Psychology matters a great deal


May 1, 2016

Psychology matters a great deal in determining shifts in the economy.

by Robert J. Shiller
“We don’t know whether any specific event — say, an unexpected spike in oil prices or a decline in the stock market — will help transform any of the current social stories into a truly virulent economic disruption. We don’t know what is coming or when. But history does tell us that human imagination can spontaneously transform discrete events into world-shaking narratives of unexpected colour and force.”– Robert Shiller –Nobel Prize Laureate in Economics 2013

Economists are good at measuring the past but inconsistent at forecasting future events, particularly recessions. That’s because recessions aren’t caused merely by concrete changes in the markets. Beliefs and stories passed on by thousands of individuals are important factors, maybe even the main ones, in determining big shifts in the economy.

That is likely to be the case again, whenever we next endure a global recession. Worries that a big downturn might be imminent seem to have abated, but they still abound. In April, for example, the International Monetary Fund reported in its World Economic Outlook that while very modest growth is likely this year, the world economy was in a “fragile conjuncture.”

It is therefore worth asking what actually sets off a real global recession. Most discussions focus on leading indicators — statistics about economic variables that have preceded recessions. While these kinds of correlations can sometimes be useful in forecasting, they provide little understanding of why major changes are taking place. Leading indicators don’t usually address ultimate causes, nor do econometric models that try to predict events.

In fact, it’s instructive to remember that global recessions have usually begun suddenly and been a real surprise to most people. As I have argued in this column and with George A. Akerlof in Animal Spirits (Princeton 2009), such events can largely be ascribed ultimately to contagious stories of wide significance. Basically, global recessions tend to begin when newly popular narratives reduce individuals’ motivation to spend money. Psychology matters a great deal.

The biggest recession of all, the Great Depression, began suddenly with the stock market crash of October 1929, as Christina Romer, former chairwoman of President Barack Obama’s Council of Economic Advisers, pointed out in a famous paper. Even before 1929 was over, she found, department store sales and automobile registrations had declined, indicating that consumer spending had already dropped sharply. But why?

Economists were alarmed by the crash, she found, and their warnings helped make consumers wary. But let’s not overestimate the importance of these economic forecasts: Most people never actually read them. They received their information from other channels.

Back then, immediately after the market crash, church sermons were a powerful influence. Congregations were told that many business people had behaved like gamblers and hucksters. Through these sermons and other word-of-mouth sources, moralising about the stock market crash spread, affecting mass psychology. Frederick Lewis Allen, in the epilogue to his 1931 best-seller Only Yesterday: An Informal History of the 1920s, wrote that cultural values changed after the crash: People began to dress more modestly, adopting a new formality and religiosity, reviving Victorian sexual taboos. It is reasonable to assume that many of these changes had an economic impact, mainly by discouraging spending.

Similarly in more recent downturns, broad cultural and social changes had big effects, too. Since World War II, there have been four global recessions, according to the International Monetary Fund, which defines such an event very specifically as negative global per capita economic growth over at least one year. In each case, these recessions lasted only one year, although relatively slow economic growth rates were also an issue in periods surrounding them. The recessions ended in 1975, 1982, 1991 and 2009.

As they had with the Great Depression, economists have cited concrete causes for these events. Oil has been named as a fundamental factor in each case, with price spikes blamed on the Yom Kippur war of 1973, the Iran-Iraq War beginning in 1980, the 1990-91 Persian Gulf war and rising energy demand in China and other emerging countries in 2008.

Broader social narratives are sometimes ignored, but they matter, too. Consider the recession of 1975. Along with oil prices, common ways of understanding and describing daily life also changed. The oil crisis was widely said to signal the end of an era of abundance. Lower highway speed limits were imposed to conserve fuel, and cars grew smaller. Americans were told to lower their home thermostats to 68 degrees. In large numbers, people began wearing sweatsuits, flannel leg warmers, thermal underwear and long johns. Among all this austerity, economist E.F. Schumacher’s 1973 best-seller Small Is Beautiful became a global morality lesson.

