Malaysia’s May 2018 General Election and Foreign Policy

August 8, 2018

by Thomas Daniel

Asia Pacific Bulletin, No. 433

Publisher: Washington, DC: East-West Center

Available From: August 7, 2018

Publication Date: August 7, 2018

Binding: Electronic

Pages: 2

Free Download: PDF

Thomas Daniel, Analyst at the Institute of Strategic and International Studies in Malaysia, explains that “In Malaysia’s May 2018 elections, foreign policy appears to have been a significant part of the campaign…but  the claim that foreign policy was a major deciding factor in Malaysian elections is still a bit of a stretch “

The 14th Malaysian General Elections (GE14) held in May saw the then main opposition alliance of Pakatan Harapan, together with an allied party from East Malaysia, win a surprising 121 of 222 Parliamentary seats, allowing them to form a simple majority government. Former Prime Minister Dr Mahathir Mohamad is once again leading the nation at the age of 92. The Barisan Nasional coalition, which ruled from even before independence, now sits on the opposition bench alongside the Islamist party PAS, while Barisan’s election allies from Sarawak in East Malaysia already have left the coalition to form an independent block of their own.

 

What role did foreign policy play in Malaysia’s recent elections? Foreign policy by itself has rarely been an issue in Malaysian elections. Some external observers might consider this odd for a nation whose prosperity depends significantly on regional and international trade and peace. Domestic issues – the economy, social dynamics, internal peace and security – have always been dominant concerns of the Malaysian electorate. Where foreign policy matters have popped up, they are limited to rather specific issues, often the flavour of the day. Traditionally, politicians from both sides of the divide have often – and rather flippantly – attempted to use Malaysian involvement or positions on global and regional affairs against each other as a smear tactic. For the most part however, foreign policy as a subject has largely been a domain of the few – policymakers, diplomats, academics and other practitioners.

At first glance, in Malaysia’s May 2018 elections, foreign policy — both directly and indirectly — appears to have been a significant part of the campaign – driven mainly by Pakatan Harapan. A large part of this has to do with former Prime Minister Najib Razak himself and the fallout from the 1 Malaysia Development Berhad (1MDB) scandal.

After vast sums of money initially linked to 1MDB which were deposited in Najib’s personal accounts turned out to be a ‘donation’ by a Saudi royal to Malaysia channelled directly to the former Prime Minister, there was chatter amongst Malaysians on the nature and impact of such ‘donations’ by friendly countries and what countries could be considered as ‘allies’ of Malaysia. This led to further conversations on whether non-alignment and neutrality was still a central tenet in Malaysian foreign policy and on the extent of Malaysia’s involvement in the Saudi-led Islamic Military Counter Terrorism Coalition, including even whether Malaysia was a silent participant of the Saudi offensive in Yemen.

The 1MDB saga itself was a major part of the campaign against the Najib and his ruling party. Various local investigations into the scandal had cleared him of wrongdoing. Nevertheless, the financial irregularities of 1MDB continued to be investigated by authorities in seven countries – including the United States. This further eroded the credibility and reputation of both the government and its associated institutions in the eyes of the Malaysian electorate, which came to see them as damaged goods when articulating Malaysia’s interests and reputation on the global stage.

Another major foreign policy factor was the nature of the Malaysia-China relationship, and perceived notions of the influence that the latter has over the former. It became part and parcel of the campaign against Najib and his party. A key driver here was the rapid and staggering rise of investment and acquisitions by Chinese companies – both private and state-linked – in Malaysia. Foreign direct investment from China, which stood at RM4.8 billion in 2013, surged to nearly RM21 billion by the end of 2016. It now encompasses diverse sectors like construction, real estate, manufacturing, ports and power generation facilities. Concerns remain over how much of the money coming in were investments, and how much were in fact loans for various projects, and if the previous government was honest to Malaysians about the nature of such transactions.The fact that Chinese companies or capital can be seen in almost every major ongoing or planned project in Malaysia unnerved many – especially the average man-on-the-street. The purchase of majority stakes in several key Malaysian companies which are household names in Malaysia by Chinese interests did not help the perception.

1MBD related scandals come into the picture once again as some of these deals include the purchase of investments and assets previously owned by the wealth fund, which helped the troubled company meet its debt payments. The allegation that China helped bail out the troubled Malaysian sovereign fund and by extension the Prime Minister thus making him beholden to China, possibly compromising Malaysia’s national interests, was a popular narrative amongst the anti-Najib camp.

Despite the above mentioned issues, the claim that foreign policy was a major deciding factor in Malaysian elections is still a bit of a stretch. The campaign for the GE14 might be one where certain aspects of foreign policy and external relations played a role – at least more than previous elections. However, they are issue-specific, or in this case, personality-specific, and driven primarily by a domestic undertone. The ‘foreign policy’ approach used by the opposition when speaking about these issues ultimately relate back to local narratives that the electorate holds dear – the price of living, the future of their children, and to an extent, national prestige. Additionally, the manifestos released by the contesting parties also barely touched on foreign policy. There were, at best, vague remarks on continuing or restoring (depending on who the author was) Malaysia’s reputation and record within global institutions.

