Tag Archives: Burma

The Asia scrum


Rather suddenly there is a welter of developments turning Asia’s dozen-odd countries into a cat’s cradle of conflicting interests – some new — that could lead to war.

Central, of course, is “a rising” China. The Chinese, themselves, have given up the phrase “a peaceful rising”. That was a promise that the new boy on the block would not repeat a united Germany’s late arrival as a strong player in Europe, setting off two world wars. Now almost daily aggressive rhetoric in official Chinese media is matched by extravagant territorial claims against its neighbors in northeast and southeast Asia coupled with a rapid naval buildup. Infringement of the cease fire lines in the Himalayas accompanies temporary military thrusts against Indian forces.

China’s only ally in the region, North Korea – dependent on Beijing aid for its very existence – has turned even more enigmatic. A highly publicized – unusual in such frequent eruptions – purging of its No. 2 leader is inexplicable even to the experts. Its tightly controlled media showed Jang Song Thaek being yanked off to prison. Then the uncle by marriage to the 31-year-old Kim Job-Un, third member of the Kim dynasty, was summarily executed.

One side effect has been both official media in China and North Korea accusing each other of perfidy; Jang was close to Chinese official and business interests. Yet there is no sign that they are not still wedded in their opposition to Japan and the U.S. These events have written a death notice for Washington’s continuing hope that Beijing could and would intervene to halt North Korea’s expanding weapons of mass destruction program. And the Obama Administration, like its predecessors has no answer to the conundrum of the continuing Pyongyang blackmail for additional aid as an incentive to halt its weapons program.

On the other side of the East [or Japan] Sea, most of which Beijing now claims as a restricted area, Japan’s extremely popular Prime Minister Shinzo Abe has defiantly defended Tokyo’s longstanding claim to sovereignty of disputed rocks between its Islands and the Mainland. His attempt to restore Japan’s economy, dawdling for a decade, has been accompanied by a campaign to regain a sense of national purpose. His strategy includes breaking through the virtual monopoly of the leftwing mainstream media not excluding the government radio and the Communist Nikyoso teachers union. Visiting Japan’s shrine to its fallen war dead was part and parcel of that cultural offensive. But because of the enshrinement there of World War II war criminals, it was looked on askance [and for propaganda] by Beijing and South Korea.

Obvious self-interest is being flaunted for political advantage: Beijing threatens to impose economic strictures on Tokyo. Seoul has refused needed Japanese ammunition for its UN Peacekeeping Force under attack in South Sudan. In a period of rapidly declining GDP and attempts at reform, Beijing can ill afford to abandon its heavy reliance on Japan for China assembly for third Japanese markets. Furthermore, Beijing has always looked to Tokyo not only for investment but for technological and management know-how, reflected in Japan being China’s No. 1 supplier in their $334 billion trade [2012]. Seoul’s collaboration with Japan, including such recent joint naval exercises, is essential for any effective counter to China’s power sponsored by the U.S. in Asia.

Abe, anticipating that Beijing despite all the talk of reform will not be able to boost its domestic consumption, long the holy grail of Japanese and Western business, is encouraging Japanese business to look elsewhere. Already Japanese direct investment into China plunged by nearly 37% in the first nine months of 2013, to only $6.5 billion, in part because of the outlook for Chinese markets. Alternatively Japanese investment in Southeast Asia’s four major economies ­— Indonesia, Malaysia, Thailand and the Philippines —­ surged by over 120% to almost $7.9 billion.

Tokyo is moving quickly to exploit the new opening in Burma through its traditional special relationship there, Not least it cultivates opposition leader Suu Kyi, whose father, one of the martyred leaders of the independence struggle, was a Japanese protégé. Tokyo has written off more than $5 billion in debt for the reforming generals, and offered new infrastructure loans. Completing the circle, Tokyo has just announced $3 billion for Burma’s long-suffering minorities in off and revolt against the central government since independence.

Japan’s attempt to move away from China toward South Asia has its geopolitical aspects as well: a recent joint naval exercise with Indian forces off that country’s coast, a first, backs up its attempt to encourage an export led investment in the other Asian giant. It is part of a growing Japanese military, integration with its U.S. ally, and projection of its power and prestige overseas.

Radical shifts are taking place elsewhere in Southeast Asia. Thailand’s feud between an urban Sino-Thai Establishment – including avid supporters of the King and Queen – and rural voters is escalating. Rioting with upcoming elections – which the opposition threatens to boycott – have already dampened continued rapid expansion of tourism which accounts for over 7% of Thailand’s economy. And it could threaten foreign investment which has made region’s leading automobile industry a cog in the growing worldwide car assembly network.

