(IPS Asia-Pacific) – Although it is six years old, few know what the ASEAN Intergovernmental Commission on Human Rights (AICHR) does. It has been called toothless, though its creation was seen as a step forward given the principle of non-interference in the 10-member Association of Southeast Asian Nations (ASEAN).

AICHR chair Dr Muhammad Shafee Abdullah

Q: Who are the individuals, groups, organisations or member countries that have approached AICHR to say they needed help for human right violations?

Dr Abdullah: There has been a sizeable number of persons and groups who came forward. But sadly, we are not authorised to receive their complaints and process them so they can go to the next level.

Q: So how did you address the complaints, given your situation?

Dr Abdullah: We asked them to go back to their countries or whoever can help them such as individual lawyers, legal institutions, human rights organisations and advocacy groups. We gave them directions on how to do that, doing all we can to help them find some answers and, we hoped, some form of restitution. But we cannot even interfere. That’s why we feel very inadequate. We are not independent enough. We need to look at our group and see how we can be a better body.

Q: How did these complainants approach you and what were their complaints?

Dr Abdullah: Many of them came to us with papers and documents, but there were more of them who contacted us through emails. Their complaints on human rights violations are very diverse – land rights violations due to seizure and incursion by more powerful people such as politicians and big business. There were those who raised their right to health and a healthy environment because of pollution caused by industries, oil and mine spills, poisoning and others. There were complaints about employment and labour practices, aggression and abuse inflicted by members of their own communities and other parties. But the majority of grievances involve violations of the fundamental rights to freedoms of speech, association and expression.

Q: In the ASEAN Responsible Business Forum (Oct. 27-29, 2015, Kuala Lumpur), you mentioned that you were surprised that ASEAN member states agreed on the ASEAN Human Rights Declaration (in 2012). What made you say that?

Dr Abdullah: Yes, I was pleasantly surprised because the 10 countries had their strong suspicions against each other for some reasons. But with this wariness, they still managed to agree that there should be an accord to guide them in human rights issues. But surprised as I was, I tried to understand this decision-making in the context of harmony even in differences in norms and beliefs.

Q: The current issue of the transboundary haze was high in the forum, and you were vocal about the responsibility of companies and industries operating in the region.

Dr Abdullah: Yes, I would say Indonesia should not be blamed for it, or any other country in the region for that matter. It doesn’t even matter which country is responsible, but all the countries should go after the companies causing the haze. They must file complaints against them and make them pay for it. I know countries need to maintain a level of diplomacy on matters like this, and the corporate sector is doing its own PR exercise, but I think each country must enforce its own laws to prevent this thing from happening again. The haze is a health and environmental issue that goes into the centre of human rights. It is a total breach of human rights. And I think the corporate sector should take this issue seriously. Thailand and Singapore have strong securities (guarantees), some sort of entry point for companies wanting to do business to comply with human rights stipulations. This should be a great start.

Q: You also praised Myanmar for initiating efforts to protect the environment.

Dr Abdullah: Myanmar co-organised a workshop on the implementation of human rights obligations relating to the environment and climate change to follow up from a similar workshop in 2014. The workshop enabled member states to understand deeper the human rights obligations relating to the environment in the ASEAN context. I would say it helped the countries look at ways of doing a regional response and charting country obligations involving the business and corporate sectors and other stakeholders, especially in environmental policy-making and protection. There were legal frameworks and environmental impact assessment tools for ASEAN.

Q: What are your next steps?

Dr Abdullah: The AICHR will ascertain that environmental issues that impact on human rights, such as the haze, will be included in discussions in the ASEAN Summit. On complaints that we continue to receive, we will make sure that they are received by the countries in question at the national level, and through specific channels. We will continue to promote human rights. We want to make sure they are in the consciousness of people in the region.

*This is part of the ‘Reporting ASEAN: 2015 and Beyond’ series of IPS Asia-Pacific and Probe Media Foundation Inc. http:www.aseannews.net

A better quality of life should be the business sector’s concern, too. Credit: S Li.

By Diana G Mendoza
KUALA LUMPUR, Oct 29 2015 (IPS)

When his father drove back to pay the 47 Malaysian cents they owed to the food stall they had just left, then nine-year-old Anis Yusal Yusoff, today president and chief executive officer of the Malaysian Institute of Integrity, learned the meaning of standing firm by one’s values.

“To me, that was having integrity, having values,” Yusoff recalled while speaking at the ASEAN Responsible Business Forum held here this week in the Malaysian capital. “We had to drive back so we can pay the stall owner what we owed him, even if it was only 47 sen (less than one US dollar) he said.

It may sound cliché, he continued, but integrity should be taught early in life so that it is carried to adulthood, and especially when a person joins the corporate world.

He asked parents and schools to teach children to be “God-fearing and law-abiding,” so that they have firm ethical foundations in life. A walk in a public park, for instance, can teach a child not to throw trash or vandalise flowers because the park belongs to everyone and should be cared for by all who use it.

Simple things like these may be far removed from what business people usually discuss in boardrooms or pay attention to in the world of negotiations, dividends and profit margins. But Yusoff said that business integrity is seen in how people work, in corporations and organisations big and small.

Doing good and practising integrity when doing business resonated through the three-day forum, which was organised by the Singapore-based ASEAN CSR Network. The conference aims to have the public sector, private sector and civil society advance responsible business practices and partnerships as deeper economic integration takes root in the 10-member Association of Southeast Asian Nations (ASEAN) with the launch of the ASEAN Economic Community in December 2015.

Attended by some 250 participants from governments, civil society groups, trade unions, academe and business, the forum discussed issues that businesses in the region have identified as important to their brand of “corporate social responsibility”: responsible business practice in agriculture, respect for human rights, assurance of a decent workplace and a path toward a corruption-free ASEAN business community.

“Businesses are widely recognised as the engine for economic growth and poverty eradication,” said Yanti Triwadiantini, chair of the ASEAN CSR Network. “The forum can provide answers by helping transform companies from merely profit-driven entities into agents of change for responsible and sustainable development.”

As agents of change that have a stake in the betterment of the societies they do business in, businesses take an active role in ensuring equitable, inclusive and sustainable development, speakers at the forum explained.

A business can be good if it has good people running it, stressed Lim Wee Chai, founder and chairman of Top Glove Corp, which produces rubber gloves. “We create awareness in the workforce on how to be good in the conduct of business – from picking up rubbish daily to wearing an anti-corruption badge,” he said.

“We encourage our people to do good. We educate them,” he told the forum. But in the wider world of ASEAN and its partner governments and organisations – as ASEAN companies get more opportunities to go across national borders – “being good alone is not good enough; make sure your neighbouring countries are also doing good,” he pointed out.

Yanti stressed that the need for the private sector to be involved in defining responsible business practices and adhering to these values, against the backdrop of the momentum of economic integration at the launch of the ASEAN Community this year.

The ASEAN Community will officially be launched by ASEAN leaders at their 27th Summit in November in this city. It marks the progression of the Southeast Asia’s main regional grouping into a community of more than 600 million people in economic, socio-cultural and political terms. If it were one single economy, ASEAN would be the seventh largest economy in the world with a combined GDP or 2.4 trillion dollars in 2013. “2015 is a milestone year for ASEAN,” said Yanti.

At the same time, Yanti asked participants to be mindful of the need to narrow the development gap among the richer and poorer ASEAN countries, and the gap within these countries, by ensuring protection for the most vulnerable groups such as children, women and migrant workers.

“Many of the problems we face today are also caused by irresponsible companies who take advantage of the prevailing conditions to earn maximum profits at the expense of people and the environment,” she said. “The current haze (is) as prime example of such a phenomenon,” she added, referring to how the drive for profits has pushed plantation owners and companies with concessions in Indonesia to use burning practices that annually pollute the air across several countries in Southeast Asia and cause regional tensions. This year’s haze episode has been the worst since 1997.

Corruption, the concern of many ASEAN citizens and a touchy topic among governments, also drew lively discussion.

“More often, corruption occurs when the government transacts business with the private sector,” said Francesco Checchi, regional anti-corruption adviser of the Southeast Asia and the Pacific office of the UN Office of Drugs and Crime. International mechanisms such as the UN Convention against Corruption (UNCAC) could be a guide to not just eliminate but to prevent corruption in business, he added.

The forum’s guest of honor, Sen. Paul Low Seng Kuan, minister for governance and integrity of the prime minister’s department of Malaysia, pointed that there are “businesses that partner with corrupt political institutions.”

“Corruption has eroded the integrity of almost all institutions,” explained Jose Cortez, executive director of Integrity Initiative Inc in the Philippines. In his country, he said, a trust-building movement has been mounted where institutions are trying to win the public’s confidence by signing “integrity initiative pledges” that commit to transparency and honesty in doing business.

“If transparency is prevalent in a company’s culture, then it is easier to detect corrupt practices,” he said.

From a larger perspective, the quest for “human dignity” is still any businessperson’s aspiration, added Thomas Thomas, chief executive officer of the ASEAN CSR Network. “I’ve heard the quest to doing good many times in this forum, and the difficulty of being good, but it is attainable,” he pointed out.

This feature is part of the ‘Reporting ASEAN: 2015 and Beyond’ series of IPS Asia-Pacific and Probe Media Foundation Inc.

Volunteers taking on fires at Garung village in Pulang Pisau district, Central Kalimantan, Indonesia. Credit: Ministry of Environment and Forestry, Indonesia

By Kanis Dursin
JAKARTA, Oct 10 2015 (IPS)

A regional agreement on managing transboundary haze caused by fires raging in Indonesia’s forests and peatlands appears all but buried in the embers of frustration of its neighbouring countries.

Nearby Singapore and Malaysia, apart from eastern Indonesia, have been hardest hit by the haze, which has been sending air pollution indices soaring to unhealthy levels for more than a month now. In recent days, the winds have blown the haze to southern Thailand as well.

In parts of Southeast Asia, a pall of grey hangs over the skies from morning until dusk, and scenes of residents walking around with masks have become common.

Over the past month or so, schools have been closed at some point, flights delayed or outdoor activities cancelled or limited, with warnings about the risks to children and the elderly, as countries asked Indonesia, with whom they are members in the Association of Southeast Asian Nations (ASEAN), to address the burning of forests and land in eastern Indonesia.

After months of digging in its heels and saying it can manage on its own, the Indonesian government was quoted as saying this week it believes foreign help would be needed to put out the fires.

“This has proven quite a challenge for us, so we see it as a necessity to work together with countries that have the available resources to extinguish the fires,” foreign ministry spokesman Arrmanatha Nasir said on Oct. 8. He said Indonesia’s foreign minister, Retno LP Marsud, had talked to Singapore, Malaysia, Russia, China and Australia “to discuss cooperation initiatives to overcome fire hotspots.”

But in these discussions about the fires there has hardly been any mention of the 1997 ASEAN Agreement on Transboundary Haze Pollution, a legally binding agreement among the 10 member countries of the organisation. These are Brunei, Cambodia, Laos, Indonesia, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.

In truth, activists say, they did not have much hope in the ASEAN haze agreement and ASEAN’s ability – or will – to hold its members to its own commitments.

“The agreement is said to be legally binding, but ASEAN has no court to try offenders,” said Nur Hidayati, head of the advocacy department of the Indonesian Forum for Environment, known by its Indonesian acronym WALHI. She added that the haze accord would likely meet the same fate as the ASEAN Intergovernmental Commission on Human Rights, which activists see as weak.

Yet this year would have been an opportunity to show the teeth of the haze agreement, which ASEAN has long held up as an example of successful regional cooperation. The haze agreement was the world’s first regional arrangement that binds a group of states to tackle transboundary pollution from land and forest fires.

After years of resistance, Indonesia – whose inability to control the fires for nearly two decades has been an irritant in its ties with its neighbours – finally ratified the haze agreement in September 2014 and became legally bound by it. That is 12 years after Indonesia signed it with other ASEAN countries in 2002, a fact that has raised doubts about ASEAN’s ability to enforce its own decisions.

ASEAN countries are also moving toward deeper economic integration and launching the ASEAN Community in December 2015, but addressing transboundary tensions continue to challenge the 48-year-old organisation.

“If the most powerful three members of ASEAN (Indonesia, Singapore and Malaysia) are not able to address a recurring and predictable problem (haze), what hope does the region have for economic integration with the ASEAN Economic Community that is going to be finalized end of this year?” asked a September commentary in the Jakarta Post newspaper by Joseph Cherian of the Centre for Asset Management Research and Investments, Jack Loo of Think Business and Ang Swee Hoon of the National University of Singapore Business School.

Singapore and Malaysia have repeatedly offered assistance to put out the raging fires, but Indonesia’s officials until recently said they could manage on their own.