Nevertheless, moving forward, policymakers and campaign managers need to take into account that foreign policy issues could become a more common fixture in Malaysian political campaigns. The signs, despite being faint, are there. Conversations about Malaysia’s relationship with China and the Saudi Arabian royal family, for example, persist in a post-GE14 Malaysia both amongst politicians and voters. The situation becomes ever more pertinent when one takes into account that Malaysia has a combination of a relatively high internet penetration rate and coupled with an active social media presence amongst its connected citizenry.

 

Foreign Policy: Myanmar Opens a New Chapter in Dealing with Big Neighbor China

July 6, 2018

Asia Pacific Bulletin, No. 432

Publisher: Washington, DC: East-West Center

Available From: July 25, 2018

Publication Date: July 25, 2018

Myanmar Opens a New Chapter in Dealing with Big Neighbor China

By Khin Zaw Win

Myanmar’s Shan state — the country’s biggest state — has a long border with China, and is on the cusp of becoming the axis of the China-Myanmar Economic Corridor (CMEC), part of China’s Belt and Road Initiative (BRI). It is home to the famed “Burma Road” which had been a lifeline for the Republic of China before and during WWII — a conduit for US war supplies to the beleaguered Chinese forces holding back a Japanese invasion. And long before it was the “Burma Road” the route had seen trade and invasion from China into Myanmar for centuries. Tea, opium, silver, and lead were among the commodities carried by mule caravans to Yunnan and beyond.

Geography and history favor the Corridor, but politics do not. As an economic development and infrastructure project, there are rationales and counter-rationales for CMEC (Myanmar’s infrastructure rankings are among the lowest in the region).

Advocates from China constantly use the term ‘win-win’ to describe economic cooperation, but even the most cursory observer will know which country wins more. Suddenly there are indications that a memorandum of understanding on the Corridor is to be signed in the very near future. However, no information on the possible terms of such an agreement have been made public; and to date there has been no official announcement.

The civilian minister for planning and economic development who had agreed to the deal in Beijing last February, has since resigned amidst allegations of unspecified corruption. A senior Myanmar investment official who reviewed ten points attached by China to the MoU objected to them. Ultimately, the Chinese withdrew the ten points, saying they are very keen for the project to proceeds. But beyond such developments, there is hardly a murmur from the Myanmar government — civilian or military — about the specifics of an MoU on the planned Corridor. The lack of public consultations and information about such an important purported engagement with China are unfortunate and unjustified.

If the word ‘distant’ is used to describe quite a number of national capitals across the world, Myanmar’s new capital of Naypyidaw, situated half-way between Yangon and Mandalay, is even more so. The tangible impression now is that it has become more opaque and divorced from reality than even during the administration of former general Thein Sein (2010-2015).

The current National League for Democracy (NLD) government is at the mid-point of its tenure and what had started out as a widely-welcomed revival of a democratic system is now beset by multiple crises. While acknowledging that the structural challenges of transition in Myanmar are great to begin with, the situation has been aggravated by the style of government. Besides the dual state (civil and military) that consults poorly with each other, the centralization of decision-making in one person, even though elected, hinders democracy.

Against this political background, the decision on the Myanmar-China economic Corridor also comes at a time when the government and military are facing a backlash from the West over their handling of the ongoing Rohingya crisis. It stands to reason that China is seizing the moment to press forward on the infrastructure arrangement with Naypyidaw.

Of China’s four existing mega-projects in Myanmar, the Myitsone dam is stalled. China is keen to resume work but is not pushing that much. The Letapadaung copper mine is operating – under heavy security provided by both Myanmar police outside the site and Chinese security inside. The oil and gas pipeline from the Bay of Bengal coast to south-west China is also functioning. The Kyaukphyu deep sea port and adjoining SEZ are going ahead, and China’s ‘pricing’ of the investment comes to US$10 billion. Aung San Su Kyi’s economic adviser has faulted this as being too high. Other voices warn of the debt trap, although China dismisses this. No doubt many are observing the recent experiences of Pakistan and Sri Lanka regarding debt burdens resulting from Chinese projects.

For China, there is ample reason for Myanmar (which it called the ‘land of the southern barbarians’ in ancient times) to be incorporated into BRI even though the environment in the country is complicated. Under the NLD-led government, with all its deficiencies, Myanmar is now more or less a democracy again, after a long and arduous struggle. But it is poorly governed and the military still has political ambitions. Of added relevance is the country’s move to the right – entrenched military, big business with tentacles everywhere, ethnic assertiveness, and the resurgence of militant religion. National peace is still elusive as evidenced by continued ethnic insurgencies, mistrust is high, and corruption is rife. Nonetheless China is prepared to take the risk and move in on a bigger scale.

