Hishamuddin’s steps to power: Loyalty pays off


April 17, 2017

COMMENT:

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I have been very critical of Prime Minister Najib Razak on many issues, corruption and governance among them; more often than not, I have been brutally so. Frankly speaking, his record has been dismal since taking over from Tun Abdullah Badawi in 2009 (with thanks to the machinations of his political mentor, Tun Dr. Mahathir Mohamad). Najib’s popularity is now at an all time low.

However, Najib’s decision to give Defence Minister Hishamuddin Tun Hussein Onn a special role in his administration is, in my view, a very strategic, politically astute and timely one. Every leader needs an aide he can trust, not someone who has ambitions of his own to be the 7th Prime Minister of Malaysia.

Hopefully, together and with the help of the charismatic  UMNO Youth leader Khairy Jamaluddin, Najib and Hishamuddin can forge a strong alliance to face Malaysian voters in GE-14 on a Malaysia-centric political and socio-economic agenda rather than a Malay nationalist-Islamist one, with a view to bringing Malaysians together again.

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Najib, Hishamuddin and Khairy –a Formidable Combination for UMNO

Hishamuddin to Najib is what Tun Hussein was to Tun Abdul Razak with one fundamental difference. Tun Hussein was a reluctant politician who had the premiership thrust upon him. Our 3rd. Prime Minister was also a man of integrity, a lawyer of excellent aristocratic pedigree and a loyal son of Dato’ Onn Jaafar, who was UMNO’s founder President.

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Hishamuddin,  on the other hand, is a thorough bred UMNO politician who rose through the ranks at a measured pace. One needs to look at his resume to note that he has held key Cabinet positions. He performed  well and served the Prime Minister and UMNO loyally. Finally, his hard work and dedication to his responsibilities have earned him the right to take on this new job. But it is difficult to say that the premiership is his for the taking.

The incumbent Deputy Prime Minister, Dr. Zahid Hamidi is a formidable rival with strong support among the UMNO grassroots and Malay nationalists of the extreme right. But at least Hishamuddin is an alternative who represents the moderate face of UMNO, which will be more acceptable to voters and UMNO’s Barisan Nasional partners (MCA, MIC and Gerakan) than the plebian Zahid. I did not mention PAS because I think this Hadi Awang-led Islamic party is headed towards political extinction after GE-14. –Din Merican

Hishammuddin’s steps to power

 by Scott Ng
 
The new Minister with Special functions occupies an unusual but maybe pivotal role.
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Hishamuddin as Malaysia’s Defence Minister in Singapore

 

The appointment of Defence Minister Hishammuddin Hussein to the position of minister with special functions is one of the more curious political moves in recent memory. The buzz is that Prime Minister Najib Razak needs his first cousin as his right hand man. So one must wonder what must be running through the head of current DPM Zahid Hamidi, especially so close to a general election.

Zahid’s ambition has been noted by several quarters, with some critics believing that he veers too far to the right for the comfort of the public. Nonetheless, the DPM is a valuable asset to the Najib administration, but Hishammuddin’s sudden ascent has thrown the succession plan into disarray.

Hishammuddin certainly has a much better reputation with moderates than Zahid, and perhaps can be seen as something of a peace offering to those spooked by the new religious fundamentalist and ethno-nationalist approach of UMNO.

Unlike his cousin’s other lieutenants, Hishammuddin has kept a low public profile. While he is not looked to for an opinion like Khairy Jamaluddin is whenever a crisis erupts, he is seen as a quiet problem solver, brokering important defence deals in the Middle East and working with China on defence interests.

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Overall, he is seen as better spoken and more temperate a candidate for leader than Zahid, but memories may be long when it comes to perceptions of a politician’s character. People still remember his belligerence as UNMO Youth Chief. He brandished a keris during his speech at the UMNO General Assembly of 2005. He might have to do a little work to shake off that memory if he is truly positioned to take over as Deputy Prime Minister.

Nonetheless, Hishammuddin’s presence may yet prove to be appealing to the more cosmopolitan of the right wing and an acceptable compromise for the moderates and the left. Such an appeal is something that BN probably feels it needs in facing GE14.

However, the appointment does not signal a complete shift to the middle ground. GE14 is shaping up to be defined as a Malay vs Malay fight. If one thing is certain, it is that all parties will fight over the hallowed motherland vote and the insults will fly thick.

