Southeast Asia, like much of the rest of the world, is losing patience with King Dollar.
The westernization of the world’s reserve currency, as through sanctions on those deemed bad actors — such as Russia for its war in Ukraine — has pushed even the typically diplomatic Southeast Asians to warn the US of the consequences.
In a conference in Singapore on Tuesday (Jan 10), multiple former officials spoke about de-dollarisation efforts underway and what economies in the region should be doing to mitigate the risks of a still-strong dollar that’s weakened local currencies and become a tool of economic statecraft.
“The US dollar is a hex on all of us,” George Yeo, former foreign minister of Singapore, said at the conference hosted by the ISEAS-Yusof Ishak Institute. “If you weaponise the international financial system, alternatives will grow to replace it” and the US dollar will lose its advantage.
While few expect to see the end of King Dollar’s global sovereign status anytime soon, Yeo urged that the risk of it happening be taken more seriously.
“When this will happen, no one knows, but financial markets must watch it very closely,” said Yeo, who is a visiting scholar at the National University of Singapore’s Lee Kuan Yew School of Public Policy.
After gaining 6.2% in 2022, the US dollar is down 0.67% in the first several days of this year, through the end of Tuesday, according to the Bloomberg Dollar Spot Index.
Yeo noted that in times of crisis, the US dollar rises further — as with levies on Russia that have left Russian banks estranged from a network that facilitates tens of millions of transactions every day, forcing them to lean on their own, much smaller version instead. That’s put more pressure on third-party countries, too, which have to unduly rely on US dollar use.
Following on Yeo’s remarks later in the conference, former Indonesian trade minister Thomas Lembong applauded Southeast Asia's central banks that already have developed direct digital payments systems with local currencies, and encouraged officials to find more ways to avoid leaning too hard on the greenback.
“I have believed for a very long time that reserve currency diversification is absolutely critical,” said Lembong, who’s also a co-founder and managing partner at Quvat Management Pte Ltd. Supplementing US dollar use in transactions with use of the euro, renminbi, and the yen, among others, would lead to more stable liquidity, and ultimately more stable economic growth, he said.
The 10 Asean countries are just too disparate to establish a common currency as with the euro bloc. But Lembong said he was “deeply passionate” on this subject of the US dollar as a global reserve currency.
The direct digital payments systems — which have boosted local currency settlement between Malaysia, Indonesia, Singapore and Thailand — are “another great outlet for our financial infrastructure”, he said.- Bloomberg
The United States biological weapons program officially began in spring 1943 on orders from U.S. President Franklin Roosevelt. Research continued following World War II as the U.S. built up a large stockpile of biological agents and weapons. Over the course of its 27 year history, the program weaponized and stockpiled the following seven bio-agents (and pursued basic research on many more):
Personnel are working inside a
bio-lab at the US Army Medical Research Institute of Infectious
Diseases at Fort Detrick on September 26, 2002. Photo: AFP
Editor's Note:
Since the military conflict between Russia and Ukraine began, the international community has grown increasingly aware of the roles the US and NATO have played behind the crisis.
From funding biological labs to creating ethnic division and ideological confrontation around the world, from imposing sanctions on "disobedient countries" to coercing other nations to pick sides, the US has acted like a "Cold War schemer," or a "vampire" who creates "enemies" and makes fortunes from pyres of war. The Global Times is publishing a series of stories and cartoons to unveil how the US, in its superpower status, has been creating trouble in the world one crisis after another. This is the fifth installment.
After World War Two (WWII), the US ran amok around the world, leaving behind a plague of war and hatred wherever they went. Whether on the biological front or in the ideological front, the US is the top "poison disseminator."
A US army tank rolls deeper into Iraqi territory on March 23, 2003?when US forces invaded?Iraq. Photo: VCG
Mysterious bio-labs
Since conflict broke out between Russia and Ukraine, biological laboratories in Ukraine that are funded by the US caught global attention.
Russian Deputy Foreign Minister Sergey Ryabkov said on March 22 that Russia cannot tolerate the US setting up biological laboratories in Ukraine with the prospects of developing biological weapon components, TASS reported.
Earlier that month, Russian defense ministry also disclosed that US spent more than $200 million on biolaboratories in Ukraine, TASS said.
The Russian military said they had gotten hold of documents confirming that Ukraine developed a network of at least 30 biological laboratories that host extremely dangerous biological experiments, aimed at enhancing the pathogenicity of plague, anthrax, tularemia, cholera, and other lethal diseases with the help of synthetic biology. This work is funded and directly supervised by the US' Defense Threat Reduction Agency (DTRA) in the interest of the Pentagon's National Center for Medical Intelligence, according to a statement by Russian Permanent Representative to UN Vassily Nebenzia.
