G7 Summit @Shima, Japan: No common workable solutions offered


May 30, 2016

G7 Summit @Shima, Japan: No common workable solutions offered.

by Bunn Nagara

http://www.thestar.com.my

ANOTHER G7 Summit has come and gone, with the only certainty being next year’s Summit amid more daunting challenges.

Leaders of the United States, Canada, Britain, France, Germany, Italy and Japan plus the EU gathered for two days during the week in the Japanese coastal resort of Shima to ponder on the world’s problems.

These mostly Western countries have come a long way in trying to tackle global challenges with declining capacity. The modalities of this year’s gathering were predictable, its tenor pessimistic.

The chief issues raised were terrorism, refugees and not least, declining growth. These are problems of the world which G7 countries have taken upon themselves to address.

The result has been a loosening grip on these already intractable problems. Typically, no common workable solutions were offered by the end of the Summit.

Terrorism has long been a scourge throughout the world. With neither “terrorism” nor its root causes identified, acknowledged and defined, it will long remain a scourge.

Much of that applies to mass refugee flows. To the West, which the G7 implicitly represents, the problem is how to handle, reduce or stop these influxes.

To the source countries of refugees however, the problem is a home nation made uninhabitable through devastation and war.

According to the UN High Commissioner for Refugees, the three main source countries are Syria, Afghanistan and Iraq. These are countries that the West has bombed, attacked and invaded in recent years.

An obvious solution for the future would be to end Western militarist ventures abroad. But there was no indication the Summit acknowledged this any more than it could identify a solution for declining growth.

The most that it could achieve this year was to produce a declaration thick with phrases like the need for “inclusive growth” that is “sustainable” because of “weak demand” and “structural problems”.

There was also the customary denunciation of protectionism and all trade barriers. The International Monetary Fund, a key G7 participant, staunchly displayed its Bretton Woods DNA in the face of multiple global challenges.

As host, Prime Minister Shinzo Abe was keen to impress and to leave an imprint, perhaps even to establish a legacy.

So he tried to sell his “Abenomics” formula as a solution to the world’s economic problems. This comprised a fiscal stimulus, monetary easing and structural reforms.

Unfortunately for Abe, by the first quarter of 2016 Abenomics was discredited widely as a failure in Japan and abroad. Among other things, it began by ignoring Japan’s debt problem and then enlarged it.

Abe tried to spook his guests into believing that the beginnings of another 2008 crisis were already at hand. But they should know a thing or two about that crisis since they started it, and said current problems were only its tail end – albeit almost a full decade later.

At the Summit Abe could not even get his first stage, fiscal stimulus, to be accepted by his G7 guests. They politely countered that each country would have to find its own solution.

Britain, Germany and the IMF in particular were dead set against a fiscal stimulus or monetary easing, let alone both. Any structural reforms deemed necessary would then be very different from those of Abenomics.

The final joint declaration agreed only to depressed growth being a problem, not to a solution for it. This did not stop Abe from claiming in his closing address that the G7 had agreed to apply Abenomics for the world.

Another issue the G7 tried to grapple with was the global steel glut with the focal point on China. But China, which produces half the world’s steel, was not mentioned.

China had already cut production by 90 million tonnes, with plans to cut up to another 150 million tonnes in the coming years. But its industrial momentum is such that, as Japan acknowledged, it is a challenge simply to slam on the brakes.

One result has been the United States slapping a 522% tax on Chinese steel for property construction and automotive manufacture, while still complaining of protectionism and trade barriers. US steel producers blame Chinese state subsidies and China blames unfair Western practices. The rest of the world sees an unrepresentative G7 posing as the world’s saviour.

This year’s Summit also expressed concern over developments in the South China Sea without mentioning China, but still incurred Beijing’s displeasure. That could conceivably have been avoided if China was a member.

The G7 began in 1974 as an informal meeting of finance officials from the United States, Britain, France, West Germany and Japan in Washington. They were supposed to be the economic movers and shakers of the world.

Then this Group of Five in 1975 grew into the G6 with the inclusion of Italy, with meetings of the finance ministers and central bank governors of the five Western countries and Japan.

