A Trade Deal with China will require a more comprehensive approach, based on a fundamental shift in mindset say, Andrew Sheng and Xiao


February 23, 2019

trump xi jinping

A Trade Deal with China will require a more comprehensive approach, based on a fundamental shift in mindset, say Andrew Sheng and Xiao

 

https://www.project-syndicate.org/commentary/trump-zero-sum-approach-china-trade-talks-by-andrew-sheng-and-xiao-geng-2019-02

In the ongoing US-China trade talks, considerable progress has been made on several key trade issues, such as intellectual-property rights protection. But to defuse tensions in any sustainable way will require a more comprehensive approach, based on a fundamental shift in mindset.

HONG KONG – Trade negotiations between the United States and China are closing in on the March 1 deadline, after which the bilateral tariff war will resume – beginning with an increase from 10% to 25% on $200 billion worth of Chinese products. While global financial markets are fluctuating wildly, investors seem to assume that too much is at stake for the US and China to fail to reach a deal. Their optimism could prove short-lived.

To be sure, there has been considerable progress on several key issues, such as technology transfer, protection of intellectual-property rights, non-tariff barriers, and implementation mechanisms. But to defuse tensions between the US and China in any sustainable way will require a more comprehensive approach, based on a fundamental shift in mindset.

Over the last 40 years, Sino-US engagement has been largely cooperative, reflecting a holistic approach that takes into account the interests of the entire global system. US President Donald Trump’s administration, however, does not seem to believe that engagement with China (or anyone else for that matter) can benefit both sides. As Trump’s “America First” agenda shows, the US is now playing a zero-sum game – and it is playing to win.

For example, the US has threatened to punish or desert its closest allies unless they increase their defense spending. Under pressure from the Trump administration, South Korea just agreed to increase its contributions to US forces in Korea by 8.2%, to $923 million, in 2019.

Similarly, Trump has repeatedly disparaged fellow NATO members for insufficient defense spending. Most recently, Trump has criticized Germany for spending only 1% of GDP for defense, compared to America’s 4.3%. German Chancellor Angela Merkel responded by condemning US isolationism at the Munich Security Conference, and calling for the revival of multilateral cooperation.

The Trump administration’s myopic approach is also apparent in its preoccupation with bilateral trade imbalances. Any US deficit with another economy is, from Trump’s perspective, a loss. Given this, if China agrees to cut its bilateral trade deficit with the US, other economies with bilateral surpluses vis-à-vis the US – including close allies, such as the European Union and Japan – may find themselves facing intensifying pressure to do the The weakening of trade that could result in this scenario would compound existing negative pressure on global growth, hurting everyone. A global economic downturn is the last thing the world needs at a time when it is already beset with risks, including a possible no-deal Brexit and populist gains in the European Parliament election in May.

Of course, while Trump does not spare his allies, his primary target remains China. After all, the competition between the US and China extends far beyond trade. Although the US maintains military, technological, financial, and soft-power superiority, China has been steadily catching up, leading to bipartisan support in the US for a more confrontational approach.

Last October, US Vice President Mike Pence bluntly accused China of technology theft, predatory economic expansion, and military aggression. Pence’s stance echoed the fears of the US national security community. As former US Defense Secretary Ashton Carter put it, “Because it is a Communist dictatorship, China is able to bring to bear on US companies and our trading partners a combination of political, military, and economic tools that a government such as ours cannot match. This puts us at an inherent disadvantage.”

And yet America’s tools are hardly useless. The US authorities have mobilized a broad range of domestic and international resources – from law and diplomacy to national security measures – to stop the overseas expansion of the Chinese telecommunications giant Huawei. If Western countries allow Huawei to build their 5G infrastructure, America’s hawks and their allies argue, they will be vulnerable to cyberattacks from China in some future war.

All of this has shaken business and market confidence to the core, wiping out trillions of dollars in market capitalization. And the Trump administration’s apparent insistence that countries choose sides in its dispute with China is further heightening fears. As the rest of the world’s trading countries understand, Trump’s approach will fragment business and reverse the globalization-enabled economies of scale that have fueled growth for decades.