Let’s jump to the most recent global recession, the one of 2009. Oil prices, subprime mortgages and the freezing up of the financial system after the collapse of Lehman Brothers were all important factors. But why did we have a global recession? The transformation of distinct events into a broad global slowdown occurred through a variety of mechanisms. Reports about financial misdoings, the possible collapse of venerable institutions, rising unemployment caused by advanced technology — all of these affected the psychology of spending.

Where does this leave us now? No single narrative seems to have enough compelling force at the moment to engender a downturn as big as the last one. Many people have been borrowing from older narratives of risk and vulnerability while trying to understand the current economy. Oil prices have been slumping, not soaring, but there are significant worries about outsourcing, downsizing and globalisation, along with deep concerns about rising inequality, refugee and immigrant flows, and what has been called secular stagnation of the economy. Political candidates on both the left and the right have been spinning charged and sometimes disruptive narratives about these issues.

We don’t know whether any specific event — say, an unexpected spike in oil prices or a decline in the stock market — will help transform any of the current social stories into a truly virulent economic disruption. We don’t know what is coming or when. But history does tell us that human imagination can spontaneously transform discrete events into world-shaking narratives of unexpected colour and force.

 

Let institutions educate, but don’t suffocate them


April 29, 2016

Let institutions educate, but don’t suffocate them

by Tunku ‘Abidin Muhriz

“Real education enhances the dignity of a human being and increases his or her self-respect. If only the real sense of education could be realized by each individual and carried forward in every field of human activity, the world will be so much a better place to live in.”– A. P. J. Abdul Kalam

A recurring theme in this column is the importance of institutions in building the nation: in particular those preserved and established by the Federal Constitution and other laws.

Tunku Abidin Muhriz and Associates

But nation-building can also rest in institutions that are not established by statesmen, constitutionalists or hacks seeking a narrow political objective: in particular, those created by educators.

Over the past week, I have been reminded of this in powerful terms visiting schools and universities in the United Kingdom that — despite their academic accolades, graduate employment statistics or state-of-the-art facilities — still speak proudly and passionately about their histories and traditions. On their students they impart not only knowledge, but an institutional heritage too.

At the Royal College of Surgeons of Edinburgh, where my father was last week conferred an Honorary Fellowship, it was clear how proud they are of their founding in 1505, and their central role in the development on the profession itself. A story to which they have devoted a large (and sometimes macabre) museum.

At Aberystwyth University, where my father was an undergraduate and was made an Honorary Fellow in 2014, they spoke beamingly of how the university pioneered certain disciplines and enthusiastically shared their plans to renovate their Old College building.

At the University of South Wales, where my father received an Honorary Doctorate in Law in 2013, a connection was made between the latest facilities in the aerospace engineering faculty and the origins of the two establishments that merged to form the current university — a mechanics institute founded in 1841, and a school serving the coal mining industry founded in 1913.

These visits were short, but still their peculiarities shone through. When talking to Malaysian students at the three universities, their focus was no doubt on how the knowledge and skills acquired will contribute to their goals in support of their families, employers or country (there were many government scholars), but still they were aware that they have become ambassadors for their universities and not just ambassadors for Malaysia while there.

More so than universities, in terms of instilling a unique identity and character building, are secondary schools, especially boarding schools. At my old school, Marlborough College, on the way back to London, a brief walk around campus reminded me of the hours I spent reading history books, imagining glacial formation, getting my head round quadratic equations and practising Chopin’s Fantaisie-Impromptu, and also an entire vocabulary of school-specific terms that I haven’t had to use since 2000.

St John’s Institution is once again known by its old name. — Picture by  Malay Mail

St John’s Institution is once again known by its old name.

The Penang Free School (Founded in 1816) will celebrate its 200th Anniversary on October 21, 2016–Fortis Atque Fidelis. The name is back too. UMNO Politicians, known to mess everything up, tried to call it Sekolah Menengah Penang Free.