“For the time being, we are only thinking of exhausting all of our internal resources before seeking external assistance,” J S George Lantu, director of ASEAN functional cooperation of the Indonesian foreign ministry said in an interview earlier in October. “We really appreciate their offers of help, but as a sovereign state we don’t want to seek to external help without trying hard enough to put out the fires. We can handle the fires ourselves,” the diplomat said.

But Indonesia is showing “complete disregard for our people, and their own,” Singapore Foreign Minister K Shanmugan told the British Broadcasting Corporation earlier in October.

The head of the environment division of the Jakarta-based ASEAN secretariat, which oversees the implementation of the ASEAN haze agreement, said Indonesia’s responses to the fires were in line with the accord. “Obviously, Indonesia can deal with the fires with its own resources,” division head Ampai Harakunarak said. “All member states are standing by, ready to receive requests from Indonesia.”

The accord aims to “prevent and monitor transboundary haze pollution as a result of land and/or forest fires which should be mitigated, through concerted national efforts and intensified regional and international cooperation.” It requires parties to “cooperate in developing and implementing measures to prevent and monitor transboundary haze pollutions as a result of land and/or forest fires” and “to control sources of fires.”

In truth, “Indonesia ratified the agreement under strong protest from Singapore and Malaysia over haze pollution. It (the ratification) was more as a political gesture than a statement of intent,” said WALHI’s Hidayati.

Significantly, Article 12.2 of the agreement says that external assistance “can only be employed at the request of and with the consent of the requesting party, or when offered by another party or parties, with the consent of the receiving party.”

President Joko Widodo had instructed government agencies to handle the fires in peatlands and forest being cleared by plantations for products like palm oil or paper. Foreign companies run many of them, prompting Singapore’s National Environmental Agency to name five companies with Indonesian concessions suspected to be contributing to the haze.

The Singapore Environment Council and Consumers Association of Singapore have urged consumers to use only products of companies that do not use burning practices in Indonesia.

Satellite images show that 70 per cent of hotspots in Sumatera and Borneo islands in Indonesia are in local plantations. Some 1.7 million hectares of land, more than a third of which are on peatland in Sumatra and Kalimantan, have been burned, Widodo said.

Clearly, Indonesia has a lot of cleaning up to do of the concessions it gives to plantation companies and enforcing of local laws, critics say.

Land and/or forest fires have plagued Indonesia annually over the past 18 years due to unprecedented expansion of pulp and paper companies and oil palm plantations and their conversion into easy-to-burn peatlands, according to WALHI.

“By nature, tropical rain forests are impossible to burn due to high humidity. However, when trees are felled and a monoculture system is introduced in oil palm and rubber plantations or forest estates, their humidity disappears and they become vulnerable to fires,” Hidayati said.

Government officials say they have frozen some oil palm and forest concessions, adding that they have fined some companies and that others are awaiting trial. “Previously, we only charged individuals or corporates violating the 2009 environmental law in criminal and civil courts. Since January 2015, however, we also impose administrative sanctions on them by either freezing or revoking their concessions,” said Muhammad Yunus, director of the criminal law enforcement division of the Ministry of Environment and Forestry.

But the government must review all forest and plantation concessions to determine whether companies can handle fires, Hidayati said. “A fire that breaks out in a plantation or forest estate should been seen as a concession holder’s inability to manage the land and thus serve as a ground to revoke the concession, regardless who sets it or whether or not it’s deliberate.”

Untung Suprapto, head of the land and forest fire control sub-directorate of the Ministry of Environment and Forestry, said his office is drafting a regulation that would require plantation and forest concession holders to have own firefighter teams, trucks and equipment.
(End)

Excerpt:

Stanzin Dolma of Choglamsar-Leh breaks down while showing the ruins of her home, wrecked by the August floods and landslides in India in 2010. Credit: Athar Parvaiz/IPS

By Jed Alegado
MANILA, Jul 8 2015 (IPS)

The Association of Southeast Asian Nations (ASEAN) started as a cooperation bloc in 1968. Founded by five countries – Thailand, Singapore, Malaysia, Indonesia and the Philippines – ASEAN has since evolved into a regional force which is slowly changing the landscape in global politics.

Five decades later, amid changing geopolitics and dynamics in the region, ASEAN faces a daunting task this year as it gears up for ASEAN 2015 economic integration amidst uncertainty in light of climate change impacts.

Agriculture – ASEAN’s key driver of growth

ASEAN banks on agriculture as the key driver of growth in the region. Its member-countries rely on agriculture as the primary source of income for their peoples. Food security, livelihoods and other needs of ASEAN citizens are at stake in the region’s vast resources, such as forests, seas, rivers, lands and ecosystems. However, climate change is threatening shared growth reliant on agriculture and natural resources.

With a region dependent on agriculture for food security and livelihoods, ASEAN needs to step up its fight against climate change. Oxfam GROW East Asia campaign recently released a report titled “Harmless Harvest: How sustainable agriculture can help ASEAN countries adapt in a changing climate.”

It argues that “climate change is undermining the viability of agriculture in the region and putting many small-scale farmers’ and fisherfolk’ livelihoods at risk.”

Data from the International Rice Research Institute (IRRI) revealed that rice yields drop as much as 10 percent for every 1 percent rise in temperature – an alarming fact for a region which counts rice as the staple food.

ASEAN 2015 in Paris?

The planned 2015 economic integration is unveiling amidst a backdrop of threats to agriculture in the region due to impacts of climate change. For ASEAN 2015 integration to prosper and its promised economic growth to be shared mutually, ASEAN must unite against climate change by taking a definitive stand as a regional bloc.

First, at the global climate negotiations of the United Nations Framework Convention for Climate Change, ASEAN leaders must unite behind a fair and binding agreement toward building a global climate deal in Paris this year.

Second, in terms of climate change mitigation, ASEAN needs to harmonise existing policies on coal and level the playing field where renewable energies can compete with other sources of energy. Furthermore, the 2015 economic integration must be clear on charting a low-carbon development plan for the region.

Third, ASEAN must ensure that its economic community-building is geared toward low-carbon development anchored on sustainability and inclusive growth. It can start by ensuring that regional policies in public and private investments in agriculture and energy do not threaten food security, improve resilience against climate-related disasters, and respect asset reform policies and the rights of small food producers.

Lastly, ASEAN leaders must also ensure that policies will be in place to shift the funding support from industrial agriculture to sustainable agricultural practices promoting agro-ecology and sustainable ecosystems.

ASEAN can do this by ensuring that each governments allocate sufficient financial resources for community-driven climate change adaptation practices while working with communities and peoples’ organisations on knowledge-sharing and learning best practices.

Edited by Kitty Stapp

Excerpt:

“Just as the world is moving towards multi-polarity, so is Asia … The economic fragmentation of the region and the competitive pursuit of security interests may well consign the Asian Century into a brief interlude rather than a millennial transformation”. Photo credit: Public domain via Wikimedia Commons

By Shyam Saran
NEW DELHI, Jun 1 2015 (IPS)

It has been apparent for some time that we are in the midst of a historic shift of the centre of gravity of the global economy from the trans-Atlantic to what is now becoming known as the Indo-Pacific.  

This is an emerging centre of economic dynamism and comprises what was earlier confined to the Asia-Pacific but now includes the South Asian region as well.

This is a region which now accounts for nearly 40 percent of world gross domestic product (GDP), which is likely to rise to 50 percent or more by 2050.  Its share of world trade is now 30 percent and growing.

Shyam Saran

This year, the region has become the largest source of foreign direct investment (FDI), surpassing the European Union (EU) and the United States. China has been the main driver of this historic shift, but other Asian economies have also made significant contributions.

As the Chinese economy begins to slow, India shows promise of regaining an accelerated growth trajectory under a new and decisive political leadership. This will help extend the scale and direction of this shift. Its geopolitical consequences will be profound.

It must be recognised that the economic transformation of Asia, in particular the spectacular growth of China, has been enabled by an unusually extended and liberal global economic environment, underpinned by the faith in globalisation and open markets.

It has also been enabled by a U.S.-led security architecture in the region which kept in check, though did not resolve, the long-standing political fault lines and regional conflicts over competing territorial claims and unresolved disputes.

This relatively benign and supportive economic and security environment is in danger of unravelling precisely at a time when the situation in the region is becoming more complex and challenging.  Paradoxically, this is partly a consequence of the very success of the region in achieving relative economic prosperity.“The danger is that instead of an inclusive and regionally integrated Asia, we may end up with exclusive and competing clusters, moving at different speeds, with different norms and standards. This may well undermine the very basis of Asia’s economic dynamism”

We are witnessing new trends in the region which, unless managed with prudence and foresight, may well sour the prospects of an Asian Century.

The relatively open and liberal trade and investment regime, in particular access to the large consuming markets of the United States, European Union and Japan, is now under serious threat.

Protectionist trends are already visible in these advanced economies as they struggle with prolonged economic stagnation which is the fall-out of the global financial and economic crisis of 2007-2008.

Instead of the consolidation and expansion of the open and inclusive economic architecture that had hitherto been the hallmark of the regional and global economy, we are witnessing its steady fragmentation.

In the Indo-Pacific region, there are competing regional trade arrangements and investment regimes, with no clarity on the contours of a new and emerging economic architecture.

The United States is spearheading its Trans-Pacific Partnership (TPP) which will include some Asian economies, but not India and China.

China has countered by proposing a free trade area encompassing the current Asia-Pacific Economic Cooperation (APEC) membership.  This will include China and the United States but not India and some of the Association of Southeast Asian Nations (ASEAN) economies.

The Regional Cooperation Economic Partnership (RCEP) would include all ASEAN countries plus China, Japan, Republic of Korea, India, Australia and New Zealand, but not the United States.

And finally, there is the East Asia Summit process (EAS) which includes all the above-mentioned countries but also the United States and Russia.

The danger is that instead of an inclusive and regionally integrated Asia, we may end up with exclusive and competing clusters, moving at different speeds, with different norms and standards.  This may well undermine the very basis of Asia’s economic dynamism.

In the security field, too, we are witnessing a growing salience of inter-state tensions and competitive military build-up.

The U.S.-led security architecture remains in place formally but its erstwhile predominance is diminished.

The gap between the military capabilities of China and the United State is closing steadily. As China’s security footprint expands beyond its shores, it will inevitably intersect with the existing deployment of the forces of the United States and its allies and partners.

Faced with an increasingly uncertain security environment and threatened by a more insistent assertion of territorial claims by China, the countries of the region, including Japan, Republic of Korea, members of ASEAN, Australia and India are building up their own defences, in particular maritime capabilities, and this itself is escalating tensions.

There is as yet no emerging regional security architecture which could help manage inter-state tensions in the region. This includes the growing possibilities of confrontation between the United States and China.

In the absence of such a regional security architecture, based on a broad political consensus and a mutually acceptable Code of Conduct, the region may well witness a heightening of tension and even conflict.  These developments would inevitably and adversely impact on the dense network of trade and investment relations that bind the countries of the region together and erode the very basis of their prosperity.

In this context, mention may be made of the Chinese One Belt One Road (OBOR) initiative which seeks to deploy China’s surplus capital to build a vast network of transport and infrastructural links not only across the Indo-Pacific but also straddling the Eurasian landmass.

The newly established Asian Infrastructure Investment Bank (AIIB) initiated and led by China would become a key financing instrument for the OBOR.  China has also recently come out with a new Defence White Paper, which puts forward a new strategy of Open Seas, shifting the emphasis from coastal and near sea defence to an expanding naval presence which matches China’s growing global profile and world-wide location of Chinese-controlled economic assets.

While China’s investment in regional infrastructure in Asia may be welcome, it will inevitably be accompanied by a security dimension which may heighten anxieties among countries in the Asian region and beyond.

It is apparent from the above analysis that it is no longer possible for any major power in the Indo-Pacific to unilaterally seek a position of overweening economic dominance or military pre-eminence of the kind that the United States enjoyed over much of the post-Second World War period.

Just as the world is moving towards multi-polarity, so is Asia.  It is now home to a cluster of major powers with significant economic and security capabilities and interests. The only practical means of avoiding a unilateral and potentially destructive pursuit of economic and security interests would be to put in place an inclusive economic architecture underpinned  by a similarly inclusive security architecture which provides mutual reassurance and shared opportunities for promoting prosperity.

The economic fragmentation of the region and the competitive pursuit of security interests may well consign the Asian Century into a brief interlude rather than a millennial transformation. (END/COLUMNIST SERVICE)

Edited by Phil Harris   

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

Excerpt:

Last year, the Philippines brought a complaint against China’s aggressive actions in the West Philippine Sea to the United Nations Arbitral Tribunal. It was a master stroke by the Philippine government.