The Russian defense ministry said that it learned of the details regarding a project implemented at laboratories in Kiev, Kharkov, and Odessa, which studied the possibilities of spreading particularly dangerous infections through migratory birds, including the highly pathogenic H5N1 influenza (lethal to humans in 50 percent of cases) and the Newcastle disease.
As part of some other projects, bats were considered as carriers for potential biological weapon agents. Among the priorities identified are the study of bacterial and viral pathogens that can be transmitted from bats to humans: pathogens of the plague, leptospirosis, brucellosis, as well as the coronaviruses disease, and filoviruses.
The analysis of the obtained materials confirms the transfer of more than 140 containers with ectoparasites from bats from a bio-lab in Kharkov abroad, according to Nebenzia's statement.
The bio-labs in Ukraine are only a handful of the 336 biological laboratories the US reportedly funds in 30 countries around the world. Most of these labs are located in the Middle East, Southeast Asia, Africa, and along the perimeter of former USSR, according to the Russian defense ministry.
Despite covert behaviors, the dubious activities of the US' overseas bio-labs had previously been revealed.
In August 2021, a South Korean civic group sued the Fort Detrick bio-labs and the US Forces Korea (USFK) over the smuggling of toxic substances to US military bases there in violation of domestic law.
In December 2015, the South Korean Yonhap News Agency revealed that the USFK had staged 15 experiments using neutralized anthrax samples at the Yongsan Garrison in Seoul from 2009 to 2014.
US officials gave incongruous responses to the bio-lab issue since Russia disclosed relevant documents. They admitted to the existence of such labs but failed to provide substantial evidence that the programs they funded were to promote public health. Thus, it increased the world's suspicions over such labs.
Libyan protesters gather in Benghazi on March 11, 2011 as Arab Spring spread in the country. The US, the UK and France?intervened in Libya?with a bombing campaign on March 19, 2021. Photo: AFP
Creating turmoil and division
The US prides itself on being the "city upon the hill" and a "beacon of democracy." However, the history of the US was full of wars and killing. During its over 240 years of history, there were only 16 years when the US was not at war.
After the end of WWII, the US became the most powerful country in the world, however, war became an important tool for the US to maintain its own hegemony.
Data shows that from the end of WWII to 2001, the US initiated 201 of the 248 armed conflicts worldwide in 153 locations, accounting for over 80 percent of total conflicts.
The Korean War (1950-53), for example, resulted in the deaths of more than 3 million civilians and created approximately 3 million refugees, and almost all major cities in the Korean Peninsula were left in ruins.
However, the US evidently lacked self-reflection after the Korean War. Immediately after the end of the Korean War, the US intervened in Vietnam in the 1950s under the pretext of preventing the expansion of Communism in Southeast Asia. During the Vietnam War, the brutality of the US army made the war the longest and most brutal war since WWII.
The Vietnamese government estimates that as many as 2 million civilians died in the war, many of whom were slaughtered by US forces in the name of fighting Viet Cong communists.
In March 1999, under the banner of "avoiding humanitarian disaster," NATO forces led by the US openly bypassed the UN Security Council and carried out the bombing of Yugoslavia for 78 days, causing death of many innocent civilians.
After the September 11 attacks in 2001, the US first invaded Afghanistan in the name of fighting Al Qaeda and the Taliban and then launched a war in Iraq under trumped-up charges.
Over the years, the US instigated the "Arab Spring," igniting civil wars in Libya and Syria.
Since 2001, wars and military operations by the US have claimed more than 800,000 lives and displaced tens of millions of people.
"We inflated the stature of our enemies to match our need for retribution. We launched hubristic wars to remake the world and let ourselves be remade instead...We midwifed worse terrorists than those we set out to fight," New York Times columnist Michelle Goldberg wrote in September 2021, on the eve of the 20th anniversary of the 9/11 attacks.
Poison disseminator Illustration: Xu Zihe/GT
Exporting 'democracy'
Former US president Jimmy Carter once said that the US is "the most warlike nation in the history of the world" due to a desire to impose American values on other countries.
The Cold War was, to some extent, a global confrontation born of ideological opposition. In this process, the US established its own discourse system and promoted a so-called "liberal democracy," which was the foundation of its cultural hegemony.
In his book, America's Deadliest Export: Democracy, the Truth About US Foreign Policy, and Everything Else, American diplomat William Blumm reveals the close connection between America's foreign expansion and its "democracy export."