Hishammuddin may yet walk out of this the biggest winner, but only if he is the contrarian of his party and maintains the professional image he has groomed for himself over the past decade or so.

There are some who theorise that Hishammuddin’s appointment signals the beginning of a transition, that our Prime Minister is preparing to step down. If that is true, then all eyes will be watching how he behaves during the coming election campaign period.

At this point, Malaysians simply want a win, and if that win comes in the form of an heir apparent with all his clothes on, it will be a positive start.

Scott Ng is an FMT columnist.

Big Challenge for Asian Modernization


March 30, 2017

Cultural-Intellectual Reinvigoration: Big Challenge for Asian Modernization

by Michael Heng Siam-Heng (received by e-mail with thanks)

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Asia has been experiencing an economic revival since the 1960s, first Japan, then the Four Little Dragons, the Asian Tigers and now China and India. With Asian economies doing relatively well against the background of global recession, many Asians hope that the 21st century would be the Asian Century. But what kind of Asian Century?

How would Asians like this period of their history to be understood and remembered in centuries ahead?  It could be a period of impressive economic growth but also known for its environmental degradation, crimes, corruption, social disparities, religious extremism, and social conflicts. Or it could be a period that draws on the best of human achievements and advances them.  The second case would contribute immensely to a new global civilization characterized by peace, social justice, cultural brilliance, technological advancement, and sustainable economic growth.

I will dwell on four points.  First, on what basis can we argue for an Asian cultural-intellectual rejuvenation? Second, is such a historical project necessary? Third, three challenges facing us. Fourth, being in Malaysia, I will briefly touch on roles that can be played by this country.

Conceptual Basis for an Asian Cultural Rejuvenation

History tells us that radical economic and social transformations are often accompanied by intellectual ferment and cultural effervescence. The transformations generate social dislocations that challenge existing cultural norms, ideas, and social institutions.  The problems are serious and they engage the best brains of the time. In attempts to solve the issues, these best and brightest draw on their intellectual heritage, learn from other sources, cross-fertilise them and creatively synthesize them to produce original thoughts.

Examples are Ancient Greece, the Spring-Autumn-Warring period of China, the Islamic golden age, and the Maurya and the Gupta period of India. The most recent experience is the European Renaissance and Enlightenment, which produced giants in the fields of philosophy, natural sciences, social sciences, fine arts, music, architecture, and literature. We all know at least a dozen of such names.  These European thinkers or cultural giants acted as a positive force during that critical period, functioning both as a social conscience and as sources of forward-looking ideas. Their works have shaped the character of modern European civilization and continue to exert an influence on our thinking and cultures even until today.

The Need for the Historical Project

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Deng Xiao Peng–China’s Great Modernizer–Pragmatist

Ever since Asia suffered defeat and humiliation in its encounters with Western imperial powers, Asian leaders slowly realized the crucial importance of reform and modernization in order to face the onslaught. Country after country began to borrow ideas from the West, not all of which were positive, as we see in the case of Japanese imperialistic aggression.

By the end of the 19th century, Japan, through its  Meiji Restoration (明治維新), was the most successful in modernizing its military and economy, fulfilling its national agenda of being both powerful and wealthy. Once powerful, Japan began to behave aggressively, turning Korea into its colony, seizing large tracts of Chinese territories and occupying Southeast Asia. It was a military adventure which ended in total defeat at the closure of WWII.  To use a  simple metaphor, modernization is like the flight of a bird.  It requires two wings to function in a harmonious manner.  Being wealthy economically and strong militarily is one wing.  The other wing is sound cultural-intellectual development.

Fast forward into early 21st century, Asia has regained much of its share of global economy.  Statistics provided by the IMF, the World Bank and transnational banks testify to this shift of economic power from the West.

To the ordinary public, this shift is visible, in the form of improved standards of living, and the new physical landscape.  The most visible is the super-tall buildings – architectural icons of modernity.  Of the ten tallest buildings in the world, 8 are in Asia, 2 in the USA.

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In contrast to the modern landscape in Asian cities, Asia has a string of disturbing social ills.  There is dysfunctional culture exhibited by the people at the top running the show.  State infrastructure projects are awarded to friends and relatives rather than to the most competent.  Newspapers are full of examples of practices that reflect mindsets that are out of sync with the demands of a modern economy. In societies where there are modern economic and legal institutions, many of these institutions lack integrity and independence.