Later Canada and then Russia joined to make it the G8. It became the G7 again after Russia was excluded, following strategic differences with the West over Ukraine.

Today the G7 plus EU remains very much a Western entity, comprising six Western countries and Japan, a US ally. More than half the members are already in the EU, with effective EU representation again amounting to additional Western membership.

The G7 still holds itself up as the arbiters of global economics, but how credible is this claim today?

The world’s highest scorers in (nominal) GDP per capita are Luxembourg, Switzerland and Qatar, and in PPP (purchasing power parity) terms are Qatar, Luxembourg and Singapore.

Granted, these countries may lack the global heft of major powers, but what are the economic standings of the G7 countries themselves today?

In nominal GDP per capita, the United States, Britain, Canada, France, Germany, Italy and Japan come in 5th, 13th, 16th, 22nd, 20th, 27th and 25th places respectively.

In PPP terms of GDP per capita, they are 11th, 21st, 27th, 25th, 20th, 32nd and 29th.

Several private Western sources list the world’s 10 most influential national economies (alphabetically) as Brazil, Britain, Canada, China, France, Germany, India, Italy, Russia and the United States, albeit in different orders.

Britain’s Telegraph newspaper group, which adjusts influence based on certain criteria, lists Indonesia in place of Italy.

Russia is now excluded from the G7 because of political differences, while China and India are excluded because they are still developing countries. But these distinctions are ultimately subjective.

What matters more, particularly for the G7’s own credibility, is how relevant its membership still is for the issues it seeks to tackle. The lack of “fit” has only produced a common frustration.

It is a frustration seen on both sides of the “Brexit” issue. A lack of fit has made one side want to pull Britain out of Europe, while the other sees a solution in redefining its presence there.

It is also a frustration seen in last year’s G7 Summit protests despite its remote location in the Bavarian mountains. Protesters saw a lack of fit between the G7 and real world problems.

G7-Summit–Obama’s Last

In the United States, a sense of frustration from a lack of fit in current institutions and practices has led to the Trump and Sanders candidacies in the presidential election. Adjustments or upheavals then naturally result.

Bunn Nagara is a Senior Fellow at the Institute of Strategic and International Studies (ISIS) Malaysia.

Philippines’ Man of the Moment: Rodrigo Duterte


May 26, 2016

Philippines’ Man of the Moment: President-Elect Rodrigo Duterte

by Mong Palatino

Mong Palatino explores the many sides to the Philippines’ new President, revealing there is far more that meets the eye than Trump comparisons alone can offer.

President-Elect Rodrigo Duterte–The Man from Mindanao

The landslide victory of Davao City Mayor Rodrigo Duterte in the recent Philippine presidential election has been reported already across the world. Perhaps many in Southeast Asia are asking: Who is Duterte?

The reaction is understandable. After all, it was only five months ago when Duterte announced his bid for the presidency.

Duterte’s electoral success is historic and politically significant for the Philippines. Not only did Duterte receive the most number of votes in the history of the Philippines, he is also set to become the first President from Mindanao.

Mindanao is the country’s second biggest island known for its rich natural resources but plagued by poverty and numerous local conflicts. When Mindanao people speak of historical injustice, they are referring to the state-sponsored displacement of Muslims from their homeland and the continuing plunder of the island’s wealth by corrupt politicians from ‘Imperial Manila.’

Duterte’s victory suddenly gave hope that the national government will start to prioritize the needs of Mindanao. Duterte, who claims to understand the history of the Muslim struggle for self-determination, also promises to pursue the peace process in Mindanao.

That a politician from Mindanao will assume the presidency on June 30 is unprecedented in Philippine politics. It’s like a Buddhist mayor sympathetic to the self-determination struggle of Thailand’s ‘Deep South’ becoming prime minister.

Unfortunately, Duterte’s anti-crime platform is given more attention by the mainstream global media. Because of his aggressive methods to rid Davao of crimes and his plan to kill all drug lords once he becomes President, he is called the ‘Punisher’ and Dirty Harry’. Perhaps he deserves the nicknames and he has no one to blame but himself if the world thinks his only crusade is to enforce discipline and order in society. He is like Thailand Prime Minister Prayut Chan-o-cha who believes that reforms can be achieved through extralegal and even authoritarian means.