I realise now how crucial this was in fostering a deep camaraderie. Some critics condemn such institutions as elitist and exclusionary, and their reaction is to favour uniformity: to remove the things that make specific establishments unique: to make most people get the “same” treatment.

This ultimately results in a centralising tendency in which bureaucrats, rather than principals and teachers, make many of the decisions that directly impact on the student experience. Thus, instead of having educational institutions that are inspired by their own ethos and history, we have schools and universities that have to operate within over-prescribed limits.

We have already seen the effects of this, from the reduction in diversity between schools and the reduction of diversity within them. That is why so many who were educated at English national-type schools want them to return, because they attracted Malaysians of all races.

Most tragic is the loss of institutional memory in our historic schools, where simply the passage of time, the relocation of campuses or name changes have been used to erase aspects now deemed undesirable.

There does seem to be some resistance:  St John’s Institution just won the right to revert to its original name after a campaign from its alumni. Even this needed to be cleared by the ministry, though.

Earlier this month, I was at Tuanku Muhammad School in Kuala Pilah (which my father attended in the 1950s) to witness the unveiling of its centenary landmark, and there too I saw different generations reminisce about the classrooms they were taught in, the food they ate, the corridors they walked.

But recently, in much newer schools too I have seen how innovative principals have used what they can to endow some unique characteristics for their pupils, from the names of their houses, or even the murals on the walls. I hope that such phenomena will be seen as beneficial by our politicians and bureaucrats.

Great educational institutions may have their idiosyncrasies. And in being so, they prepare young people for real life: to endow the idea that as workers and citizens, it’s the shared experiences that create unspoken bonds, that everyone is bound by the rules, and that traditions matter.

* Tunku ‘Abidin Muhriz is Founding President of IDEAS.

* This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail Online.

http://www.themalaymailonline.com/what-you-think/article/let-institutions-educate-tunku-abidin-muhriz#sthash.ODU4PO1i.dpuf

 

Self-Affirmation and Stereotype Threat


April 25, 2016

Self-Affirmation and Stereotype Threat

by Dr. M. Bakri Musa, Morgan-Hill, California
http://www.bakrimusa.com

Dr. M. Bakri Musa

Our mind’s narrative of the world includes the perception we have of ourselves, and what we believe others have of us. The first is self-affirmation; the second, stereotype. Each of us is a member of some groups or other (race, profession, culture); thus we cannot escape from being stereotyped.

As for self-perception, like all other of our mental patterns this one too grew out of our experiences. Should we encounter something that does not conform to that mental picture we have of ourselves, we react like the patient with Cabgras delusion; we alter or ‘edit’ that information to make it conform to our pre-set pattern.

Our “self” narrative includes the stereotype others have of us, as with the colonialists’ “lazy native.” Not surprisingly, we often perform to those expectations, further reinforcing the stereotype. This vicious cycle continues, each cycle reinforcing earlier ones.

You have to work doubly hard and perform beyond well just to dispel the stereotype. Then even if you do succeed, there is no guarantee of escaping the stereotyping. It is a heavy burden to bear.

Consider girls and mathematics; there are many associated negative stereotypes. Should a girl were to stumble at her first test in college, not an uncommon experience especially at an elite college where all your classmates are top students while in high school, she would risk being a victim of negative stereotype when there could be other and more valid reasons, as with poor study habits or wrong choice of course. This stereotype burden would be worse if she were also to be a member of a visible disadvantaged minority.

Something similar happened to my daughter. She excelled in mathematics in school but she aspired to be a lawyer. Her undergraduate college required all students to take a math (as well as a science) course, the choice of which to be based upon the college’s own placement test. She was assigned one and found the going rough. She had to devote more than her usual effort just to stay abreast. She confided to us her problem, and as concerned parents we suggested that she met with her counselor.