Even in a modern economy and society operating efficiently, we need something more.  Again using the example of Japan.  It is the most modern Asian country. Yet its modernization is confined to the fields of economy, technology, and life styles. It has not undergone a philosophical development based on a foundation of critical rationality and humanism. The Japanese nation as whole has not been able to come to terms with its atrocities during World War II.

 Three Major Challenges

Asians face three major challenges at this juncture of their history, namely (a) drawing on their own cultural resources and rejuvenating them, (b) learning from others, and (c) learning from each other.

The first challenge can be formulated as: how and what Asians can draw from their own cultural and intellectual resources in the process of dealing with new problems.

With an open and inquisitive mind, old ideas take on new meanings and interpretations in the context of new social problems. If a new interpretation provides an effective way in solving problems, the new solution is likely to find easier acceptance because it is framed in language familiar to the people. A sense of continuity is useful in coping with change.

Interestingly, there is often a link between the old and the new. Even a new philosophy is dependent on the intellectual achievements of the preceding centuries and millennia.  A scholar of the European Enlightenment observes that “enlightenment philosophy simply fell heir to the heritage of those [preceding] centuries. It ordered, sifted, developed and clarified this heritage rather than contributed and gave currency to new and original ideas.  Yet in spite of its dependence with respect to content, the Enlightenment produced a completely original form of philosophical thought.”  In other words, old beliefs can put on modern attires and assume modern colours. The result is a new idea.

This sounds rather straightforward. But it is not so if we observe carefully around us.  Hardcore conservatives prefer a literal and rigid interpretation of their traditions, all the more so if these are written. There is also the fear that in rejuvenating local culture and tradition to cope with the demands of a modern economy, the local culture and tradition may disappear, and that future generations will become culturally rootless.  Another problem is what to select from the past.

I believe that the proper attitude is to embrace change, and to see culture as something living, tradition as living tradition.  They are products of their times, and they will change with the demands of the time.

The second challenge is how and what to learn from others. To the extent that there are similarities in the issues involved in the transition from pre-modern societies to modern societies, we should learn from others’ experiences, both positive and negative. To quote the Indian philosopher Sarvepalli Radhakrishnan : “Similar experiences engender in men’s minds similar views”. Since the West has a longer history of modernization, Asia can certainly learn from them.

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Again like the first challenge, learning from others is not easy. Some believe that it is very difficult, or even impossible, to transplant ideas, values, and institutions that have sprouted and developed in a different culture and a different set of historical conditions.

Take the case of China’s difficult journey of learning after defeat at the hands of Japan in 1895. While the Chinese leadership welcomed the adoption of obviously more advanced technologies from the West, they had difficulties embracing the Western ideas and value system. The problem is less acute today but is not over.

What happened in China a century ago is happening in West Asia. The common belief was that “Eastern” culture of spirituality was superior to “Western” culture of materialism.  There is a fear that the spirit of local heritage and culture was threatened with destruction by the importation of western ideas and values.

Adoption and adaption of foreign ideas to local conditions is a long drawn out process, which requires creativity, flexibility, and openness. Though the process is complex, it has happened in history, in Southeast Asia, elsewhere in Asia, and Europe.

Evidence in history support the claim that we can borrow ideas that originated in a very different historical context, and adapt them to serve local needs or even improve upon them in the process of creative synthesis. Let me list briefly three examples. First example: Southeast Asia was able to adopt religious beliefs, ways of life, and institutions from India, China, the Middle East, and Europe. These influences from distant lands had originated in settings that were alien to Southeast Asia. Second example is Europe’s absorption of bureaucracy from China. Combining it with check and balance by civic society, the Western practice is more efficient and less prone to corruption, offering useful lessons for China. This is a vivid illustration of the Chinese saying, 青出于蓝而胜于蓝, or the pupil excelling the master. Third example: Buddhism was introduced to China, a country with a profoundly different culture. After centuries of acclimatization, we have a synthesis of the two cultural traditions known as “Chan” in Chinese and “Zen” in Japanese.

The sensible attitude of learning is to be open-minded and rational rather than be influenced by emotion and sentiments. We must be curious and humble while at the same be meticulous, critical and independent minded. Just as Asians should not feel a sense of superiority in being a source of Western modernization, they should not feel a sense of inferiority in borrowing from the West.  Learning from the findings of others can only increase the range of possible solutions.