Like Prayut, Duterte’s scandalous statements ridiculing women and the LGBT sector often attract wide condemnation. Both Prayut and Duterte think that crass talk can make them more popular among ordinary citizens. But when commentators condemn Duterte’s behaviour, most fail to mention his similarity with Prayut. Right or wrong, Duterte is often compared to American presidential candidate and business tycoon Donald Trump.

The comparison is inaccurate and unfair to Duterte. First, he is not a billionaire. Second, he does not mouth anti-Muslim statements. Third, he is proud of his so-called Leftist background. And fourth, he has been serving the country as an elected leader for three decades already.

Cambodia’s Hun Sen: Making a Difference

If making politically-incorrect pronouncements is the measure for comparison, Duterte’s image is closer to Prayut or Cambodian Prime Minister Hun Sen. The latter is like Duterte, a veteran politician who uses obscene language to ridicule his critics and political enemies.

But perhaps matching Duterte with Trump can also help to make the Filipino leader realize that his public antics are increasingly being viewed by many as offensive and divisive.

Persuading Duterte to abandon his ‘Trump’ reputation is easy.  He only needs to remember his record as a politician who has consistently worked well with progressive groups and NGOs in drafting social welfare programs for the poor. Unlike Trump who is part of America’s traditional elite, Duterte is seen as an ‘outsider’ who challenged the rule of oligarchs and big landlords in the Philippines.

In many ways, Duterte is like Indonesian President Joko ‘Jokowi’ Widodo. Both made a name by being effective city mayors before running for a national position. Both gained popular support among the poor and the youth. And both tapped into the widespread frustration of ordinary voters against the inefficiencies and inequities of the bureaucracy.

The Philippines today is like Indonesia in 2014 after the electoral victory of Jokowi. There’s high expectation that Duterte will deliver change and uplift the conditions of the poor and marginalized.

Duterte is no democracy icon like Myanmar’s Aung San Suu Kyi but many Filipinos now see him as a leader who will lead the struggle against elite oppression, criminality, and corruption.

The defeat of the military-backed party in Myanmar remains the most meaningful political event in Southeast Asia in recent years but Duterte’s rise to power is a political phenomenon that deserves serious attention too. Indeed, Duterte has cultivated a strongman image like Hun Sen and Prayut; but unlike the two, he gained power in a more democratic way similar to how Jokowi and Suu Kyi’s party won a convincing mandate to lead in their countries.

There’s a persistent anti-communist bias in the Philippines, and in the whole Southeast Asian region as well, but here’s an incoming president who introduces himself as Leftist or socialist. If Duterte turns out to be a real socialist, will this start a trend in Southeast Asia?

Will he become a genuine reformer or will he degenerate into a conservative populist? He has six years to establish his true legacy but this early he is already facing corruption allegations. It’s noteworthy to mention that his rivals are suspicious about his bank transactions. The issue is quite similar to the ‘political donations’ received by Malaysian Prime Minister Najib Razak (pic above) in his dollar bank accounts. Although, to be fair to Duterte, Najib’s corruption scandal is definitely far worse.

Duterte’s detractors want to unseat him already even if he has not yet taken his oath as president. His supporters, however, expect him to bring change in three to six months which is part of his election campaign pledge. Of course substantial change is difficult to achieve in six months but he must try to show some concrete results during this period if he wants to retain the support of the majority who voted him to power.

Duterte is more than just the Trump of East Asia. To understand his politics, it’s useful to compare him to other leaders in the region. And once we see the many sides of Duterte, he appears less scary; although he remains an enigmatic political figure who can either strengthen or destroy democracy in the Philippines.

Mong Palatino is a Filipino activist and former legislator. He is the Southeast Asia editor of Global Voices, a social media platform.