China will also have to grapple with ground attitudes in Myanmar toward expanded engagement. As a recent policy brief by the International Growth Centre of China warns:

     “Chinese investors should be wary of existing negative attitudes [in Myanmar] but can improve their image by carefully selecting their local partners and engaging directly and actively with the affected communities. Furthermore, this research offers a warning for the BRI and the China-Myanmar Economic Corridor about the potential local resistance they may face if their investment strategies do not consider the local context carefully.”

The planned China-Myanmar Economic Corridor will have implications far beyond infrastructure and economic development. A very pertinent starting question would be: if there are to be benefits for Myanmar, how will these be shared? What will be the impact of specific contemplated projects on ending the civil war and creating the hoped-for federal system? How will it affect the regional balance of power in Southeast and South Asia? It is a matter of some doubt whether these and similar concerns are even being considered in the halls of Naypyidaw. On the CMEC as well as in other spheres, a more consultative, inclusive and participatory approach is urgently required. More than just about overcoming crises and electoral prospects at the next elections in 2020, CMEC must ultimately be directed towards building a viable, plural, and federalist democracy, and a more equitable and tolerant society.

Khin Zaw Win is Director of the Tampadipa Institute in Yangon. He can be contacted at Khin.Z.Win@gmail.com.

The Domestic Political Impact of Rapid Economic Change in the Indo-Pacific Region

July 25, 2018

by Ellen Frost

Asia Pacific Bulletin, No. 426

Publisher: Washington, DC: East-West Center

Available From: July 11, 2018

Publication Date: July 11, 2018

Binding: Electronic

Pages: 2

Free Download: PDF

 

Ellen L. Frost, Senior Advisor and Fellow at the East-West Center in Washington, explains that “A key question is whether the strategies employed by current Indo-Pacific governments are working well enough to be both competitive in the new regional economic environment and responsive to legitimate grievances at home.”

 Structural changes in the external economic environment have a profound and complex impact on the distribution of power and wealth among and within national societies. They mobilize new actors, influence the content of domestic and foreign economic policies, and ultimately contribute to–or erode—the legitimacy of national governments.

Nowhere in the world are these impacts more visible and more dynamic than in the nations of the Indo-Pacific, many of which will hold elections within the next year. These challenges are not new, but they have intensified. Beginning in the 1980s, the revolution in communications technology and the advent of large-scale container shipping swept across East and Southeast Asia, connecting people and markets as never before. In the 1990s, burgeoning production networks linked the more competitive and investment-friendly developing economies—such as Singapore, Thailand, Malaysia, South Korea, and Taiwan—with world markets, leaving more closed economies such as Laos, Myanmar, and India lagging behind. Market-opening in China fueled spectacular rates of growth, lifted millions out of poverty, and enabled the country to become not only an assembly nexus and production hub but also an assertive regional power.

Regional economic integration has become a dominant feature of today’s Indo-Pacific. All governments are committed to promoting closer economic ties with each other, whether half-heartedly or not. Integration is inching along, gingerly encouraged by governments but driven more powerfully by pressure from the private sector and from ocean-facing local governments. Trade-liberalizing agreements, though imperfect and limited, are the new norm. Negotiations spearheaded by the Association of South East Asian Nations (ASEAN) have made some progress. Despite the Asian financial crisis of 1997-98 and the U.S.-origin global recession of 2008-09, no government in the Indo-Pacific region has rejected the rules embodied in the World Trade Organization (WTO) or retreated from its slow and uneven march toward more open markets.

Indo-Pacific governments that signed on to the high-standard Trans-Pacific Partnership (TPP) agreement—Brunei, Singapore, Malaysia, Vietnam, Australia, and New Zealand—remain committed  to improving the protection of intellectual property and tackling other behind-the-border measures that impede trade and investment, with or without the United States. Promoting the transition to a digital economy is likely to gain more prominence next year, when Thailand takes over the chairmanship of ASEAN. Meanwhile, negotiations on a less demanding, ASEAN-sponsored Regional Comprehensive Economic Partnership (RCEP), which includes India as well as Australia, and New Zealand, continue to inch along.

Even India has embraced closer integration, as emphasized most recently by Prime Minister Modi at the June 2018 Shangri-La Dialogue. India’s economic reform is lagging, but its high growth rate, relatively low level of public debt, and youthful population have attracted an upsurge in foreign investment. The Modi government’s outward-looking strategic awakening is gradually improving relations with nations bordering the Bay of Bengal and the Indian Ocean littoral, thus facilitating closer integration. But the combination of India’s federal system, local politics, corruption, and remnants of the “license raj” has thus far thwarted wide-ranging economic liberalization.