The above two challenges are related. It is difficult to learn from foreign sources and adopt their useful elements if we are not culturally and intellectually confident. With confidence in our own cultural heritage, we are at ease to critically appreciate the achievements of others. And cultural confidence can only stem from a deep and critical understanding of our own cultural roots, to the extent of discarding outdated ideas and practices of our own traditions.

he third challenge is for Asians to know much more of each other’s history, intellectual achievements, and cultural traditions.  Though language may present a barrier, most Asian intellectuals use English as the second language which renders exchange of ideas possible. What holds them back is their attitude.  Asians tend to know more about Australasia, Europe and America than their Asian neighbours.  

Given the guarded attitude many Asians have regarding learning from the West, they have less misgivings regarding learning from each other. They can benefit from sharing their experiences in modernization.  In fact, Japan’s path of rapid economic development has provided valuable insights to Southeast Asia and later on China and India. This pattern of economic development is described as the Flying Geese, with Japan as the leading goose. In coping with the broader social and cultural issues arising from modernization, the Middle Eastern countries are more likely to consult the experiences of Malaysia and Indonesia than those from the West.

As a concrete project of mutual learning and co-operation among Asian countries, they can compile a set of books – the Great Books of the East, containing the cream of Eastern intellectual achievements. It is a doable project.  It serves as a platform for top scholars of Asian countries to work together, creating as a byproduct a network Asian intellectuals of similar interests.  It would produce a convenient reference work for libraries all over the world.  It world form a key component of common body of knowledge for serious minded global citizens.

Another concrete project is traditional medicine.  Asia is the home of traditional Chinese medicine, traditional Indian medicine, and traditional Middle Eastern medicine. It represents distilled knowledge accumulated over many centuries of medical practice, often under poor material conditions. It is thus evidence-based.  However, critics of traditional medicine often claim that it is not scientific because its research method departs from that of western medicine. Its theory needs a modern set of vocabulary and updated to take into account new medical findings. We can think of a productive sharing and conversation among the three streams of Asian traditional medicine. This is an area for active collaboration of Asian countries that can boost the cultural and intellectual confidence of Asia, while making concrete and valuable contributions to healthcare in the whole world.

Malaysia as the Italy of the Asian Mediterranean(Venice)

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Malaysia is unwilling to tap its rich diversity due to myopic Malay-centered leadership and  corruption–Bodoh Sombong

Cultural and intellectual rejuvenation is often a synthesis and product of the cross-fertilization of cultures and ideas.  Its birthplace is located at the cross-roads of diverse cultures and intellectual currents. For example, Italy, widely regarded as the birthplace of the European Renaissance, was an important meeting point of different cultures and intellectual traditions in the Mediterranean.

Malaysia can have an important role in such a historical process. Here, the four major currents of world civilizations (Chinese, Indian, Islamic and Western) are co-existing as mainstreams of social life. They represent invaluable resources. Southeast Asia is a region with a multi-layered sedimentation of diverse cultures. It is a vibrant, peaceful and forward-looking region when we compare it to other regions with similar historical background. If we borrow the language of the European Renaissance, Southeast Asia may be seen as a kind of Mediterranean region in the cultural revival of Asia and Malaysia can aspire to be the Italy of Asia (Venice).

Reinventing prevalent social-cultural practices is quite common in societies undergoing structural changes.  It is part of the efforts of a society to refine and refurbish the inner resources of their societies. It is through such processes of renewal that societies try to overcome internal stagnation and meet external challenges.

The process touches societies profoundly, involving ideas, values, morality, belief systems, culture, and institutions. It requires us to revisit our concepts of goodness, truth, and beauty.  The blossoming of culture represents the sublimation of the human spirit, the enrichment of human experience and the nurturing of human nature towards goodness. It is a project with both social and spiritual dimensions. It is a project with a historical soul.

Economic resurgence in itself does not guarantee a corresponding intellectual ferment and cultural effervescence. There are formidable obstacles in the long journey. First, Asian intellectuals may not rise to the call. Second, there is lack of freedom and internalized self-censorship that originates from a culture of fear. Third, there is no critical mass of thinkers to stimulate each other. Fourth, there are as yet no powerful social groups willing to adopt and champion new philosophies developed by their people.

The rise of Asia may thus be conceived of as an opportunity for an Asian cultural revival, which may or may not happen. Much depends on how Asians will make use of the opportunity. Will they translate the opportunity into a mission, and turn it into a reality?

