INDIA: Modi’s Personal Diplomacy at Work


July 10, 2016

INDIA: Modi’s Personal Diplomacy at Work

by KC Singh*

India needs to reconsider geo-political fault lines, history

PRIME Minister Narendra Modi, after two years in office, finally gave a calibrated television interview to a fawning anchor. The PM’s remarks on foreign policy give an insight into his thinking. Undoubtedly, China blocking India’s entry into the Nuclear Suppliers Group (NSG), despite his personal intervention with Chinese President Xi Jinping at Tashkent, was in his thoughts.

Three interlocking comments are noteworthy. First, that the Cold War bipolarity is over. Hence, it was level playing field and India was free to engage the entire global community. Finally, the PM — on his globe-trotting — postulated that as the world came to know “Modi” (referring to himself in the third person), they would perforce be drawn to India. He, naturally, did not mention that he was also bolstering his own image dented by past visa denials.

This strategic perception of the world derives from the Sanskrit phrase Vasudhaiva kutumbakam — the world is one family. While Modi is historically right that the Cold War ended in the early 1990s with the Soviet Union’s collapse, but the new bipolarity between a relatively weaker US and an ascendant China is already upon us. However, while berating Pakistan, he seemed reticent on China. Whether this is dissimulation to avoid open confrontation and calibrated counter-measures, which may follow, or Nehruvian self-delusion, only time will tell.

Rebonding: Mozambique is on the PM’s four-nation African tour, beginning July 7.

Global outreach, as a novel Modi doctrine, ignores history. The developing world, particularly Africa, has always welcomed India because of the relentless Indian support to de-colonisation post-Indian Independence, at the UN. Despite periodic foreign exchange paucity, India maintained training and development assistance to African countries. India joining the Commonwealth led other nations gaining independence from Britain doing likewise. Nonalignment was a quest for the developing world as a family. More recently, Indian lines of credit, grants and training slots to Africa were incrementally enhanced during the UPA rule, as two India-Africa summits were held to bolster ties.

PM Modi’s four-nation African tour from July 7, covering prominent east-coast nations — Mozambique, South Africa, Tanzania and Kenya — builds on this past legacy. It also supplements visits by the President and Vice-President earlier to West and North Africa, respectively. While India has traded with East Africa since time immemorial, the British took Indian workers to run their African colonies from which have spawned the diaspora and the modern links. The five-nation East African Community, founded in 2000 to coordinate infrastructure development, is an East African success story.

The China factor lingers whenever India engages Africa. Deep pockets and hunger for resources during the early part of this century, when Chinese economy was growing at double- digit rate, pales the Indian presence. In 2014, while the China-Africa trade was $200 billion, India’s languished at $70 billion. Indian investments are also $35 billion, considerably below China’s. However, two factors now favour India. One, the Chinese use of its own labour to extract resources with unseemly hurry has created a backlash and is seen as exploitative. Two, the slowdown of the Chinese economy — growing, many believe, well below the target rate of 7.5 per cent — presents India an opportunity, as commodity exporting countries are in recession. The US shale gas revolution has also affected gas exporting nations like Mozambique. Between 2010 and 2014, African countries growing at 6 per cent, or more, fell from 25 to 12, and those with low inflation being only six. Three of them are EAC members. Kenya, with its pro-West tilt, was always an exception to the warm India-Africa ties. However, with a new dynamic President, Uhuru Kenyatta, it is perhaps ready to embrace India.

Africa also can be critical for food security, with 600 million hectares of arable uncultivated land, constituting 60 per cent of the global total, making it tomorrow’s granary for a growing population in the developing world. Even in 1950-60, the then Raja of Faridkot applied for permission to acquire land in Ethiopia, ruled by the then Emperor Haile Selassie. In the period 2000-11, 948 land deals for 124 million hectares were registered; among buyers are rich Gulf states. But land can be an emotive issue and there are reports of local ire over the diversion of water, exploitation of labour, etc. In Africa, only 5 per cent of cultivated land is irrigated, compared to 41 per cent in Asia. There would also be the element of security as many of these states have weak institutions.

The Modi doctrine of personalised diplomacy will flounder, as in the case of NSG, if it ignores geo-political fault lines, or the emerging balance of the power game between China and the US, or, indeed, lessons of history. It can be a useful adjunct to a grand strategy in a de-globalising world. President George W Bush erred in 2001 when he declared on meeting Russian President Putin that he found him trustworthy as he “got a sense of his soul”. A Soviet expert would have told him that former KGB agents do not let their souls interfere with realpolitik.

The Cabinet rejig presents an unintended irony in the Ministry of External Affairs created by again personal chemistry trumping objective analysis. Minister of State Gen VK Singh (retd) — persistently advocating honouring of Maharana Pratap, routed in the Battle of Haldighat by Emperor Akbar’s forces — now faces another Akbar, MJ, perhaps wresting the Gulf and West Asia from him. Modi thereby succumbs to the fallacy that a Muslim is best to deal with the Islamic world, a Congress-perpetrated myth which PM Vajpayee rejected. Do the P5 members of the UNSC even send Muslim envoys to Islamic nations? It was Jaswant Singh, as External Affairs Minister, who struck a vital equation with the then Saudi Crown Prince Abdullah, laying the foundation of the present close engagement.