“Ending the Sino-US trade war will require considerable statesmanship on the part of Trump and Chinese President Xi Jinping. But, beyond that, both sides need to recognize that supporting global peace and prosperity requires less ideology and more respect for diversity of political, social, and cultural systems. Failing that, the fault lines will continue to deepen – much as they did in the 1930s – potentially setting the stage for full-blown war”- .

More broadly, the Trump administration’s rejection of multilateralism undermines the global cooperation needed to confront a range of issues, including migration, poverty and inequality, climate change, and the challenges raised by new technologies. Trump’s focus on geopolitical rivalry – and the associated rise in security and defense spending – will dramatically reduce resources available for global public goods, such as infrastructure investment and poverty-reduction programs.

 

Trump’s Foreign Policy wreckage in Asia


February 20, 2019

Trump’s Foreign Policy wreckage in Asia

Author: by Editorial Board, ANU

http://www.eastasiaforum.org/2019/02/11/trumps-foreign-policy-wreckage-in-asia/

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Right now, he is the most dangerous man in the Free World

The real worry is that beyond Trump’s Presidency all the signs suggest that both the impulse of the United States to engage multilaterally will be very difficult to repair and that Mr Trump has fractured trust in multilateral endeavours around the world.–Editorial Board, ANU

When the Trump administration came to power two years ago, the response by policymakers with a huge stake in the relationship — from the leadership of China to that of rusted on allies like Japan or Australia — was that Trump’s team would settle back after the election and that business would resume with the new administration more or less as usual.

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Burney Sanders– Will he do the BURN in 2020?

The United States was the crux of the economic and political security system on which the world has relied for more than three-quarters of a century. The global economic architecture which the United States and its allies put in place after World War II is now absent US leadership and care. Mr Trump and his team have trashed it. Trump’s trade war with China and his trade actions against others, including US allies like Japan, Europe and Canada, show utter disrespect for its core rules. This system is the international system of rules, whatever its weaknesses, on which Asia’s political security also vitally depends.

The wreckage of Mr Trump’s approach to foreign policy continues to pile up across Asia and around the world.

Image result for Joe Biden

Joe Biden must make up his mind soon

The immediate outlook, over the next year or two, promises rising economic and political uncertainty. The real estate market bargaining style that Mr Trump has brought to dealing with these issues undervalues the complex interdependence between the economic and political security interests that are at stake. It undervalues the damaging multilateral consequences of bilateral dealing. That’s what is so risky about the bilateralisation of the US trade negotiations with China, which as the largest trading nation in the world is wisely bound into the multilateral global trading regime. Japan too is under pressure to do a bilateral trade deal with Mr Trump — a deal that goes beyond the multilateral commitments it has made to members of the so-called TPP-11. On the US trade conflict with China, there’s a deepening perception gap with Washington, and diplomatic realignment despite the deep security undertow in some countries.

Asian policy leaders are still coming to terms with the reality that Mr Trump is different and that the United States which delivered his electoral success is never likely to be quite the same. But there’s a growing understanding in Tokyo, Jakarta and even Canberra of what’s at stake in dealing with Mr Trump’s administration and the more proactive response that will be needed to defend core Asian economic and political interests that transcend the anxieties that exist between a rising China and the rest of Asia.

In this week’s lead essay Sheila Smith argues that based on the past performance of the Trump administration, US policy in Asia will ‘be erratic and self-serving’ in the coming year as the Trump administration continues ‘to work out its issues with countries in the region bilaterally and sporadically’. The ‘more openly pugilistic US relationship with China’, she says, ‘unsettles nerves’ across the region.

But the main problem for US foreign policy makers, Smith reckons, is not the behaviour of other global actors, including those in Asia or elsewhere. The main problem is the ‘crippling divisions within the Trump administration itself, and between the administration and the legislative and judicial branches of the US government, [that] could make any attempt to marshal US resources into foreign relations almost impossible’.

The coming year, as Smith says, will likely be a year of domestic political entanglement for the President and his administration. The effect of the political turbulence surrounding the White House and the extent to which it dominates US foreign policy is one dimension. But the lack of focus and consistency in the direction of foreign policy strategy is an altogether higher order concern. Diminished expertise and experience at all levels of the Trump administration undermine the trust that allies, partners and even adversaries can put in the reliability of US posturing.