The Chinese “were really unprepared for that and were really embarrassed by it,” one of Vietnam’s top experts on Chinese diplomacy told me during my recent visit to Hanoi to give a series of lectures on foreign policy and economic issues.None of the key players in East Asia today may want war. But neither did any of the Great Powers on the eve of the First World War.

The move put China on the defensive, said another Vietnamese analyst, and was one of the factors that prompted Beijing last year to agree in principle to hold discussions with the Association of Southeast Asian Nations (ASEAN) on a Code of Conduct for the disputed body of water – known in the Philippines as the West Philippine Sea, in Vietnam as the East Sea, and in China as the South China Sea.

The budding cooperation between Vietnam and the Philippines is the latest development stemming from China’s aggressive territorial claims in the region.

In 2009, China put forward the so-called “Nine-Dash Line” map in which it claimed the whole of the South China Sea, leaving four other countries that border on the strategic body of water with nothing more than their 12-mile territorial seas.

In pursuit of Beijing’s goals, Chinese maritime surveillance ships have driven Filipino fisherfolk from Scarborough Shoal, which lies within the Philippines’ 200-mile Exclusive Economic Zone (EEZ). In the most recent incident, the Chinese tried to disperse Filipino fishing boats approaching the shoal with water cannons.

Chinese government ships have also reportedly chased off Filipino boats trying to replenish a garrison on Ayungin Shoal in the Spratly Islands.

The Philippines and Vietnam are natural allies in their common struggle against China’s drive for hegemony in East Asia. Already partners in ASEAN, the two are likely to be driven closer together by Beijing’s increasingly brazen displays of power as it enforces its claim to some 80 percent of the South China Sea.

Both have also drawn closer to the United States, seeking to use Washington to balance China’s growing military presence in the region.

Vietnam has played the U.S. card more adroitly, however, relying on the Philippines to explicitly invite an expanded U.S. military presence on its soil and seas, something the Vietnamese would not themselves allow. But despite a common interest in containing China, both countries should avoid turning the conflict into a superpower conflict between the United States and China.

Figuring out Beijing’s Motives

The Vietnamese offered several schools of thought on China’s territorial claims. The first sees the Nine-Dash Line as delineating the maritime borders of China and not necessarily possession of the islands in the area.

The second interprets it as saying only that the islands and other terrestrial formations in the area belong to China, leaving the status of the surrounding waters ambiguous. A third opinion is that the map asserts that both the islands and surrounding waters belong to China.

A fourth perspective sees the Nine-Dash Line as an aggressive negotiating device.

According to a diplomat and academic expert who has first-hand experience negotiating with the Chinese, Beijing’s style of resolving territorial issues has the following steps: “First,” he said, “the two parties agree on the principles guiding negotiations. Second, both sides draw up their maps reflecting their respective territorial claims, with China pushing its territorial claims as far as possible.

“Third, they compare the maps to identify overlapping or disputed areas. Fourth, the parties negotiate to resolve the disputed areas. Fifth, if there is agreement, draw up a new map. Finally, they go to the United Nations to legalise the new map.”

Despite varying views on China’s intentions, however, the Vietnamese are one on two key points: 1) that the Nine-Dash Line claim is illegal, and 2) that owing to the number of parties and overlapping claims involved in the South China Sea dispute, only multilateral negotiations can set the basis for a lasting comprehensive solution.

Also, whatever may be their different readings of China’s motives for advancing its Nine-Dash Line claims, there seems to be a consensus among Vietnamese officials and experts that China’s strategic aim is to eventually assert its full control of the South China Sea.

In other words, Beijing’s aim is to legally transform the area into a domestic waterway governed by Chinese domestic laws.

Some of Beijing’s acts are explicit, such as the establishment of Sansha City as a domestic governing unit for the whole South China Sea and the recent passage of a fisheries law requiring non-Chinese vessels fishing in the area to obtain a license from the Chinese government.

Others are more ambiguous, such as Beijing’s views on the issue of freedom of navigation in the disputed area. Ambiguity serves their purpose at a time that they do not yet have the capability to match their power to their ambition.

“But there is no doubt that when they reach that point, of having the power to impose their ambition,” said one Vietnamese analyst, “they will subject the area to Chinese domestic law.”

The United States: From Enemy to Ally?

In an irony of history, the Vietnamese have welcomed Washington’s plans to increase the U.S. military footprint in the region to “balance” China. Once an enemy, Hanoi now has good security relations with the United States, whose navy Vietnam has invited to use the former Soviet naval base at Cam Ranh Bay for logistical and ship repair needs.

For the same reason, the Vietnamese approve of the U.S. military’s controversial build-up in the Philippines. I was told that as a long-time ally of the United States, it was the role of the Philippines to ask the United States to increase its military presence in the Western Pacific.

But inviting the United States to have a larger military presence is counterproductive if the aim is to resolve regional territorial disputes with China.

A larger U.S. presence would transform the regional context into a superpower conflict, thus marginalising the territorial question and the possibility for its resolution.

Moreover, inviting Washington to plant an even bigger military footprint in the Philippines would convert the country into a frontline state like Afghanistan and Pakistan, with all the terrible consequences such a status entails – including the subordination of our economic development to the strategic-military priorities of a superpower.

Finally, a balance of power situation is unstable and prone to generate conflict, since although no one may want a war, the dynamics of conflict may run out of everyone’s control and lead to one. China’s aggressive territorial claims, the U.S. “Pivot to Asia,” and Japan’s opportunistic moves add up to a volatile brew.

Many observers note that the Asia-Pacific military-political situation is becoming like that of Europe at the end of the 19^th century, with the emergence of a similarly fluid configuration of balance-of-power politics.

None of the key players in East Asia today may want war. But neither did any of the Great Powers on the eve of the First World War. The problem is that in a situation of fierce rivalry among powers that hate one another, an incident may trigger an uncontrollable chain of events that may result in a regional war, or worse.

Walden Bello is a representative of Akbayan (Citizens’ Action Party) in the Philippine House of Representatives. He was the author of the House resolution renaming the South China Sea the West Philippine Sea. An earlier version of this commentary was published by Foreign Policy In Focus.

Since his rise to power in late 2012, China’s President Xi Jinping has managed to consolidate his control swiftly over the three pillars of the Chinese political system, the state bureaucracy, the Chinese Communist Party (CCP), and the military. In response, many neighbouring countries cautiously welcomed a more self-confident and stable leadership in Beijing, hoping the new Chinese president will display greater flexibility on outstanding regional issues.

After years of intensifying territorial disputes between China and a number of competing claimant states in the South and East China Seas, fears of an accidental clash in the high seas have grown hand in hand with deepening risks of an outright military confrontation in one of the world’s most crucial waterways.

Against this backdrop, the early 2013 appointment of Foreign Minister Wang Yi, a veteran diplomat with considerable experience in Asia, was interpreted as a positive move in the direction of dampening brewing territorial disputes with neighbouring countries, especially Japan, Vietnam and the Philippines. While many analysts saw the diplomatic reshuffle as a reflection of the new leadership’s commitment to prevent further deterioration in its regional ties, President Xi Jinping has proceeded with buttressing the country’s territorial manoeuvres in the Western Pacific.It seems that the Chinese leadership’s more assertive territorial issue, which resonates with the majority of the citizens, is part of a calculated effort to enhance its political legitimacy ahead of the difficult task of implementing a perilous economic transition.

In mid-2013, Xi consolidated various maritime security agencies under the National Oceanic Administration (NOA), which ensured a more efficient and vigorous enforcement of the country’s territorial claims. This, experts contend, allowed China to step up its patrols across the South China Sea and secure its hold on occupied features.

He went even further in streamlining the country’s foreign policy bureaucracy, establishing the State Security Committee (SSC) in November. This is an overarching decision-making body that allows the president to manage national security and foreign policy issues more directly. Previously, the Chinese leaders had to coordinate foreign policy decisions through a complex web of bodies, namely the Leading Small Groups on Foreign Affairs and National Security and the Central Military Commission.

In late-November, China unilaterally imposed an Air Identification Defence Zone (ADIZ) which covers maritime features claimed by both South Korea (Leodo/Suyan Reef) and Japan (Senkaky/Diaoyu Islands) in the East China Sea. To demonstrate its commitment to enforce the new measure, China announced that it will “adopt defensive emergency measures to respond to aircraft that do not cooperate in the identification or refuse to follow the instructions.”

Worried by China’s move, the U.S., Japan, and South Korea immediately challenged the newly announced ADIZ (late November), sending military aircraft to the area and ignoring Chinese authorities. This was followed by a high-profile visit by U.S. Vice-President Joe Biden to the region, where he held direct talks with leaders in Tokyo, Beijing, and Seoul, hoping to calm down tensions.

“China’s recent and sudden announcement of the establishment of a new air defence identification zone has, to state the obvious, caused significant apprehension in the region,” Mr. Biden lamented during his visit to Beijing, where he held tense talks with Chinese President Xi Jingping.

Meanwhile, the Chinese Defence Ministry’s announcement that it will “establish other air defence identification zones at an appropriate time after completing preparations” worried Southeast Asian nations, who fear the imposition of a similar measure over the contested waters of the South China Sea.

“There’s this threat that China will control the air space [in the East China Sea] … It transforms an entire air zone into China’s domestic air space,” said Philippine foreign secretary Albert Del Rosario, openly criticising China’s ADIZ announcement. “That is an infringement and compromises the safety of civil aviation…[and] the national security of affected states.”

But China has refused to rescind its ADIZ, sending its own jet fighters to the area to enforce its regulations. China maintains that its ADIZ is consistent with established international practices, since a number of countries, including the U.S., Japan, India, Pakistan, Norway, and the UK maintain their own air identification zones. In response, Washington has advised civilian aircraft to observe the Chinese ADIZ, while clarifying that the existing ADIZs elsewhere — contrary to that of China — strictly apply to civilian aircraft only.

Meanwhile, Japan and the Association of Southeast Asian Nations (ASEAN) have worked on a joint statement to express their common concern over any potential “threat” to international civilian aviation, calling for ‘freedom of overflight’ in the region. Reports suggest that the draft statement reaffirms the common positions of both sides to “freedom of navigation” in international waters and “maritime security”.

For many observers, the widely shared criticism against China’s latest measures stands in clear contrast to how Beijing was able to garner tremendous regional clout in early-October, when Xi – in the U.S. President Barack Obama’s absence – offered multi-billion dollar trade and infrastructure deals to facilitate economic integration in the region. The hope was that China would avoid further territorial tensions as it seeks to project itself as the new pre-eminent force in East Asia.

“Is the former [Hu Jintao] administration different from the current one? We have hoped that the current administration will be much more constructive, and we are [still] hoping that the situation improves,” Philippine foreign secretary Albert Del Rosario told IPS, expressing the Philippines’ desire for a retrenchment in China’s perceived growing territorial assertiveness.

Others have been less optimistic, pointing to the leadership’s willingness to accommodate the rising tide of popular nationalism, which has been driving the country’s more assertive territorial posturing. The Chinese leadership is already grappling with a difficult economic transition, as it tries to establish a more sustainable economic model driven by domestic consumption, liberalised capital markets, and high-end manufacturing.

The process of economic transition is expected to meet stiff resistance from the beneficiaries of the previous labour-intensive, export-oriented growth model, while attempts at establishing a more competitive market economy could unleash instability in the future.

So far, it seems that the Chinese leadership’s more assertive territorial issue, which resonates with the majority of the citizens, is part of a calculated effort to enhance its political legitimacy ahead of the difficult task of implementing a perilous economic transition.

Poorer countries will find it hard to gain access to bilateral trade agreements unless the WTO helps them do so. Credit: Amantha Perera/IPS

By Amantha Perera
TOKYO, Nov 29 2013 (IPS)

For years, it was the power chamber at the headquarters of the World Trade Organisation (WTO) in Geneva – the Director General’s Conference Room, more popularly known as the Green Room, where a handful of delegates would gather for important discussions and meetings.

The traditional power quad – the U.S., EU, Japan and Canada – would gather in the Green Room to “decide on global trade deals,” according to Masahiro Kawai, the head of the Tokyo-based Asian Development Bank Institute (ADBI), a think tank. That, however, was in the past.

“They sat in the Green Room and came up with agreements, but not any more,” Kawai said.

The erosion of power within the Green Room discussions, and more specifically that held by rich nations like the U.S. or Japan, is primarily linked to the rise of emerging nations such as India and China, and of newer, leaner and meaner trade groups like BRICS (Brazil, Russia, India, China and South Africa), as well as the change in traditional global supply chains.

A quarter of a century ago the share of global GDP held by emerging and developing economies was below 20 percent, according to World Bank and International Monetary Fund statistics.