Domestic Aspects of Regional Integration

The upsurge in Indo-Pacific economic integration has spawned a rising middle class whose members have embraced the choices available in the regional (and global) marketplace. Urban dwellers in particular have become used to higher standards of living, more consumer choice, and a wide spectrum of social media. Thousands of Asians have found employment in foreign firms or joint ventures, while others have lost their jobs. What Karl Marx and others called the “comprador bourgeoisie”—local agents or managers working for foreign entities—has emerged as an educated political class with a major stake in regional integration.

Many provincial and urban authorities have developed close ties to their nearby counterparts across borders, particularly in mainland Southeast Asian countries bordering on or close to China (Myanmar, Laos, Vietnam, and Thailand). Small- and medium-size companies and local enterprises account for a growing share of China’s overseas investment. All of these groups have acquired a stronger political voice.

China    

Overshadowing all this activity is the sheer weight of China. China’s economic growth and central role in production networks have made it the number-one or number-two trading partner of virtually all countries in the East and Southeast Asia regions. Some smaller nations have found a niche in China-centered manufacturing networks, while others have boosted their sale of commodities and raw materials. China’s Belt and Road Initiative and the China-sponsored Asian Infrastructure Investment Bank will spur badly needed development of Indo-Pacific infrastructure and connectivity. Local interest groups have sprung up accordingly. For all of these reasons, most Indo-Pacific governments feel compelled to maintain friendly relations with China.

Dependence on China comes at a price, however. Huge loans for infrastructure projects can feed large-scale corruption and saddle poorer countries with unsustainable debt. To enforce its geopolitical agenda, Beijing is increasingly resorting to coercive economic statecraft (“sharp power”), including surprise “inspections” and delayed approvals, selective boycotts, and limits on tourism. Chinese companies investing in Indo-Pacific countries typically import large groups of Chinese workers to perform jobs that might otherwise go to local laborers. The militarization of islands claimed or created in the South China Sea has gone unchecked, spurring criticism in rival claimants.

Challenges Facing Indo-Pacific Governments

“Governments that fail to reform the structure of their economies risk falling even further behind in the regional marketplace, but those who neglect their most vulnerable citizens may be voted out of office—or overthrown.” –Ellen Frost

A number of major threats to integration, growth, and political stability in the Indo-Pacific region are beyond national governments’ control. They include financial volatility, cyber crime, terrorist attacks, refugee flows, fluctuating commodity prices, rising sea levels, severe storms, and other natural disasters. Grievances and conspiracy theories proliferate via social media. Manufacturing breakthroughs such as 3-D printing may localize or otherwise shrink the regional supply chains in which many Asians have found a profitable niche. Growing income inequality is also a threat; when those left behind come from a neglected or persecuted ethnic or religious group, the result can be highly destabilizing.

The latest threat to Indo-Pacific prosperity—and indirectly to regional integration—is the outbreak of protectionism and populist nationalism in the United States. The Trump administration’s “America First” campaign may well divert investment away from the Indo-Pacific and into the United States. Indeed, that is an explicit U.S. policy goal. As regional integration stalls, domestic interest groups with a stake in the expanding regional economy and others with previously high expectations may turn against established governments.

Electoral Prospects: Finding a Balance

Upcoming elections in Bangladesh, Bhutan, Cambodia, the Philippines, Indonesia, Thailand and India (including Indian states), scheduled for 2018 or 2019, will put the leaders of these countries to the test. Governments not facing challenges from the ballot box will feel pressure from their citizens as well. Some of the likely issues will be linked to or exacerbated by the evolving external economic environment, such as large-scale corruption in the infrastructure sector, widening income gaps, unwelcome Chinese activities, and worker layoffs in non-competitive sectors.

A key question is whether the strategies employed by existing Indo-Pacific governments are working well enough to be both competitive in the new regional economic environment and responsive to legitimate grievances at home. Governments that fail to reform the structure of their economies risk falling even further behind in the regional marketplace, but those who neglect their most vulnerable citizens may be voted out of office—or overthrown.

https://www.eastwestcenter.org/publications/the-domestic-political-impact-rapid-economic-change-in-the-indo-pacific-region

Economic Pragmatism and Regional Economic Integration: The Case of Cambodia

July 12, 2018

Economic Pragmatism and Regional Economic Integration: The Case of Cambodia

by Chheang Vannarith

Chheang Vannarith, Visiting Fellow, ISEAS-Yusof Ishak Institute, explains that “International economic cooperation and regional integration are key principles of Cambodia’s foreign policy.”

Asia Pacific Bulletin, No. 429

Cambodia’s foreign policy strategy has been chiefly shaped and driven by “economic pragmatism,” meaning the alignment of foreign policy with economic development interests. The Cambodian government’s two main approaches to regional economic integration are (1) transforming the international environment into a source of national development and (2) diversifying strategic partnerships based on the calculation of economic interests. International economic cooperation and regional integration are key principles of Cambodia’s foreign policy, which emphasizes shared development and win-win cooperation.