Resting foreign policy on seeking universal goodwill through personal diplomacy is not a strategy in a world with assertive China, diabolical radical Islam and anti-globalisation and free trade virus in the veins of Europe and the US. Henry Kissinger, in a 1963 critique of the Kennedy administration, wrote that they ran a “government by improvisation and manipulation”. He added their government lacked strategic clarity in “a period of revolutionary change”. He had Vietnam in mind. It sums up the Indian dilemma today. Hopefully, now that the PM is at spring cleaning, seeking a tangible strategy comes next.

*The writer is a former Secretary, Ministry of External Affairs

http://www.tribuneindia.com/news/comment/personal-diplomacy-at-work/262038.html

Boris Johnson–The BREXIT Buffoon


Washington DC

July 1. 2016

Boris Johnson–The BREXIT Buffoon

by D. D. Guttenplan*

THE problem with spending your whole life pretending to be a buffoon is that eventually people start to believe you.

The British are spared of this Brexit Buffoon

Back in April, when the possibility of Britain actually voting to leave the European Union seemed remote, two newspapers commissioned a poll asking which political figure readers would most like to dine with. Boris Johnson, who had recently announced his support for Brexit, was the winner by a wide margin: 38 percent of respondents said they’d prefer his company, compared with 18 percent for the Labour Party leader, Jeremy Corbyn, and just 12 percent for the Conservative Prime Minister, David Cameron.

This morning, I found myself wondering how many had changed their minds, for Mr. Johnson — or Boris, as he’s universally known here — now seems more like the sort of date who’d order a lavish meal and the best wine on the menu and then walk out, leaving his companions with the check.

A week ago Britain had the fifth largest economy in the world. By the weekend, after Britons had voted by a margin of 52 percent to 48 percent to leave the European Union, it had slipped to sixth place, behind France. Mr. Cameron, who had staked his political future on the vote, resigned.His successor, it was widely assumed, would be Boris Johnson.

The tousled blond figurehead of the Leave campaign had been seen as prime minister in waiting since his return to Parliament last year. He and Michael Gove — like Mr. Johnson, a journalist turned Tory politician — were the intellectual heavyweights of the campaign, widely expected to become next-door neighbors in government, with Mr. Johnson as Prime Minister at No. 10 Downing Street and the Goves in No. 11, the residence of the Chancellor of the Exchequer.

Michael and Sarah G0ve

The Goves had other ideas. On Wednesday, Mr. Gove’s wife, Sarah Vine, a columnist for The Daily Mail, inadvertently leaked an email indicating her distrust of Mr. Johnson. “You MUST have SPECIFIC assurances from Boris OTHERWISE you cannot guarantee your support,” she admonished her husband. She also reminded him that both Paul Dacre, The Mail’s powerful editor, and Rupert Murdoch “instinctively dislike Boris but trust your ability enough to support a Boris Gove ticket.” (Before he became a member of Parliament, Mr. Gove was an editorial writer for Mr. Murdoch’s Times).

Yet in her own column that day, Ms. Vine gave no hint that Mr. Gove had any plan to supplant Mr. Johnson as favorite to be the next Conservative leader and Prime Minister. The same could hardly be said of Boris, whose ambition was as broad as his indiscretions.

Playing the clown served Mr. Johnson well, though. It created a cushion of public indulgence around his persona, even as the Old Etonian plotted his next career move. The young reporter who was fired by The Times in 1988 for fabricating a quotation became the editor of The Spectator in 1999. The newspaper columnist who in 2002 wrote scornfully of “flag-waving piccaninnies” with “watermelon smiles” was elected mayor of one of the most diverse and cosmopolitan cities in the world in 2008.

Along the way, he fathered two children out of wedlock. In 2013, an Appeal Court castigated him for the “reckless” conduct of his “philandering.”

We can’t say we weren’t warned. When Mr. Johnson took over at The Spectator, his friend and biographer, the political journalist Andrew Gimson, remarked that it was like “entrusting a Ming vase to an ape.” Somehow, though, none of the buffoonery or scandal slowed him down. It was just Boris being Boris.

He even got away with an extraordinary degree of flip-flopping on Brexit: from “finely balanced” in February to all-out in April to his latest, post-referendum column for The Daily Telegraph, in which he assured readers that “Britain is part of Europe, and always will be.”

Recklessness doesn’t get near it. On Thursday morning, after destroying the political career of his old school chum Mr. Cameron, wrecking the British economy and possibly breaking up Britain, Mr. Johnson announced that he wouldn’t be sticking around to clean up the mess he’d made. His erstwhile ally, Mr. Gove, delivered the coup de grâce as he announced his own candidacy for the Conservative leadership: “Boris cannot provide the leadership or build the team for the task ahead.”