To the horror of her counselor, my daughter was assigned to a class for honors mathematics and engineering majors! Presumably she aced her placement test and was thus assigned the “appropriate” course. It may be appropriate based on her test scores but not for her career aspirations. Fortunately it was early in the academic year for her to switch course. Also luckily for her she had sufficient self-confidence and was not burdened by any possible negative stereotype. Imagine a Malay girl having a similar problem at the University of Singapore or even the University of Malaya.

This stereotype threat is the rationale for having single-sex schools and colleges. This phenomenon is also seen in non-academic settings like sports, as with, “White men can’t jump!”

Stanford’s Claude Steele

Claude Steele, the Stanford psychologist (above) who had studied stereotypes and self-affirmation threats extensively, shared his insights in his book, Whistling Vivaldi. And Other Clues on How Stereotypes Affect Us.

The title itself is intriguing; he had the idea from his fellow African-American student at the University of Chicago. Like at other elite campuses, African-Americans were noticeable for their rarity at such places, then and now. This friend sensed that his fellow students felt uncomfortable by his presence and would purposely avoid him. He overcame this prejudice by whistling Vivaldi (a classical composer, thus indicating a “high brow” taste in the finer things of life) to smooth the way. I can just imagine the horror on the staid white campus had he tried rap music!

There are many negative stereotypes burdening Malays, like our supposed lack of aptitude for mathematics specifically and academics generally. Unfortunately the statistics reinforce this. Consider that when the results of the SPM and other public examinations are announced, the consistent feature would be Malay under-representation among the top scorers.

The tempting conclusion, and not just by non-Malays, would be to believe these ugly stereotypes about Malays. However, consider this. The Sixth Form science class at Malay College I joined in 1961 had been threatened with closure because there were too few students from the college who had passed the entrance examination. And the college supposedly took in only the brightest Malays! That only fed the prevailing ugly stereotype.

It took the initiative of its chemistry teacher, Mr. Peter Norton, a non-Malaysian, to identify the problem and then push to solve it. Malay College boys did poorly in science not because they were Malays rather they were insufficiently prepared. So in 1961 the college vastly expanded it science laboratories and instituted for the first time a pure science stream at the fourth form. For perspective, my old school in Kuala Pilah had been doing this for years. No surprise then that my old school outperformed Malay College in science.

That first batch of “pure science” students at Malay College excelled, as did others following. They are now among the nation’s eminent doctors, scientists and professors, as represented by Ariffin Aton, a University of Leeds PhD in Chemical Engineering, now head of MyIPO, the body concerned with intellectual properties.

Then there was my calculus class experience at Malay College. At Lower Six we had a Canadian “Peace Corp” volunteer as our teacher. Being new to the country he did not harbor any negative stereotypes of or preconceived ideas on Malays, except perhaps that we lived in trees. On finding out that we did not, he proceeded to treat us like his Canadian students.

Mr. Allen Brown began his class with us without any fuss; no dire preamble about how “tough” calculus would be and that we had to “buckle up.” He treated it like any other subject; he assumed we could handle it.

I remember well his first day in class. He began by drawing a series of arcs of from the same center point, each with a longer radius. Then he asked us to comment on the shape. It was obvious; as the radius got longer, the curve became flatter. No mystery there. Then he asked us to imagine an arc with a radius of infinity. That would be very flat, we responded. Then he beamed and exclaimed, “Yes! A straight line is nothing but a curve with a radius of infinity!”

“Now imagine the opposite,” he continued. “Consider two points on a curve that are infinitely close to each other.” Then he began taking a small arc and magnified it serially, and with each magnification the curve became flatter. “As you can see, if I were to magnify a wee tiny part of this curve a zillion times,” as he pretended doing it on the board, “the two points on it would essentially be on a straight line.”

Then he swung around and exclaimed, “There you have it! A curve is nothing but a series of infinitely short straight lines with variable slopes!” He went on to explain that what we had learned about the properties of a straight line would be equally applicable to a curve, or at least an infinitely small part of it.