As a less developed country in the region, Cambodia has a strong interest in promoting and realizing a more inclusive, fair, and just process of regional community-building that narrows the development gap and implements people-centered regional cooperation. Linking regional integration with national economic policies is critical to sustaining dynamic economic development.  Key tasks include improving regulatory harmonization and harnessing and synergizing various regional integration initiatives.  It is particularly important to link ASEAN community blueprints with sub-regional cooperation mechanisms such as the Greater Mekong Subregion (GMS) program and Mekong-Lancang Mekong Cooperation (MLC).

Samdech Prime Minister Hun Sen–Father of Cambodia’s Socio-Economic Development

The Cambodian government perceives regional integration as a means to further advance its national development interests. ASEAN, GMS and MLC are the main gateways for Cambodia to reach out to the region and beyond. The ASEAN Economic Community Blueprint 2025 aims to achieve five goals: (1) an integrated and cohesive economy; (2) a competitive, innovative and dynamic ASEAN; (3) enhanced connectivity and sectoral cooperation; (4) a resilient, people-oriented, and people-centered ASEAN; and (5) a global ASEAN. GMS operates under the principles of non-interference, consultation and consensus, mutual interest and equality, win-win cooperation, shared development, and common destiny. GMS gives emphasis to practical or functional cooperation, aiming at achieving concrete results in poverty reduction. MLC promotes regional connectivity, production capacity, cross-border economic cooperation, trade and investment facilitation, customs and quality inspection, financial cooperation, water resource management, agriculture, forestry, environmental protection, and poverty reduction.

In the Rectangular Strategy Phase III, issued in 2013, a five-year strategic development plan, the Cambodian government set out a vision that states, “by the end of the first half of the 21^st century, Cambodia is to reclaim full ownership of its own destiny, while becoming a real partner in regional and global affairs.” It further states that Cambodia is now “actively integrating itself into the regional and global architecture, and playing a dynamic role in all regional and global affairs on equal footing and with equal rights as other nations.”

The Cambodian government stresses several key benefits of regional integration, including regional peace and stability, the development of both hard and soft infrastructure, energy and digital connectivity, free and effective movement of trade and investment, human capital development, the expansion of regional production bases and networks, and stronger regional cooperation and coordination in agricultural development. Strengthening regional cooperation — especially in the Mekong region in rice production and trade facilitation — would contribute to improving farmers’ standard of living. Creating an association of rice-exporting countries will strengthen the global position of the Mekong countries.

Although there have been remarkable achievements over the last two decades in forging regional cooperation, integration, and connectivity, there are several challenges that Cambodia needs to overcome. Those challenges include socio-economic inequality within the country and the region, weak institutions and governance, and the lack of national capacity in implementing regional projects. Income disparity within the regions and localities contributes to political instability, trans-boundary crimes, illegal labor migration, and human trafficking.

Institution-building based on good governance remains a key challenge to the effective implementation of regional policies. The national capacity of each member country of the GMS in transforming and integrating its regional development agenda into a national development action plan is limited. The lack of resources in realizing regional development projects requires more investment and participation from the private sector.

Local government plays a significant role in regional cooperation and integration. Recognizing the role of local government in socio-economic development, in 2008 the government adopted two Organic Laws and established a National Committee for the Democratic Development of Subnational Administrations. These measures are aimed at decentralizing power and creating a sub-national governance system. Delegating power and resources to local governments at the commune, district and provincial levels not only contributes to national development but also connects governments with neighboring countries, especially in the border areas.  For instance, the Cambodia-Laos-Vietnam Development Triangle was formed in 2002 to link 13 border provinces of the three countries.

A major challenge is that both the central government and local governments in Cambodia lack sufficient institutional capacity and resources to effectively implement the country’s regional cooperation and integration agenda which includes the budget infrastructure connectivity projects. It is therefore necessary to forge a closer partnership between the public and private sectors, especially in infrastructure development and connectivity.  Decentralization, delegating more authority to local governments, can facilitate public-private partnerships and stimulate national public administrative reform. Cambodia’s Ministry of Economy and Finance crafted a policy paper on public-private partnership for public investment project management, 2016-2020, which aims to “create an enabling environment for promoting the participation of the private sector and financial institutions in public investments.”

Phnom Penh, Cambodia

To enhance Cambodia’s competitiveness, and thereby to improve the depth and quality of its participation in regional economic integration, Prime Minister Hun Sen said at the GMS Business Summit in Hanoi in March 2018 that it was necessary to strengthen efforts in regional economic integration and connectivity through prioritized areas of finance, economy, e-commerce and cross-border trade.