Until yesterday, Mr. Johnson seemed to have an ability to outrun boring facts and bad publicity only surpassed, perhaps, by one Donald J. Trump. Boris will not be Britain’s prime minister any time soon, and probably never, so what next?

A break from British politics seems like a good idea. Although he gave up his American passport to avoid paying taxes, Mr. Johnson was actually born in New York City. Perhaps Mr. Trump would take him on as a warm-up act — or even a running mate.

*D. D. Guttenplan is The Nation’s editor at large.

A version of this op-ed appears in print on July 1, 2016, on page A23 of the New York edition with the headline: Boris the Clown Bows Out. Today’s Paper|Subscribe

China’s South China Sea Diplomacy: Some Lessons from Africa


Washington DC

June 29, 2016

The Diplomat

China’s South China Sea Diplomacy: Some Lessons from Africa

China has been actively seeking international support for its position that the South China Sea dispute with the Philippines should be resolved exclusively by negotiations among the parties directly concerned and thus should not have been submitted to arbitration. Among the 40 states that support China are several African countries, including Burundi, Mozambique, Niger, and Togo. China is also seeking the support of Cameroon, Côte d’Ivoire, and Senegal. Beijing believes that China and Africa should support each other on issues concerning their vital interests, since they had all been “victims of colonization.”

Some Western experts have dismissed these states as “small, poor and inconsequential.” They allegedly support China because they receive massive Chinese assistance. Niger’s oil industry is said to be almost totally dependent on Chinese enterprises and the CNPC (China National Petroleum Corporation). It is true that Mozambique declared its support during a state visit of its president to China, when the two states agreed to establish a Strategic Partnership for Comprehensive Cooperation and China promised to assist in Mozambique’s industrialization and modernization.

Nevertheless, as China’s spokesperson rightly pointed out on March 25, 2016, the dismissive attitude is “permeated with arrogance, prejudice and snobbishness… all countries, big or small, rich or poor, should be respected as equals… [It is] particularly preposterous to judge right and wrong based on the size and wealth of a country.”

In that same spirit, China could and should learn a lesson or two from the African countries in the area of peaceful dispute settlement. More and more African states now accept the principle of international adjudication, i.e., dispute settlement through international courts, and actually submit specific disputes to the International Court of Justice (ICJ) and the International Tribunal for the Law of the Sea (ITLOS). Moreover, the actual conduct at the ICJ of three African states whose support China is seeking — Burundi, Senegal and Niger — is exactly the opposite of that of China in the Philippines v. China arbitration.

African States Accept International Adjudication

The consent of states parties to a dispute is required before an international court can hear their dispute. A dispute may be submitted to the ICJ if states have given their consent in advance under Article 36(2) of its Statute, through a special agreement, or through a treaty on another subject. States parties to the 1982 UN Convention on the Law of the Sea may also give their consent in advance to submission of their disputes to ITLOS, created by the Convention.

States prefer to resolve their disputes by negotiation, mainly because they believe that they remain in control of the process without the intervention of third parties. In addition, socialist states believe that international law is a tool of capitalism; for developing countries, it was an instrument of imperialism. At present only 72 UN members (less than one-third of the total), have given their consent to dispute settlement by the ICJ under Article 36(2) of the Statute.

As a socialist state, China is viscerally opposed to dispute settlement by international courts. In contrast, the attitudes of developing countries, in particular the African states, have evolved considerably since the 1980s. Before that time only 12 African states had recognized the Court’s compulsory jurisdiction: Botswana, Egypt, Gambia, Kenya, Liberia, Malawi, Mauritius, Somalia, Sudan, Swaziland, Togo, and Uganda. Since then they have been joined by Cameroon, Côte d’Ivoire, Djibouti, Democratic Republic of Congo, Guinea, Guinea-Bissau, Lesotho, Madagascar, and Nigeria, bringing the number to 22 (out of 72 UN members from around the world). This group includes four of the states that officially support China: Cameroon, Côte d’Ivoire, Senegal, and Togo.

African states now constitute the second largest group of states that have recognized the Court’s compulsory jurisdiction, second only to the group of European states (27). The number of Asian states that have done so (six, including the Philippines and Japan, but not China) has not increased at all since the 1980s. Understandably, Africa’s role in reconciling the Third World with the ICJ has been described as “considerable.”

Of the 22 African states on the list, eight (Cameroon, Democratic Republic of the Congo, Guinea-Bissau, Kenya, Nigeria, Senegal, Somalia, and Uganda) have been involved in eight cases. Seven cases involving ten African states (Benin, Botswana, Burkina Faso, Chad, Libya, Mali, Namibia, Niger, Republic of the Congo, and Tunisia) have been heard on the basis of a special agreement, while five disputes in which five African states were parties were submitted on the basis of a treaty (Burundi, DRC, Djibouti, Libya, and Rwanda). A total of 21 African states have thus been involved in 19 out of 83 cases heard by the Court since 1980. The figures might seem very low but Asian states are arguably even more wary of international courts. Since 1980 the Court has heard only two “Asian” cases, in which three Asian states (Indonesia, Malaysia, and Singapore) were parties.