The project of an Asian cultural rejuvenation is an ambitious undertaking.  It is likely to last for several generations. It has no walls and borders. Contributions from all corners of the world are warmly welcome. Though the stage is in Asia, the cast and audience are global.   This opens up a new arena of international cooperation for all those who aspire to contribute to the long term well-being of humanity.  As co-operation and competition with the West can be expanded to include friendly co-operation and competition in the field of ideas, this new arena could well be an alternative to the geopolitical rivalry between an emerging China and a US in decline.

Let us imagine that East Asia or South Asia could provide a case of cultural revival together with economic modernization.  It would be an attractive alternative to the current Western model for the Middle East. It may offer new insights and solutions for solving the whole array of social, economic and political problems there.

If and when Asian cultural and intellectual reinvigoration does happen in its full glory, it will lift Asian civilization to a higher level. In so doing, it will contribute to the cultural resources of the world and indeed to a richer modern civilization.  It will also impart a more profound and enduring meaning to the term Asian Century.

This is the text of the author’s public lecture delivered at the Sungei Long Campus of Universiti Tunku Abdul Rahman on  March 17, 2017.

Cambodia: Stability, Security and Economic Growth amidst Geo-Political Uncertainties remains top priority


March 22, 2017

Cambodia: Stability, Security and Economic Growth amidst Geo-Political Uncertainties remains top priority

by Dr. Sorpong Peou

http://www.newmandala.org

Cambodia’s ruling party is seeking to shore up its chances of electoral success with recent changes to the rules governing political parties, Sorpong Peou writes.

Much has been written about the Cambodian culture of impunity as an obstacle to democratic development, but what is still least understood is the fact that the persisting culture driven by the fear of personal retribution (actual or perceived) has been a principal threat to democracy.–Dr. Peou

Is Cambodia heading towards a single party dictatorship? This is a legitimate question after the Cambodian government took a drastic but unsurprising step in February 2017 to amend the law on political parties – a step that its critics consider undermines liberal democracy. In my view, Cambodia has not resembled any form of liberal democracy since 1997, and the existing hegemonic party system is likely to remain.

If and when it comes into effect, the amended party law will allow the Supreme Court to dissolve any political party with leaders who have criminal records and to bar such party leaders from standing for political office for five years. Moreover, the new law requires that any party that loses its President find a replacement within 90 days of the King’s signature.

The amended law will also allow the Ministry of Interior to suspend indefinitely any political party that the government considers to be involved in activities resulting in an “incitement that would lead to national disintegration” and subversion of “liberal multi-party democracy.”

The amendments were designed to ensure that the Cambodian People’s Party (CPP) led by Prime Minister Hun Sen will remain politically dominant, but not to eliminate opposition parties. They were intended to further empower two CPP-dominated state institutions – the Supreme Court and the Ministry of Interior – to prevent opposition parties, especially the Cambodian National Rescue Party (CNRP), from winning enough seats to form a government.

The CPP does not want to see the 1992 or the 2013 national election repeated. It lost the UN-organised election in 1992, but forced the winning party (led by the Royalists) to share power, and then removed the royalist prime minister from power by force in July 1997.

The multi-party system has since weakened, giving rise to a hegemonic party system, with the CPP as the dominant power. However, the party was badly shaken by the 2013 election results: it won only 68 seats (compared to the 55 seats gained by the CNRP), leaving it with fewer seats than the previous elections.

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Attempts by Hun Sen to seek reconciliation with CNRP’s Sam Rainsy has not been successful

After the 2013 election, the CPP leadership did a lot of soul searching and took a number of steps to weaken the CNRP. Opposition politicians have been subject to intimidation and litigation. Sam Rainsy, ex-President of the CNRP and opposition leader (in exile since 2015), has been sentenced to a total of seven years in prison. CNRP Vice-President Kem Sokha had been subject to criminal prosecution and sentenced to five months in prison (for not showing up in court for a dubious lawsuit against him) before he received a pardon from the King at Hun Sen’s request.

All this goes to show that the CPP leadership was well aware of the fact that it would not do well in the upcoming commune election in June 2017 and the National Assembly election in 2018 – if the CNRP could have its way. After the July 2016 killing of Kem Ley, a popular political commentator known for his strong criticism of the government, the CPP has become increasingly unpopular with growing public anger directed toward them.