How to introduce Duterte in Southeast Asia

ASEAN Economic Community: Shining light of the East


May 24, 2016

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

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

ASEAN Economic Community: Shining light of the East

by Dr. Munir Majid

http://www.thestar.com.my

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

UK diplomacy must maintain an edge in the face of competition


May 11, 2016

UK diplomacy must maintain an edge in the face of competition

 

Ambassadors need good language skills to be ready for a Paxman-like grilling, writes James Blitz

Jeremy Paxman

 

It is hard to think of any Whitehall department that spends as much time considering how it runs itself as the Foreign and Commonwealth Office (FCO). In the past five years, the FCO has been through much internal change, reconfiguring where it puts its biggest embassies, boosting its language school and holding lengthy seminars with outsiders as it strives to achieve what it calls “diplomatic excellence”. Now it has published yet another report on how it can boost “the FCO’s internal working, policymaking and impact”.

The analysis by Tom Fletcher, the former UK ambassador to Lebanon, has 36 recommendations on how the FCO can improve its modus operandi. He argues that the department’s IT system, the bane of many a diplomat’s life, needs a complete overhaul. Foreign Office staff need to spend longer at each embassy abroad — serving postings of four not three years — so that their expertise can be better harnessed. He recommends much stricter language requirements so that ambassadors can survive what he calls a Jeremy Paxman-like grilling from the local television anchor.

All this is an encouraging sign of how the FCO, instead of standing still, is thinking about what role it serves in the Whitehall firmament. Things are not as tricky for the FCO as they were in the Blair years, when Number 10 ran Iraq policy by itself. Under William Hague, the previous foreign secretary, the department regained a lot of its amour-propre. But when it comes to furthering UK diplomacy, it is competing in an increasingly crowded space.

 George Osborne, the chancellor, spearheads UK policy towards China; David Cameron’s decision to create the National Security Council has given considerable heft to the Cabinet Office; the Department for International Development has huge clout because of its considerable budget; and in the run-up to next month’s referendum on EU membership, the prime minister and chancellor have been in the lead in negotiations over Britain’s place in the EU.

 

Whatever the voters decide on June 23, the UK will continue to need an effective diplomatic service of its own. What Mr Fletcher’s report appears to indicate is that, in a world where heads of government and finance ministries are increasingly powerful, foreign ministries need to sharpen their role. For the FCO, this means reducing the amount of time it devotes to dry policymaking in oak-panelled rooms. The goal should instead be to build a well-resourced global network that comprises genuinely capable and knowledgeable individuals.

 

https://next.ft.com/content/88155146-15d2-11e6-b197-a4af20d5575e

Paul Krugman, the Conscience of the Liberal, speaks


May 1, 2016

Paul Krugman, the Conscience of the Liberal, speaks on US Presidential Elections–It’s Hillary vs Donald in November, 2016

http://www.nytimes.com

Maybe we need a new cliche: It ain’t over until Carly Fiorina sings. Anyway, it really is over — definitively on the Democratic side, with high probability on the Republican side. And the results couldn’t be more different.

“Personalities surely played a role; say what you like (or dislike) about Clinton, but she’s resilient under pressure, a character trait notably lacking on the other side. But basically it comes down to fundamental differences between the parties and how they serve their supporters.”–Krugman

Think about where we were a year ago. At the time, Hillary Clinton and Jeb Bush were widely seen as the front-runners for their parties’ nods. If there was any dissent from the commentariat, it came from those suggesting that Bush might be supplanted by a fresher, but still establishment, face, like Marco Rubio.

Secretary Hillary Clinton

Most Experienced and Prepared for the Job as US President and Commander-in-Chief

And now here we are. But why did Clinton, despite the most negative media coverage of any candidate in this cycle — yes, worse than Donald Trump’s — go the distance, while the GOP establishment went down to humiliating defeat?

Personalities surely played a role; say what you like (or dislike) about Clinton, but she’s resilient under pressure, a character trait notably lacking on the other side. But basically it comes down to fundamental differences between the parties and how they serve their supporters.

Both parties make promises to their bases. But while the Democratic establishment more or less tries to make good on those promises, the Republican establishment has essentially been playing bait-and-switch for decades. And voters finally rebelled against the con.

First, about the Democrats: Their party defines itself as the protector of the poor and the middle class, and especially of nonwhite voters. Does it fall short of fulfilling this mission much of the time? Are its leaders sometimes too close to big-money donors? Of course. Still, if you look at the record of the Obama years, you see real action on behalf of the party’s goals.

