of seeing Cambodia jump on China’s bandwagon could not be higher.

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GDP Real Growth in Excess of 7.5 per cent p.a over the last 2 decades

Furthermore, to expect Cambodia to act against her own national interests in order to preserve ASEAN’s centrality is highly unlikely to happen, even though ASEAN remains the cornerstone of Cambodia’s foreign policy. In this regard, the next chapter of Cambodia’s foreign policy will definitely play out in favor of China despite peer pressure from the ASEAN states.

Opportunities for Cambodia

Despite these many challenges, there are enormous opportunities for Cambodia as an ASEAN member. From economic to social advantages, and from diplomatic to strategic benefits, Cambodia has enjoyed and will continue to enjoy tremendous opportunities as the country strives to keep up with its more developed ASEAN friends and exert its influence on the region.

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Angkor Wat in Siem Reap–Steadfast, Dependable and True Symbol of an Emerging Cambodia

Economically, Cambodia has greatly benefited from ASEAN as it joined the ASEAN Free Trade Area in 1999 and the World Trade Organization in 2004. It has also attracted foreign direct investment from ASEAN member states, particularly Thailand and Vietnam. While Thailand and Cambodia have agreed to strengthen cooperation in bilateral trade and investment, the two-way trade volume between Vietnam and Cambodia, according to Khmer Times, reached USD 3.37 billion in 2015 and USD 2.38 billion in 2016. These figures, however, were below the 2015 target of USD 5 billion both countries have pledged.

In terms of social prospects, Cambodia’s ASEAN membership has helped to increase opportunities for Cambodians through the mobility scheme for skilled labor, improved access to cheaper and a wider range of imported goods and services, and improved education and health services in the Kingdom. More importantly, by joining the ASEAN and later the AEC, people-to-people connectivity between Cambodia and the other ASEAN members has increased.

As for the diplomatic gains, Cambodia has taken advantage of her ASEAN membership to salvage her once non-existent relations with ASEAN member states and ASEAN Dialogue Partners, particularly Australia, China, Japan, and the United States. Until more recently, Cambodia’s foreign policy has significantly been strengthened and Cambodia has put in a great deal of effort to upgrade its diplomatic relations with its nearest neighbors, ASEAN members, and regional and global powers.

Noticeably, Cambodia-Russia bilateral relations have recently been restored and strengthened, with exchanges of high-level visits and greater mutual support and cooperation between the two countries. Likewise, Cambodia-China bilateral relations have reached a new historic high, with Xi Jinping’s first presidential visit to Cambodia last year, immediately following Cambodia’s refusal to partake in an ASEAN joint communiqué critical of China’s claims and policies in the disputed territory in the South China Sea.

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Phnom Penh –The Pulse of The Kingdom of Cambodia

Strategically, Cambodia’s geopolitical location and ASEAN status, together with current political developments in the region, have granted this small state a special privilege to assert its influence and exercise its power in the regional group and the wider Asia-Pacific region. If Cambodia were not an ASEAN member, she would have found it hard to capture Chinese attention and enjoy China’s financial aid — with its controversial no-strings-attached policy — arising from Cambodia’s intervention in the territorial dispute over the South China Sea.

Thus, in spite of the great challenges, Cambodia seems to be able to grasp considerable opportunities along its zigzag ASEAN path. In this respect, it might not be wise to weigh the challenges against the opportunities for Cambodia because it has been a mixed blessing for the country. It would be best, nevertheless, for Cambodia to continue to engage with countries in the region and regional initiatives like the Greater Mekong Subregion and ASEAN, or else it will run the risk of becoming too dependent on China.

Kimkong Heng is an Assistant Dean, School of Graduate Studies and a doctoral candidate in International Relations, Techo Sen School of Government and International Relations, The University of Cambodia, Phnom Penh, Cambodia.