Eighty-six-year-old King Bhumibol Adulyadej is ill and apparently unable, especially given his closest followers’ involvement, to make his usual intervention to calm political waters. And the Thai military, which many hoped had been ruled out of a new democratic, booming society, now have hinted they will lapse back into their old coup habit as they did in 2008 if street violence continues. Meanwhile, no one is paying much attention to a growing insurgency in Thailand’s Malay provinces on its southern border. That augurs badly for the region with Malaysia’s own increasingly Islamicist Malays moving toward conflict with its Chinese and Indian minorities, and more radical politicians arising in the more isolated states on Thailand’s border.

Indonesia, largely ignored despite its fourth largest population in the world nearing 250 million – almost a third under 14 — has temporarily staved off a balance of payments crisis. But its meager 3.6% increase in gross national product in 2013 is not what is required for one of the world’s most resource endowed countries with a generally docile and hardworking population. Highly dependent on a few mineral and agricultural specialty exports, Indonesia has been hard hit by the downturn in the world commodity prices. Despite large oil and gas potential, one of the founders of the Organization of Petroleum Export Countries [OPEC] became a net importer in 2009. Corruption, protectionism and fluctuating economic and fiscal policies have discouraged foreign investment and technological transfer. Despite conventional wisdom that Islam in Indonesia is moderate and catholic, incorporating large elements of its pagan and Hindu past, the world’s largest Muslim nation has always had a virulent jihadist movement. Indonesian authorities have been less than prescient in cracking down on it. In a deteriorating economy, it could become a major factor in the worldwide Islamicist terrorist network.

It was into this rapidly moving miasma that Sec. of State Hillary Clinton just two years ago announced the Obama Administration’s “pivot”, a turn from concentration on the Middle East to focus on Asia. But to continue Clinton’s metaphor, a pivot is a “central point, pin, or shaft on which a mechanism turns or oscillates”. It could well be that in the world of diplomacy – and geopolitical strategy — one does not reveal the fulcrum. The U.S. has every reason to hope and even pretend that the growing aggressive rhetoric and behavior of Communist China is not the central issue in Asia for the foreseeable future. But to ignore that threat publicly is not to make it central to the strategy shift which was so loudly proclaimed.

Yet, particularly in its relations with Japan, since 1950 the keystone of American strategy in Asia, the Obama Administration appears not to have a China policy beyond associating itself rhetorically with China’s neighbors resisting Beijing’s encroachment. It may be just as well that U.S.-Japanese military integration under an expanded Mutual Defense Treaty is moving rapidly ahead on autopilot. For despite Tokyo’s continued public espousal of close relations, the coolness between Abe’s Tokyo and Obama’s Washington are an open secret. The strong – by the exotic standards of formal diplomatese – of Washington denunciation of Abe’s visit to the Yasukuni Shrine [“disappointing”] — was a shock in Tokyo despite an earlier warning. Washington’s refusal to take a direct hand in smoothing relations between its two most important bilateral allies in Asia, Japan and South Korea, has been …disappointing in Tokyo and elsewhere. That is particularly true since U.S.diplomats [and retired Foreign Service Officers] and Secretary of Defense Chuck Hagel have publicly espoused mediation between Japan and China.

The Washington-sponsored Trans Pacific Partnership, an ambitious attempt to create a vast new common market including 40% of U.S. trade, all North America and some hangers-on, is stagnating, in part because of inattention from the Administration’s leaders. And it is no secret that excluding China from the TPP – even if there were not substantial justification given its unfair trading practices – is presumably a part of the pivot.

But shaking off the Middle East, even with repeated attempts at “leading from behind”, is certainly not conclusive. This weekend’s crisis in Iraq and Washington’s promise to intervene short of boots on the ground shows how hard it will be to disentangle the U.S. from primary concentration on the area. Sec. of State John Kerry’s persistent – if unrealistic – devotion of enormous time and energy toward a breakthrough in Israel-Palestinian relations, too, points in another direction

The U.S. President is scheduled for a swing through Asia in April. It remains to be seen whether the Administration will publicly try to tidy up its “pivot’ with new initiatives.

.Until then the “pivot” is flapping in the growing East winds of change.

sws-05-01-14

 

 

Advertisements

Snarls in “The land of Smiles”


The last time I saw my old friend, she had finally given up on her magazine dedicated to what we used to call “upcountry” householders. She lamented the passing of “paradise”, a Thailand she and I had known in the late 1940s when I was a young reporter for a local Bangkok English-language newspaper. “Rice in the paddy and shrimp in the klong [canal]” and all is right with the world went the old saying.