Above all, you have the Affordable Care Act, which has given about 20 million Americans health insurance, with the gains biggest for the poor, minorities and low-wage workers. That’s what you call delivering for the base — and it’s surely one reason nonwhite voters have overwhelmingly favored Clinton over a challenger who sometimes seemed to dismiss that achievement.

And this was paid for largely with higher taxes on the rich, with average tax rates on very high incomes rising by about 6 percentage points since 2008. Maybe you think Democrats could and should have done more, but what the party establishment says and what it does are at least roughly aligned.

Things are very different among Republicans.Their party has historically won elections by appealing to racial enmity and cultural anxiety, but its actual policy agenda is dedicated to serving the interests of the 1 percent, above all through tax cuts for the rich — which even Republican voters don’t support, while they truly loathe elite ideas like privatising Social Security and Medicare.

What Donald Trump has been doing is telling the base that it can order a la carte. He has, in effect, been telling aggrieved white men that they can feed their anger without being forced to swallow supply-side economics, too. Yes, his actual policy proposals still involve huge tax cuts for the rich, but his supporters don’t know that — and it’s possible that he doesn’t, either. Details aren’t his thing.

Establishment Republicans have tried to counter his appeal by shouting, with growing hysteria, that he isn’t a true conservative. And they’re right, at least as they define conservatism. But their own voters don’t care.

If there’s a puzzle here, it’s why this didn’t happen sooner. One possible explanation is the decadence of the GOP establishment, which has become ingrown and lost touch. Apparatchiks who have spent their whole careers inside the bubble of right-wing think tanks and partisan media may suffer from the delusion that their ideology is actually popular with real people. And this has left them hapless in the face of a Trumpian challenge.

Probably more important, however, is the collision between demography and Obama derangement. The elite knows that the party must broaden its appeal as the electorate grows more diverse — in fact, that was the conclusion of the GOP’s 2013 post-mortem. But the base, its hostility amped up to 11 after seven years of an African-American President (who the establishment, dominantly White, has done its best to demonize) is having none of it.

The point, in any case, is that the divergent nomination outcomes of 2016 aren’t an accident. The Democratic establishment has won because it has, however imperfectly, tried to serve its supporters. The Republican establishment has been routed because it has been playing a con game on its supporters all along, and they’ve finally had enough.

And yes, Trump is playing a con game of his own, and they’ll eventually figure that out, too. But it won’t happen right away, and in any case it won’t help the party establishment. Sad! ― The New York Times

– See more at: http://www.themalaymailonline.com/opinion/new-york-times/article/wrath-of-the-conned-paul-krugman#sthash.YoCCQiWB.dpuf

 

Whither ASEAN–The View of a Pessimist?


April 30, 2016

Whither ASEAN–The View of a Pessimist?

by Philip Bowring

http://www.asiasentinel.com/politics/obituary-association-southeast-asian-nations/

As 2016 chair of the Association of South East Asian Nations (ASEAN), the Laotian People’s Democratic Republic is leading the group toward political irrelevance. And that is doubtless how China, the hand controlling the Laotian glove puppet, would like to see it.

The three minnows of ASEAN, Brunei, Cambodia and Laos, have just undermined ASEAN’s efforts to present some sort of a united front questioning China’s claims and activities in the South China Sea. Feeble though these have been, with endless talk of a developing a Code of Conduct making scant headway, they have at least been commonly agreed.

Meanwhile China has continued aggressive actions, reclaiming land, driving Filipinos from the Scarborough Shoal which lies well within the Philippine Exclusive Economic Zone and sending fleets of fishing boats protected by armed Coast Guard vessels operating 1,000 miles from the China coast to steal the fish from the exclusive zones of Indonesia, Malaysia and Vietnam.

But creating facts in the sea while stalling the Code of Conduct, is not sufficient for China. On April 24 in the Laotian capital Vientiane, China’s Foreign Minister Wang Yi announced, with an understandable sense of triumph, that an “important consensus” had been reached with the three that disputes over the South China Sea should be resolved entirely on a bilateral basis and not involve ASEAN.

According to the Chinese, the consensus criticized any efforts to “unilaterally impose an agenda on other countries” and vowed that national sovereignty would prevail over the regional grouping. None of the other parties has contradicted Wang.