In the short term, these worries are focused on Mr Trump and his administration. Some think that Trump will have more freedom to pursue his ambitions for ‘America First’ around the world. The immediate issue is how to respond to the ‘America First’ momentum in all its dimensions. But even if there are fewer experts in the government to challenge Mr Trump’s vision, implementation of his goals remains a challenge, especially against what now appears to be comprehensive pushback by the US security community in almost every theatre.

The turmoil at home, Smith warns, could produce more brittle and reactive decisions. This could bedevil meaningful dealings with others around the globe because of the instinct to seek settlement prematurely, in the trade war with China or denuclearisation in North Korea, for example, instead of pursuing stable, long-lasting agreements that serve the interests of the United States as well as its partners.

The crrizeises Mr Trump proudly proclaims that he alone could have dealt with are largely of his own making ( and for he arrogantly thinks he deserves the Nobel Peace Prize). It’s hardly surprising that Asian allies and partners alike should worry about how Mr Trump might deal with a real crisis when there’s a significant move within the US Congress to put limits on the President’s use of nuclear weapons.

The chances that the Trump administration, in this mode, will succeed in mitigating global-system destabilising trade and other tensions with China or, alone, secure an agreement on denuclearisation with North Korea appear remote.

Only multilateral engagement on both these and other issues such as climate change is likely to deliver stable, mutually advantageous outcomes to the United States and all its partners in any of these areas. That’s not on Mr Trump’s agenda.

The real worry is that beyond Trump’s presidency all the signs suggest that both the impulse of the United States to engage multilaterally will be very difficult to repair and that Mr Trump has fractured trust in multilateral endeavours around the world.

The EAF Editorial Board is located in the Crawford School of Public Policy, College of Asia and the Pacific, The Australian National University.

Cambodian Foreign Policy is headed in the right direction


February 20, 2019

Cambodian Foreign Policy is headed in the right direction

by  Taing Vida / Khmer Times

https://www.khmertimeskh.com/50579745/leng-thearith-says-foreign-policy-is-on-the-right-track/

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 A Cambodian scholar said that Cambodia’s foreign policy towards its neighbours and other countries in the world has been on the right track.

In a Cross Talk interview with Khmer Times on Monday, Leng Thearith, Director of Center for Strategic Studies, said the Kingdom’s foreign policy has improved after the country held its 1993 UN-brokered national election, and has been reformed over the past three years, especially in capacity building and strategic analysis.

Mr Thearith said the Kingdom has good relations with other countries thanks to the government’s efforts in integrating the country into the region as a member of the Asean and the World Trade Organisation.

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However, he said as a small state, Cambodia has limited strategic space to manoeuvre while its foreign policy dynamics face considerable challenges.

“It’s important for a small state like Cambodia to prevent itself from any attack that might be caused by powerful states,” he said. “We must oppose them in order to protect our sovereignty but at the same time, we must cooperate with those states to ensure good relations.”

Mr Thearith said that Cambodia is now seen as apologetically leaning towards China after the government received strong support from China through aid and loans without strings attached, noting that the country’s current approach toward the United States and the European Union will not be helpful in the long run.

“For now, I’m sure that the government is on the right track. Cambodia’s foreign policy’s behaviour changes from time to time,” he said. “Although Cambodia is now leaning towards China, I think the country will change and turn to other developed countries like Japan.”

Mr Thearith said that the government slammed the EU and the US because they meddled in Cambodia’s internal affairs, but later should mend ties for development benefits.

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“For now, the government can turn its back on the EU and the United States because they interfere in the country’s political issue and sovereignty,” he said. “However, in the upcoming years, the government should restore the relations and take advantage of them as development partners.”

The EU last week started the process of intense monitoring and engagement for six months that could lead to the temporary suspension of the EBA trade scheme over perceived human rights setbacks and the decline of democracy following the dissolution of the CNRP.

In response, the Cambodian government condemned the EU trade threat as an extreme injustice, accusing it of using double standards in its treatment of Cambodia.

Political analyst Lao Mong Hay said that the country’s current foreign policy is not on the right track as it is sucked in the Sino-American conflict.

“Now Cambodia is being sucked in the new Pacific war and specially the Sino-American conflict,” he said, noting that the foreign policy behaviour has led Cambodia back to the pre-1970 situation where it was gradually sucked in the then ongoing international conflicts.