Thus was the mystery of variable change and calculus revealed, at least to me. I had taken calculus the year before in fifth form and had aced it. Yet I did not fully grasp its concepts. All I did was memorize the formula and then plug in the numbers. The surprise was that I did well just with that.

We had an even greater surprise the following February when the national examination results were announced. The entire class but two had aced it. The two who did not nonetheless scored high “credit” (B plus). It was a record not just for the school but also the country. As we were whooping it up back at the dorm, Mr. Brown came upon us and wondered what it was we were celebrating. To him, it was not a surprise at all; after all he had seen our performances on the many regular tests he had given us during the year. The surprise for him was that we were surprised.

Decades later, I saw the movie “Stand and Deliver” about a teacher, Jamie Escalante, in a predominantly Hispanic Los Angeles inner-city school. He did such an incredible job with his AP (Advanced Placement, college-level) class that the College Board (the examining body) thought his students were cheating and forced them to re-sit the test! They still aced it!

Escalante quickly became a celebrity. Not revealed in that movie were the many monumental as well as petty obstacles placed in Escalante’s path by his principal and others. For example, his principal was against Escalante using the gym to accommodate the large size of his class, and the teachers’ union was against his exceeding the class-size limit. Tellingly, the program collapsed when Escalante left in frustration.

Talk to any dedicated teacher in Malaysia and she would readily identify with Escalante.I too can testify to that culture. Many years ago I visited an elite residential school in Malaysia. I wanted to donate a video microscope for its biology lab. As I also wanted to know of its other needs, I made an appointment to see the headmaster. On three occasions he canceled our meeting at the last-minute as he had “other commitments.” Needless to say, that video microscope was my only gift to that school.

As for the headmaster’s “other commitments,” one was the meeting of the local Koran reading contest committee, the other, planning the reception for a ministerial visit.

Judging from the many social media postings by parents today, things have only gotten worse in our national schools, further reinforcing the burden of self-affirmation and stereotype threats among their students who today happened to be mostly if not exclusively Malays.

Excerpted from the author’s book, Liberating The Malay Mind, published by ZI Publications, Petaling Jaya, 2013. The second edition was released recently in January 2016.

South China Sea Tensions Likely to Get Worse Before They Get Better


March 25, 2016

South China Sea Tensions Likely to Get Worse Before They Get Better

A Tribute to John Legge


March 2, 2016

A Tribute to John Legge:Pioneer who taught Australia about Asia (1921-2016)

by Anthony Milner

http://www.smh.com.au/comment/obituaries/john-legge-obituary-pioneer-who-taught-australia-about-asia-20160211-gmrfs7.html

In the words of a former President of the Asian Studies Association of Australia, Elaine McKay, John Legge more than any other was the founder of modern Asian studies in Australia. In the great expansionist period of the Australian university system he was (as Professor of history, and then dean of arts) a leader in the building of Monash University – and also in the vital interaction between academic analysts and government policymakers.

Through his international and Australian networks, and growing numbers of students, he influenced Australia’s engagement with Asia. Internationally, Legge was especially recognised for his writing on Indonesia – and also as a theoretician in the discipline of history.

Legge was a graduate of Melbourne University and Oxford, and his early writing was on colonial government, with major books on Papua and British Fiji. The Papua project on Australia’s administration of the territory arose from Legge’s wartime work in the government’s Directorate of Research and Civil Affairs, which recruited also the poet James McAuley and future governor-general John Kerr. At the University of Western Australia in the immediate post-War period (1946-1960), Legge was also a pioneer in the teaching of Asian history – Fred Chaney, Sir Neil Currie and others spoke later of how his survey course changed their lives.
Professor John Legge as a young man.

These years in Western Australia, working in the department of history founded by Fred Alexander and living in St Georges College under the wardenship of the respected and eccentric “Josh” Reynolds, were particularly happy ones for Legge. It was here that he met and married, in 1952, Alison Hale, a fellow Oxford graduate and the star of a local production of Shaw’s St Joan. They had three children, David, Catherine and Colin.