Between 1947 and 1989, the US carried out 64 covert operations of subversion and six overt ones, wrote Lindsey O'Rourke, a political scientist at Boston College, in her book Covert Regime Change: America's Secret Cold War. Costa Rica, Guatemala, Ecuador, Bolivia, El Salvador, Grenada, Honduras, Panama, Haiti, Venezuela...Of all America's Latin American neighbors, there were few who have not faced meddling from the US.
After the end of the Cold War, the US became more unscrupulous in promoting interventionism and frequently exported "color revolutions."
A US Congressional investigation in 1976 revealed that nearly 50 percent of the 700 grants in the field of international activities by the principal foundations were funded by the CIA, Frances Stonor Saunders wrote in the book Who Paid the Piper? The CIA and the Cultural Cold War.
These foundations support elites and students from other countries to study in the US and select and support "opinion leaders" who serve the interests of the US.
The US has also long linked economic aid to the "democratic revolution" and put pressure on some developing countries through its leading international financial institutions.
Far from achieving stability and prosperity, most of the recipients of the US' version of democracy seem to be trapped in the "democratic curse" of political turmoil and national retrogression.
As Michael Parenti, an American political scientist pointed out, the US has been wearing these "democratic" glasses for years. An inexplicable sense of superiority has led the US to stand on the notion of it being the so-called "city on a hill", regarding its democracy as an "international model," an unsupported hypothesis, and point fingers at other countries. The US' enthusiasm for "democracy export" is not really about democracy, but about maintaining American hegemony.
As former US President Bill Clinton said, "defending freedom and promoting democracy in the world is not just a reflection of our deepest values. They are vital to our national interest."
Next up:
Is the US a "defender" or a "destroyer" of human rights? Who has been sacrificed on the "altar" of US-touted democracy? In our next story, we will focus on the US' vile practice of igniting war under the pretext of "human rights and democracy."
Singapore will cap the number of homes that can be developed in suburban
projects as it seeks to curb the increasing trend of so-called shoebox apartments.
The government plans to limit the number of homes for
apartment projects outside the city’s central area to
“discourage” shoebox units, the Urban Redevelopment Authority
said in a statement posted on its website today. The new rules
will be implemented from Nov. 4.
The island state’s population growth, scarce land and
surging property values have prompted developers to shrink
housing space.
Residential prices surged to a record at the end
of 2011 in a city that’s about half the size of Los Angeles, and
the government said in May it’s concerned that shoebox
apartments are mushrooming as private home sales surged to a
three-year high with record purchases of units that are smaller
than 50 square meters (538 square feet).
“The new guidelines will discourage new developments
consisting predominantly of ‘shoebox’ units outside the central
area, but at the same time give flexibility to developers to
offer a range of homes of different sizes to cater to the needs
of various demographic groups and lifestyles,” according to the
statement.
Shoebox units will increase more than four-fold to about
11,000 units by the end of 2015 from 2,400 at the end of last
year, the authority said.
‘Almost Inhuman’
Singapore should curb the trend of shoebox apartments
because they are “almost inhuman,” said Liew Mun Leong, chief
executive officer of CapitaLand Ltd. (CAPL), Southeast Asia’s biggest
developer. The government should intervene because these
projects are “wasting” the country’s scarce land resource, he
said in the interview in May.
The smaller apartments helped boost sales, comprising 2,766
units or 42 percent of the sales in the first quarter, Li Hiaw
Ho, executive director at CBRE Research, said in an e-mailed
statement in July.
Home sales have climbed to 12,254 units this year through
June 30, according to data from the authority. Suburban projects
will be the “driving force” for developers in the second half
of 2012, PropNex said.
The government’s guidelines are a “welcome move” amid
concerns of smaller homes dominating the suburbs, according to
Jones Lang LaSalle.
Consumer Trends
“The policy itself is well thought through,” Jones Lang,
a Chicago-based property brokerage, said in an e-mailed
statement. “Central area, where land prices are high, is
excluded thereby allowing market forces to continue to dictate
the relevant housing form especially through the measures of
financial affordability and equally that of consumers’
preferences and trends.”
The government doesn’t want shoebox units to form a
“disproportionately large portion” of the housing supply in
Singapore, the Urban Redevelopment Authority said today. Some
new housing developments are made up mostly of these smaller
units, sometimes as much as 80 percent of a project, it said.
A large concentration of such developments could add stress
to the local road infrastructure with more units that the
government had planned for, according to the statement.
Asean countries are still developing because there is still much to do, and much to learn about how to do it.