FOREIGN POLICY: Cambodia needs to maintain good relations with the West


FOREIGN POLICY: Cambodia needs to maintain good relations with the West. Like it or not, the CPP still needs the West

There is an assumption by some commentators and analysts (myself included, on occasions) that just because China is now Cambodia’s closest political ally, the influence of Western nations has become negligible.

As early as 2015, Sebastian Strangio noted in his book Hun Sen’s Cambodia  that Western influence in Cambodia had “begun to wane.” Years on, this process was complete, according to many. In late 2017, Foreign Policy magazine reported on the “limits of US willingness or ability to influence Cambodia become clear when compared to China’s overwhelming influence there.” “Why the West was doomed to fail in Cambodia,” reads a headline from the Southeast Asia Globe last year. The exiled political analyst Kim Sok more recently asserted that Prime Minister Hun Sen “has no choice but to rely on the Chinese” as he increasingly pushes the West away.

China might be many things to Cambodia: the main provider of aid, investment and goods, a key geopolitical ally and something of a sagacious, avuncular mentor, an “ironclad friend” in Phnom Penh’s argot. But it isn’t, and most likely never will be, a major importer of Cambodia-produced goods. Instead, the major importers are the United States and the European Union. Together, they imported a little under two-thirds of all Cambodian exports in 2017. China, by contrast, imported just 6% of Cambodian total exports that year.

This matters greatly as both the US and EU now threaten to impose trade sanctions on Cambodia and re-introduce tariffs on its exports, a response to the Cambodian People’s Party (CPP)’s stage-management of last year’s general election, at which it won all the seats in the National Assembly, and its dissolution of the main opposition party, the Cambodian People’s Rescue Party (CNRP), the previous year. On 11 February, the EU formally started the 18-month process to remove Cambodia from its preferential Everything But Arms (EBA) scheme, a process that can be stopped if the EU thinks Phnom Penh is making sufficient progress in political and human rights reform.

Cambodia’s economy, despite years of high economic growth, remains highly dependent on exports. Products made in its garment and footwear sector—the largest employer, by sector, and largest contributor to GDP—almost exclusively are exported to Western nations. So should the EU withdraw Cambodia from its Everything But Arms (EBA) scheme, which grants Cambodian exporters duty and quote-free access to European markets, then the imposition of tariffs and quotas will certainly see exports to Europe plummet, causing a considerable slump in the Cambodian economy.

The government knows this. That’s why it planned for years to reduce the economy’s dependence on exports, chiefly low-cost manufactured goods. But progress has been slow, if not glacial. Granted, the tourism sector is booming thanks to increasing numbers of Chinese visitors. So too are the retail and property sectors. But exports are still prepotent. There is likely zero chance, despite the opinions of some analysts, that if Western democracies punish Phnom Penh by imposing higher tariffs on its exports or switching to suppliers in other nations, then China can simply jump in and bail out Cambodia. Quite obviously, China doesn’t need to import low-cost garments from Cambodia; it produces more than enough domestically. China’s main import to Cambodia, the raw materials stitched and sewed at Cambodia’s garment factories, would also be harmed if exports to Western nations slump. Chinese investors own many of the largest firms in Cambodia’s garment and footwear sector, so they will be among those who will lose out if exports dry up. Moreover, Beijing would have wasted millions, if not billions, of dollars on funding new roads, ports and special economic zones in Cambodia that were aimed at improving its export capabilities.

A more astonishing response from Beijing would be to simply hand Cambodia the cash to make up for any shortfall if exports to the West decline, a move some analysts think is possible. But it’s actually improbable. Would this come in the form of concessional loans or simply cash payments? The latter would be raise serious opposition in Beijing, where some policymakers and analysts are already becoming sceptical of the amount of money wasted through Xi Jinping’s signatory Belt and Road Initiative (BRI). At least for the BRI, however, Xi can point to the likelihood of future returns on investments. Few profits, though, would be reaped by simply bailing out Cambodia’s exporters.