As of 2012, they had almost caught up with the G7 powerful industrialised nations (Canada, France, Germany, Italy, Japan, UK and U.S.). The G7 share was around 48 percent while the emerging nations’ share was just below 40 percent.

They have already overtaken the G7 as the largest trading bloc in the world, accounting for just over 40 percent of all global trade. The G7 share of global trade has fallen from a peak of above 50 percent in the first half of the 1990s to around 35 percent.

“No wonder the voices of the emerging and developing nations have risen at the WTO,” Kawai said.

Another reason for the erosion of power held by the G7 is the change in global supply chains. Whereas decades back global trade would be dominated by end-products, now it is predominantly a market for intermediary products.

“Today, nearly 60 percent of the world merchandise trade is trade in intermediary products,” Kawai said.

When he researched the supply chain of the iPhone, ADBI Director of Capacity Building and Training Yuquing Xing came up with a starling statistic. Of a production cost of 178.96 dollars (2010 values), China’s manufacturing cost was a mere 6.50 dollars. The remaining costs came from over a dozen companies in five countries. The most expensive component, according to Xing’s research, was the flash memory, at 24 dollars, which came from Toshiba Co in Japan.

This new trading pattern allows China to export over 11 million iPhones a year to the U.S., the country where it was developed and where the company that markets the product is located, Xing said.

But this reinvention of global trade negotiations does not bode all that well for poorer nations and lower-middle-income nations, according to ADBI experts and others. Why? Because the emerging nations and G7 members are now eagerly negotiating and entering into regional and bilateral free trade agreements, mostly with equally powerful trading partners.

According to ADBI, there are 379 such trade agreements in force globally, with more being negotiated. There are ongoing discussions for the Trans-Pacific Partnership, which would bring together 10 countries on either side of the Pacific: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the U.S., and Vietnam.

Equally closely watched are the discussions on the jumbo Association of Southeast Asian Nations (ASEAN) Plus Three partnership that would bring together the ASEAN nations and Japan, South Korea and China.

“The non-tariff trading regimes are the current weapons of choice,” said Rodolfo Certeza Severino, the former secretary general of ASEAN between 1998 and 2002 and currently the head of the ASEAN Studies Centre at the Institute of Southeast Asian Studies in Singapore.

What these jumbo and super powerful trading agreements do is leave middle-income and poorer countries in an unenviable position of being left on the sidelines, unable to get in.

For example, none of the eight countries in the South Asian Association for Regional Cooperation (SAARC), a political association, feature among India’s fifteen largest trading partners.

India’s largest South Asian trading partner is Sri Lanka, with which it did four billion dollars worth of trade last year. But here too the trade has been lopsided, with Indian exports amounting to over 3.4 billion dollars in 2012.

“These free trade agreements are setting the new realities,” Kawai said.

These new realities dictate that while the richer nations negotiate, argue and cajole for more preferential trade, the world’s poor are being left further adrift.

A recent report by the U.N. Conference on Trade and Development said that the 49 least developed nations recorded job growth of just over two percent in the last few decades, barely above population growth levels.

ADBI’s Kawai however sees a role for the WTO to break the trading cycle that favours the rich. The organisation should act as a catalyst for trade negotiations and as an effective arbitrator of disputes, he said. More multilateral and regional trade agreements should be promoted, with the WTO playing a critical central role, he added.

“A revamped WTO process could achieve global trade and investment liberalisation through consolidation of regional agreements, creation of cross-regional agreements, and harmonisation of rules across agreements,” he said.

Former ASEAN Secretary General Severino agreed. “In fact most of the provisions in these [free trade] agreements have to be WTO-consistent,” he said.

But with the WTO hobbled, still unable to conclude the Doha round of negotiations that started in 2001, the chances of it playing a decisive role in trade negotiations remain low, at least in the short term, both experts agreed.

By Lusha Chen
UNITED NATIONS, Nov 14 2013 (IPS)

In June, Singapore, Malaysia and Indonesia were enveloped in haze as hundreds of forest fires burned across the island of Sumatra, in the worst pollution crisis to hit Southeast Asia in more than a decade.

Dr. Nigel Sizer, Courtesy of the World Resources Institute

An analysis by the U.S.-based World Resources Institute (WRI) determined that 150,000 square kilometres burned – more than twice the size of Singapore. Worse, nearly three-quarters of the fires in the study area burned on peatland (a soil layer composed of partly decomposed organic material,  often several metres deep), which acts as a sink to absorb planet-heating carbon dioxide.

Dr. Nigel Sizer, the director of WRI’s Global Forest Initiative, spoke with IPS correspondent Lusha Chen about the obstacles they confronted in investigating the fires, and what countries in the regional Association of Southeast Asian Nations (ASEAN) can do to prevent this recurring environmental catastrophe.

Q: Regarding the most recent fires across Sumatra, what efforts are being undertaken and what efforts should be taken to investigate the cause of the fire and potential culprits?

A: Achieving full accountability for the fires in Sumatra is important, but it will not be easy. Officials in Indonesia, Singapore, and elsewhere are currently investigating who started the fires and who is legally responsible. Several companies that operate palm oil and pulpwood concessions, as well as a few individuals, have already been implicated.

Still, it remains to be seen exactly who will be officially prosecuted and what the penalty will be. Knowing who is legally responsible can be determined only after careful collection of evidence and proper due process.

A major hurdle is that land ownership information in Indonesia is complex, difficult to obtain and opaque. Analysis from the World Resources Institute found that determining who is legally responsible managing the land where fires occurred is a huge challenge.

For example, although many fires were concentrated in company concession lands set aside for palm oil or pulpwood development, simply identifying which companies manage the land proves very difficult. The company concession data are inconsistent between the Ministry of Forestry, the provincial and district governments, and even more so with the self-reported data from the companies.

Indonesia, Singapore, and Malaysia should work together to try and unravel the complex ownership structures of the companies, and their subsidiaries, to understand who manages the land where fires may have occurred.

Q: In the report, you called on ASEAN leaders to act together to stop the pollution. Did this happen at the recent meeting in Brunei?

A: In October the heads of state from the ASEAN countries took some positive steps towards combatting the illegal and harmful fires that cause the haze. Indonesia, Malaysia, Singapore, Brunei, and Thailand agreed to adopt a joint “haze monitoring system” and share digital land-use and concession maps on a government-to-government basis. These are good steps towards transparency and accountability.

But much more progress needs to be made. The governments stopped short of making concession and land use data entirely public, which would allow for independent monitoring of fire-prone areas by civil society. The ASEAN governments can also do more to ensure that companies operating in multiple countries in the region are held to responsible for their operations in Sumatra.

Ultimately, enforcement on the ground in Indonesia remains the most important thing. The risk of further fires will remain high unless the no-burn policies as strictly enforced at a local level. This will require support from national and local governments, as well as corporate buyers and consumers who purchase commodities produced in the area.

Q: How seriously are the fires contributing to Indonesia’s GHG emissions, and what are the long-term consequences if the problem is not addressed?

A: The fires are an enormous contributor to Indonesia’s Greenhouse Gas (GHG) emissions, and will have profound impacts on the country’s climate strategies.

Calculating the emissions from the fires is be extremely difficult, due to uncertainly in the depth and quantity peat, a soil layer of partly-decomposed organic material that can emit large amounts of gas when burned. According to estimates from Indonesia’s national office on climate change*, changes in land use (including fires) and the effects on peatland account for 79 percent of Indonesia’s total emissions. This is globally significant, as Indonesia is, by some accounts, the third largest emitter in the world.

The Indonesian government has pledged to cut emissions 26 percent (or 41 percent with international assistance) by 2020 compared to business-as-usual. It will be very difficult for them to meet this ambitious goal without addressing the issue of fires on forest and peatland.

Q: Slash-and-burn is a very traditional way to clear the land for planting. What efforts should be taken at the grassroots level?

A: We need greater awareness and political will from the leaders on the ground. Elected officials, local governments, and local communities need to take strong action to ensure that illegal burning is controlled. Local farmers should be given alternatives to burning, such as access to mechanised equipment that can make clearing and planting easier.

It is also vital that major plantation companies prohibit their local company operators and suppliers from burning land. Similarly, corporate buyers of commodities like palm oil and pulp and paper should ensure that their supply chains are not linked to companies suspected of burning.

Getting the markets to send the right message will help ensure that local farmers and company operators understand the damage that the fires cause.

Change on the ground cannot happen without them.

(*Citation: DNPI (2010) Indonesia’s Greenhouse Gas Abatement Cost Curve. Dewan Nasional Perubahan Iklim, Jakarta, Indonesia.)

Excerpt:

As the U.S. struggles with a weeks-long government shutdown which has threatened the country’s economic recovery and forced President Barack Obama to cancel a series of high-stakes visits to Asia, China has instead taken the centre-stage, boosting ties with Asian neighbours and promising multi-billion trade and investment deals.

Amid rising geopolitical tensions in the Western Pacific, Obama’s scheduled trip to Asia was meant to reassure allies and reiterate Washington’s commitment to regional stability. Moreover, Obama was also expected to make a strong pitch for the Trans-Pacific Partnership Free Trade Agreement (TPP-FTA), which aims to cover 12 Pacific Rim nations that collectively constitute about 40 percent of the global economy and a third of its total trade.

But facing a domestic political crisis, with the U.S. Congress blocking implementation of the Affordable Healthcare Act, the White House announced Obama’s decision to not only skip state visits to Malaysia and the Philippines, but also trips to the Asia Pacific Economic Cooperation (APEC) as well as the Association of Southeast Asia Nations (ASEAN) summits in Indonesia and Brunei."Obviously we prefer a U.S. government that is working than one that is not, and we prefer a U.S. President who is able to travel and fulfill his international duties to one that is preoccupied with domestic preoccupations.”

In Obama’s absence, Chinese President Xi Jinping took the limelight, becoming the first foreign leader to deliver a speech at the Indonesian Parliament and serving as the keynote speaker at the APEC summit (Oct. 7-8).

To up the ante, Xi offered to set up a 50 billion dollar Asian Infrastructure Investment Bank which is set to rival the U.S.-Japan-led Asian Development Bank (ADB) as the continent’s primary source of development aid.

“China will firmly uphold regional peace and stability and help cement a foundation for a win-win situation in the Asia-Pacific,” declared Xi at the APEC summit. He emphasised China’s role as Southeast Asia’s top economic partner and its emergence as a regional powerhouse. “China cannot develop in isolation of the Asia-Pacific, and the Asia-Pacific cannot prosper without China.”

Throughout the summit, Xi astutely glossed over China’s deepening territorial disputes with neighbouring countries, namely Japan, Vietnam and the Philippines, while emphasising the resilience of the Chinese economy and the depth of its interdependence with Southeast Asian neighbours.

Intent on undermining the TPP, a centerpiece of Washington’s pivot to Asia that ostensibly excludes China, Xi also pushed for the Regional Comprehensive Economic Partnership (RCEP) free trade agreement (FTA), which aims to consolidate already existing regional FTAs into an overarching trade arrangement, with China very much at its centre.

The ongoing TPP negotiations, which have been criticised for their lack of transparency, have met strong domestic opposition across member countries, especially in Asian countries such as Japan, Malaysia, and Vietnam. The TPP is widely characterised as a corporate-driven FTA, which aims to stringently uphold intellectual property rights, allow foreign companies to override domestic laws and sue member states, curtail consumer access to basic goods and services, and place restrictions on or/and dismantle state-owned enterprises.

“The TPP is designed as a second-best alternative to promote corporate interests via free trade given the stalemate at the World Trade Organisation,” Dr. Walden Bello, a renowned expert on trade-related issues, told IPS. “The benefits of trade accruing to corporations whatever their nationality with what will soon become the world’s biggest economy will undermine the U.S.’s geo-economic objective.”

Equipped with almost 200 billion dollars in foreign aid budget, China has become the prime economic force in Asia. While cautiously welcoming Beijing’s increased economic footprint, with Xi declaring a one trillion dollarChina-ASEAN trade target by 2020, Southeast leaders are, however, less impressed with Washington.

“Obviously we prefer a U.S. government that is working than one that is not, and we prefer a U.S. President who is able to travel and fulfill his international duties to one that is preoccupied with domestic concerns,” lamented Singapore’s Prime Minister Lee Hsien Loong, prodding Washington leaders to get their act together.

“And America has to continue to be engaged in this region because it plays a very important role which no other country can replace, not China, not Japan, not any other power.”

Immediately after the APEC summit, Chinese Premier Li Keqiang, in turn, took the mantle of leadership at the ASEAN summit (Oct. 9-10) in Brunei. After months of hectic negotiations over establishing a new regional Code of Conduct (CoC) to peacefully resolve territorial disputes in the South China Sea, many were hoping for concrete indications of a diplomatic breakthrough.