IF Asean is sometimes accused of being a talking shop, it also vividly demonstrates the value and virtues of some talking shops.
Officials’
meetings at various levels are legion, growing in number and scope over
half a century until they average a few a day for every day of the
year.
Between these are the summits, being more prominent in
comprising heads of governments. Besides the content of the proceedings,
the frequency of the summits themselves may indicate the state of the
South-East Asian region.
When leaders from Indonesia, Malaysia,
the Philippines, Singapore and Thailand met in Bangkok in 1967 to found
Asean, that was somehow not considered a summit. So the “first” summit
came only in 1976 in Bali, with the “Treaty of Amity and Cooperation in
South-East Asia” and the “Declaration of Asean Concord.”
The
second summit came the following year in Kuala Lumpur, coinciding with
an Asean-Japan dialogue. Although this was only one year after the
first, it was a whole decade after Asean’s founding and would be another
full decade before the next.
The third summit (Manila, 1987)
decided to hold summits every five years. By the seventh (Bandar Seri
Begawan) it would be every year, then after skipping 2006 the
Philippines hosted the 12th in Cebu amid local protests.
The 14th
summit slated for 2008 in Thailand was postponed to early 2009 over
domestic disturbances, then put off for another two months in the broken
Pattaya gathering. From then on, summits would be biannual affairs.
Between
and beyond the summits, whether or not local scandals and protests add
to the news value of Asean gatherings, the original five member nations
seem to attract more attention if not also more interest. This is
anomalous since Asean membership confers equal status on all members
regardless of size, age, clout or political system.
The newer
members can actually be quite pivotal in their own way, as Vietnam and
then Cambodia had been, and as Myanmar may be now. And several of the
older members need not be particularly significant to the Asean 10 as a
whole, much less beyond.
With such issues in mind, Malaysia’s
Foreign Policy Studies Group last week held another roundtable
conference in Kuala Lumpur on how relations between Malaysia and the CLM
countries (Cambodia, Laos, Myanmar) can contribute to Asean
consolidation.
An earlier roundtable comprised delegates from
Indonesia, Thailand and Vietnam in assessing how their countries’
relations with Malaysia could progress in the same vein. Vietnam, as the
largest and most developed of Asean’s newer CLMV members, had also
introduced reforms earliest to qualify to join the earlier dialogue with
some of the original members.
Other CLMV countries have
progressed on other fronts on their own. It is now 20 years since
Cambodia, for example, reached agreement with Malaysia on visa-free
travel.
Laos is another country that Malaysia has assisted, with
the establishment of bilateral relations (in 1966) even before Asean was
founded. Since then, relations have flourished, particularly after
Malaysia worked to welcome Vientiane into Asean.
Myanmar today is
still undergoing a transition, and therefore also very much a focus of
world media attention. Its people now have a greater sense of nationhood
following a raft of reforms, mindful of the national interest from
economic priorities to the prerogative of rejecting foreign military
bases on its soil.
A Malaysian delegate said that the US,
following news reports last Sunday, was now looking for a suitable site
for a new “missile shield” system in the region. The US and China were
the two proverbial “elephants in the room”, and the geopolitical rivalry
between them very much an issue for all delegates.
No
individual, organisation or country at the roundtable, whether
officially or unofficially, was left undisturbed by major power rivalry
contaminating the Asean region. This was the more so when preparations
abroad tended to centre around a military build-up, with the US “pivot
to Asia” involving stationing 60% of its military assets in the
Asia-Pacific.
According to one recent analysis, at current and
anticipated rates China’s economy could surpass the US’ as early as
2016, and US overall decline could become evident by 2020. Ironically,
as with its former Soviet adversary before it, the decline would be
underscored by excessive military expenditure and a warlike mindset.
Given
these scenarios, it is important to be reminded of some pertinent
underlying issues. These may be framed by some telling questions that
must be asked, for which answers are vitally needed.
First, are
the CLM countries necessarily more dependent on a regional
superpower-as-benefactor like China economically, compared to Asean’s
older and more developed members. Not so, especially when considering
that the latter, with larger economies, have more at stake in dealing
with a rising China.
Second, is China even likely to consider
challenging US dominance in the region? Despite occasionally dire
pronouncements by some there is no evidence of that, indeed quite the
reverse: beyond assertions of its old maritime claims, Beijing’s
relations with all countries in the region have been progressing and
progressive.
US military dominance in the Asia-Pacific is often
credited with keeping the regional peace, particularly in the high seas.