As for ITLOS, 36 states, out of 167 parties to the 1982 Convention, have accepted its jurisdiction. Six African states (Angola, Cape Verde, DRC, Madagascar, Tunisia, and Tanzania) make up the second largest group, together with the Latin American and Caribbean group, that has accepted the Court’s jurisdiction, after the European group.

None of the six has been a party to any of the 23 inter-state cases that have been heard by ITLOS, but five other African states have appeared before it. Ghana and Côte d’Ivoire concluded a special agreement requesting that the Tribunal delimit their maritime boundary. Ghana and three other states (Guinea, Seychelles, and Guinea-Bissau) have appeared in five cases relating to the release of vessels.

Beyond the statistics, the conduct at the ICJ of three African states whose support China is seeking – Burundi, Senegal, and Niger – vividly demonstrates the great differences between Chinese and African attitudes toward international courts.

African States Appear Before the ICJ   

Burundi has not accepted ICJ jurisdiction and thus may not be forced to appear before it. Yet when a case was filed against it, it did not boycott the Court. Senegal, which has accepted ICJ jurisdiction, cannot anticipate when and over what issue another state may bring a case against it. If the issue is sensitive, Senegal might still challenge the Court’s jurisdiction. Nevertheless, it chose to appear before the Court when Guinea-Bissau filed two cases against it. Niger, which gave its consent by special agreement, could not predict the outcomes of the cases, but accepted the risk of unfavorable outcomes after decades of negotiations with two neighbors had failed.

In 1999, Burundi was accused of aggression by the Democratic Republic of the Congo (DRC), which had accepted ICJ jurisdiction. Aggression is one of the gravest violations of international law that may be made against a state. International law prohibits the use of force in international relations, and the UN’s fundamental aim is to maintain international peace and security. No state, big or small, wishes to be accused of aggression. The conduct of Burundi in this case should be instructive to China. As Burundi had not given its consent to ICJ jurisdiction, it could have boycotted the proceedings. Yet Burundi appointed an agent to represent it in the case; attended a consultation with the DRC and the ICJ over the procedure; and complied with the deadline set by the Court for submission of its written arguments. The case was terminated when the DRC discontinued it in 2001.

Senegal, which accepted ICJ jurisdiction in 1985, was implicated between 1985 and 1995 in a less dramatic, but more protracted, process: it was a party to three proceedings before two international tribunals over one issue, maritime delimitation with Guinea-Bissau, which accepted ICJ jurisdiction in 1989. In the first case, an arbitral tribunal held that a 1960 exchange of letters between France and Portugal, the then colonial powers, had determined the boundary between Senegal and Guinea-Bissau, but that it did not delimit their EEZs (Exclusive Economic Zones). In the second and third cases, Guinea-Bissau, which was dissatisfied with the tribunal’s award (judgment), requested that the ICJ declare that the award was null and void and delimit the maritime boundaries between the two states. It was arguably not in Senegal’s interest to participate in the second case, since the tribunal’s award was partly favorable to its theses. But both had accepted ICJ jurisdiction.

Senegal’s conduct in this case could not be more different from that of China in the Philippines v. China arbitration. Senegal appointed an agent to represent it in the case; participated in consultations on the procedure; submitted its written arguments by the deadline; and took part in all oral proceedings. Senegal denied that Guinea-Bissau’s case was admissible. The ICJ did not agree with Senegal, but it ruled that the award was valid and binding for the two states. The ICJ’s judgment paved the way for negotiations between the two states to delimit all maritime areas and the withdrawal of the third case in 1995.

Niger, which has not given its consent to ICJ dispute settlement, has been party to two frontier disputes before the Court, which heard them on the basis of special agreements. Niger and the two other states involved could not have predicted the outcome of the cases; notwithstanding the uncertainty they turned to the ICJ because decades of negotiations following independence from France in 1960 had not yielded any solution. This conduct again contrasts sharply with that of China, which insists on bilateral negotiations despite the fact that they have failed over many years.

Niger’s dispute with Benin (2002-05) concerned 25 border islands situated on the delta of the Niger and Mekrou Rivers between them. Although incidents had occurred in 1960, 1993, and 1998, joint commissions meeting in 1961, 1963 and between 1995 and 2000 failed to delimit the border. The two states finally signed an agreement in 2001 to submit the dispute to the ICJ.

African observers believe that the Court’s judgment represented a balanced settlement. In one sector of the boundary, the Court accepted Niger’s thesis; in another sector, it was Benin’s thesis that was followed. Benin thus had title to nine islands situated between the boundary and the right bank of the Niger River, while Niger was granted title to 16 islands situated between the boundary and the river’s left bank.