The seize the opportunities arising from fourth industrial revolution and digital integration in ASEAN the Cambodian government is focusing on four pillars.  According to a speech by Prime Minister Hun Sen at the 2018 Cambodia Outlook Conference in Phnom Penh, these are:

(1) Developing a skilled workforce by emphasizing education in science, technology, engineering, and mathematics (STEM) and technical and vocational training, supporting linkages between education and enterprises, and creating a national accreditation system.

(2) Promoting a research and development network, a high-quality physical infrastructure, and a public-private partnership mechanism to support the establishment of research and development, the facilitation of information sharing and technology transfer, and the penetration of foreign markets.

(3) Further strengthening institutional, policy and regulatory frameworks by bolstering the implementation of intellectual property law, related regulations, and other regulatory frameworks in order to encourage and support entrepreneurs and scientists to innovate and sell their technology products and services.

(4) Inspiring public participation in the science and technology sector, promoting public awareness of the importance of STEM, and nurturing the talents of its population.

Young and Better Educated Cambodians

As a small and open economy, Cambodia has taken a proactive approach in promoting regional integration based on the principle of win-win cooperation.  The government has taken measures to diversify the sources of growth by investing in knowledge-based economy and strengthen public-private partnerships. However, the lack of institutional capacity at both national and local levels remains a key constraint.

ASEAN’s Role in the US Indo-Pacific Strategy

June 28, 2018

Asia Pacific Bulletin, No. 425

ASEAN’s Role in the US Indo-Pacific Strategy

By Kavi Chongkittavorn

Ever since US President Donald Trump announced the Indo-Pacific strategy at the Asia-Pacific Economic Cooperation leaders’ meeting in November, 2017 at Danang, Vietnam, the leaders from of the 10 member countries of the Association of Southeast Asian Nations (ASEAN), have been anxious trying to figure out what it really means and to understand the possible long-term regional implications.

Eight months have elapsed and the US has not yet come out with detailed strategic and operational plans, except for some outlines. The US State Department views the Indo-Pacific strategy in an all-encompassing way, which includes security, economic, and social aspects. The Defense Department’s version, however, puts more emphasis on strategic matters. Both share key commonalities of an ideal Indo-Pacific region that must be free from any coercion, open for free and competitive trade, abide by rules of law and universal principles. Emphasis is also placed by both on commercial governance as well as high-quality investment in infrastructure and connectivity.

 

At the Shangri-La Dialogue in June 2018 in Singapore  Defense Secretary General James Mattis reiterated that ASEAN centrality remains vital to the success of the Indo-Pacific strategy.

In his speech at the Shangri-La Dialogue in June 2018 in Singapore, Defense Secretary General James Mattis highlighted four pivotal elements of this strategy. First, it has to do with the maritime commons, which requires capacity and capabilities building in naval and law enforcement. It is aimed at improving monitoring and projection of maritime borders and interests within the region. Second, it is about expanding interoperability and establishing a network of allies and partners working together to increase mutual trust between militaries and economies. Third, it aims at strengthening the rule of law, civil society and transparent governance, promoting sustainable economic development. Finally, it foresees an increasing role of private sector in promoting development and finance institutions to be “better, more responsive partners.” Transfer of knowledge and technology with end-to-end solutions would also be front and center to this approach without abandoning economic sovereignty of recipient nations.

The essence of US Indo-Pacific strategy has been aptly summarized by General Mattis, who called it a subset of the US broader security strategy: “Make no mistake: America is in the Indo-Pacific to stay. This is our priority theater,” he declared. Indeed, the Pacific Command, which oversees security stretching both the Indian and Pacific Oceans, has changed its name to the Indo-Pacific Command.

During the informal meeting with ASEAN Defense Ministers on the sidelines of the Shangri-la Dialogue, Gen Mattis praised the group’s consensus-making process, which aims to avoid confrontation. He reiterated that ASEAN centrality remains vital to the success of the Indo-Pacific strategy.

Over the past months, Australia, Japan, and India, which are democratic allies of the United States, have also put forward their visions of Indo-Pacific strategy. They comprise similar features to the US concept, emphasizing an international rules-based order and norms, transparency, governance, maritime security, and infrastructure. Furthermore, they also pinpointed ASEAN centrality as a driving force for forging closer cooperation in the region.

However, Japan and India also have broadened the Indo-Pacific’s geographic footprints to include not only the two oceans — Indian and Pacific — but also the two continents of Asia and Africa. Obviously, as major Asian economies, they would like to connect the Asian continent and business opportunities with Africa, which has enjoyed impressive growth over the past two decades.

As ASEAN has been accorded a higher profile by major powers, the 10 member-states are also under constant pressure to respond to their clarion calls and prove their mettle. Given the rapid shifts of the regional and international environment, ASEAN has to be more proactive and adopt forward-looking positions on key transnational issues such as the North Korean nuclear crisis, extremism, and cyber security. Most importantly, it must ensure that no one nation should be allowed to dominate the region. This appeal comes at the time when ASEAN is building up its regional security architecture, reliance on its existing security mechanism, and security partnerships.