Government officials have confidentially indicated that the CPP is determined not to lose in the upcoming elections and that it would not transfer power to any winning party if it lost. The amendments to the party law were just another step the CPP has taken as part of its pre-emptive measures designed to avoid the repetition of the 1992 and 2013 elections.

Much has been written about the Cambodian culture of impunity as an obstacle to democratic development, but what is still least understood is the fact that the persisting culture driven by the fear of personal retribution (actual or perceived) has been a principal threat to democracy.

Top members of the CPP elite remain as insecure as ever. What else can explain the fact that the (CPP) Prime Minister has up to 6,000 personal bodyguards? Opposition members have called CPP leaders traitors and threatened to bring them to justice for their past human rights violations (perhaps including some of those committed under the murderous Pol Pot regime) and rampant corruption. CPP leaders, thus, appear to believe that their political fate would be sealed if they lost the elections.

It is reasonable to assume that the CPP is not interested in turning the country into a single-party dictatorship, as some commentators think. The ruling party would be happy if it could just maintain a party system that would allow it to remain dominant and secure.

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 Cambodia has enjoyed peace, stability and sustained economic growth since 1998

The CPP’s behaviour may s also help explain weak reactions from members of the international community, especially donors, some of whom seem to prefer political stability under a CPP leadership to chaotic democratic politics. Others may simply have come to the realisation that there is not much they can do to weaken the CPP’s grip on power.

Over the past several years, CPP leaders have worked harder to deepen their relations with two powerful authoritarian states – Russia and China. China has emerged as Cambodia’s largest donor. Sino-Cambodian relations have grown much tighter in recent years. The harsh reality is that the CPP leadership remains suspicious of Western democracies’ regime-change agendas and wary of any criticisms directed at the human rights situation in Cambodia.

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The current global political environment also does not allow democracy in Cambodia to thrive. The looming return of fraught geopolitics (the rise of China, the escalating tension in the South China Sea, the ongoing confrontation between Russia and the West over Crimea and Ukraine), the rise of right-wing forces in Europe and the United States, and the persistence of authoritarianism in Southeast Asia – have all produced negative effects on Cambodian politics.

Dr. Sorpong Peou is Full Professor in the Department of Politics and Public Administration at Ryerson University, Canada, and a member of the Yeates School of Graduate Studies.

This article is a collaboration with Policy Forum — Asia and the Pacific’s leading platform for policy analysis and debate.

From Economic Analysis to Inclusive Growth


January 23, 2017

From Economic Analysis to Inclusive Growth

by Kemal Dervis

Most economies are seeking a recipe for inclusive economic growth, whereby high rates of investment, rapid innovation, and strong GDP gains are pursued alongside measures to reduce income inequality. Conservatives insist that growth requires low taxes and incentives such as flexible labor markets to encourage entrepreneurship. But reducing inequality requires higher levels of government spending and taxation (except when government is pursuing deficit spending to stimulate a depressed economy).

Related imageFree Education for All–Investment for an Educated Citizenry

The Scandinavian economic model is often invoked to bridge this gap. The Danish “flexicurity” system, in particular, has historically delivered solid economic performance alongside low inequality. Leading economists such as Philippe Aghion have published excellent analyses of how this model could balance growth, equality, and overall satisfaction of citizens elsewhere in the world.

These economists argue that labor markets with few restrictions on hiring and firing, low taxes on entrepreneurship, and generous incentives for innovation are compatible with a relatively equal income distribution, high social spending by government, and equalizing social policies such as universal free education.

This model has sustained an ongoing debate in Europe, one that is now relevant in the United States, because Donald Trump’s new administration has promised to help globalization’s “losers” while improving innovation and growth. But in the US, it is far more difficult, politically, to argue for generous public spending on education, health care, and financial security for retirees, because doing so always raises the specter of high taxes.

An inclusive growth model would seem to have to square the policy circle. It would have to increase substantially public spending, particularly on education, unemployment benefits and training, and health.

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Inclusive Green Growth?