In the Niger-Burkina Faso (2010-13) dispute, commissions meeting in 1964, 1988, and 1991 had been unable to demarcate the border. In February 2009, the two states finally concluded a special agreement to submit the dispute to the Court. African assessments believe that the Court’s judgment split the difference between the two states. It rejected Burkina Faso’s request for delimitation in two sectors in the North and the South, while at the same time rejecting Niger’s request to modify slightly the delimitation around two localities. The Court’s judgment attributed 786 square kilometers of territory occupied by Niger to Burkina Faso, which acquired 14 villages; 277 square kilometers of Burkina territory were returned to Niger, which received four villages.

A Burkina source implies that Burkina Faso obtained a slight advantage over Niger by being granted greater access to the River Sirba, an affluent of the Niger River, than Niger would have wanted. Yet Niger’s Minister of Justice declared that the two states were winners, because there would be no more disagreement regarding the border. It would seem, then, that the risk of submitting the dispute to the Court was worth running, because the Court gave reasons for satisfaction to both states.

It is sad that China should have to be reminded of the conduct of African states at the ICJ. Based on its own assertions of equality, China cannot dismiss African countries’ attitudes to and conduct before international courts, alleging that their disputes have low stakes and that they are small countries. China would do well to stop canvassing their support for its position and emulate their conduct.

Dr. Alfredo C. Robles, Jr. is an academic based in the Philippines. This is an abridged version of a paper originally published by the Philippine Foreign Service Institute (FSI) here.

http://thediplomat.com/2016/06/chinas-south-china-sea-diplomacy-could-use-some-lessons-from-africa/

Brexit Outcome: Schumacher’s Lessons for Nations


New York

June 28, 2016

Brexit Outcome: Schumacher’s Lessons for Nations

by Dr. Lim Teck Ghee

Over 40 years ago, a British economist, E.F. Schumacher, published a collection of essays on the theme of “small is beautiful” which argued that the modern growth-obsessed economy is unsustainable.

Anticipating the present global warming and environmental crisis in our land and oceans, he noted that natural resources should be treated as capital, since they are not renewable and subject to depletion. He further argued that nature’s ability to fight and resist pollution is limited as well – a warning which has still not sunk deeply enough into the corridors of power all over the world.

Besides his somber – and now proven to be correct – message on environmentalism, he made the case for sustainable development and against inappropriate technology transfer to developing countries which, in his view, would not resolve the underlying problems of unsustainable economies.

Schumacher was also amongst the earliest economists to question the appropriateness of using gross national product and other pure economic indicators to measure human well-being.

What has been referred to as “his dense mixture of philosophy, economics and politics” struck an immediate chord with Western readers, especially during the era of the 70s and the advent of the first global energy crisis. In 1995, the Times Literary Supplement ranked the slim volume of his work as among the 100 most influential books published since World War II.

Since then his influence appears to have waned. New critiques of conventional economic thinking have emerged; and Schumacher’s concern for the “philosophy of materialism” to be replaced or subsumed to ideals such as justice and harmony, and his counter-cultural ideas on the organic, the gentle, the non-violent, the elegant and beautiful as laid out in his Buddhist economics, have been taken up by less credible “gurus” with new vocabulary omitting his ideas and name.

Today, however, some of the concerns which “small is beautiful” raised in 1973 just before the push for European Union began to take place, are echoing in the popular sentiments and issues raised by the “Leave” voters in the Brexit referendum.

Why Britain is Leaving EU

The historic upset defeat of the “Remain” camp and successful revolt against the EU has been explained and interpreted in many ways.

In a lead article, the day after the referendum result, the BBC listed 8 reasons why Leave won the UK referendum on the EU. These reasons included the backfiring of Brexit economic warnings; bungled leadership of the Prime Minster, David Cameron; Labour’s disconnect with voters; the inter-generational divide with older voters preferring to leave; the ascendency of immigration and national and cultural identity issues in the minds of lower income voters; perceived economic benefits; and finally, the influence of Euroskeptic leaders and critics such as Nigel Farage and Boris Johnson during the referendum campaign.

While all the reasons advanced played a role in the final voting count to tilt the balance towards those opting for an uncharted and potentially precarious future, in one sense it represented a rejection of what local Britishers see as a much too big, too powerful and out-of-touch technocratic Frankenstein’s monster – as described in a United Kingdom Independence Party’s internet newsletter on the eve of the referendum – which has made life not only difficult but has also profoundly alienated the common citizen (http://www.ukipdaily.com/eu-is-a-frankenstein/)

In the immigration issue especially which assumed center stage in the Brexit debate, many Britons resent the EU migrants who legally move to jobs in Britain, are seen as taking jobs away from locals and are alleged to abuse the country’s benefits and welfare system.

And this is by no means just a view found in Britain. Other nations in the EU face similarly disenchanted citizens fed up with the “big is good; bigger is better” philosophy in economic and political systems that Schumacher warned against, and which the enlarged grouping of European nations seemed to signify.

Ordinary people and communities seem to be looking for solutions which call for more local autonomy and for moves away from centralized control towards greater decentralization and a return to local and national economies in which they have greater influence, however naive or impractical it may appear to the political and business elites that run our world today.

