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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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.

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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.

Thailand’s misstep on the way back towards democracy


February 18, 2019

Thailand’s misstep on the way back towards democracy

By Editorial Board, ANU

http://www.eastasiaforum.org/2019/02/18/thailands-misstep-on-the-way-back-towards-democracy/

Princess Ubolratana Rajakanya Sirivadhana Barnavadi, the elder sister of Thailand King Maha Vajiralongkorn. Picture: AFP

Last week, Thailand’s upcoming elections took a bizarre turn when Princess Ubolratana Rajakanya (pic above), Thai King Maha Vajiralongkorn’s elder sister, was registered as a prime ministerial candidate by Thai Raksa Chart, a Thai political party affiliated with the exiled billionaire and former prime minister Thaksin Shinawatra. The King swiftly condemned the move as unconstitutional and an inappropriate interference of the monarchy in Thai political affairs. But both interventions on the way to the 24 March elections leave many questions about the country’s transition from military rule along the road back towards democracy.

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By most reckoning, Thailand is the second most important member of ASEAN. Thailand is Southeast Asia’s second largest economy although its growth rate, which had been running at 6.5 per cent before martial law was imposed, is now languishing at under 1 per cent. Its people are more prosperous than the population-large Indonesia and, although stalled in the middle income trap, its economy includes the most advanced industrial production networks in Southeast Asia and is highly integrated into the East Asian economy.

Thailand’s economy is flexible and globally connected. Its production networks enhance regional productivity and efficiency. ASEAN efforts at regionalising its market and production depend on re-igniting Thailand’s success — positioned as it was at the leading edge of Southeast Asian modern industrial development. Its political troubles of the past half-decade have posed the usual issues for international investor confidence for Thailand itself, but they’ve also raised serious issues about its ability and commitment to deal with ASEAN’s challenges in an uncertain world economy and the new shape of geopolitics in the region.

This year, Thailand chairs the ASEAN group and in that position it will play a crucial role in trying to frame the region’s response to perhaps the most testing international and economic environment that the regional organisation has confronted in the more than 50 years since it was founded. Thailand’s return to democracy after the coup five years ago is in part preparation for the leadership role for which it now has responsibility.

At its roots, the fracture of Thai political stability five years ago was a consequence of the nation’s failure to build a stable consensus about how to distribute political and economic power across society, ordered around the monarchy, the military and bureaucratic elite, and the people, gradually enfranchised through elections after the student uprisings in 1973. The restoration of a measure of democracy this time round depends on the commitment of the most powerful interests in the nation, including the palace and the army, to respect electoral mandates. If things go badly wrong again, Thailand — one of the most successful societies in Asia and a society that is comfortable with its positive international and regional standing — will not only find it more difficult to re-establish its place back on the perch, it will weaken ASEAN’s new determination to assert its centrality in regional affairs.

One view is that Thailand can manage its regional responsibilities, as chair of ASEAN, and continuing political turmoil at the same time. There will be no repeat of the 2009 episode when protesters forced the cancellation of that year’s ASEAN Summit and badly dented ASEAN’s international standing. That’s probably a sanguine view of Thailand and ASEAN’s situation today. The region and the organisation are under intense pressure and searing critical examination. If Thailand’s missteps along the road towards democracy spill over into uncertainties about the process of setting a new strategic direction for ASEAN, the costs will be non-trivial.

The monarchy appears to have shown decisiveness and appealed to worthy principle in dealing with the fiasco created by Princess Ubolratana’s unusual entry into Thai politics via Thaksin’s clumsy tactic. Yet our first lead piece this week by Patrick Jory speculates that the King may have had knowledge of his sister’s and Thaksin’s move. Were that so, it would forebode continuing febrility in the relationship between the monarchy and the bureaucratic elite.