Is this assumption merited if piracy and terrorism are not included in
the calculus, since there may not be any other military force out to
wreak havoc in the region post-1945?
Fourth, how much value is
there still in the assumption that the US military posture is and will
remain the status quo entity in the region? The status quo is helping
China’s economy grow, with secure shipping and harmonious development,
while the US economy is continually taxed by its large and growing
military presence.
Fifth, and by extension, how much pulling
power is there today in US efforts at soliciting allies? The problem
with enlisting in an alliance for other countries is that to be
identified as an ally of a major power is also to identify as an ally
against another major power.
Dividing the region in Cold War
fashion does not help anyone, and never did. To enlist with a
(relatively) declining superpower creates further problems of its own
for such allies.
Sixth, can China’s reported flexing of its
muscles in the South China Sea and the East China Sea in any way be a
show of strength? Since it only gives Beijing a negative image just as
it needs to look good, without any gain in return, it is instead a point
of weakness.
Seventh, can US efforts to contain China ever work?
There is no shortage of instances that verify containment, a situation
confirmed by official denials.
So, eighth, why try to contain
China at all when in the process the US only loses goodwill before
losing face? Perhaps old habits die hard, but more likely the
military-industrial complex dies harder.
Smaller countries in
Asean and elsewhere have much to learn from the major powers, notably
the US and China. Sadly, the lessons are just as much what not to do as
they are about what to do.
BEHIND THE HEADLINES By BUNN NAGARA sunday@thestar.com.my
I DON’T usually pay attention to Asean meetings as there are so many
of them but the disappointing outcome of the recently concluded Asean
Ministers Meeting (AMM) in Phnom Penh caught my attention.
The failure of the meeting to come up with a joint communiqué was striking even to casual observers.
The
failure, the first in the bloc’s 45-year history, caused by
disagreement among Asean members over the South China Sea dispute, was a
worrying development that has cast doubts over its ability to speak in
unison on this thorny issue.
The last thing Asean needs is to be caught in a turf war for superpowers in its own backyard.
The
South China Sea, which is so crucial not only to the littoral states
but to the international community at large, could well be that stage.
China
has been seen by many as acting “assertively” in backing its claim of
the sea and has been involved in several stand-offs with Vietnam and the
Philippines, which have also reacted strongly against China in those
situations.
I wonder if Malaysia, as a claimant state, should
start thinking of having in place specific contingency plans to confront
the kinds of situation that Vietnam and the Philippines have faced
against China.
I know Malaysia enjoys close bilateral and
people-to-people relations with China. Beijing has even described us as a
“special friend”.
Despite this, let us be reminded that China also has deep relations with Vietnam and the Philippines.
It
even has nearly inextricable economic and strategic relations with the
United States, a potential adversary and with whom it has clashing
interests in the sea.
I am not schooled in the fine art of
international relations but I believe nations should not always think
the best of others and must be prepared to face any eventuality.
In
the context of the South China Sea, such eventualities should include
facing potentially hostile and intrusive acts of our neighbours which
can undermine our interests.
Any one of the claimant states can turn adversarial but I believe we have to pay special attention to China.
Its
recent actions such as patrolling disputed waters and deploying a
garrison at Sansha city to impose its jurisdiction all point towards
Beijing’s readiness and resolve to assert its claims.
What would
Malaysia do should we find the cables of our offshore exploration
vessels cut by a Chinese vessel or if Chinese surveillance and patrol
vessels appear in our Exclusive Economic Zone (EEZ), situations which
Vietnam and the Philippines have faced?
I believe Malaysia should
prepare contingency plans to face such situations. Merely reacting to
developments in this high-stake theatre would not be good enough.
The tense situation underscores the need for a binding code to govern the behaviour of the claimants.
Such a code will compel them to settle their disputes through peaceful means and using international law.
While
I noticed progress between Asean and China to come up with guidelines
for the Declaration of Conduct in the sea between them, they still have a
long way to go before they can agree on a Code of Conduct.
On
the outcome of the AMM meeting in Phnom Penh and China’s refusal to
discuss disputes multilaterally, I foresee a prolonged impasse. At the
rate things are going, I don’t see China changing tangent of not wanting
to discuss the dispute multilaterally.
The Code of Conduct that
Asean and China are working to establish would not be efficient if it
did not include all the claimants. In this regard, one wonders if it
would make sense to include Taiwan, which is also a claimant in the sea,
to be a party to such a code.
It would not make sense to ignore
this claimant in the construct of a code to govern the conduct of
claimant states. What set of conduct then would Taiwan be subjected to
if the Code of Conduct is agreed only between Asean and China?