The other option, bailouts in the form of loans, would be just as risky to the Cambodian government, which is struggling (though doesn’t admit it) with a growing public debt, especially to China. How would Phnom Penh square the circle of attaining more loans if exports, its chief means of acquiring foreign currency, dwindle? Moreover, say that new European tariffs on exports and reductions in trade see Cambodia’s exports figures slump just 10%, or roughly US$500 million a year. Would China be willing to provide this much annually for few returns? Also, what about the knock-on impact to other sectors in Cambodia if exports slump? It would certainly see investment and profits contract in the retail, construction, property and many other sectors, too. The real costs of even a minor slump in garment exports is likely to be felt throughout the economy, as well as by the millions of family members of workers who rely on remittances each month.

Whichever way one looks at it, Western nations still have considerable influence in Cambodia. They clearly know this and that’s why they are exerting pressure on Phnom Penh to make political reforms through threats to the country’s export-driven economy. The Cambodian government, for the most part, either says it isn’t concerned about threatened Western sanctions, claims that they are an assault on Cambodia’s sovereignty, or a move to punish only poor Cambodians. It hasn’t yet publicly admitted that its own actions may actually be the real cause.

But here’s the kicker: trade with the US and EU might be immensely import to Cambodia, but it’s only negligible to them. Indeed, the EU’s trade with Cambodia—which is overwhelmingly Europe importing Cambodian goods, not the other way around—is worth about a tenth of its trade with Vietnam, for example. So there wouldn’t be any mutual catastrophe if exports decline; it would simply be felt by one side. Just look at how the US is currently weathering new tariffs President Donald Trump imposed on Chinese imports, which could soon be raised even higher. Any loss in trade with Cambodia won’t even be felt as a tremor in America, though it would be an earthquake in Cambodia.

Remember, too, that it isn’t as though Cambodia is the world’s only producer of cheap clothes and shoes. Bangladesh is making them for much cheaper, as does Vietnam, whose ruling Communist Party is now backing down to American and European demands for some political and legal reforms in order to boost trade. Hanoi appears more than happy to negotiate, while Phnom Penh stuffs its ears. It would be so much easier from some European importers to simply say, enough of Cambodia, and move operations or find new supply chains in other countries.

Amid all of this, pay attention to the irony of the situation. The CPP government has largely been allowed to do what it wants politically for so many years because of the fat profits reaped from its export-driven economy. Years, if not decades, of enviable economic growth rates have provided the CPP government with its main source of legitimacy; the economy is growing, wages are raising, unemployment is low, and we’ve created a brighter future for Cambodia, the party constantly says. Much of the public who might be unhappy with political conditions temper their emotions with this acknowledgment.

But the CPP government today faces a novel problem. While it was a low-cost, export-driven economy that gave the party so much legitimacy, the same export-driven economy is now its Achilles heel. However much it wants to drag itself under the parasol of Chinese patronage, it remains exposed to the storms of Western trade.

 

 

 

 

Cancer -Like Anti-Semitism has spread throughout the Islamic World


February 17, 2019

Cancer -Like Anti-Semitism has spread throughout the Islamic World

by Dr. Fareed Zakaria

https://fareedzakaria.com/columns/2019/2/14/anti-semitism-has-spread-through-the-islamic-world-like-a-cancer

(c) 2019, Washington Post Writers Group

Ilhan Omar (Minn.) and Rashida Tlaib (Mich.)

In recent weeks, attention has focused on two freshman Democratic members of Congress, Ilhan Omar (Minn.) and Rashida Tlaib (Mich.), both of whom are Muslim and have made critical statements about Israel and its most ardent American supporters. Their tweets and comments have been portrayed by some as not simply criticisms of Israel but rather as evidence of a rising tide of anti-Semitism on the new left.

I don’t know what is in the hearts of the two representatives. But I believe that Muslims should be particularly thoughtful when speaking about these issues because anti-Semitism has spread through the Islamic world like a cancer. (Omar and Tlaib are not responsible for this in any way, of course, but they should be aware of this poisonous climate.) In 2014, the Anti-Defamation League did a survey in more than 100 countries of attitudes toward Jews and found that anti-Semitism was twice as common among Muslims than among Christians, and it’s far more prevalent in the Middle East than the Americas. It has sometimes tragically gone beyond feelings, morphing into terrorist attacks against Jews, even children, in countries such as France.