With China earlier this year agreeing in principle to re-open negotiations over a CoC, there were expectations of new announcements on the contours of the proposed code, the composition of the technical group in charge of drafting its guidelines, and a detailed timetable for its conclusion.

Among Southeast Asian states such as the Philippines, which are locked in a bitter territorial dispute with China over a variety of features in the South China Sea, there was a great sense of urgency for a major diplomatic development.

Despite incessant efforts by major regional leaders from Japan, Australia and the U.S. (represented by Secretary of State John Kerry), however, there was hardly any sign of China softening its territorial stance, with Premier Li emphasising how China is “unshakable in its resolve to uphold national sovereignty and territorial integrity.”

Alarmed by China’s assertive stance, and with little indications of the ASEAN collectively standing up to China on the territorial issue, Philippine President Benigno Aquino and his Vietnamese counterpart Prime Minster Nguyen Tan Dung held a meeting on the sidelines of the summit aiming to coordinate their efforts in preventing a conflict in the South China Sea and peacefully resolving disputes.

As an indication of the depth of bilateral tensions, Aquino’s effort to reach out to his Chinese counterpart was rebuffed, while Filipino and Chinese diplomats reportedly quarrelled over the wording of a paragraph regarding the territorial disputes in the ASEAN-China joint statement.

The Philippines, currently negotiating an expanded U.S. rotational military presence on it soil, was hoping for Obama to back its territorial claims and dissuade China from further territorial assertiveness.

But amid Washington’s shutdown and Obama’s absence, China was busy courting Southeast Asian states and elevating its regional profile by offering massive trade and investment incentives.

With territorial tensions in the South China Sea entering a new phase of confrontation, there are signs of growing Indian involvement in regional affairs.

Aside from its anxieties over China’s expanding naval capabilities, India has direct economic and strategic interests in Southeast Asia. For many years, India’s state-run Natural Gas Corp. (ONGC) has been involved in joint ventures with TNK Vietnam and Petro Vietnam, conducting exploratory/offshore hydrocarbon projects in the disputed waters of South China Sea.

Meanwhile, India has also been expanding its strategic ties with the booming economies of Association of Southeast Asian Nations (ASEAN), hoping to raise bilateral trade to as much as 200 billion dollars in the next decade.

As ASEAN’s major dialogue partner, India has repeatedly underscored its commitment to the freedom of navigation in the South China Sea, cautioning against rising threats to maritime security.

During the recently-concluded ASEAN-India Summit, many Southeast Asian states, in response to China’s provocative actions, have sought greater role for and involvement of India in ensuring regional stability and deterring Chinese aggressive posturing.

“While the centre of the global economy is shifting eastward, the Indian and Pacific oceans have been and will become even more important in providing the vital sea routes for trade and commerce,” Indonesian President Susilo Bambang Yudhoyono declared during the summit.

Both India and the ASEAN seem to share growing concerns over China’s increasing maritime assertiveness and naval capabilities.

November of last year – when Chinese (paramilitary) vessels allegedly harassed the Vietnamese Binh Minh 02 seismic survey vessel in the hydrocarbon-rich blocks where India’s ONGC is directly invested – marked a turning point in India’s disposition towards the South China Sea disputes.

“Not that we expect to be in those waters very frequently, but when the requirement is there for situations where the country’s interests are involved, for example ONGC Videsh, we will be required to go there and we are prepared for that,” Indian navy chief Admiral D.K Joshi declared in response to the incident, warning China against further provocations.

His comments coincided with a new round of Sino-Indian negotiations over long-standing border disputes, which sparked a war back in 1962 and have embittered bilateral ties since then.

Recent years have witnessed a precipitous escalation in regional maritime disputes, pitting China – which claims almost all features in the South China Sea and continues to prefer bilateral dispute-settlement mechanisms – against Southeast Asian states such as Philippines and Vietnam.

However, last year marked a further deterioration in regional security, with ASEAN failing to adopt a common position on establishing a binding regional Code of Conduct (CoC) to settle maritime disputes.

The situation worsened when the new Chinese leadership engaged in a series of provocative actions, ranging from the issuance of a new Chinese passport, featuring the full extent of Beijing’s territorial claims across Asia, to the recent announcement by Hainan authorities to search and intercept foreign vessels straddling China’s claimed maritime territories, and the new Chinese official map featuring territories within Vietnam’s Exclusive Economic Zone (EEZ).

In response, the Philippines and Vietnam sought deeper strategic and defence cooperation with sympathetic Pacific powers such as the U.S. and India. Vietnam, Philippines, and Taiwan formally protested against China’s passport design, while the ASEAN bloc expressed deep concerns over new maritime regulations by Chinese provincial authorities in Hainan.

There is also the bigger issue of India-China rivalry. Traditionally, the Indian Navy (IN) has focused on patrolling and safeguarding the country’s interests in the immediate waters stretching from the Strait of Hormuz in the Persian Gulf to the Indian Ocean and the Strait Malacca. Yet, China’s rapid rise as a regional naval powerhouse has encouraged continental rival India to speed up its naval modernisation and develop an expeditionary outlook.

Between 2000 and 2012, the IN’s share of annual military expenditures has increased from 15 to 19 percent, while joint exercises with other regional allies, especially the U.S. Pacific Command, have intensified accordingly. An armada of new aircraft carriers, modern French submarines, indigenously designed nuclear submarines, and state-of-the-art aircraft are slated to boost the IN in coming years.

With one of Asia’s most formidable navies, dwarfing all of those in the ASEAN, India’s new naval arms race with China has gained even greater significance in light of rising frictions in the strategic, hydrocarbon-rich waters of South China Sea. Back in 2011, Chinese forces even challenged an IN ship that was patrolling off the coast of Vietnam.

The U.S. pivot to the Asia-Pacific region has been followed by renewed strategic-military commitments with regional partners, but the Philippines and Vietnam are also eagerly seeking India’s muscle to deter China.

“I hope that India supports ASEAN and China in full implementation of the declaration on the conduct of parties in the South China Sea and ASEAN Six-Point Principle on the South China Sea…” Vietnam’s Prime Minister Nguyen Tan Dung emphasized during the ASEAN-India summit.

In fact, the summit’s concluding ‘vision statement’ underscored, in the most unequivocal terms, the importance of maritime security: “We (ASEAN and India) are committed to strengthening cooperation to ensure maritime security and freedom of navigation and safety of sea lanes of communication for unfettered movement of trade in accordance with international law, including UNCLOS.”

Although India has historically stood up to China over territorial disputes as well as the Tibetan issue, in addition to its expressed commitment to defend energy investments in the disputed waters and challenge China’s new passport design, India has actually struck a moderate tone in numerous official pronouncements.

India is not a direct party to the disputes and a bulk of its strategic interests still lie in the Indian Ocean, while its booming bilateral trade with China – hovering above 70 billion dollars annually – means that it has little appetite for risking direct confrontation with Beijing in behalf of ASEAN.

“There are fundamental issues there (South China Sea) that do not require India’s intervention,” India’s External Affairs Minister Salman Kurshid stated in relation to the maritime disputes during the ASEAN-India summit. “(The disputes) need to be resolved between the countries concerned.”

Microcredit-financed rugmakers in Bangladesh. The new ASEAN Economic Community envisions a region of equitable economic development. Credit: Naimul Haq/IPS

By Thalif Deen
UNITED NATIONS, Jan 3 2013 (IPS)

As the United Nations continues to intensify the promotion of South-South cooperation among member states, Asia plans to take a great leap forward in regional economic integration during the next decade.

The 10-member Association of South-East Asian Nations (ASEAN) and the eight-member South Asian Association for Regional Cooperation (SAARC) are taking the lead in an ambitious drive to strengthen trade and economic links in their respective regions.

A new ASEAN Economic Community (AEC) is planned for 2015, while SAARC is heading towards the establishment of its own economic union by 2020.

SAARC Secretary-General Ahmed Saleem, who is based in Nepal, told IPS that “regional cooperation is important because in a globalising world, regional integration is being increasingly considered as building blocks in the progress towards globalisation, especially from the point of view of trade and commerce.”

He said this is aimed at wiping out “the ugly face of protectionism”, which is inimical to global trade.

Thus, the World Trade Organisation (WTO) itself recognises the formation of regional trade groups as long as the group or bloc itself does not become protectionist, added Saleem, a former senior Maldivian diplomat.

The eight members of SAARC are Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka.

An ASEAN diplomat told IPS the proposed AEC is not a common market per se.

But it envisages ASEAN as a single market and production base, a highly competitive economic region, a region of equitable economic development, and a region fully integrated into the global economy.

“The elimination of intra-ASEAN tariffs is one of the principal means to promote the free flow of goods within ASEAN, which will thereafter contribute to the creation of a single market and production base,” he added.

Besides the free flow of goods, he said, ASEAN is currently working towards the free flow of services through 10 packages of services liberalisation as covered under the ASEAN Framework Agreement on Services.

The 10 members of ASEAN include Brunei, Myanmar (Burma), Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.

Last August, the rice-exporting countries of Southeast Asia announced the creation of a new formal alliance to boost prices and increase exports. The alliance includes Burma, Cambodia, Laos, Thailand and Vietnam.

Currently, Thailand and Vietnam control about half of the global rice trade, while India remains the largest single exporter, according to the London-based International Grains Council.

Meanwhile, U.N. Secretary-General Ban Ki-moon envisages South-South cooperation far beyond trade and commerce.

“Regional cooperation is critical,” he said last month. “The challenges of climate change, drug trafficking, terrorism and extremism cannot be tackled by any one country alone.”

Joint action, he said, will also help countries of the region better manage natural resources, expand trade and improve transport.

On the economic front, the United Nations has a Special Programme for the Economies of Central Asia (SPECA) primarily to strengthening regional economic cooperation and integration in Central Asia.

The aim is to share Asian experiences and learn from the successes and challenges of regional economic integration in similar blocs, particularly ASEAN, SAARC and the Greater Mekong Subregion (GMS).

At a meeting in Bangkok last November, U.N. Under-Secretary-General Dr. Noeleen Heyzer, executive secretary of the Economic and Social Commission for Asia and the Pacific (ESCAP), said “regional economic integration has become ever more important in our quest to find new drivers of regional growth, in support of shared and sustained prosperity”.

She said national, and even bilateral approaches, alone are no longer sufficient to address these challenges.

“Regional solutions, through regional cooperation, can be the way for us to forge more sustainable economic growth, close development gaps, and help lift tens of millions of people still in poverty,” she said.

ESCAP’s work in support of SPECA focuses on trade, transport, water and energy – all key areas which are central to any subregional and regional integration in Central Asia.

SAARC Secretary-General Saleem told IPS the formation of his regional group has helped member states to cooperate in areas where otherwise it would have taken a long time or may have become complicated.

For example, trade under the South Asian Free Trade Agreement (SAFTA) has permitted member countries to trade in those products which they cannot do with ease – and bilaterally.

And the exercise to develop regional standards, which have started in some tradable products in the region, will allow for faster movement of those products across the region, once those standards have been developed, he added.

“Regional cooperation has also contributed considerably to easing of (political) tension in the region,” said Saleem.

Asked what role South-South cooperation will play in the U.N.’s post-2015 economic agenda, he said regional cooperation will assume more importance because it is now well accepted that the Millennium Development Goals (MDGs) will not be reached in a majority of countries by the 2015 deadline.

However, those goals will continue to be a minimum standard to be reached by all. And thus policies and development goals will continue to be geared toward meeting these objectives.

Regional cooperation will be one of the most important arrangements to achieve the set goals and objectives, Saleem noted.

The ASEAN diplomat told IPS the regional group has also implemented the ASEAN Comprehensive Investment Agreement, which contains elements supporting a free and open investment regime, such as investment liberalisation, protection, facilitation and promotion.

He said ASEAN has been relatively successful at strengthening economic and trade relations among its members.

Following the entry into force of the ASEAN Free Trade Area in 1993 and the ASEAN Framework Agreement on Services in 1995, intra-ASEAN trade saw an average annual growth rate of 10.2 percent from 1995 to 2011, he added.

“This is a significant achievement when juxtaposed against the average annual growth rate of eight percent in world trade over the same time period.”

ASEAN will continue to deepen relations among its members, with a view to achieving the ASEAN Economic Community in 2015, he declared.

The victory of the Liberal Democratic Party (LDP) in the recent Japanese elections, with Shinzo Abe coming back as prime minister after five years, will probably mean an escalation of tensions with China. Both countries are embarking on a fresh burst of nationalism, but for different reasons.

Roberto Savio.