“Modernity” with all its problems had come to the devoutly Buddhist land, preindustrial but with abundant resources. Rites of passage once required young men to spend months in the wat [temple] with their begging bowls. Every morning my friend along with most housewives seeking to “make merit” toward a future existence through charity were at their doorstep dishing out rice and Thai curries to them.

But now the klongs in sea level Bangkok are filled – originally by a corrupt French contractor which produced continual flooding. The stench of diesel replaces cardamom drifting from night markets with the world’s most exotic menu. One might have eaten in Yawarat, sarcastically called “Chinatown”. For since cheap ocean passage after the opening of Suez in the mid-19th century with British and French maritime expansion, Bangkok was a Sino-Thai city, flooded with South China immigrants.

Modernization was, of course, beneficial. Health standards improved. The arid northeast no longer survived by sending migrants to the capital. In recent years, investors saw Thailand as Southeast Asia’s auto manufacturing center. Not only No. 1 rice exporter, worldwide housewives snapped up Thai processed delicacies. And Thailand is destination for sophisticated European tourists, replacing the 60s backpackers who came for pot and sex.

But all this is threatened by a social breakdown. Coming for several decades, it reached crescendo in 2006 with the fall of Prime Minister Thaksin Shinawatra. Ironically, the billionaire politician was brought down by his neighbors, the Singaporeans. Mentor Minister Lee Kuan Yew who styles himself leader of a squeaky-clean regime does not follow the old adage admonishing Caesar’s wife to be above suspicion. For it was his daughter-in-law’s Singapore sovereign fund, Temasek, who blew up Mr. Thaksin

Temasek, moving away from funding of Singapore’s manufacturing base — eroded in no small part by China – has gone farther afield. In Bangkok, Mrs. Ho Ching, Lee’s son, the Prime Minister’s wife, negotiated an under-the-table $2 billion plus deal for Mr. Thaksin’s telecommunications empire. It was acquired through government, his detractors say. When he escaped taxation on the deal, it was too much for Bangkok’s Sino-Thai professional elite, fed up with unlimited corruption. They supported a military takeover. When Mr. Thaksin won another election, he was ousted again.

But Mr. Thaksin had long since won the hearts and minds of the rural population through a populist program including medical services. Gone is the old division of labor – Bangkok Sino-Thai families dominating the bureaucracy but rural ethnic Thai arriving at higher echelons through the military. [Mr. Thaksin, unlike yesteryear’s Sino-Thai, makes no bones about his Chinese origins, even going on a traditional kowtow to South China to his grandfather’s grave]

Out of office but not out of money – even though a court recently seized $1.5 billion, about half his formal Thai holdings – Mr. Thaksin has been feeding his supporters from exile. His Red Shirts followers and their Yellow Shirts opponents – far too reminiscent of Germany on the eve of Hitler’s takeover – threaten law and order. The beloved but aging King Phumipol Aduldet is increasingly powerless to play his traditional referee role.

During the Vietnam War a prominent Thai general told me his country could successfully continue to assimilate the Chinese immigration if the U.S. assured regional security. But now, not only is there a threat in the south where Muslim Malay ethnics link with internationalist jihadists, but Chinese no longer arrive only by sea and air .More and more the Chinese export juggernaut is plowing into Thailand’s markets – with trade growing 20% annually. Politically, the old isolation along the northern border with southern China disappears as Beijing pushes communications and development south along the Mekong River.

Continuing destructive domestic violence – billions in tourism have already been lost after 38 countries issued travel warnings – could spell disaster.

The Thais have a caution in Burma next door. There military thugs for decades have squandered human and raw materials resources. Burma’s repressive regime is Beijing’s ally to whom it supplies weapons and a market for oil. And Washington is no longer Southeast Asia’s Big Brother. The U.S., certainly under an Obama Administration preoccupied with domestic troubles and two wars in the Middle East, seeks accommodation with Burma as with other old antagonists.

Thailand, like so much of the rest of the world, is now adrift in a welter of conflicting domestic and world currents. Long gone are the days of the national leitmotiv “mai pen rai”, “[never mind], it is not important”.

sws-03-20-10

 


There are sanctions and sanctions


Surprise! Surprise! Our “multilateralist” European allies – never mind the Chinese and Russians — won’t crank up Iran sanctions.