It might surprise people to know that it wasn’t always this way. In fact, through much of history, the Muslim Middle East was hospitable to Jews when Christian Europe was killing or expelling them. The great historian Bernard Lewis once said to me, “People often note that in the late 1940s and 1950s, hundreds of thousands of Jews fled Arab countries. They rarely ask why so many Jews were living in those lands in the first place.”

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Bernard Lewis and Henry Kissinger

In his seminal book, “The Jews of Islam,” Lewis points out that in the Middle Ages, when polemics against Jews were commonplace in the Christian world, they were rare in the Islamic world. In the early centuries of Islamic rule, he writes, there was “a kind of symbiosis between Jews and their neighbors that has no parallel in the Western world between the Hellenistic and modern ages. Jews and Muslims had extensive and intimate contacts that involved social as well as intellectual association — cooperation, commingling, even personal friendship.” One shouldn’t exaggerate the status of Jews back then — they were second-class citizens — but they were tolerated and encouraged to a far greater degree in Muslim societies than in Christian ones.

Things changed in the Muslim world only in the late 19th century, when, according to Lewis, “as a direct result of European influence, movements appear among Muslims of which for the first time one can legitimately use the term anti-Semitic.” Muslims worried that the British, who came to rule much of the Middle East, were favoring the small non-Muslim communities, especially Jews. Muslims began importing European anti-Semitic tropes such as the notion of blood libel, and noxious anti-Semitic works started to be translated into Arabic, including the notorious “Protocols of the Elders of Zion.”

What supercharged all these attitudes was the founding of Israel in 1948 and the determination of Arab leaders to defeat it. In their zeal to delegitimize the Jewish state, men such as Egyptian President Gamal Abdel Nasser promoted all kinds of anti-Semitic literature and rhetoric. Arab states became vast propaganda machines for anti-Semitism, brainwashing generations of their people with the most hateful ideas about Jews. Even the supposedly secular president of Syria, Bashar al-Assad, declared in 2001 that Israelis were “trying to kill all the values of the divine religions, with the same mentality that brought about the betrayal and torturing of Christ and in the same way that they tried to betray the Prophet Muhammad.” Religious states such as Saudi Arabia were just as bad, if not worse.

Decades of state-sponsored propaganda have had an effect. Anti-Semitism is now routine discourse in Muslim populations in the Middle East and also far beyond. While some Arab governments have stepped back from the active promotion of hate, the damage has been done.

It should be possible to criticize Israel. As Peter Beinart has written, “establishing two legal systems in the same territory — one for Jews and one for Palestinians, as Israel does in the West Bank — is bigotry. . . . And it has lasted for more than a half-century.” It should be possible to talk about the enormous political influence of the American Israel Public Affairs Committee, or AIPAC. I recall senators privately worrying that if they supported the Iran nuclear deal, AIPAC would target them. (Of course, this is true of other lobbies and is not the only reason senators voted against the deal.) These are legitimate issues to vigorously debate and discuss in the United States, just as in Israel.

Unfortunately, by phrasing the issue as the two new representatives sometimes have, they have squandered an opportunity to further that important debate.

 

The Mekong region is caught in a tug-of-war


February 14, 2019

The Mekong region is caught in a tug-of-war

by Nguyen Khac Giang, VEPR

http://www.eastasiaforum.org/2019/02/07/the-mekong-region-is-caught-in-a-tug-of-war/

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For the Mekong countries, including Thailand, Laos, Myanmar, Cambodia and Vietnam, 2018 was a big year both domestically and regionally. Key developments from last year will inevitably continue to shape the politics of the region in 2019. In terms of domestic affairs, the most worrying trend is the consolidation of autocratic power in almost all countries.

 

In Vietnam, the sudden death of president Tran Dai Quang in September 2018 created a huge power vacuum, which was filled by Vietnamese Communist Party chief Nguyen Phu Trong. By merging the two most powerful positions in Vietnamese politics, he has become the strongest Vietnamese leader since the death of Ho Chi Minh in 1969, edging the communist state towards the Chinese model of centralised rule.

Cambodia, in theory a multi-party democracy, has practically become a one-party regime after an election that saw Prime Minister Hun Sen’s Cambodian People’s Party win all parliamentary seats in July 2018. He is now one of the world’s longest-serving heads of government, having held the premiership for 33 years since 1985.