Besides
ensuring that everyone plays by the same rules, bringing Taiwan into
the fold could help yield fresh perspectives to the discourse on
disputes at sea, which to me seems to be getting nowhere.
Taiwan
has much to offer in areas such as marine scientific research, fishery
management/conservation, environmental protection, humanitarian
assistance/disaster relief, and search and rescue.
The claimant
and littoral states could tap into Taiwan’s expertise in these areas and
promote cooperation, build confidence and avert further tension.
I
hope my take on the subject would provide food for thought to claimant
states and prompt them to set aside differences and work together
towards peace.
I believe Malaysia as a claimant state should not
only be steadfast in safeguarding its interests but should also show
initiative to promote peace.
Malaysia can leverage its position
as a founding member of Asean and as a friend to claimant states and the
United States to be a voice of reason.
With the statesmanship
skills of our diplomats we can help restore unity in Asean that was
shaken in the aftermath of the AMM in Phnom Penh, restore confidence
between Asean and China, and reassert Asean’s centrality in regional
security matters.
SON OF THE SEA
Kuala Lumpur
China Pushes on the South China Sea, ASEAN Unity Collapses
China and ASEAN Much Further Apart than the Smiles Suggest
For
more than two decades Beijing has pursued a consistent policy in the
South China Sea composed of two main elements: gradually strengthening
the country’s territorial and jurisdictional claims while at the same
time endeavoring to assure Southeast Asian countries of its peaceful
intentions. Recent moves by China to bolster its maritime claims have
brought the first element into sharp relief, while reassurances of
benign intent have, however, been in short supply. Indeed, far from
assuaging Southeast Asian concerns regarding its assertive behavior,
China has fuelled them by brazenly exploiting divisions within the
Association of Southeast Asian Nations (ASEAN) to further its own
national interests.
China Hardens Its Stance
Commentaries
in China’s state-run media analyzing the South China Sea issue have
become markedly less conciliatory. Opinion pieces highlight several new
themes in China’s official line. One theme is that China’s territory,
sovereignty as well as its maritime rights and interests increasingly
are being challenged by Southeast Asian nations and Japan in the South
and East China Seas. China’s response, it is argued, should be to uphold
its claims more vigorously, increase its military presence in contested
waters, and, if necessary, be prepared to implement coercive measures
against other countries. As one commentary notes “Cooperation must be in
good faith, competition must be strong, and confrontation must be
resolute” (Caixin, July 13).
Another
theme is that, while China has shown restraint, countries such as the
Philippines and Vietnam have been pursuing provocative and illegal
actions in a bid to “plunder” maritime resources such as hydrocarbons
and fisheries which China regards as its own (China Daily, July 30).
A
third theme is that Manila and Hanoi continue to encourage U.S.
“meddling” in the South China Sea and that the United States uses the
dispute as a pretext to “pivot” its military forces toward Asia (Global Times,
July 11). To reverse these negative trends, Chinese commentators have
urged the government to adopt more resolute measures toward disputed
territories and maritime boundaries. Nationalist sentiment, they argue,
demands no less.
Recent
measures undertaken by the Chinese authorities do indeed suggest a more
hard-line position. Ominously, some of the initiatives have included a
strong military element, presumably as a warning to the other claimants
that China is ready to play hardball.
Perhaps
the most noteworthy attempt by China to bolster its jurisdictional
claims in the South China Sea was the raising of the administrative
status of Sansha from county to prefecture level in June. Sansha
originally was established in 2007 as an administrative mechanism to
“govern” the Paracel Islands, Macclesfield Bank and the Spratly Islands.
Sansha’s elevation was an immediate response to a law passed on June 21by
Vietnam’s national assembly, which reiterated Hanoi’s sovereignty
claims to the Paracels and Spratlys. Both Vietnam and China protested
the other’s move as a violation of their sovereignty (Bloomberg, June
21). Less than a month later, Sansha’s municipal authorities elected a
mayor and three deputy mayors and China’s Central Military Commission
authorized the establishment of a garrison for “managing the city’s
national defense mobilization, military reserves and carrying out
military operations (Xinhua, July 20).
Earlier,
in late June, China’s Defense Ministry announced it had begun “combat
ready” patrols in the Spratly Islands to “protect national sovereignty
and [China’s] security development interests” (Reuters, June 28).
Embarrassingly for the People’s Liberation Army (PLA) Navy, however, on
July 13, one of its frigates ran aground on Half Moon Shoal, 70 miles
west of the Philippine island of Palawan and within the Philippines 200
nautical mile exclusive economic zone (EEZ). The frigate was refloated
within 24 hours, suggesting that other PLA Navy vessels were nearby when
the incident occurred. These developments provide further evidence of
the growing militarization of the dispute.