In 1956, John and Alison took sabbatical leave at Cornell University, the pre-eminent centre of south-east Asian studies in the United States. Here Legge was impressed by the academic leadership of George Kahin, with his focus on modern Asia not Orientalism, his (often critical) engagement with Washington and his network of relations with the rising new elites of post-colonial south-east Asia. The great Indonesianist, Herb Feith, who knew both men well, once reflected that despite their many common perspectives, Legge’s “emancipatory liberalism” was “more playful and sceptical”.

John David Legge was born in Murchison, WA, on May 24, 1921. He had a particularly Australian style, shaped in part in Western Victoria (at Warrnambool High School and Geelong College). His father was a Presbyterian clergyman and his great-grand-uncle was the missionary James Legge, the translator of Confucius and first professor of Chinese at Oxford. In the midst of academic debate, John Legge’s face – like that of his ancestor – could assume an expression of Protestant tenacity.

At Melbourne University Legge studied in the Department of History – where the influential professor, R.M. (Max) Crawford, was questioning the nature of history as a process of inquiry, and also warning Australians that the age of European empires had ended, and that they must now come to terms with the societies of the new Asia Pacific. In future years Legge addressed these two themes himself as an academic leader, especially when he moved to the new Monash University as foundation professor of history in 1960.

At Monash, Legge created a department of history which was soon regarded as one of the finest in the country. It was distinguished by a fresh approach to the study of theoretical issues, an extraordinary range of expertise – including some of Australia’s most prominent specialists in Australian and European history – and a collegiality which is today still a hallmark.

He was also central in developing the Monash Centre of Southeast Asian Studies – modelling it in some ways on the Cornell Centre, and achieving a wide international reputation for Australia as well as Monash with amazing rapidity. The first south-east Asia specialists who came to Monash – including Feith, Cyril Skinner, Ian Mabbett, Michael Swift, Jamie Mackie and Milton Osborne – were renowned in their various fields. Monash was also now equipped to contribute to the development of south-east Asian studies in the region itself – Legge, for instance, spent 1969-1970 as director of Singapore’s today-famous Institute of Southeast Asian Studies. One of his initiatives there was to institute weekend seminars where public servants, business people and journalists could interact with academics. As always, he believed an academic institution “should not be an ivory tower”.

In his own academic writing following the Cornell sabbatical, Legge’s principal focus was Indonesia – which he recognised as a country of the highest possible importance for Australians to understand. He was the first Australian historian to devote himself primarily to the study of Indonesia, and his best known works are a beautifully crafted biography of Indonesia’s founding statesman Sukarno (first published in 1972) and a general history, Indonesia (first published in 1964). This second work is remarkable in combining Legge’s desire to understand the historical processes which have shaped Indonesia with his commitment to advancing the discipline of history.

It is an achievement in inter-disciplinary collaboration, with the historian Legge reaching out to a range of social science writing. America’s leading anthropologist, Clifford Geertz, acknowledged that it was Legge more than any other scholar who had brought the disciplines together in Indonesian studies.

Alison’s illness in the late 1970s was a blow which the couple met with dignity and fortitude. John faced the untimely death of his 52-year-old life partner with a strength which may have drawn on his childhood in the manse and the early death of his own mother. A second, 16-year marriage to Jane, a fellow Indonesianist, brought new happiness.

It was from his strong academic foundation in history and South-East Asian studies that John Legge played a broader role in Australian public life. Many of his students went to key academic posts around the country, and also to influential positions in government departments. He supported research and educational projects which he believed would help the nation and he accepted high office in a range of public institutions.