The same soul searching in the rest of Europe has already produced populist politicians and a growing number of Euroskeptics. They will seek their own referendums on EU membership and if successful will produce a breakup of the present union; and the need as French Prime Minister  Manuel Valls puts it “to invent another Europe.”

Can Malaysia Learn

In Malaysia the Brexit referendum result has produced the predictable dollars and cents focused analysis of what it means to the nation’s trade and investment flows as well as to the property, education and other sectors whose links with the UK are based on its inclusion in the EU. This is a limiting and inadequate focus which misses the larger lessons to be learned.

In our part of the world, especially in Sabah and Sarawak which opted to join Malaya and Singapore in the formation of Malaysia in 1963, a sense of alienation towards the federalized centralized political entity, run from Kuala Lumpur and beholden to UMNO’s agenda, has been brewing for some time.

In August 2014, a coalition of NGOs, politicians and activists from Sarawak and Sabah drew up a petition addressed to the United Nations (UN) secretary-general to re-open the issue of self-determination for the two East Malaysian states. The petition believed to be signed by some 100 representatives was also copied to the UN Special Committee of 24 (C-24) and the UN Human Rights Committee (http://www.theborneopost.com/2014/08/13/group-draws-up-self-determination-petition-for-sarawak-and-sabah/#ixzz4Ccnmmakv).

These local autonomy and even separatist tendencies and forces are not going to go away. At some point – unless real reforms are put in place to provide for greater autonomy and to protect the freedoms and sense of local identity that the local communities from the two states feel they have lost – we will have our own version of Brexit demanded more forcefully.

 

For America, ‘Brexit’ May Be a Warning of Globalization’s Limits


New York

June 25, 2016

For America, ‘Brexit’ May Be a Warning of Globalization’s Limits

When the mills that birthed the industrial revolution in cities like Manchester and Birmingham still powered the British economy of the mid-20th century, Robert Stevenson was a frequent visitor to the Midlands.

Eastman Machine, the company his family helped start in upstate New York 128 years ago, had a big factory 100 miles north of London, and Britain accounted for roughly a fifth of the firm’s sales.

That was then. While Britain is still an important market for Eastman’s sophisticated cutting tools, its workshop there was shuttered in the 1970s, and British customers are now served by Eastman’s main factory in Buffalo and a smaller one in China.

So when the British electorate stunned the world on Friday with the results of the vote to leave the European Union, it was a shock for Mr. Stevenson, but not because it poses an immediate threat to Eastman’s bottom line or the job security of its heavily blue-collar, 120-strong work force in downtown Buffalo.

What most concerns Mr. Stevenson and owners of businesses big and small is what the so-called Brexit says about the shape of economic things to come.

“You never know if there will be a domino effect, and we worry about other countries securing their borders,” Mr. Stevenson said. “We were certainly surprised.”

For all the shock and awe on Wall Street and financial markets around the globe on Friday, the imminent danger to the underlying American economy is relatively small. What’s far more worrisome is whether Britain’s decision represents an end to the economic integration and opening markets that have helped propel sales at companies like Eastman over the last few decades.

Since the fall of Berlin Wall in 1989, politics and economics have mostly moved in one direction, with the elites on both sides of the Atlantic favoring policies like the North American Free Trade Agreement with Canada and Mexico, the introduction of the European currency and the entry of China into the World Trade Organization. Business has applauded these moves, but voters are not necessarily on board as they once were.

“I think a lot of the market reaction is less about the financial impact and more about populism and what it means for the liberal economic order,” said Glenn Hubbard, a top economic official to President George W. Bush who now serves as dean of the Columbia Business School.

The Brexit vote, he added, reflects a deep distrust of the benefits of the global economic system among a wide swath of voters in Europe and the United States, and a broadly held view that government institutions — whether in Washington or Brussels — are calcifying and don’t work well.

“Both of those forces have a lot of wind at their back,” he said.“In the near term, you’re seeing markets being roiled, and feedback effects for the Federal Reserve,” Mr. Hubbard said. But for now, at least in the United States, “I don’t think it’s going to raise recession probabilities.”

When it comes to commerce, Britain is not even among the United States’ top five trading partners — it’s currently the seventh largest, according to the United States Census Bureau, which tracks trade data. American exports to Britain last year totaled $56 billion, or just over 0.3 percentage point of gross domestic product.

Partly that’s a reflection of how the United States, despite leading the era of globalization, remains something of an economic island. Exports account for 13.4 percent of American economic output, according to the World Bank, compared with roughly 30 percent for Britain.

The 2015 slowdown in the United States’ biggest trading partner — China — may have blunted domestic growth in the last year, but even that hardly threw the American economy into a tailspin. Nor should Brexit, most experts say.

Jared Bernstein, a liberal economist who most recently served in the Obama administration and is now a senior fellow at the Center on Budget and Policy Priorities, sees minimal pain within American borders. “It won’t be helpful for our economy,” Mr. Bernstein said, but “we won’t take anything like the direct hit that I expect will befall the economy.”

Several economists estimated that the fallout from the vote would probably end up decreasing growth in the American economy by about a quarter of a percentage point or less, while postponing any push by the Federal Reserve to raise interest rates, possibly through the end of 2016.