China
also has moved to undercut the claims and commercial activities of the
Philippines and Vietnam in the South China Sea in other ways.
In
June, the state-run China National Offshore Oil Corporation (CNOOC)
invited foreign energy companies to bid for exploration rights in nine
blocks in the South China Sea. The blocks lie completely within
Vietnam’s EEZ and overlap with those offered for development to foreign
energy corporations by state-owned PetroVietnam. Accordingly, Hanoi
vigorously protested CNOOC’s tender (Bloomberg, June 27). More
importantly the blocks are located at the edge of China’s nine-dash line
map and seem to support the argument that Beijing interprets the dashes
as representing the outermost limits of its “historic rights” in the
South China Sea. Under the 1982 United Nations Convention on the Law of
the Sea (UNCLOS), however, coastal states are not entitled to “historic
rights” on the high seas. It is therefore unlikely that any of the major
energy giants will bid for CNOOC’s blocks—although smaller companies
may do so if only to curry favor with Beijing with a view to landing
more lucrative contracts down the road. If, however, exploration does
move forward in any of the nine blocks, a clash between Vietnamese and
Chinese coast guard vessels will become a very real possibility.
On
the issue of ownership of Scarborough Shoal, scene of a tense standoff
between Chinese and Philippines fishery protection vessels in May-June,
China position remains uncompromising. At the annual ASEAN Regional
Forum (ARF) in Phnom Penh, Cambodia in July, Chinese Foreign Minister
Yang Jiechi restated China’s sovereignty claims to the shoal, rejected
the notion that it was disputed and accused Manila of “making trouble”
(Xinhua, July 13). According to the Philippine foreign ministry, Chinese
trawlers―protected by Chinese paramilitary vessels—continue to fish in
waters close to Scarborough Shoal in contravention of a bilateral accord
whereby both sides agreed to withdraw their vessels [1].
Following
the ARF, China kept up the pressure on the Philippines. In mid-July, it
dispatched a flotilla of 30 fishing trawlers to the Spratlys escorted
by the 3,000-ton fisheries administration vessel Yuzheng 310 (Xinhua,
July 15). The trawlers collected coral and fished near
Philippine-controlled Pag-asa Island and Chinese-controlled Mischief and
Subi Reefs (Philippine Daily Inquirer, July 27). The Philippine authorities monitored the situation but took no action.
The Phnom Penh Debacle
In
the past, after China has undertaken assertive actions in the South
China Sea it has tried to calm Southeast Asia’s jangled nerves. At the
series of ASEAN-led meetings in Phnom Penh in mid-July, however, Chinese
officials offered virtually no reassurances to their Southeast Asian
counterparts. Worse still, China seems to have utilized its influence
with Cambodia to scupper attempts by ASEAN to address the problem,
causing a breakdown in ASEAN unity.
In
the final stages of the annual meeting of ASEAN foreign ministers
(known as the ASEAN Ministerial Meeting or AMM), the Philippines and
Vietnam wanted the final communiqué to reflect their serious concerns
regarding the Scarborough Shoal incident and the CNOOC tender. They were
supported by Singapore, Indonesia, Malaysia and Thailand who felt that
ASEAN should speak with one voice. Cambodia—which holds the rotating
chairmanship of ASEAN and has close political and economic ties with
China— objected because, in the words of Foreign Minister Hor Namhong,
“ASEAN cannot be used as a tribunal for bilateral disputes” (Straits Times,
July 22). Attempts by Indonesian Foreign Minister Marty Natalegawa to
reach a compromise on the wording were unsuccessful and for the first
time in its 45-year history the AMM did not issue a final communiqué.
The
fallout from the AMM was immediate and ugly. Natalegawa labelled
ASEAN’s failure to reach agreement “irresponsible” and that the
organization’s centrality in the building of the regional security
architecture had been put at risk (Straits Times, July 16). Singapore’s Foreign Minister, K. Shanmugam described the fiasco as a “sever dent” in ASEAN’s credibility (Straits Times,
July 14). Cambodia and the Philippines blamed the failure on each
other. Cambodia was pilloried by the regional press for its lack of
leadership and for putting its bilateral relationship with China before
the overall interests of ASEAN. One analyst allegedCambodian
officials had consulted with their Chinese counterparts during the
final stages of talks to reach an agreement on the communiqué [2].