On coronation, it’s believed, the King could in fact extend political amnesties to cement the progress of constitutional monarchy under his reign. If that extended to Thaksin, however, there would certainly be further trouble down the track. Meanwhile, the role of the military and Prime Minister Prayut Chan-o-cha will be decisive. He was nominated as a prime ministerial candidate by the Phalang Pracharat Party at the same time as Princess Ubolratana’s spectacular flameout. Although this was not unexpected, it raises difficult questions. Prayut’s nomination for prime minister by Phalang Pracharat can be argued to compromise the military’s interest in respecting the electoral mandate. The appointment of senators (who have a vote with elected parliamentarians on the choice of prime minister) is by the National Council for Peace and Order of which Prayut’s chair. Senate votes could carry the day in the likely event that there is no decisive majority outcome from the popular electoral vote.

In our second lead piece this week, Greg Raymond canvasses these and other political problems in Thailand today.

‘Much is still to play out,’ says Raymond, ‘but there are reasons to think that both sides of politics may see it in their best interests to act with restraint. One of the beneficiaries of what has occurred is without doubt Prime Minister General Prayut Chan-o-cha’. Prayut looks like he has a strong chance of being elected prime minister. He needs to secure 126 seats from a coalition of his own and other smaller parties, and command virtually all of the 250-member Senate (as is expected given senators are appointed by the junta) to get a winnable 376 seats to ensure his installation as prime minister.

But political emotions are inevitably running high and Thaksin’s might not be the only misstep. Were the military to cancel the election in the light of what has happened, or take excessively punitive measures against the Thai Raksa Chart party, it could trigger unrest and make a volatile situation more so. The Pheu Thai Party, the main Thaksin-affiliated party, is still in the contest if it can preserve its cool and insulate itself from whatever happens to the Thai Raksa Chart party, including possible dissolution.

Prinya Thaewanarumitkul, Vice Rector of Thammasat University, has urged Prime Minister Prayut to stand back and withdraw from the Prime ministerial contest in order to avoid a conflict of interest for the National Council for Peace and Order in its role in the appointment of senators. That would be an act of great statesmanship, but an unlikely turn of events. There is quite a way to go before Thailand restores its rank among the democracies and many uncertainties along the path over the next several months.

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

 

Will David Malpass be a malady for multilateralism?


February 18, 2019

Will David Malpass be a malady for multilateralism?

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http://www.eastasiaforum.org/2019/02/15/will-malpass-be-a-malady-for-multilateralism/
by  Peter McCawley, ANU
 

In early January 2019, World Bank President Jim Yong Kim made the startling announcement that he is resigning. Reports suggested that the United States would nominate senior US Treasury official David Malpass for the post. Soon after, Donald Trump officially nominated him. 

Now that he has US backing, the chances are that he will quickly get the job. In principle, the Board of Executive Directors of the World Bank is committed to an internationally competitive selection process. As soon as Jim Kim announced his resignation, the board issued a list of Selection Principles proposing five key criteria to be considered. The list, which was a good one, includes having a proven track record of leadership, the ability to articulate a clear vision for the World Bank’s development mission and an appreciation for multilateral cooperation.

It’s a good try. But the board’s effort will almost certainly fail. The United States has come to regard the World Bank post as a gift from the US President. The Trump administration doubtless expects that the board will confirm Malpass as World Bank president without too much fuss.

Malpass has a solid Republican background. He worked in the Reagan and HW Bush administrations, had a career on Wall Street working for the Bear Stearns global investment bank before it collapsed in 2008, and ran (unsuccessfully) in a Republican primary in New York for the US Senate in 2010.

More recently he worked as an economic adviser to Trump during the 2016 presidential election campaign and was appointed as Undersecretary for International Affairs at the US Treasury Department in 2017.

Since joining the Treasury Department, Malpass has been an outspoken sceptic of both multilateralism and, more specifically, of the World Bank’s activities. In an extended interview in 2017 he outlined the Trump administration’s view that ‘multilateralism has gone substantially too far’. One of the problems of the multilateral system, he said, is that it ‘often drifts away from our values of limited government, freedom, and the rule of law’.