“The flight to safety means lots of people are flocking to U.S. Treasury bonds, putting downward pressure on interest rates,” Mr. Bernstein said. “One possible outcome is that Fed’s path to higher interest rates may become flatter as these events play out.”

“With the pound dropping 10 or 15 percent, it may strengthen a couple of our competitors in the U.K.,” he said. “I think they could be quite happy about it and gain market share.”

As befits the owner of a company that survived World Wars I and II, outlasted the Great Depression and the Great Recession, and survived the collapse of the American textile industry — all without abandoning Buffalo — Mr. Stevenson has learned to adapt to potential shocks like Brexit.

Increasingly, that’s meant focusing on making high-tech, software-driven equipment to cut composites and carbon-based fabrics for the aerospace industry and automakers, rather than the woolens and cotton Eastman’s equipment was once designed to slice.

Many of Mr. Stevenson’s current customers in Britain are in these sectors, he noted. The dressmakers and hosiers and other clothiers that once populated England’s redbrick towns have long departed.

“Our focus has been to understand where the market is going,” said Mr. Stevenson. Twenty years ago, 70 percent of Eastman’s products were of traditional fabrics; the rest were space-age materials. Now, it is the reverse, which is among the reasons a fifth generation of Stevensons will have a company to take over.

“Our goal has been to maintain the company in Buffalo and as a family business,” Mr. Stevenson said. “My son is 40, and I’m 65, and he is focused on these new materials. This saved our butt.”

For those exporters that have managed to hang on in the industrial heartland of Britain, the Brexit could actually be good news, simply because the pound’s plunge against currencies like the euro and the dollar makes their goods more competitive.

British exports like Rolls-Royce jet engines, high-end Jaguar automobiles and certain food products could get a lift. Last month, for example, Britain exported the largest cargo of wheat to the United States in more than two decades.

So would British hotels and restaurants, eager to host American visitors looking for what could amount to a 10 to 20 percent-off sale.

“If you wanted to buy a nice little house in Scotland, today’s the day,” said Kevin A. Hassett, an economist at the conservative American Enterprise Institute.

Chief executives of major American companies are paid well to see around corners, and must adapt their businesses even to trends they oppose, or face the consequences in the form of falling stock prices and angry shareholders.

That’s among the reasons General Electric, which relies on foreign markets for more than half its revenue, has been preparing for the kind of political retreat from open markets that the British vote to leave the European Union represents.

“Companies must navigate the world on their own,” G.E.’s chief executive, Jeffrey R. Immelt, said in the commencement speech last month at the N.Y.U. Stern School of Business.

For G.E., he said that meant seeking to achieve “a local capability inside a global footprint.” Today, its 420 factories spread across the world give G.E. “tremendous flexibility,” Mr. Immelt said, with jet engines, power generators and rail locomotives increasingly manufactured at several sites to ensure market access.

“A localization strategy,” Mr. Immelt said, “can’t be shut down by protectionist politics.”

G.E. had prepared for the risk that Britain might vote to leave the E.U. by hedging in foreign currency markets. But beyond that immediate step, a G.E. spokeswoman said on Friday it was too early to discuss longer-term moves the company might make.

Mr. Immelt, in a statement, said that G.E., America’s largest manufacturer, which employs 22,000 people in Britain and 100,000 in Europe over all, remains “firmly committed” to both Britain and Europe.

While Brexit’s impact on Britain’s overall economy may be mixed, its London-based financial sector is likely to feel the full force of the coming storm. The City, as London’s equivalent of Wall Street is known, has boomed in the last 20 years as a global financial capital, especially for Continental banks seeking a more market-friendly home than Frankfurt or Paris.

With a recession in Britain now a distinct possibility, some experts worry that a government desperate to create and maintain jobs could seek to save the financial sector by making the City more attractive as an offshore haven.

“This could lead to London becoming even more like the Cayman Islands and other British territories, skirting around regulations, in a race to the bottom for the financial sector,” said Adam S. Posen, a former member of the rate-setting committee at the Bank of England and now president of the Peterson Institute for International Economics in Washington. “This potentially could leave pretty big holes in the financial safety net.”

He pointed to the 2008 crisis involving the insurance giant American International Group, where a hedge-fund-like subsidiary operating in London and under less stringent rules nearly brought down the company and contributed to the financial crash.

“They could get away with things in London that they couldn’t get away with in New York,” Mr. Posen said, “So imagine repeating that on a larger scale or a more frequent scale.”

Of course, dangers like those are the hardest to anticipate. “Right now we’re in one of those points in history,” Mr. Hassett of the American Enterprise Institute said, “where there are lot of ‘unknown unknowns,’” referring to the infamous comment by former Defense Secretary Donald Rumsfeld on the Iraq war.

Consider two very different types of uncertainty, Mr. Hassett explained, citing a well-known economic metaphor. If you bet on a roulette wheel, you know all the possible outcomes and the attendant risks. But now imagine a game where you don’t know all the places the roulette ball might land, or the chances of it falling into different slots or even the prizes if you are fortunate enough to bet correctly.