For the time being, only three countries — Thailand, Indonesia and Vietnam — have expressed their individual opinions about the perceived role of ASEAN in the overall Indo-Pacific scheme. Obviously, as the group’s biggest economy, Indonesia has been the leading voice on the Indo-Pacific concept. In 2013, former foreign minister Marty Natalegawa proposed that ASEAN and its dialogue partners committed to peace-building and non-use of force to further prevent conflicts in the region, but received lukewarm support. However, the government under President Joko Widodo has decided to revive the idea again after Trump’s announcement of Indo-Pacific with a new emphasis that rebranded Indonesia as a maritime power.

To ensure continuity, Jakarta is working closely with Thailand, the upcoming chair of ASEAN. Bangkok will coordinate all ASEAN positions and prepare a report for the members next year. At the 32^nd ASEAN summit, the leaders discussed the Indo-Pacific concept but did not come up with any position. In the chairman’s statement, it simply said that ASEAN looked forward to further discussing the new concept.

Granted the lack of details from Washington, ASEAN senior officials quickly filled the gap. They have already discussed and exchanged notes on points of convergence that need to be included in the ASEAN Indo-Pacific version. These are some of elements: free and open, rules based, complementary, ASEAN-led mechanism, ASEAN centrality, connectivity, infrastructure, inclusiveness, and not involving a third party.

Meanwhile, the Washington-based ASEAN diplomats have been informed by the US State Department that the details of US Indo-Pacific would soon be available. President Donald Trump is scheduled to take part in the 13^th East Asian Summit in early November in Singapore. He expects to outline the contour of the Indo-Pacific strategy himself.

Despite President Trump’s decisions to revoke several of the international commitments and cooperative frameworks of his predecessor Barack Obama, including the US-led Trans Pacific Partnership (TPP), he has maintained existing programs and activities related to US-ASEAN bilateral cooperation. With continued strong bipartisan support, Trump’s Indo-Pacific strategy will be value-added to further strengthening the US interoperability and networks of security partners in the region.

All in all, it is incumbent on ASEAN to reach out to the United States, Japan, India, and Australia to ascertain that all proposed elements are synergized and most importantly, the emerging broader strategy would place ASEAN in the center.

Kavi Chongkittavorn is a Visiting Fellow at the East-West Center in Washington, DC, and Senior Fellow at the Institute of Security and International Studies, Chulalongkorn University. He can be contacted at Chongkik@eastwestcenter.org.

APB Series Founding Editor: Dr. Satu Limaye | APB Series Coordinator: Peter Valente

The views expressed in this publication are those of the author and do not necessarily reflect the policy or position of the East-West Center or any organization with which the author is affiliated.

The East-West Center promotes better relations and understanding among the people and nations of the United States, Asia, and the Pacific through cooperative study, research, and dialogue. Established by the US Congress in 1960, the Center serves as a resource for information and analysis on critical issues of common concern, bringing people together to exchange views, build expertise, and develop policy options.

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Foreign Policy: India’s Role is Key in Japan’s Free and Open Indo-Pacific Strategy

May 18, 2018

Asia Pacific Bulletin No. 424

India’s Role is Key for Including Central Asia in Japan’s Free and Open Indo-Pacific Strategy

By Shutaro Sano

Central Asia has become an increasingly important region for the international community including Japan. Tokyo initially pursued bilateral relationships with each of Central Asian country through its “Silk Road Diplomacy” in the late 1990s, but started to strengthen the relationships by initiating the multilateral “Central Asia plus Japan” Dialogue in 2004. Since then, Japan has striven to become a “catalyst” for regional cooperation that would enable the Central Asian countries to achieve “open, stable and autonomous development.”

 

A more developed and secure Central Asia is also expected to provide Tokyo with a reliable alternative source of energy supply such as oil, natural gas and rare earth metals including uranium. Japan’s growing acknowledgement of Central Asia was highlighted by Prime Minister Abe’s visit in October 2015, when he became the first Japanese leader to visit all five Central Asian countries.

Today, Japan’s cooperation covers a broad range of areas, including regional security arrangements (nuclear non-proliferation, countering terrorism and narcotics), trade and investment, development (disaster reduction and maternal and child health), and people-to-people and cultural exchanges. Notably, cooperation in energy and socio-economic infrastructure has been the immediate priority for Tokyo as strengthening the connectivity inside and outside Central Asia would enhance overall regional development, thereby promoting stability and prosperity in the Indo-Pacific as a whole.

Yet Japan’s involvement in the landlocked region has been marginal compared to countries such as Russia and China. The gross disbursement of Japan’s ODA to the Central Asia and the Caucasus, for instance, has increased over the years, but it accounted for only 2.5 percent of the total ODA in 2015. In this respect, India, which seeks to play a more active role with Japan through the Special Strategic and Global Partnership, has become a promising partner for Tokyo.