Malpass was also critical of the World Bank’s program of lending to China. He said that it ‘doesn’t make sense’ for China to receive money borrowed in the United States, using the US government guarantee, when Beijing has ‘plenty of resources’ of its own and access to capital markets.

Views of this sort reflect boilerplate Republican approaches to international agencies such as the World Bank. They will nevertheless dismay staff of the World Bank, many of whom were bewildered by the nature of Jim Kim’s abrupt departure.

It may be that not too much should be made of Malpass’ tough language. Senior US Treasury officials — Republican and Democrat alike — have a long track record of growling at the World Bank and pounding the table during international negotiations over funding. They need to demonstrate to their colleagues around Washington and especially to Congress that they are protecting US foreign policy interests.

Neither are their criticisms always unreasonable. It is certainly true that the World Bank and numerous other international agencies have fat that can be trimmed. It is also true that many of these agencies are subject to ‘mission creep’ and that close reviews of their work programs are often useful.

If and when Malpass takes up the post as President of the World Bank, he will find himself in charge of a sprawling bureaucracy that contains many internal fiefdoms. He will face much resistance to change, both from within the World Bank and from many of the 189 member countries that belong to it — including, no doubt, China.

Hopefully Malpass will balance scepticism with enthusiasm as president. His faith in US benevolence should help bolster him in his work. In the same 2017 interview, he explained that it is in the United States’ ‘own self-interest’ as a global leader to see neighbours do well.

If he can apply principles of this kind to his new job, Malpass might come to leave his mark as one of the more successful presidents of the World Bank.

Peter McCawley is Honorary Associate Professor in the Crawford School at the Australian National University. He is formerly an Australian Executive Director on the Board of the Asian Development Bank in Manila.

Navigating ASEAN’s economic priorities


February 14, 2019

Navigating ASEAN’s economic priorities

By  Kaewkamol Pitakdumrongkit, RSIS

Southeast Asian economies may face major economic headwinds this year amid US–China trade tensions and US Federal Reserve interest rate increases. To help weather the impact, ASEAN member states should prioritise progress on regional economic initiatives.

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Some observers think that the 90-day truce between Washington and Beijing could beget better relations between the two powers. But they may be overestimating China’s ability to make concessions that fulfil what the Trump administration wants. Buying more American products is easy, but implementing measures to address ‘unfair’ trade practices to a degree that satisfies the United States is more difficult to achieve within 90 days. More rounds of tariff escalations or other trade-restricting measures could be in the offing.

On the financial front, in December 2018 the US Federal Reserve raised interest rates from 2.25 to 2.50 per cent and forecast the possibility of further increases in 2019. The Fed did so to ensure there will be room for it to use monetary policy and decrease interest rates to fight the next US recession.

Additional hikes could trigger capital pull-outs from Southeast Asian countries as investors move funds to seek higher yields in the United States. If not well-managed, such capital outflows may instigate financial instability in the ASEAN region.

Regional economies must brace themselves for future economic and financial turbulence. While they are unlikely to be able to avoid such headwinds, ASEAN member states can nevertheless cushion the impact through regional initiatives: the ASEAN Economic Community (AEC) 2025, ASEAN–Hong Kong Free Trade and Investment Agreements (AHKFTA and AHKIA), Regional Comprehensive Economic Partnership (RCEP) and Chiang Mai Initiative Multilateralization (CMIM).

Policymakers should prioritise the complete implementation of the AEC 2025. This is a regional economic integration project by the 10 ASEAN member states designed to achieve five objectives: a highly integrated and cohesive economy; a competitive, innovative and dynamic ASEAN; enhanced connectivity and sectoral cooperation; a resilient, inclusive, people-oriented and people-centred ASEAN; and a global ASEAN.