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Things are no better in Thailand. Four years after seizing power, the military junta has made — and broken — five promises to hold a general election to establish a civilian government. Even if the sixth promise is fulfilled in February 2019, it will be difficult to sen Myanmar, the intensifying Rohingya crisis has not only created Southeast Asia’s biggest humanitarian concern but also exposed the reluctance of Aung San Suu Kyi and her National League for Democracy to complete the democratic transition that started in 2011.e swift change, as the junta will exploit all means available to dominate the electoral process.

In Myanmar, the intensifying Rohingya crisis has not only created Southeast Asia’s biggest humanitarian concern but also exposed the reluctance of Aung San Suu Kyi and her National League for Democracy to complete the democratic transition that started in 2011.

 

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In Myanmar, the intensifying Rohingya crisis has not only created Southeast Asia’s biggest humanitarian concern but also exposed the reluctance of Aung San Suu Kyi and her National League for Democracy to complete the democratic transition that started in 2011.

The autocratisation of the Mekong region has significant implications at a time when its giant neighbour China continues a long march to the south. China has committed billions of US dollars in concessional loans and credit to Mekong countries via the Lancang-Mekong Cooperation (LMC), an ambitious initiative which was launched in 2016. But the LMC’s actual impact remains to be seen. While the LMC is ostensibly aimed at creating a ‘shared future of peace and prosperity’, China can use it as part of a carrot and stick strategy due to its largely opaque and non-binding frameworks.

It should be noted that Beijing has a record of working closely with autocracies. Beijing has helped leaders in Central Asia guard against ‘colour revolution’, provided African autocrats with an alternative model of development and has aided socialist Venezuela in crisis. A less democratic Mekong region will be more exposed to China’s strategy of buying influence, which often involves closed-door negotiations and dealings.

Image result for the Xe-Pian Xe-Namnoy hydropower dam in southern Laos collapsed,

The LMC, as well as other established regional mechanisms such as the Mekong River Commission and Lower Mekong Initiative, have also failed to address the core issue which theoretically binds Mekong countries together: transnational water management. In July 2018, a section of the Xe-Pian Xe-Namnoy hydropower dam in southern Laos collapsed, reportedly killing 34 people, leaving 97 missing and displacing 6000 others. The collapsed part of the dam was only an auxiliary section and the whole project is built in one of the Mekong’s tributaries instead of the main stream. Needless to say, it could have been an even greater catastrophe.

Image result for the Xe-Pian Xe-Namnoy hydropower dam in southern Laos collapsed,

In Vietnam, for example, hydro dams are considered to be time bombs ticking over the head of the Mekong Delta on which 90 per cent of Vietnam’s rice exports depend. Despite the incident, the Laos government resumed its dream of becoming ‘a battery for Asia’ by permitting work to continue on several hydro projects. Beneficiary countries of the hydropower boom such as Thailand and China gave condolences and support to Laos but continued building their own dams. China, for instance, has built 7 and has plans for a further 21 dams on the Mekong — plans formulated without consultation with lower-Mekong countries.

The ongoing trade war between China and the United States also has the potential to impact the Mekong region both economically and politically. If the trade war accelerates, investors will consider countries like Vietnam and Thailand, and to a lesser extent Cambodia, as shelters to circumvent higher tariffs and other technical barriers. Exports from the Mekong region to the United States, many of which are substitutes for Chinese goods, will also benefit from the trade dispute. On the other hand, the region also bears the risk of a flood of Chinese goods into domestic markets, which is already a big issue.

More broadly, the Mekong region will continue to be a battlefield for influence between the two global superpowers. The rumour that China seeks to build a military base in Cambodia, although dismissed by Hun Sen, should be a serious warning for Washington. Of the five Mekong countries, only Vietnam is wary of China’s charm offensive due to a lingering sovereignty dispute in the South China Sea. The superpowers’ tug-of-war will perhaps come to play a key role in shaping the region’s development trajectory.

Nguyen Khac Giang is the lead political researcher at the Vietnam Institute for Economic and Policy Research (VEPR) at the Vietnam National University in Hanoi.

This article is part of an EAF special feature series on 2018 in review and the year ahead.