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Showing posts with label Southeast Asia. Show all posts
Showing posts with label Southeast Asia. Show all posts

Saturday 21 July 2012

No one can stop China in South China Sea but China - Former Philippines National Security Adviser

No one can stop China from claiming “indisputable sovereignty” over the West Philippine Sea (South China Sea)—except China itself or the authoritative power of world opinion.

Short of war, a war nobody wants or would wish, even the United States can only delay or impede the fulfillment of China’s inordinate ambition to gain sovereign control of 3 million square kilometers of this great inland sea that is also Southeast Asia’s maritime heartland.

This is the strategic context of China’s assertive ambiguity in the West Philippine Sea (South China Sea).

Just now, Beijing can only bluster and intimidate, as it probes for weaknesses in its rival claimants.

But once China can translate its economic power into military capability credible enough to challenge that of the United States—when the “time is right” in China’s terms—then the geopolitical configuration in the Asia-Pacific region will change radically.

And time and circumstances favor China. Analysts say China is likely to become the world’s largest economy in a decade or so.

If they are right, the Philippines has only 10 short years to prepare for what is likely to become an interesting Asia-Pacific future.

Long-term security

Given the constraints under which it’s working, the administration of President Benigno Aquino has so far done all that could possibly be done, in the short term, to defend our nation’s interests in the West Philippine Sea.

But in this case it’s not enough to deal with the immediate problem. Our nation’s long-term security hangs in the balance.

And to ensure our safety, we must look at the root of our nation’s security, which lies in our people—in everyone of us and nobody else.

If our country is to prevail in any challenge, if the Philippines is to become worthy of respect as a sovereign nation, we must first of all enable our people to become effective wealth creators.

We must make our country rich enough to enable us to acquire the means to defend our nation’s interests, to protect our people’s dignity and honor.

Nationhood infrastructure

To carry out the government’s strategies, policies, plans and programs to grow and develop the nation, we must strive urgently to create the four conditions necessary for growth and development.

Let us make no mistake, without these, the nation can hardly enforce its Constitution and its laws, and no development plan can succeed:

1. We must come to terms with ourselves. We must build among us the infrastructure of nationhood. We must be able to answer the basic question of who we are.

We must live the core values our forebears fought and died for: Dignity, honor, freedom, justice, self-determination, hard work, discipline, tolerance, mutual caring and compassion.

We must become a people at peace with themselves and with the world.

There is nothing our people cannot accomplish, if our identity and the goals we seek are articulated in terms of the core values taught us by our heroes and martyrs.

These core values define what is right or wrong for our people. They guide us, like our heroes and martyrs, to live only when it is right to live, and to die only when it is right to die.

2. No matter what it takes, we must end our internal wars. Our radical insurgency is kept alive by our grievous inequality and the elemental injustice of mass poverty. And both are caused by corruption and misgovernment.

The same is true of our separatist conflict in Mindanao. There popular frustrations are worsened by rivalries over land and livelihood, and the situation is complicated by ethnic and religious enmities.

3. We must complete all the land and nonland reforms we still need to do. Not only will their completion make rebellion, separatism and mutiny irrelevant but will also accelerate our nation’s growth. And, finally, it will unite our people.

4. We must transfer the power of the few over the state to the people as citizens. In the World Bank’s view, we are a country where state policies and their implementation serve not the common good but those of special interests.

The capture of the state and its regulatory agencies by vested interest groups has made our economy the least competitive among comparable economies in East Asia.

In sum, we must put our house in order. We must level our popular playing field to grow and develop the nation—and so enable our people to surmount any challenge.

No luxury of time

As we create the four conditions necessary for growth and development, we must also carry out our development plans. Given the uncertainties building up in East Asia, we do not have the luxury of time.

It is the Chinese people’s historic sense that is driving their country’s rise. They count their recovery from generations of humiliation at the hands of the great powers as lasting 150 years starting from the initial European effort to open up China around 1800.

In 1949, Mao Zedong proclaimed China had stood up. But China began to recover economically only after Deng Xiaoping’s reforms (1978). In three and a half decades, China has become the world’s second largest economy.

We, too, must tap into our people’s sense of nationality—and do no less. By creating the four conditions necessary for growth and development that I cited above, and by simultaneously carrying out the government’s development plans, we can change our country—we can modernize it without leaving anyone behind—during the next 10 years.