It is useful to look at the numbers from the oft-cited Danish and Swedish examples. Generally speaking, these countries have excellent economic indicators. Although GDP growth is not higher than in the US, most people share a high standard of living, and surveys show that Scandinavians (particularly Danes) are some of the happiest people in the world. But, as the following chart shows, these countries also have some of the highest government spending- and taxation-to-GDP ratios in the OECD.

spending to taxation ratios

Hypothetically, if the US adopted Denmark’s universal free education policy, but kept its tax-to-GDP ratio unchanged, its fiscal deficit would exceed 6% of GDP. The US has run deficits that high only during World War II and the Great Recession of 2008-2009, when a huge stimulus package was implemented to spur recovery. So, just providing universal free education in the US would run the country’s deficit up to the highest level ever recorded in normal times.

In the context of this comparison, it would seem that the circle cannot be squared without a major macroeconomic shift. Scandinavian countries are smaller and can more efficiently collect revenues and administer public services. But even if the US approached this efficiency – a difficult feat in such a large and diverse country – social solidarity still would demand high effective taxes, as it does in Denmark and Sweden.

Another crucial component of the Scandinavian model is labor-market flexibility. On the OECD “Employment Protection Legislation” index, the US scores a 1.2 on a 0-5 scale, where zero indicates full flexibility. Meanwhile, France and Germany come in at 2.8, Italy at 2.9, and Denmark and Sweden at 2.3 and 2.5, respectively. This shows that, though Scandinavian labor markets are more flexible than elsewhere in continental Europe, the US labor market is far more flexible – and provides less security – than any of them.

Such broad static accounting suggests that we should proceed cautiously in applying lessons from the Scandinavian model to large countries like the US. Then again, to assess a model’s long-term impact on citizens’ welfare, we would need a more dynamic analysis over the course of at least a decade. Only then could we gauge how strongly investment and innovation would respond to incentives, how much free universal education would cost in the medium term, or how demographic structures would affect different social policies.

Economic analysis alone cannot settle the political debate between right and left. What it can do is help to narrow and focus that debate. The key is for participants on both sides to be more explicit about the values and objectives they believe that society should pursue, and to quantify their assumptions about how dynamic performance will respond to particular incentives. Only then can a democracy choose effectively between potential paths.

Good economic analysis can enable “constructive populists” to debate the “post-fact, fanciful populists” who seem to be on the rise, with a realistic alternative discourse – one that is transparent and based on credible expectations of economic policies and outcomes. In other words, economic analysis can facilitate good choices; it cannot make them.

Bilateral and Regional Implications of the U.S.-Philippine Enhanced Defense Cooperation Agreement


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Number 365 | December 21, 2016

ANALYSIS

Bilateral and Regional Implications of the U.S.-Philippine Enhanced Defense Cooperation Agreement

By Renato De Castro

On April 28, 2014, then Philippine Secretary of National Defense Voltaire Gazmin and U.S. Ambassador to the Philippines Philip Goldberg signed the Enhanced Defense Cooperation Agreement (EDCA) a few hours before President Barack Obama’s arrival in the Philippines. The signing of the EDCA sent a strong diplomatic signal to Beijing that it would have to take account of an American military presence in the Philippines if it chose to unilaterally change the status quo in the South China Sea. More significantly, a rotational U.S. military presence was expected to strengthen the Philippines’ determination to uphold its territorial claims vis-à-vis China in the South China Sea dispute backed by American resolve and credibility to honor its defense commitment to the Philippines.

 The 21st Century Philippine-U.S. Enhanced Defense Cooperation Agreement (EDCA)

This is not a new security treaty; it is merely an updated version of the 1951 Mutual Defense Treaty. This executive agreement serves as a framework by which the Philippines and the U.S. can develop their individual and collective defense capabilities. This goal is accomplished through the rotational deployment of American forces in Philippine bases. Although the EDCA allows American forces to utilize facilities owned and controlled by the Armed Forces of the Philippines (AFP), the Philippine base commander has unrestricted access to these locations. Likewise, American-built or American-improved infrastructure inside these installations can be used by the AFP. Furthermore, any construction and other activities within the Philippine bases require the consent of the host country through the Mutual Defense Board (MDB) and Security Engagement Board (SEB). More importantly, the EDCA is designed to minimize domestic opposition to U.S. military presence in the country by explicitly affirming Philippine sovereignty and providing a legal framework for increased American rotational presence rather than the re-establishment of permanent bases, which remains a sensitive issue among Filipinos.