Japan is suffering from an economic and political crisis. The economy is stagnating (albeit at a high level), and Abe will be heading the sixth government in five years. His party had been in power almost with interruption since the end of the Second World War, until he resigned abruptly in 2007 for serious health reasons.

The Japanese tried for a change, and in 2009 put the Democratic Party of Japan (DPJ) in power, which rapidly went through three prime ministers in just three years. The DPJ has been a terrible administrator and its handling of the nuclear disaster and tsunami in 2011 has been completely incomprehensible. During a visit to Japan earlier this year, I heard from refugees housed in a large camp in the north that they had not seen an official in 18 months. In the meantime, Abe found a medicine that worked and made his comeback, largely thanks to the debacle of the DPJ. But nothing has changed – Japan has an old prime minister with a new medicine, but there are no new ideas or new leaders.

What is new is that the tide in Japan has shifted in the direction of nationalism. Not only is Abe a hawk who has always minimised Japanese aggression in Asia, even denying the enslavement of Korean women as prostitutes for the Japanese army. More seriously, he wants to eliminate Article 19 of the constitution, which forbids Japan from having an army for offensive purposes and commits the country to peace. This can only come about through a referendum and, lately, the citizens of three of the largest Japanese cities have elected right-wing mayors.

The economic crisis is bringing the usual escape from reality, with politicians claiming that they will go back to the old good days and people wanting to believe that this is possible – “All we need is a strong leader, forget the economy, globalisation and other structural problems”.

Rising nationalism in China has totally different roots. Xi Jinping, who is set to become China’s new president in March 2012, has much more power than in past transitions, but knows well that the idea of communism is no longer vital and that he has to come up with some popular idea for rallying the people behind him. So he speaks about “fu xing”, the idea of “renewal”, which has always been a strong element in Chinese history, and he associates that with the “Chinese dream”. His speeches have mixed bolder economic policies with anti-corruption measures, a vigorous military build-up and a muscular foreign policy. The Chinese have not forgotten the humiliation of the two Opium Wars in the 19th century, when the Western powers used arms to impose their right to sell opium freely in China during the Qing dynasty.

Beside the use of “fu xing” in his speeches, it is worth noting that, two months before his election in November as general secretary of China’s Communist Party, Xi was appointed as head of a powerful inter-agency group high up in the Chinese Government to oversee maritime disputes. And it was during Xis tenure that the conflict over the Diaoyu-Senkaku islands flared up.

The islands were originally Chinese, but in 1895 were annexed by Japan during the first Sino-Japanese war (another Chinese humiliation), amidst general indifference. But some years ago, a geological survey found that the islands could have deposits of gas and oil. The ultra-nationalist governor of Tokyo, Shintaro Ishihara, wanted to buy those three barren and uninhabited islands from their private Japanese owner as a sign of Japanese muscle. To outsmart Ishihara, Japan’s outgoing prime minister, Yoshihiko Noda, bought them for the government. This, of course, met with a sharp Chinese response and enormous mass demonstrations, which, while allowed by the government, were basically spontaneous. Since then, boats from both countries have been to the islands in a show of sovereignty.

Then, on Dec. 13, on the eve of the Japanese elections, a Chinese plane flew over the islands, with five Japanese F-15 fighter jets sent to intercept it.

As the late Tarzi Vittachi[1] famously said, “Everything is always about something else”. In this case, it is about the consequences of the United Nations Convention on the Law of the Sea (UNCLOS), concluded in 1982, which basically gives countries “economic exclusive rights” to an area of up to 650 kilometres around their coasts.  Because of its many islands (Minami, Ogasawaram, Izu) situated 2,000 kilometres from Tokyo, Japan thus has an exclusive maritime zone of 4.5 million square kilometres, the ninth largest in the world. China, with more coast than Japan, has only 880,000 square kilometres, ranking 31st in the world, between the Maldives and Somalia. Furthermore, China is blocked by the maritime zones of the United States (islands such as Guam, Palau, Caroline, etc.), the Philippines and South Korea.

Let us add that Obama has announced that, by 2016, 60 percent of the U.S. fleet will be at sea around China. This will include six aircraft carriers and all the most advanced weapons, from nuclear submarines to electronic shields, formally deployed against North Korea (but, in fact, against China). And, in the dispute between China and Japan, while it has called for peace and diplomacy, Washington has also made clear that, in the event of conflict, it considers itself obliged to intervene in favour of Japan, by virtue of the mutual defence treaty that both countries signed in 1960.

This kind of conflict between China and Japan should actually be resolved by the Association of Southeast Nations (ASEAN), in which the United States is an observer. But ASEAN is irremediably split over China, with some countries like Cambodia so dependent on Chinese aid that they block any attempt to regulate China.

There are maritime disputes among nearly all countries in this part of the world: the Philippines, Vietnam, Taiwan, Korea, Japan, China, Brunei and Russia all have unresolved issues of sovereignty over islands. But it is unmistakable that China is ready to confront others. In its latest passport, China has printed a map of Asia in which it lays claim to practically all of the South China Sea. The Philippines has refused to stamp the passport and, on the eve of the Japanese elections, its minister of foreign affairs declared that his country “would very much welcome” a change of the Japanese constitution, allowing Tokyo once again to become a military power and this from a major victim of Japanese invasion during the Second World War.

All the signs point in the direction of this dispute over three barren islands becoming a major element in the realignment of geopolitics in the near future. When will humankind ever be free from the spectre of confrontation and war?

(END/COPYRIGHT IPS)

[1] Senior official with UNFPA and UNICEF.

Roberto Savio is founder and president emeritus of the Inter Press Service (IPS) news agency and publisher of Other News.

With newly re-elected President Barack Obama having chosen Southeast Asia as his first foreign destination, where he also attended the much-anticipated pan-Pacific East Asia Summit, the U.S. has underscored its commitment to its so-called strategic ‘pivot’ to the Asia-Pacific region.

Months after the 2011 U.S. military withdrawal from Iraq, President Obama signaled the formal launch of the pivot in a November speech to the Australian parliament: “As a Pacific nation, the United States will play a larger and long-term role in shaping this region and its future.”

The U.S. already has around 320,000 troops stationed in the region, as well as 50 percent of its formidable global naval assets. Under the pivot strategy, the U.S. is set to commit several thousand additional troops and increase its naval strength by another ten percent in the coming few years.

The Obama administration has repeatedly denied that the pivot is a containment strategy aimed at Beijing, arguing it is simply a logical ‘rebalancing’ towards the region in light of Asia’s stunning economic growth and the increasing importance of maintaining U.S. interests there.

However, more than two years into the so-called U.S. pivot, many strategic commentators across the Pacific have raised major questions as to its real intentions, actual impact, and practicability, given the United States’ deep fiscal constraints ahead of scheduled defence-spending cuts.

Reacting to lingering uncertainties over the U.S. strategy, China, which views the pivot as an act of provocation, as well as other countries in the region such as Vietnam, Philippines, and Japan, have stepped up their territorial claims in the Western Pacific – indirectly testing America’s resolve to uphold its strategic commitments.

In this sense, the pivot – purportedly to reinforce the United States’ role as an ‘anchor of stability and prosperity’ in the Pacific – has ironically contributed to greater uncertainty, turbulence, and belligerence vis-à-vis the festering maritime disputes.

In a recent op-ed for the Singapore-based daily The Straits Times, Barry Desker, the dean of the Singapore-based S. Rajaratnam School of International Studies (RSIS), called for ‘mutual restraint’ by all disputing littoral states to ‘diffuse’ tensions, while contending that all parties are “guilty of occupying uninhabited islands and land features.”

And a recent report by the Brussels-based International Crisis Group says: “With tensions on the rise, Manila is eager to pursue closer military cooperation with the U.S., and Hanoi (as a strategic partner) is keen to carefully bring in and balance U.S. influence in the region.

“If these countries frame any U.S. assistance as being directed against China, it will be harder for the former to persuade the latter that it will not get involved in territorial disputes.”

The pivot can be traced as far back as the 2010 ASEAN Regional Forum (ARF) in Hanoi, where Secretary of State Hillary Clinton injected the U.S. into the centre of decades-long territorial disputes in the South China Sea by announcing that her country had a ‘national interest’ in the freedom of navigation across the Western Pacific, including the South China Sea.

As a result, allies such as Japan and the Philippines have repeatedly sought U.S. re-assurance vis-à-vis existing bilateral mutual defence treaties, especially in the event of military confrontation with China over disputed maritime features in the Western Pacific.

The Philippines and Vietnam are mired in bitter maritime disputes with China over a whole host of features in the Spratly and Paracel chains of islands in the South China Sea, while Japan is contesting China’s claim to the Senkaku/Diaoyu chain of islands in the East China Sea.

Meanwhile, Washington’s allies in Northeast Asia, Japan and South Korea, are locked in a separate territorial dispute over the Takeshima/Dokdo islands in the Sea of Japan.

In last month’s Australia-U.S. Ministerial Meeting, Clinton sought to calm Chinese nerves by stating, “We (the U.S.) welcomed a strong, prosperous and peaceful China, which plays a constructive role in promoting regional security and prosperity… We do not take a position on competing territorial claims in the South China Sea.”

The U.S. Navy also invited China to join the large-scale, U.S.-led ‘Rim of the Pacific Exercise’ by 2014.

Yet an unconvinced China, under its new leadership, has nudged up its claims. Recently, authorities in the southern Chinese Island of Hainan have issued new laws, whereby beginning next year, they will have the authority to intercept and board any foreign vessel seen to violate China’s ‘sovereignty’ over all claimed features in the South China Sea.

In response, Secretary-General of the Association of Southeast Asian Nations (ASEAN) Surin Pitsuwan warned that such a decision “…has increased a level of concern and a level of great anxiety among all parties, particularly parties that would need the access, the passage and the freedom to go through.” Beijing subsequently insisted that the new authority was not aimed against sea-borne commercial traffic.

China’s new passport design, incorporating disputed territories in the South China Sea under the country’s official map, has also sparked renewed concerns among some of its southern neighbours.

In the face of what it sees as Chinese provocations, however, a deeply divided ASEAN has failed to make any meaningful progress in crafting a legally-binding regional Code of Conduct to resolve disputes, as strongly urged by Washington.

If the pivot is seen in Beijing as a provocation, it has also encouraged greater assertiveness on the part of some of its neighbours.

While the Vietnamese have stepped up their energy exploration projects in disputed territories, and the Japanese government decided to purchase from its private owner one of the disputed Senkaku/Diaoyu islands in the East China Sea, the Philippines has pushed to upgrade its military ties with the U.S., Canada, Australia, Japan, and South Korea to defend its own claims.

“While we are all aware that the U.S. does not take sides in disputes, they do have a strategic stake in the freedom of navigation, unimpeded commerce, and the maintenance of peace and stability in the South China Sea,” Filipino President Benigno Aquino stated at last month’s East Asian Summit, prodding further U.S. involvement in the South China Sea disputes.

How Washington will react to these kinds of pressures, particularly given its own fiscal challenges that have already resulted in nearly 500 billion dollars in cuts to its projected military budgets over the next ten years, adds yet another level of uncertainty to the calculations of the contending parties in the region.

Already, the pivot is being attacked by the U.S. right as insufficient. “This reallocation of military and diplomatic resources was supposed to guarantee stability in a region seeking to balance China’s rise. In reality, this strategic shift is less than it appears,” argued Michael Auslin in an op-ed for the Wall Street Journal. “In reality…it won’t solve Asia’s problems and may even add to the region’s uncertainty by over-promising and under-delivering.”

Members of the Women’s Network for Unity in Cambodia are fighting for LGBT rights, land rights, peasant rights and human rights. Credit: Michelle Tolson/IPS

By Michelle Tolson
PHNOM PENH, Dec 13 2012 (IPS)

For a brief moment last month, mainstream international media turned the spotlight on Cambodia, one of the world’s 48 least developed countries (LDCs), as a high-level visit from U.S. President Barack Obama and the annual summit of the Association of Southeast Asian Nations (ASEAN) gave this country of 14.3 million people a glamorous edge.

The burst of international attention also united many grassroots groups and organisations, which came together under an umbrella called the ASEAN People’s Grassroots Assembly (APGA) – comprised of farmers, fisherfolk, labour unions and other rights groups – to protest the limits of the recently adopted regional human rights declaration, and expose grave rights violations in Cambodia.

The difference is that while international scrutiny and curiosity quickly faded, the activists’ work –against a backdrop of accelerating regional cooperation between ASEAN’s ten member states – is only just beginning.

According to Pisely Ly, a Cambodian legal activist, the most marginalised members of society are just as badly off as they were before Cambodia hosted the annual ASEAN gathering in mid-November.