By that time, we will also have nurtured the inclusive institutions that will sustain our people’s capacities for wealth creation.

No primrose paths

Let us not delude ourselves. There are no short cuts—no primrose paths—to growth and development. We must never give up even if our country’s rise takes 150 years or more.

We have no choice. The alternative is too dire to contemplate.

We must work together to prevent the situation developing that reduces our country into a tributary, a vassal, a province of a great power.

Those who sacrificed and died for us and for generations yet to come will never forgive us if we fail to summon the courage and the will to take the radical steps toward the Filipino future: To deliberately put in place the four conditions necessary for growth and development without delay.

By:

Friday 20 July 2012

Malaysia's Days in the Sun - WSJ

New York, Hong Kong, London...Kuala Lumpur? Malaysia is going gangbusters. Now, it must sustain the momentum.



The Southeast Asian nation is home to the world's second and third largest initial public offerings this year—the $3.3 billion listing of Felda Global Ventures 5222.KU 0.00% and IHH Healthcare's $2 billion IPO. Meanwhile, the benchmark KLCI hit a record Wednesday after rising almost 7% this year.

State backing for Malaysian equities is a factor. Felda's IPO was largely bought by government-backed investors such as individual Malaysian states. Mandatory retirement savings boosts domestic pension funds that typically invest a lot in the local market too.

The economy is also performing well. Unemployment is low. Inflation is benign at about 2%. Gross domestic product growth is around 5%. That is important because the Malaysian stock market is mainly comprised of domestically focused companies.

Diverse exports are also relatively robust. Commodities like palm oil, petroleum and gas make up about a quarter of exports, while electronics and manufactured goods make up the rest. HSBC notes that Malaysia's exports are down just 2% since last August, compared to a 13% aggregate decline for shipments from Singapore, Thailand, Indonesia and the Philippines.

The country's banks look healthy too. Asset quality is strong and deleveraging by European banks isn't a big threat, says Moody's. "Their claims on the Malaysian economy amount to a mere 5% of GDP," notes the rating company.

Still, there are risks that warrant caution. A prolonged slump in global trade would hurt. Net exports are equal to about 16% of GDP—much higher than the ratio for neighbors such as Indonesia and the Philippines.

Politics is a wildcard too. Prime Minister Najib Razak wants to improve infrastructure and boost investment in sectors including oil and gas and tourism. Investors must hope that agenda stays on track regardless of the outcome of an election expected by early 2013.

Much of the good news may be priced in. Malaysia's benchmark stock index trades at about 15 times current earnings. Some analysts say that is rich. Malaysia has momentum. But much now depends on domestic politics and the depth of the weakness in global trade.

Write to Cynthia Koons at cynthia.koons@wsj.com

Sunday 15 July 2012

Investing in better relations

China and Asean edge towards better ties, mostly because of the risk of a deteriorating relationship.

ASEAN and China made moves during the week to upgrade ties, or at least to talk about the prospect of formal deliberations to do so.

The unusually roundabout manner of this, even for Asean diplomacy, was because much of the basis for it is the highly unlikely and delicate one of contested maritime territory in the South China Sea.

All contending parties have had to tread gingerly, with fingers and toes crossed. But other events have also played a role.

Asean countries had already made clear that regardless of disputes with each other or with China, no external party should get involved. It was not difficult thus to put US diplomats on notice.

So when Secretary of State Hillary Clinton toured South-East Asia this time, with an appearance at the Asean Ministerial Meeting in Phnom Penh, she talked about economic cooperation rather than a “pivot” to “rebalance” against China. It contrasts with her last foray into this region and another Asean meeting.

However, Clinton’s office also had an official announce that the Diaoyu/Senkaku Islands claimed by both China and Japan fell under Article 5 of the US-Japan security treaty. The official declared that the uninhabited islands were under Japan’s jurisdiction, bolstering Tokyo’s claim, and that the US was thus obliged to respond in any conflict.

That made officials in Beijing jump. It also made them seem more conciliatory on the Asean front, in a set of disputes over the Spratly Islands.

China declared on Wednesday that it wanted to strengthen “communication and cooperation” with Asean members with mutual benefit all-round. On the same day at the meeting in Phnom Penh, Thailand announced that it would not allow disputes in the South China Sea to disrupt cooperation between Asean and China.