Advancing the AEC 2025 will enable businesses to better tap into the integrated market of over 600 million people, rendering regional economies more resilient to the incoming headwinds.

Southeast Asian governments should also ratify the AHKFTA and AHKIA signed in November 2017 so that these treaties can enter into force in early 2019 as expected. The agreements will enhance cross-border flows of goods, services and investment between ASEAN and Hong Kong.

The agreements will not only allow firms to enjoy greater access to goods and services markets and better investment protection, but also enable ASEAN nations to further tighten trade and investment ties with China. The latter will help Southeast Asian economies to recuperate from any damage that future Washington–Beijing trade spats may inflict on them.

ASEAN authorities should also concentrate on wrapping up RCEP talks. If concluded, this 16-economy free trade bloc will encompass a market of 3.6 billion people that contributes to a third of global GDP. It will cover 29 per cent of global trade and 26 per cent of the world’s foreign direct investment flows.

Concluding the negotiation will create more opportunities for businesses to deepen their supply chains, and provide RCEP economies with another means to diversify their economic relations and cushion against the negative effects of future US–China trade war spats.

Finally, ASEAN nations together with China, Japan and South Korea (ASEAN+3) should advance the CMIM, a regional financial safety net under the ASEAN+3 framework. Launched in 2010, the scheme provides financial support through a network of currency swaps to help ASEAN+3 nations weather their balance-of-payments difficulties.

Because future Fed rate hikes could trigger investor panic leading to financial instability and capital flights in certain regional economies, the CMIM can provide financial assistance to alleviate such problems.

Admittedly, the above initiatives face their own challenges. A major hurdle for implementing the AEC 2025 is a lack of coordination among domestic ministries and agencies. Individual ASEAN countries must sort out how to improve coordination among the involved authorities. Certain domestic hurdles must also be cleared for a successful ratification of the ASEAN–Hong Kong treaties.

Planned elections in Australia, India, Indonesia and Thailand in 2019 may delay the conclusion of RCEP negotiations in the first half of 2019. Politicians in these nations will likely prioritise their electioneering over international matters. And if the momentum of RCEP talks picks up in the second-half of the year, the parties’ different positions and preferences will still need to be reconciled to seal the deal.

Regarding the CMIM, while a laudable agreement was signed in December 2018 to create more favourable conditions that will enable the regional financial safety net to better assist in a crisis, efforts to advance other aspects of the CMIM have been lacklustre in recent years.

For one, its size has remained the same at US$240 billion since 2012. With this amount, the scheme can at best provide simultaneous lending support to a few small- and medium-sized economies should they come under a crisis. The participants must push for an expansion of the CMIM’s size.

US–China trade tensions and Fed rate hikes will likely generate undesired effects for Southeast Asian economies this year. Despite the challenges of the above initiatives, ASEAN countries must collectively pursue them to navigate through the coming economic headwinds. Time is running out and policymakers must act fast.

http://www.eastasiaforum.org/2019/02/11/navigating-aseans-economic-priorities

Kaewkamol Pitakdumrongkit is Deputy Head and Assistant Professor at the Centre for Multilateralism Studies, S Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore.

 

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.

Strengthening Cambodia’s Foreign Policy via institutional reforms


January 19, 2019

Strengthening Cambodia’s Foreign Policy via institutional reforms

By Dr. Chheang Vannarith, Cambodian Institute for Cooperation and Peace

http://www.eastasiaforum.org

Amid shifting global power dynamics and intense pressure from the West, Cambodia’s foreign policy strategy in the coming years will aim to diversify its external relations, with a focus on South and East Asian countries. But in practice Cambodia still struggles to implement an effective foreign policy, stymied by institutional weaknesses.

 By Dr. Chheang Vannarith, Cambodian Institute for Cooperation and Peace

http://www.eastasiaforum.org.