Timed for Hague Decision 

This China-created “consensus” was timed in advance of the decision expected in June from the Permanent Court of Arbitration in The Hague on a Philippine case against China. Beijing refuses to accept the jurisdiction of the court but needs to find some diplomatic support given that the court is widely expected to rule largely in the Philippines’ favor.

The statement also comes at a time when Indonesia, which long claimed not to be involved in the South China Sea disputes, is making more determined efforts to protect its fisheries and is growing concerned about the proximity of China’s nine-dash line claim to its gas fields off the Natuna islands.

In February, ASEAN expressed serious concern about developments in the South China Sea, with only Laotian and Cambodian opposition preventing a stronger statement. But now the three minnows have effectively said that neither ASEAN nor international courts play any role in regional issues.

In which case, why bother to treat ASEAN as having any political or diplomatic role? Just leave ASEAN as a loose economic grouping with some extra benefits such as visa-free travel and stop pretending that it is anything more. It has long been clear that the overriding national interests of the states abutting the South China Sea were not fully shared by Myanmar or Thailand, let alone landlocked Laos.

As it is, tiny Laos with its long Chinese border, is already the focus of massive Chinese investment and is a bridgehead for the advance of Chinese road and rail systems into Thailand. The Hun Sen regime in Cambodia was installed by the Vietnamese (?) but has come increasingly under Chinese influence thanks to money and historic Khmer suspicion of Vietnam.

Brunei Sultan Blazes Islamic Path

As for Brunei, making sense of the decisions of its autocratic Sultan Hassanal Bolkiah is never easy. Two years ago he announced that full Islamic law would be introduced in three stages, culminating in such features as cutting off limbs and stoning adulterers and homosexuals. At the same time, he is trying to reduce dependence on oil and make his petty kingdom into an Islamic version of Singapore, which would call for a far more open society than he consents to envision. All this is very confusing particularly given the Brunei royal family’s past reputation for gross extravagance and as a paradise for beautiful rent-seeking women who dare serious sexual harassment from randy royal children.

Brunei’s EEZ is known to contain oil and gas it needs to replenish its dwindling reserves. Much of its 200-mile EEZ lies within China’s nine-dash line so Brunei’s interest should be in expressing solidarity with Malaysia, the Philippines and Vietnam. But Chinese money may have been more persuasive. Or the Sultan may figure that being a tool of China makes it less likely that Brunei, population 250,000, will eventually be swallowed by Malaysia or Indonesia.

The current divide makes it a good occasion to re-think both the name and the concept of the region. The very name Southeast Asia is of recent creation – by the British in the 1940s to describe territories occupied by Japan from Burma (previously part of British India) to the Philippines vis so-called Indochina, the Malay Peninsula and the Indian (or Malay) Archipelago (Indonesia). ASEAN in turn was invented in the 1960s as an anti-Communist bloc from which grew something bigger but more oriented towards trade.

ASEAN Minus Five?

Trade cooperation is still needed but as a political tool for its three largest states, Indonesia, the Philippines and Vietnam, which between them account for 75 percent of its population, ASEAN is now counter-productive. Likewise Malaysia needs close South China Sea allies not merely to defend its own islands and exclusive zones but to protect the integrity of a nation divided by roughly 600 km of sea, some of which lies within China’s nine-dash line.

In other words, these four states plus Brunei, if it could be released from the clutches of a newly medieval ruler, need a new grouping, could find sensible compromises on their own overlapping claims and confront China with a firm and united voice.

Convincing Indonesia of the merits of such as idea would be difficult. Jakarta not only hosts the ASEAN secretariat, such as it is, but harbors a sense that it is both the leader of the group and voice of moderation on all issues. That may have been the case in the past when it still basked in its non-aligned legacy and China was on the margin of regional affairs. But now China’s power and expansionist interests have divided ASEAN and made a myth of Indonesian assumptions of quiet leadership.

Wang Yi’s April 24 statement was a blunt description of a reality that has long been evident but fervently denied by foreign ministries in many capitals wedded to ASEAN illusions. It can be denied no longer. China has spoken: ASEAN is irrelevant.