New Delhi not only shares civilizational heritage with Central Asia from the Mughal period, but also has been more engaged in regional cooperation and security arrangements through its “Connect Central Asia Policy.” Indeed, the development of Iran’s Chabahar port and Afghanistan’s Zaranj-Delaram Highway, in which India played a critical role with the support of Japan, have begun to provide Tokyo and New Delhi valuable access to energy-rich Turkmenistan, Uzbekistan and Kazakhstan bypassing Pakistan. Furthermore, India’s proposal to integrate land routes in Central Asia with the International North-South Transport Corridor, to which Japan could also contribute, would expand the geographical scope of connectivity to include not only Central Asia, Caucasus and South Asia but also Europe.

However, Japan’s engagement in Central Asia faces challenges. First, Japan needs to balance its policies towards Central Asia and China in a very sensitive manner with India in mind. This is particularly important as Tokyo is now willing to cooperate, under certain conditions, with China’s $1 trillion cross-border infrastructure development project, the Belt and Road Initiative (BRI). The initiative, which includes the development of Central Asia, poses considerable challenges to New Delhi, which clearly sees the BRI as part of Beijing’s long-term strategy to contain India; notably with the establishment of the China-Pakistan Economic Corridor (CPEC). Furthermore, the dominance of China and the presence of Pakistan in the Shanghai Cooperation Organization (SCO) may limit India’s role in the organization. Therefore, Tokyo would need to alleviate New Delhi’s concerns by, for example, linking its own regional connectivity efforts with the BRI with an aim to strengthen regional integration in the Indo-Pacific as a whole rather than any projects that could be seen as isolating any specific country including India.

Second, Japan is entering an already-crowded region of competition including regional rivalries such as between Russia and China. So far, China has adroitly refrained from developing an extensive hard security footprint in the region, but the regional imbalance of power has widened significantly in favor of Beijing as China’s trade with the five Central Asian countries spiked over the past decade, nearly doubling the amount of Russia’s by 2016. Meanwhile, Iran has also become more involved with the region as it reportedly seeks to build a “Persian axis” in the heart of Central Asia as well as to stop the flow of Afghan illegal drugs. Furthermore, the Central Asian countries have not necessarily been on the same page as illustrated by the energy inequality among the regional states as well as by membership in the SCO; in which Turkmenistan refuses to become a member.

In light of these events, Japan would need to avoid becoming embroiled in the new “Great Game” which also includes the United States, and continue its low-profile political engagement which has been welcomed by the regional states. Specifically, Japan should exert its effort exclusively in strengthening regional connectivity without developing strategic ambitions in Central Asia. It is also important that Japan continue to refrain from imposing democratic reforms to the Central Asian countries as a condition for economic cooperation.

Third, Japan will need to give considerable attention to the security conditions not only in Central Asia but also in Afghanistan. After gaining membership in the South Asian Association for Regional Cooperation (SAARC) in 2007, Afghanistan has become a potentially vital economic hub connecting Central and South Asia in trade, transport and energy. Kabul also lies at the center of the Central Asia Regional Economic Cooperation Program which links markets in 11 countries with six corridors.

However, the fight against the Three Evil Forces (terrorism, ethnic separatism and religious extremism) remains a huge challenge for regional integration as well as Japan and India’s involvement in Central Asia. Therefore, Japan together with India would need to continue its engagement in Afghan reconstruction and help Kabul fill the security vacuum that may be exploited by armed groups. Meanwhile, Japan and India need to pay substantial attention so that cooperation in Afghanistan will not jeopardize the India-Pakistan relationship.

Given the growing significance of Central Asian, it is essential that Japan strengthen its policy towards the region by seeking greater cooperation with India. Consequently, this will promote Japan’s “Free and Open Indo-Pacific Strategy” which aims to provide assistance to the region’s long-term stability and sustainable development. Japan’s “Free and Open Indo-Pacific Strategy” is not just applicable to the vast maritime space, but also to the Eurasian landmass of Central Asia.

Shutaro Sano is Professor and Deputy Director at the Center for International Exchange, in the National Defense Academy of Japan. He can be contacted at Sano-Shu@nifty.com.

 

APB Series Founding Editor: Dr. Satu Limaye | APB Series Coordinator: Peter Valente

The views expressed in this publication are those of the author and do not necessarily reflect the policy or position of the East-West Center or any organization with which the author is affiliated.

The East-West Center promotes better relations and understanding among the people and nations of the United States, Asia, and the Pacific through cooperative study, research, and dialogue. Established by the US Congress in 1960, the Center serves as a resource for information and analysis on critical issues of common concern, bringing people together to exchange views, build expertise, and develop policy options.