“In those types of situations,” he said, “anything can happen. And if you don’t know what will happen, the optimal strategy might be to assume the worst.”

Steve Lohr contributed reporting.

A version of this article appears in print on June 26, 2016, on page BU1 of the New York edition with the headline: ‘Brexit’ in America.

Politicians and the Lies That Matter


June 1, 2016

Politicians and the Lies That Matter

In Defense of Hillary Clinton.

I see from polls that Hillary scores very low on “trustworthy” questions. Well, let’s talk about truth in politics. All politicians shade the truth at times. Some do it more than others. Indeed, when Donald Trump tells the truth, it should be labeled “Breaking News — Trump tells truth without immediately contradicting himself. We’re going live to the scene right now.”

A Powerful Combination for the United States –Bill and Hillary Clinton

Here is what is relevant: Lying is serious business. But Hillary’s fibs or lack of candor are all about bad judgments she made on issues that will not impact the future of either my family or my country. Private email servers? Cattle futures? Goldman Sachs lectures? All really stupid, but my kids will not be harmed by those poor calls. Debate where she came out on Iraq and Libya, if you will, but those were considered judgment calls, and if you disagree don’t vote for her.

Bernie Sanders has been getting away with some full Burger King Double Whoppers that will come crashing down on the whole country if he gets the chance to do what he says.”Friedman

But while Hillary’s struggles with the whole truth on certain issues have garnered huge attention, driving up her negatives, Trump and Bernie Sanders have been getting away with some full Burger King Double Whoppers that will come crashing down on the whole country if either gets the chance to do what he says.

Trump told a biker rally in Washington on Sunday: “When you think of the great General Patton and all our generals, they are spinning in their graves when they watch we can’t beat ISIS. … We are going to knock the hell out of them.” Then, for good measure, he repeated his longstanding call to build a wall along the Mexican border, and when he asked who would pay for it, the crowd shouted in unison: “Mexico!” Trump added, “Not even a doubt.”

Really, not even a doubt? Why hasn’t President Obama been a “real man” and just carpet-bombed ISIS off the face of the earth? Answer: 1.) ISIS is embedded in urban areas, among Iraqi and Syrian civilians, so we can’t carpet-bomb the terrorists without killing all the civilians around them. 2.) If Obama sent the 82nd Airborne into Mosul and wiped out ISIS, after horrific door-to-door fighting, the morning after the battle we would own Mosul, because there is no agreement among Sunni tribes there, let alone the Kurds, Shiites and neighboring Turkey, over who should control Mosul post-ISIS.

In other words, we’d be stuck governing it. So Obama is trying to squeeze ISIS with one hand while trying to squeeze Iraqis to come together around a post-ISIS order with the other. It’s called being strategic and General Patton would be applauding from his grave.

On Mexico, please tell me why it would pay for a multibillion-dollar wall on our border and how we would compel our neighbor to do so and what impact that would have on U.S. companies? To act as if those are not even issues is fraud.

Trump’s tax plan? The nonpartisan Tax Policy Center estimates that it would decrease tax revenues over 10 years by $11.2 trillion, and since Trump has ruled out entitlement cuts, he would need to slash all discretionary federal spending by 80 percent — that’s where the defense, research and education budgets come from. This is not just magical thinking, it’s nonsense, and if Trump implemented half of it, your kids would pay dearly.

As for Sanders, he is promising to break up the big banks. Under what legal authority? What would be the economic fallout? And how would this raise stagnant incomes for middle-class Americans? Bernie mumbles on these questions.

The Tax Policy Center said in a study of Sanders’s full economic plan, including free health care, with no premiums or co-pays, and free college education, more generous Social Security benefits and 12 weeks of family leave, “Even though Sanders would raise taxes on nearly all households by a total of more than $15 trillion over the next decade, his plan still would add an additional $18 trillion (plus at least $3 trillion in interest) to the national debt over the period” and thereby “create an enormous fiscal challenge.” Even eliminating the defense budget wouldn’t come close to balancing his books.

If you’re a college student “feeling the Bern,” I hope you’re wearing sunscreen, because if Sanders wins, you and your kids will be paying for his cash burn for eternity.

All lying in politics is not created equal. I think the ideology Bernie is selling is fanciful, but underlying it is a moral critique of modern capitalism that has merit and deserves to be heard. But Bernie is not being truthful about the costs. What is grating about Hillary is that her prevarications seem so unnecessary and often insult our intelligence. But they are not about existential issues. As for Trump, his lies are industrial size and often contradict each other. But there is no theory behind his lies, except what will advance him, which is why Trump is only scary if he wins. Otherwise, his candidacy will leave no ideas behind. It will just be a reality TV show that got canceled.

This is serious. We’re about to elect all three branches of our government. I wish we had better choices, but given the options, I’d vote for the candidate who is most likely to be a practical unifier and get some things done — and who only tells whoppers about herself, not about my country’s future.