Sex workers and lesbian, gay, bisexual and transgender (LGBT) people, for example, have few protections under the law.

Add to this the intersecting issues of widespread land evictions, loss of livelihoods, women supporting rural families, trafficking and sex work and the grassroots movement here is faced with a long road ahead, she said.

ASEAN integration 2015

Plans to achieve full integration of the 10 ASEAN economies by 2015 also have Cambodian activists on edge.

If the integration roadmap goes according to schedule, member states will experience increased regional trade and investment in the next two years, which AGPA members fear will exacerbate the disastrous impacts of Cambodia’s land policies. Already the government has signed off over 11,000 acres of arable land to various international investors.

The World Policy Institute reported that Chinese investments in Cambodia have spiked since the China-ASEAN Free Trade Agreement was inked in January 2010, and now comprise 20 percent of total foreign investment in the country.

Vietnam’s investments have grown as well, primarily in rubber plantations.

The consequences of these investments, which often lead to displacement, are grave and far-reaching.

Earlier this month Member of Parliament Mu Sochua visited a community displaced by the Ly Young Phat palm sugar plantation land concession.

“One of the victims of land grabs was dying when we were there. She lost everything to Ly Young Phat. She was pregnant and hunger pushed her to seek food in the forest. She was poisoned by the mushrooms she found…this is an extreme case of the end result of land concessions,” Sochua told IPS.

The New York Times reported earlier this year, “One major problem is the widespread grant of so-called Economic Land Concessions (E.L.C.). Under Cambodia’s 2001 Land Law, the government is allowed to make use of all “private state land” and lease up to about 25,000 acres to a company for as many as 99 years. The government has carved out some of the country’s best land one bit at a time, evicting many poor people for the commercial benefit of a few.”

“We can (no longer) utilise our land to grow food,” said Pen Sothary, a member of the Women’s Network for Unity (WNU) – a 6,400-member collective of sex workers, LGBT people and garment workers based here in Cambodia’s capital, echoing the sentiments expressed during a recent collaboration between the WNU and the AGPA.

Between 2003 and 2008, land concessions in Cambodia affected a quarter of a million people, according to the Cambodian League for the Defence and Promotion of Human Rights (LICADHO).

Analysts believe a new draft law for 2012 will further weaken peasants’ ownership of their land.

Meanwhile, the ASEAN People’s Forum (APF), which represents civil society within the region, recently released a statement expressing concerns from farmers, fisher folk, sex workers and LGBT people that regional integration could also worsen the situation in Cambodia.

Rural-urban migration fuels sex trade

Pech Sokchea, a transgender woman and member of the WNU, told IPS that these land concessions have resulted in massive evictions and loss of livelihoods.

The problem is particularly severe in a country where 70 percent of the population are subsistence farmers.

To avoid going hungry evictees “often become migrant workers and are at risk of being trafficked”, Sokchea told IPS.

Researcher Melissa Ditmore wrote in a recent WNU report, “High-interest loans lead to landlessness among rural people, and consequently to urban migration.”  Ditmore also found that farmers lose out in credit schemes, and sometimes borrow at a 500 percent interest rate to buy seed. When crops fail, they often lose their land and their homes.

The International Labor Organisation (ILO) has documented rural to urban migration, starting from the mid-1990s, as a trend among women seeking work in garment factories in cities, where they typically earn a monthly salary of no more than 60 dollars a month.

To supplement this meagre income, many also seek part-time work in the ‘entertainment’ industry, which consists of beer gardens, karaoke bars and massage parlors, often serving as fronts for sex work. Back in 2009, the ILO estimated the number of entertainment workers to be over 21,000 in Phnom Penh alone.

Entertainers’ salaries can be as low as 35 dollars a month, while the going rate for sex work is about 25 dollars per night. This wage difference is crucial for people struggling to make ends meet in an economy that calls for a minimum monthly income of 177 dollars. Most women also remit a large portion of their earnings to extended family members still living in the countryside, according to the SOMO research organisation.

Cambodian migrant workers who move around within the region in search of better work may find higher wages outside the country, but no protection for their rights as labourers.

Young Cambodian women working as maids in Malaysia have been subjected to physical and sexual abuse by employers due to scant protection of their rights. “Some women do not get paid and return empty-handed,” Keo Tha, an elected secretary for the WNU, explained to IPS.

“Some are cheated and turn to sex work (in order to survive),” she added. “Some become HIV positive and have no access to healthcare and medicine.” The problem is made worse by the fact that the commercial sex trade is illegal and unregulated.

WNU members are particularly concerned about the impact of the ‘loophole’ in the new ASEAN rights framework, which allows states to adhere to internationally accepted human rights standards only insofar as they do not trample on “cultural and religious” norms in each respective country.

This caveat gives the green light to governments to ignore the rights of, for example, LGBT people, Ly told IPS. Still, she has faith that grassroots activists can come together to unite the many connected issues in the country.

“We believe the people’s voice is very powerful,” Ly added.

(END)

Mudjayin holds up a copy of a document identifying him as a former political detainee. Credit: Kanis Dursin/IPS

By Kanis Dursin
JAKARTA, Nov 29 2012 (IPS)

At the age of 82, former Indonesian political detainee Mudjayin wonders if he will ever see justice served.

Back in 2010, he, along with other victims of state terror, submitted their case to the recently formed human rights commission of the Association of Southeast Asian Nations (ASEAN).

Two years later, they have still not received official recognition of their complaint, suggesting that the rights body lacks the necessary power or political will to carry out its mandate.

“We have still not heard anything on what they did with our report,” said Mudjayin, one of tens of thousands of Indonesians rounded up by the military following the coup attempt on Sep. 30, 1965 that saw seven army generals killed.

The army blamed that abortive coup on the Indonesian Communist Party and embarked on a campaign of mass killings, which, in the following days and weeks, led to the deaths of hundreds of thousands of alleged communists.

That bloody chapter in Indonesia’s history also saw the rise of Suharto as the architect of the ‘New Order’ dictatorial regime, which held power for more than three decades.

Speaking to IPS at his house in Tebet, South Jakarta, Mudjayin recalled that he was arrested without a warrant in October, 1965 and held for 14 years as a Class B detainee – meaning that no evidence to link him with the Indonesian Communist Party or the September coup had ever been established – without ever being formally charged and tried.

He was finally released in 1979, but did not demand justice until after former president Suharto stepped down in May 1998 amid massive public protests.

Aided by rights groups such as the National Committee for Missing Persons and Victims of Violence (Kontras), Mudjayin and other former political detainees have been seeking justice for over a decade, to no avail.

The creation of the ASEAN Intergovernmental Commission on Human Rights (AICHR) in 2009, the first regional rights body of an organisation that had traditionally avoided addressing issues that were seen as domestic internal matters, provided him a fresh channel through which to seek redress for his wrongful imprisonment.

Mudjayin was joined by parents and relatives of students shot dead during anti-government protests in Indonesia in 1998 and 1999, relatives of pro-democracy activists kidnapped in 1997 and 1998, relatives of 32 journalists slain in the southern Philippine province of Maguindanao in 1999, and some human rights victims from Burma.

At the time the complaint was submitted, all 10 rights commissioners representing each of the ASEAN member countries – Brunei, Cambodia, Laos, Burma, Malaysia, Indonesia, Philippines, Singapore, Thailand and Vietnam – were in Jakarta to attend their first official meeting after being appointed in October 2009.

But none showed up to meet the victims, let alone to receive their complaint, Mudjayin recalled.

A limited mandate

According to Indonesian Human Rights Commissioner Rafendi Djamin, “We (AICHR) are not mandated to deal with individual claims.”

Set up in October 2009, AICHR is tasked with promoting and protecting human rights and fundamental freedoms of ASEAN peoples, enhancing regional cooperation on the promotion and protection of human rights, and upholding international human rights standards.

Rights defenders in Southeast Asia hailed the foundation of the Commission but have lamented its limited power to carry out its own mandate.

“AICHR has been given very weak terms of reference that limit its mandates, authority and powers to promote and protect human rights,” said Yap Swee Seng, executive director of the Bangkok-based Asian Forum for Human Rights and Development.

The commission’s effectiveness was further undermined when “some member states appointed government officials to the commission as their representatives, rather than independent human rights experts”, he continued.

Now, eight of the ten commissioners are government officials or diplomats. The only two independent experts are Indonesia’s Djamin, a human rights activist, and Thailand’s Sriprapha Petcharamesree, an academic.

This development has rendered the commission “institutionally problematic”, according to Kontras Coordinator Haris Azhar. “The fact that AICHR reports to the ASEAN Ministerial Meeting (AMM) indicates that the commission is not independent and that it serves as an auxiliary body to AMM,” Azhar said.

Proponents of the rights body such as Danny Chian Siong Lee, director of community affairs development in the ASEAN secretariat based here in the Indonesian capital, lauded the Commission’s efforts vis-à-vis the ASEAN Human Rights Declaration, which was adopted at the organisation’s summit in Cambodia earlier this month.

The declaration lists civil and political rights; economic, social and cultural rights; the right to development and the right to peace.

But this, too, has been the topic of much debate among Southeast Asia’s rights activists, who have criticised the draft as being too weak and setting standards that fall short of the Universal Declaration of Human Rights.

For Rena Herdiyani of the Women’s Crisis Centre ‘Mitra Perempuan’, the inclusion of the right to development is the document’s only saving grace, “making it different from the Universal Declaration on Human Rights”, she said.

But she also called attention to the declaration’s caveat that “the realisation of human rights must be considered in the regional and national context bearing in mind different political, economic, legal, social, cultural, historical and religious backgrounds”, making the exercise of fundamental rights highly subjective.

Further, the declaration “does not protect the rights of lesbian, gay, bisexual, and transgender (LGBT) people or the rights of indigenous people”, Herdiyani added.

Yap criticised the commission’s lack of transparency. “The performance of AICHR in the first two years (2010 to 2011) has been unfortunately very poor, marked by an extreme lack of transparency and consultation with stakeholders in the process as well as the content of its work,” he said.

“This has been illustrated by the non-disclosure of any documents that the AICHR has adopted since its establishment in 2009, including its annual report to the ASEAN foreign ministers in 2011,” Yap added.

He also called on ASEAN to review AICHR’s terms of reference to make it truly independent with the necessary mandates and powers. “The ASEAN member states also need to provide adequate resources and financial autonomy for the AICHR to function effectively,” Yap added.

And while the rights body confronts its teething troubles, people like Mudjayin continue to wait for justice.

*This story was produced through IPS Asia-Pacific’s ‘Reporting Development in ASEAN‘series, made possible by the support of the International Development Research Centre.

Against the backdrop of growing territorial tensions in the South China Sea, inflamed by a more explicit Sino-American rivalry in the Pacific theatre, the recently-concluded ASEAN Summit in Cambodia represented the best chance at bolstering regional security through peaceful, multilateral mechanisms.

With the ASEAN (Association of Southeast Asian Nations) gathering coinciding with the pan-regional East Asia and ASEAN+3 Summits, Cambodia, as the current chair of the ASEAN, took centre-stage in a broader international gathering, which brought together leading Pacific powers such as the U.S., China, Japan and India.

Ahead of the ASEAN Summit, many commentators as well as regional leaders expressed their hopes for some form of diplomatic breakthrough to address festering maritime disputes in the South China Sea.

Recent months have also witnessed growing diplomatic pro-activeness by countries such as Indonesia to mend intra-regional rifts, especially between Cambodia and the Philippines, and re-focus diplomatic efforts on a peaceful and rule-based resolution of ongoing disputes. For instance, the Indonesian-proposed “six points of consensus” highlights the commitment of regional states to the 2002 Declaration on the Conduct of Parties in the South China Sea and the adoption of a legally binding regional Code of Conduct (CoC).

“We are hoping and expecting that there will be smooth and very productive results of these meetings as far as our advocacies are concerned,” said Philippine Department of Foreign Affairs spokesperson Raul Hernandez. “What is important here is to underscore the ASEAN centrality and, for ASEAN it has always been our position that any initiatives (such as the CoC) should first be accepted and approved by ASEAN and only then would it be presented to other dialogue partners.” His statements echoed Philippine President Benigno Aquino’s cautious optimism regarding a more unified regional stance on the issue of maritime security.

Interestingly, the Philippines has also been very busy with thawing out increasingly frayed relations with both China and Cambodia in recent months, hoping to build positive momentum ahead of the ASEAN summit in Phnom Penh.

The newly re-elected President Obama also called for easing of tensions among claimant states, warning against an escalation in disputes, while Secretary of State Hillary Clinton earlier identified the territorial conflicts as a ‘critical issue’ in need of urgent resolution.