The EDCA also proved advantageous to the AFP. With its small and obsolete naval force and an almost non-existent air force, the Philippine military benefits from the regular and short-term visits of U.S. forces that conduct military training as well as humanitarian and disaster response operations. Logistically, the U.S. construction of vital military facilities, infrastructure upgrades (such as hangers, air defense surveillance radar systems, ground based air defense systems, and naval operating bases), and the storage and prepositioning of defense equipment in agreed locations can lower the cost of the force and training modernization programs since the buildings and equipment can be shared and utilized jointly by American and Philippine Armed Forces.

The implementation of EDCA augurs well for the Philippine military. Philippines Air Force (PAF) fighter pilots can train with their American counter-parts at the five airbases that are part of the agreement. The PAF can also use facilities that American forces will improve or build inside its facilities. In addition, the Obama Administration has requested US$50 million from the U.S. Congress to fund the Maritime Security Initiative in Southeast Asia. The lion’s share of the funds in the first year will go to the AFP’s capability building program. It is expected that there will be allocations for the purchase of equipment to monitor activities and movements in the South China Sea.

Regional Security Implications

During the Sixth Annual Bilateral Security Dialogue (BSD) between the U.S. and the Philippines in Washington D.C. on March 18, 2016, it was announced that American forces will be allowed access to the following AFP bases: Antonio Bautista Air Base in Palawan; Basa Air Base and Fort Magsaysay in Luzon; Lumbia Air Base in northern Mindanao; and Mactan-Benito Ebuen Air Base in Cebu.

With EDCA’s implementation, the United States enhances the rotational presence of its forward-deployed forces, improves existing facilities, and pre-positions supplies and equipment in five agreed-upon locations. In the long-term, the effects of EDCA will go beyond the modernization of the Philippines’ military and increased inter-operability between the armed forces of the two allies. The EDCA will have two far-reaching strategic/diplomatic implications. First, a rotational U.S. military presence will strengthen the Philippines’ resolve to uphold its territorial claims in the South China Sea and test American credibility in honoring its defense commitment to the country. Second, the use of air and naval infrastructure in the Philippines will facilitate a rapid and massive deployment of American forces in case armed clashes erupt in potential flash points such as the South China Sea, the East China Sea, and in the Taiwan Strait.

Since the 1996 Taiwan Strait Crisis, the USAF has sought arrangements for the rotational deployments of its aircraft and personnel in the Philippines. This arrangement entails infrastructural improvements to keep facilities “warm,” enabling the rapid start of operations in the event of a crisis. American access to the aforementioned five operationally flexible Philippine bases addresses this need. It also thwarts China’s plan of preventing U.S. forces from operating in the disputed South China Sea.

Conclusion

Currently, there is small unit of USAF aircraft and personnel deployed in the Philippines.  Only time will tell whether this small USAF formation will become an effective forward-deployed force that can deter China’s expansion in the South China Sea. This will depend largely on how President Rodrigo Duterte would tolerate China’s expansion into the Philippines’ maritime domain, and the importance of his country’s long-standing alliance with the U.S. Recently, however, President Duterte has expressed critical comments toward the alliance. He announced that he wants the withdrawal of 107 American troops from Mindanao, saying that he was only maintaining them against possible attacks by Muslim militants. He declared that the Philippines would stop patrolling the country’s Exclusive Economic Zone (EEZ) in the South China Sea with the U.S. Navy to avoid provoking China. In early October, he also announced that the U.S.-Philippine Philbex joint amphibious exercise would be the last during his four-year term.

On November 7, 2016, despite his earlier rhetoric against the U.S. and the alliance, President Duterte suddenly gave his consent for the conduct of a joint U.S.-Philippine military exercise and for the implementation of the EDCA. His decision to continue joint U.S.-Philippine military exercises and to implement the EDCA will be conveyed to the MDB later this month. However, it is still too early to guess President Duterte’s future executive decisions toward the implementation of the EDCA in particular, and the alliance in general. The AFP’s recommendations to conduct joint exercises between U.S. and Philippine forces and the implementation of EDCA will not only affect Philippine national security interests but also the regional balance of power.

About the Author

Dr. Renato Cruz De Castro is a professor (on sabbatical leave) in the International Studies Department, De La Salle University, Manila, and holds the Charles Lui Chi Keung Professorial Chair in China Studies.  He is currently the U.S.-ASEAN Fulbright Initiative Researcher from the Philippines based in the East-West Center in Washington, D.C. He can be contacted at renato.dccastro@dlsu.edu.p

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