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Amid shifting global power dynamics and intense pressure from the West, Cambodia’s foreign policy strategy in the coming years will aim to diversify its external relations, with a focus on South and East Asian countries. But in practice Cambodia still struggles to implement an effective foreign policy, stymied by institutional weaknesses. Without much-needed reform, Cambodia’s weak international presence may persist.

 

The rumour that China is eyeing a naval base in Cambodia’s Koh Kong province is stirring public debate both inside and outside the country. US Vice President Mike Pence has raised concerns directly with Prime Minister Hun Sen on the issue.

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The Cambodian government has repeatedly stressed that it does not intend to align with any major power, nor will it ever allow any foreign military base on its soil, because it adheres to a foreign policy stance of permanent neutrality and non-alignment. Despite these assurances, international media and observers still tend to portray Cambodia as a client state of China.

Such perceptions, which do not reflect the entirety of Cambodia’s foreign policy dynamics, damage the country’s international image and role. The tough measures taken by the European Union and the United States on Cambodia’s perceived ‘democratic backsliding’ partly reflect their own strategic interest in ensuring that Cambodia does not align itself too closely with China.

Facing unprecedented pressure from the West, Cambodia’s foreign policy options are constrained. There is a shared belief among Cambodia’s ruling elites that the European Union and the United States have double standards and treat Cambodia unfairly. They question why the European Union and the United States target Cambodia while Vietnam and Thailand still enjoy good relations with the West. And they question why Cambodia is attacked for forging close ties with China when other Southeast Asian countries are doing the same.

Such external circumstances force Cambodia to invest heavily in foreign policy. During the 41st Party Congress of the long-ruling Cambodian People’s Party in December 2018, foreign policy was highlighted as an area requiring more attention.

Cambodia’s foreign policy outlook is shaped by the unfolding power shifts in the Asia -Pacific region and the implications of major power rivalry. As the world becomes a multi-polar one, Cambodia is adjusting its foreign policy objectives and strategies accordingly. In this new world order, Cambodia’s ruling elites believe that the country’s foreign policy direction cannot be detached from that of the Asian powers.

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Phnom Penh has signed only two strategic partnerships so far: one with China in 2010 and another with Japan in 2013. Cambodia views China and Japan as among its most important strategic partners, and ones that can be relied on to help Cambodia realise its vision of becoming a higher middle-income country by 2030 and high-income country by 2050.

 

Cambodia also gives strategic importance to ASEAN as crucial to furthering regional integration and helping Southeast Asian countries cushion against foreign intervention.

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Diversifying strategic and economic partners has occupied Cambodian foreign policymakers for years. A lack of coordination among the relevant ministries — such as the Ministry of Foreign and International Cooperation (MOFAIC), Ministry of Commerce, Ministry of Economy and Finance, Ministry of National Defence and Council for the Development of Cambodia — remains a significant issue preventing Cambodia from achieving its diversification strategy. These ministries need to work together to implement a more robust foreign policy.

There is strong political will on the part of MOFAIC to develop and implement a more robust foreign economic policy but other government agencies do not seem prepared to come onboard. MOFAIC has taken a leadership role in negotiating the ‘Everything But Arms’ (EBA) initiative with the European Union, for instance, but this should ideally be done by the Ministry of Commerce.

Cambodia’s ruling elites are aware of the risks emanating from over-reliance on a single or few countries for their survival. Hedging and diversification are recognised as important strategies, but implementation remains an issue. It will take a few more years for Cambodia to develop a concrete action plan, build institutional and leadership capacity, and strengthen institutional coordination and synergies between ministries.

The United States and the European Union should demonstrate more flexibility towards Cambodia to avoid the perception of unfair treatment. They should provide Cambodia with more options instead of forcing it to compromise its sovereignty. Multi-layered, multi-sectoral and multi-stakeholder engagement should be encouraged. As a small country, Cambodia needs expanded strategic space to manoeuvre.

Chheang Vannarith is Senior Fellow and Member of the Board at Cambodian Institute for Cooperation and Peace.

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