Legge was a guiding influence in the Australian Institute of International Affairs (writing its history in 1999) and the Asian Studies Association of Australia – and played a large part in many major forums and “teach-ins”. He was prominent in the contest over Vietnam, debating against supporters of the American-led campaign. From 1987-1993 he was an executive member on the Victorian Curriculum and Assessment Board and for many years he chaired the Department of Foreign Affairs Editorial Advisory Board for the series Documents on Australian Foreign Policy.

Legge’s students and colleagues will best remember his delight in debate, fundamental fairness and personal warmth. He was determined that Australia should be in the vanguard of international historical research.

 

ASEAN: Security Concerns in the wake of rising US-China tensions


ASEAN: Security Concerns  in the wake of rising US-China tensions

by Patrick Sagaram

http://asiapacific.anu.edu.au/newmandala/2016/01/12/spy-planes-and-singapore/

 

.The US Poseidon spy plane.

The US Poseidon spy plane

Sino-US tensions increase amid Poseidon spy plane deployment to Singapore.

On 7 December 2015, the US and Singapore signed the enhanced defense cooperation agreement.

Under it, both countries pledged to work together on five key areas: military, strategic, policy, technology and non-traditional security challenges such as cyber-security to counter-terrorism. Of significance is the announcement that Singapore has allowed the US to operate a fleet of Poseidon spy planes from its bases.

This move comes at a time of heightened tensions in the South China Sea. For months now, the US has criticised China’s building of artificial islands, calling it ‘out of step with international rules’ — especially when it came to light that it has been steadily deploying defensive structures, air defense systems and paving airstrips in the islands.

Despite Beijing’s contention that the islands are for civilian purposes, the US views this build-up as China’s attempt at strengthening existing power projection capabilities.

In recent years, the Obama Administration has stepped up the US’ security presence in Singapore, deploying two littoral combat ships to the city-state. Clearly, the Poseidon deployment is part of a bigger strategy by the US to contain China by not allowing it to fundamentally shift the balance of power in the Asia-Pacific region.

China expressed discontent with the deployment, calling it an act of ‘militarisation’ by the US and maintained that the situation in the South China Sea is peaceful and stable. China also argued that the deployment ‘goes against the common and long-term interests of countries in the region.’

This is ironic since countries in the region – namely Japan and Southeast Asia nations – have grown increasingly nervous about China’s unilateral posturing and disregard for international law in making its maritime claims.

For its part, Singapore faces a tricky situation of appeasing both the US and China.

China is Singapore’s largest trading partner and Singapore has been a significant investor in China for many years. While China has not placed any blame on Singapore for the deployment, the city-state was equally careful to position the agreement with the US under the ambit of ‘relationship building’ and ‘humanitarian and disaster relief’.

Singapore relies on the US for the sale of arms, and access to its bases for the conduct of training and joint-exercise operations for its servicemen. The Poseidon deployment also assuages Singapore’s concerns over the unfolding situation in the South China Sea.

The disquieting fact is that the disputed waters in the South China Sea are a flashpoint for an all out war between the US and China. Although there have not been any skirmishes, both sides have resorted to employing maneuvers to see which side blinks first.

In May last year, a P8 Poseidon flew over the contested waters in the South China Sea only to have the Chinese Navy issue numerous warnings for the American aircraft to leave the area.

In October, the USS Lassen, a destroyer sailed within 12 nautical miles of one of the islands claimed by China in the Spratly Islands. The Chinese promptly issued a warning to the Americans, stating that a minor incident could escalate into full-scale conflict.

It would serve us well to be reminded that in 2001, a EP-3 Aries spy plane collided with a Chinese fighter jet, 50 miles southeast of China’s Hainan Island causing a international dispute between the two countries. The Chinese fighter crashed into the sea, killing the pilot, while the American plane was forced to land in Hainan where 24 of its crew were detained and interrogated before being released. (For more on this see the CRS report to Congress.)

Now as Washington strengthens its resolve and Beijing refuses to back down, the real question is how far either side is going to go before things really get out of hand.

Patrick Sagaram lives in Singapore and works as a teacher.