Thailand is serving as coordinator between Asean and China over the next three years. It is not among the four Asean countries that are claimants to the Spratly Islands along with China and Taiwan.

It has been 10 years since Asean and China signed the Declaration on the Code of Conduct of Parties in the South China Sea (DOC), a non-binding agreement covering “soft issues” like maritime research and environmental protection.

Since then, Asean has wanted to move on to a binding Code of Conduct for the South China Sea (COC). But while China is all for the DOC, saying that it had yet to be implemented fully, it wants to move slower on the COC.

It is still unclear how far serious talks will go in creating a new status quo for the contending claims. On present form, despite all the pleasantries and avowed goodwill, any talks at all are unlikely to achieve anything substantial.

For decades, no specific talks had even been envisaged, let alone conducted satisfactorily and concluded successfully. Now differing positions are being taken over the DOC and the COC, which does not help, amid a general feel good feeling about everyone wanting to feel better, which may not get anywhere.

Prof Zhang Yunling is director of the Centre for the Study of Global Governance at Renmin University in Beijing. The following is part of an exclusive interview he gave during a recent ISIS conference in Kuala Lumpur.

Q. China’s rise has largely been economic; how else will it express its ascendancy in the region and the world?

A. China’s rise has reshaped the region’s economic structure, which has been a very positive development. It will continue to rise, and in other aspects, as well as play an important role.

Compared to the past, there are two differences today. First, it is based on an open economic structure, with close links with other countries, not top-down but in equal partnership as in production networks.

Secondly, there is institutional development, not just gestures as with the old China. There are equal rights, equal treatment of other countries, which are rules-based and multi-layered. We are moving ahead, but it also needs time.

There is greater movement of people, through travel and tourism, and people get to know each other better. There are also more projects for (international) assistance, training and capacity-building.

There is anxiety over China’s military build-up, but it is normal for China to develop its military along with its (economic) development.

One concern is a change in the existing order because China was not a player before. Japan has historical (baggage), the US has been dominant in the past, so there should be a place for China.

Another concern is over dispute settlement: previously there has been cooperative behaviour, now there are bigger armed forces. Yet no other country has so many unsettled disputes as China on both land and sea.

>How do you see China-US ties, today’s most important trans-Pacific bilateral relationship?

This is a very complex matter for China. For others, it is about how to accept a rising China and its role in a positive way.

Germany and Japan before were not bound by factors as China is today: agreements, commitments, shared interests. How China would manage these should not cause other countries to see it as a threat; it is now in a transitional period, without much experience of it.

The US is very important to China in economic terms. So China has to carefully manage relations with the US, to avoid any possible confrontation and seek any possible cooperation.

Both countries have such a close relationship which never occurred before between a rising superpower and an existing superpower. They have to live together and work together.

US technology and its economy are still dominant and important for China. But the US sees China as a threat, and ideologically wants to see China turn into a democratic country.

The US has always tried to make China more like it over the past 100 years, but not successfully – yet it is still trying. US pressure is very clear.

China wants to have its place, and the US has to prepare for that. It is trying to contain China, so China sees this as a threat.

But it’s not a zero-sum game as with the Soviet Union, because of the close interests between the US and China. The door is open, not closed.

> What is the status of China’s proposals to promote military cooperation with South-East Asian countries?

There is now no military cooperation. We should have regular defence ministers’ consultations and exchanges of military personnel.

There should be joint maritime operations for accidents at sea, for example. Also, on non-traditional threats at sea (piracy, terrorism, human trafficking, narcotics, illegal immigration).

There have been exchanges between China and Indonesia, and cooperation between China and Malaysia in producing military equipment.

> How has China’s perception of Asean changed over the years?

China sees the Asean process positively, acknowledging Asean’s role in creating a stable and cooperative region. There is the China-Asean FTA, with other cooperative projects.

All this is quite different from the past.

China hopes Asean can play a stronger role in the region for more cooperation and institution-building. Asean needs to be more united to work cooperatively towards a real Asian century.

Asean can help create a new regional institution. Asia should be a security provider, since there has been too much reliance on outside security providers.

Behind The Headlines By Bunn Nagara

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