Hypocrisy has reached new heights: during the annual German-Israeli joint cabinets meeting — deciding whether the Jewish state will again be gifted more submarines – comes a billion-dollar German package to stand up the mullahs’ LNG business. That’s the latest in1700 German companies tripling Hermes subsidized exports to $6.5 billion annually between 2000 and 2007. Some 50 German companies sell nuclear tech for Russia’s Iranian Bushwehr plant. And then there’s non-lethal support for Tehran’s ambitious missiles program. Ditto Italy, France.

Meanwhile, Pres. Obama might shade his eyes to survey the scene with the badly chewed open hand he has been extending the mullahs: a nuclear-clad Tehran would not only test the metal of Israel’s “Never Again”, likely producing new Mideast wars. It would redraw the world strategic map.

Just the threat has sent the Saudis again throwing money at Iranian ally Syria. Riyadh is trying to coax the Gulf minipetrostates into appeasement of Big Brother just across their pond. [They don’t call it the Persian Gulf for nothing.] A whirling idiosyncratic Muslimistic regime in Ankara bites its nails.

With nuclear weapons to dominate Arab oil, the mullahs might even halt the escalating erosion of their failed theocracy. [“Munich” not only armed a Nazi division with Skoda weapons for the attack on Poland initiating WWII but fed German nationalism.] Iranian WMD could help stifle nascent domestic dissidence with dreams of a new Persian empire – especially after latecomer Obama’s tepid endorsement of its martyrs.

In this muddle, conventional wisdom holds American unilateral sanctions won’t work.

That’s patently wrong. As always, the devil is in the details.

When Pres. Bush finally went after Pyongyang’s fronts in Macao – threatening Chinese banks dealing with them – Beijing saw to it that decades of counterfeiting $100 bills stopped, and Kim Jong Il had to look elsewhere for laundered money to cover his Danish pork tab.

NYC District Attorney Morgenthau has got the Treasury after years of dithering to move on flamboyant sanctions violators. Probably working around Presidential Adviser Volcker – the Swiss’ favorite American banker – Credit Suisse forfeited a $536-million fine for helping clients evade sanctions, giving up names. The U.K.’s Lloyds paid $567 to the Treasury and Morgenthau’s prosecution for setting up a special unit to flummox authorities. Barclays is under investigation. Morgenthau hints that Washington should do more, warning against Caracas’ growing ties to Iran.

If U.S. sanctions haven’t worked against Burma’s thugs – Sen. Webb’s endless mantra echoing in Foggy Bottom – it just could be because Chevron [successor to UNOCAL] and Total have poured billions into their pockets [receipts from a gas pipeline to Thailand built with slave labor].

The real question, as more often than not, is whether Obama will act. State has done a soft-shoe dance with California Congressman Berman for a ban on Iran’s petroleum product imports. But the legislation is camouflage. Does anyone really believe the always ambivalent Indians and the fragile Gulf states would halt the lucrative trade or that Washington would jeopardize relations to enforce it?

Furthermore, as George Washington University Professor Askari points out, it might have unanticipated consequences: Tehran’s more serious economic planners would welcome reducing extravagant consumption, saving foreign exchange and trimming monstrous subsidies —  all the while blaming it on The Great Satan.

Equally lame is the purported effort to go after accounts of the Revolutionary Guards. Dubai, for example, certainly before its recent near collapse, is happy hunting ground for South Asian embezzling politicians hiding their loot. And what about the VIP thieves running Iran?

But really effective – the operative word — unilateral sanctions against Iran could add one last straw to the mullahs’ camel’s back.

It requires sanctioning the central bank of Iran, cutting off credit lines to other central banks; Malaysia, for example. It means squashing letters of credit from American banks.

Most painfully, it means going after some of the two million Iranian Americans who flout the IRS by not reporting worldwide income. In the former environment no one could blame them – many refugees from the regime itself – for making a buck on the 15-20% interest rates on Iran-based accounts. But the income tax law ought to be enforced, and Berman ought to have a heart-to-heart talk with some of his constituents.

But in Washington, true enough Treasury Secretary Geithner has his hands full. New duty calls in trying to mitigate the scapegoating “populist” strategy of his boss against the banks. Obama now threatens New York City’s role as the world’s pre-eminent financial center. Nor does it help that the nominee for Treasury international assistant secretary hasn’t taken her seat, apparently because of tax and nannygate delinquencies.

Given the high priority Iran holds in the long litany of U.S. foreign policy issues – not the least its state terrorist maneuvers in Syria, Lebanon, Gaza, Bahrain, Yemen, and most importantly Iraq and Afghanistan – an authentic sanctions route ought to be tried. Tried before it is too late.