China’s Global Times
characterized the outcome of the AMM as a victory for China, which does
not think ASEAN is an appropriate venue to discuss the dispute, and a
defeat for the Philippines and Vietnam (Global Times, July 16).
A
few days after the AMM, Indonesian President Susilo Bambang Yudhoyono
dispatched his foreign minister to five Southeast Asian capitals in an
effort to restore ASEAN unity. Natalegawa’s shuttle diplomacy resulted
in an ASEAN foreign minister’s statement of July 20 on “ASEAN’s
Six-Point Principles on the South China Sea” [3]. The six points,
however, broke no new ground and merely reaffirmed ASEAN’s bottom line
consensus on the South China Sea. In response to the joint statement,
China’s Foreign Ministry said it would work with ASEAN to implement the
2002 Declaration on the Conduct of Parties in the South China Sea (DoC)
(Chinese Ministry of Foreign Affairs, July 21).
One
of the six points calls for the early conclusion of a code of conduct
(CoC) for the South China Sea, but the Phnom Penh debacle has made that
target highly doubtful.
Although
China agreed to discuss a CoC with ASEAN in November 2011, Beijing
always has been lukewarm about such an agreement, preferring instead to
focus on implementing the DoC. Undeterred, earlier this year ASEAN began
drawing up guiding principles for a code and in June agreed on a set of
“proposed elements.” While much of the document is standard boiler
plate, there are two aspects worthy of attention.
The
first is that ASEAN calls for a “comprehensive and durable” settlement
of the dispute, a phrase that seems to repudiate Deng Xiaoping’s
proposal that the parties should shelve their sovereignty claims and
jointly develop maritime resources. Clearly, the four ASEAN claimants
have rejected Deng’s formula as it would be tantamount to recognizing
China’s “indisputable sovereignty” over the South China Sea atolls.
The
second interesting aspect concerns mechanisms for resolving disputes
arising from violations or interpretations of the proposed code. The
document suggests that disputing parties turn to the 1976 Treaty of
Amity and Cooperation (TAC) or dispute resolution mechanisms in UNCLOS.
Neither, however, would be of much utility. While the TAC does provide
for a dispute resolution mechanism in the form of an ASEAN High Council,
this clause has never been invoked due to the highly politicized nature
of the High Council and the fact that it cannot issue binding rulings.
Moreover, although China acceded to the TAC in 2003, Beijing almost
certainly would oppose discussion of the South China Sea at the High
Council because it would be outnumbered 10 to 1.
UNCLOS
does provide for binding dispute resolution mechanisms, including the
submission of disputes to the International Court of Justice (ICJ) or
the International Tribunal on the Law of the Sea (ITLOS). China always
has rejected a role for the ICJ in resolving the territorial disputes in
the South China Sea and, in 2006, China exercised its right to opt out
of ITLOS procedures concerning maritime boundary delimitation and
military activities.
On
July 9, Vice Foreign Minister Fu Ying had indicated to ASEAN foreign
ministers that China was willing to start talks on a CoC in September.
Two days later, however, as ASEAN wrangled over their final communiqué,
Foreign Minister Yang seemed to rule this out when he stated discussions
could only take place “when the time was ripe” (Straits Times, July
11). At present ASEAN and China are not scheduled to hold any meetings
on the CoC, though officials currently are discussing joint cooperative
projects under the DoC.
If
and when the two sides do sit down to discuss the CoC, it is probable
that Beijing will demand all reference to dispute resolution be removed
on the grounds that the proposed code is designed to manage tensions
only and that the dispute can only be resolved between China and each of
the other claimants on a one-on-one basis. Taken together, these
developments have dimmed seriously the prospect of China and ASEAN
reaching agreement on a viable code of conduct for the South China Sea
any time soon. As such, the status quo will continue for the foreseeable
future.
Ernest Bower, “China reveals its hand on ASEAN in Phnom Penh,” Center for Strategic and International Studies, July 20 2012.
“Statement
of ASEAN Foreign Ministers on ASEAN’s Six-Point Principles on the South
China Sea,” Cambodian Ministry of Foreign Affairs, July 20, 2012 http://www.mfaic.gov.kh/mofa/default.aspx?id=3206.
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.
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 Ventures5222.KU0.00%
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.
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.
A US army tank rolls deeper into Iraqi territory on March 23, 2003?when US forces invaded?Iraq. Photo: VCG
Libyan protesters gather in Benghazi on March 11, 2011 as Arab Spring spread in the country. The US, the UK and France?intervened in Libya?with a bombing campaign on March 19, 2021. Photo: AFP
Restoring unity at South China Sea