However, much to the disappointment of some Southeast Asian nations, especially the Philippines and Cambodia – reportedly at the behest of China – once again blocked the inclusion of the South China Sea dispute in the summit’s agenda. After all, China has repeatedly warned against ‘internationalising’ the disputes, while actively sidestepping the issue in all recent regional multilateral forums.

In essence, Cambodia has effectively trammeled any development on the crucial issue of adopting a more binding CoC to not only rein in China’s growing territorial assertiveness in the near future, but to also lay down the foundations of a more robust regional approach to resolve intractable territorial conflicts in the long run.

Far from unprecedented, Cambodia’s recent move mirrored its earlier stance during the ASEAN Ministerial Meeting (AMM) in June, where it blocked the inclusion of maritime disputes in the final communiqué. While Cambodia’s actions during the AMM prompted a flash walkout then by the Filipino Foreign Secretary Albert Del Rosario, this time Manila resorted to a formal protest against Cambodia’s decision to once again block the issue from the ASEAN’s agenda.

“Among the principles that the ASEAN community has pledged to abide by is that of centrality; it should also be foremost in our minds as we address concerns in the East Asian maritime region. Prevailing tensions in the area stand to impact regional peace and stability,” President Aquino shrieked in his formal intervention during the ASEAN+3 Summit. “We reiterate our call on all parties concerned to avoid the threat or use of force, and to adhere to universally recognised principles of international law in settling disputes…because respect for the rule of law remains the great equaliser in the relations among nations.”

Aware of Cambodia’s cosy ties with China, Manila’s strategy during the recently-concluded summits was to rally the support of sympathetic and influential external actors such as the U.S., Japan, India and Australia to push for a binding CoC in the South China Sea and exert more pressure on Beijing against further military fortifications and adventurism in the disputed areas.

Refusing to stand idly by, the Philippine president reiterated his concerns in an intervention during the ASEAN+India Summit, emphasising India’s stake in ensuring regional maritime security. “Since a great deal of our (ASEAN and India) trade and resources flow through our seas, the Philippines views that ASEAN and India will mutually benefit from jointly addressing threats to maritime stability through peaceful means in accordance with international law,” Aquino stated.

During the ASEAN+Japan Summit, Aquino underscored the common interest of both Japan and ASEAN states to uphold the rule of law vis-à-vis ongoing disputes by stating, “The Philippines will continue to uphold this principle in its engagement with ASEAN, Japan, and other stakeholders, as the region strives to resolve overlapping maritime claims.”

Foremost in his mind, Aquino also urged the U.S. to play a more active role to stave off rising Chinese assertiveness.

“Each one of our nations has a stake in the stability of Southeast Asia. The United States understands this and, for this reason, has chosen to work with us to ensure the peace and continuous advancement of our region,” Aquino said during the summit, prodding greater U.S. involvement. “While we are all aware that the U.S. does not take sides in disputes, they do have a strategic stake in the freedom of navigation, unimpeded commerce, and the maintenance of peace and stability in the South China Sea.”

In a veiled criticism of China’s preference for a bilateral approach to the disputes, Aquino argued, “We have long said that if it’s a multilateral problem, you can’t have a bilateral solution.” Most interestingly, he also stated, “The ASEAN route is not the only route for us”, suggesting Manila’s possible recourse to greater military cooperation with the U.S. as well as other regional allies such as Australia and Japan, especially if the ASEAN continues to fail in providing a credible multilateral, rule-based approach to ongoing territorial conflicts.

The Association of Southeast Asian Nations (ASEAN) summit in Cambodia, bringing together top leaders of all ten member nations represents a critical juncture to ensure regional security and in shaping the fate of the organisation itself, as divergent strategic positions among member countries threaten the very fabric of the regional body.

Earlier this year during the ASEAN ministerial meeting in Phnom Penh, Cambodia as the ASEAN’s current chair blocked the inclusion of ongoing territorial disputes in the South China Sea in the final communiqué, provoking uproar among certain members, especially the Philippines and Vietnam, who accused Cambodia of doing China’s bidding. As a result, the meeting failed to issue a final communiqué for the first time in the organisation’s 45-year history – precipitating a diplomatic fallout among member nations, with Philippine-Cambodia relations suffering a temporary but dramatic nosedive.

Cambodia’s actions stood in contrast to the more pro-active chairmanships of Vietnam in 2010 and Indonesia in 2011, where ASEAN made a more concrete move towards establishing a more binding Code of Conduct (CoC) to supplement the highly symbolic 2002 Declaration of Conduct of Parties in South China Sea, which called for a rule-based and peaceful resolution of territorial disputes.

The 2012 ministerial meeting failed to build on earlier multilateral efforts to even iron out the contours of guidelines for a more binding regional CoC, ostensibly to rein in territorial tensions and regulate the behaviour of conflicting parties in the South China Sea. Meanwhile, China still insists on a bilateral resolution of the disputes.

The whole episode created a cloud of uncertainty over the fate of an organisation found on the principles of solidarity, consensus, and consultation, with a growing number of commentators questioning the very centrality as well as the utility of ASEAN as an agent of stability, cooperation, and security in the region.

Writing for the Asia Times, Southeast Asia expert Amitav Achariya captured this growing concern by stating, “…the idea of ASEAN centrality, which assumes that ASEAN, rather than the great powers like China, Japan, the U.S. or India, should be the building bloc and hub of developing a wider Asian or Asia-Pacific regional architecture, is facing a severe test.”

“That failure (absence of a final communiqué) cast significant doubt on ASEAN’s ability to evolve and tackle tough issues. It also caused troubling allegations, especially from Vietnam and the Philippines, that Cambodia had placed its close relationship with China above the interests of its fellow ASEAN members,” argued Gregory Poling and Alexandra Sander of the Washington-based Centre for Strategic and International Studies (CSIS).

Currently, ASEAN members such the Philippines and Vietnam are locked in a bitter conflict with China over a whole host of features in the South China Sea. Diplomacy has partly suffered because of China’s notorious ‘9-dashline’ doctrine, which stipulates that is has ‘inherent and indisputable sovereignty’ over almost all features in the South China Sea.

There is also a domestic political angle: Grappling with a cocktail of outsized domestic economic and political challenges, the Chinese leadership is experiencing a highly sensitive period of transition. With communism losing its ideological appeal, it is popular nationalism that has become the Chinese Communist Party’s (CCP) main tool to placate an increasingly restive nation.

Thus, in recent years, we have seen rising popular pressure on the political leadership to assert China’s territorial claims in adjacent waters of East and South China Seas. This also partly explains the rising influence of more hawkish elements within the People’s Liberation Army’s Navy (PLAN) – already a beneficiary of a growing chunk of China’s ballooning military budget – which have called for a more aggressive approach to securing the country’s territorial claims.

Adding to the complexity of the issue, the U.S.’ ‘pivot’ to the Asia-Pacific has also injected a new geopolitical layer to the ongoing territorial disputes. Back in April, the Philippines and China squared off over the Scarborough Shoal in the South China Sea, culminating in a bitter series of naval and diplomatic jostling over the control of the disputed feature and its surrounding waters.

After securing its control over the shoal, aided by a bilateral agreement that oversaw the withdrawal of Philippine warships from the disputed area, China stepped up its fortifications by expanding its military garrisons and paramilitary infrastructure in occupied features within the Paracels and Spratly chain of islands, encouraging both the Philippines and Vietnam to further deepen their increasingly revitalised military ties with the U.S.

With the U.S. identifying ‘freedom of navigation’ in the South China Sea as a cornerstone of its national interest, and signaling its commitment to the defence of its Asian allies against China’s perceived encroachments, Washington has de facto carved out its place at the centre of simmering territorial conflicts.

Responding in kind, China has rapidly improved it’s ‘anti-access’ and blue naval capabilities to counter U.S. maritime dominance in the Pacific, increased its diplomatic and economic pressure on U.S. allies such as the Philippines, and more aggressively leveraged its favourable ties with ASEAN members such as Cambodia, where Beijing dominates the overall trade and investment picture, to push its interests within regional bodies. Ironically, the U.S. pivot seems to have only encouraged greater Chinese assertiveness.

Despite growing cynicism over this year’s ASEAN summit, there is some room for cautious optimism. The past month or so has witnessed a qualitative shift in the strategic predisposition of countries such as the Philippines. Recognising the importance of healthy bilateral ties with China and Cambodia, Manila has engaged in a diplomatic charm-offensive to restore a measure of ASEAN-wide urgency in pushing for a regional CoC and to de-escalate maritime tensions between China, on one hand, and Southeast Asian countries such as the Philippines and Vietnam, on the other.

So, in many ways, the upcoming summit in Cambodia marks a make-or-break moment for not only ASEAN as a supposedly coherent regional organisation, but also the prospects of a peaceful resolution of ongoing territorial disputes. After all, the 2012 summit theme is: ‘ASEAN: One Community, One Destiny’.

Although it remains the fastest growing region, Asia is already experiencing an economic slowdown, with gross domestic product (GDP) expected to fall from 6.8 percent in 2011 to slightly below six percent in 2012. Several countries – including China, India and Turkey – have been adversely affected by weaker demand from developed countries.

Supachai Panitchpakdi

Given the headwinds from the international economy, some developing countries have since relaxed their monetary conditions and many of them have applied countercyclical measures that are helping to boost household incomes and to maintain a much needed shift from external to domestic demand, alongside the role of investment.

China, for example, has played a critical role in global rebalancing, being the chief engine of world growth since 2009 and having reduced its surplus markedly (from 10 percent of GDP in 2007 to two percent in 2012) as it shifted its economy towards domestic demand.

In China and other major economies in the region, however, internal rebalancing remains unfinished as private consumption should take on a greater role relative to investment. High wage growth will help to support this goal as well as helping to promote further external rebalancing.

High and volatile commodity prices also present a risk to the rebalancing process for the Asian region, because they can be a drag on growth. Rising oil prices, for example, act as an immediate dampener on aggregate spending in fuel-importing countries, contracting spending more or less immediately, whereas any spending expansion from fuel-exporting countries occurs only after a lag.

However the main risk continues to be concentrated in the developed economies, where the United Nations Conference on Trade and Development (UNCTAD) has long been concerned that premature and excessive fiscal austerity is choking recovery and growth unnecessarily. The developing economies in Asia have played a major role stoking the engine of growth since the crisis, but this could be derailed if there continues to be a decline in consumer demand from their traditional markets in the advanced economies, and the effects of a reduction in this demand would of course have further spill-over effects if it provoked a downturn in Asian household and investment demand.

The second aspect of the rebalancing has occurred after the crisis. Global trade rebalancing has been largely due to the decrease in China’s exports and the increase in its domestic demand. Trade imbalances for many other East and South-East Asian (ASEAN) countries have not altered significantly. In 2011, the trade surplus of ASEAN as a whole had recovered to its 2007 level and it is currently similar in size to that of China, at about 100 billion dollars.

The rebalancing of the last three years has been due to a number of factors: the worsening terms of trade, especially for China, the decrease in international demand for products collaboratively (vertically) produced by East Asian countries, and the increase in domestic demand in China.

In practice, while China’s trade surplus is largely related to its trade with high-income markets, that of other East Asia countries is largely owing to trade with China. Indeed, the trade surplus of ASEAN countries with China has been increasing in the recent years.

The implications of this rebalancing are largely related to Chinese imports from the region. In this regard, the increase in Chinese domestic demand and the weak international demand for Chinese manufactures are resulting in a shift in the composition of Chinese imports. In practice, China imports relatively fewer goods to fuel its export sectors, and more consumption goods to meet the increasing domestic demand.

In this context, regional partners serving the Chinese export industry (those with vertical supply chain links with China) are likely to continue to be negatively affected as long as demand for Chinese exports remains weak. On the other hand, regional firms serving the Chinese domestic markets are likely to show continuous growth. However, a caveat is that China’s demand for final goods is still largely met by domestic producers, and thus the increase in domestic demand may not have large external spillovers.

A reduction in international demand for Chinese exports may also accelerate the transformation of the Chinese manufacturing industry towards higher value-added goods. This clearly depends on the extent to which Chinese firms are able to upgrade along the value chain and to capture market share in these segments.

If (or when) this occurs, it may have repercussions for the vertical integration of production processes in the region. In practice, Chinese firms could turn from vertically integrated partners into competitors of firms in more advanced countries. On the other hand, the process of manufacturing upgrading may benefit less advanced economies in the region, which are presently competitors of Chinese firms.

Ultimately, what is most important is that regional markets remain open, so that rising domestic demand in each country is met not only by domestic enterprises but also by those operating in other countries of the region. (END/COPYRIGHT IPS))

* Supachai Panitchpakdi is the secretary-general of the United Nations Conference on Trade and Development (UNCTAD).