Author: Satish Chand

The third and final element of my proposal for assisting the Pacific achieve improved development outcomes involves underwriting law and order via the South Pacific Forum. Specifically, I am proposing a short-term, a long-term, and a bridging strategy to improve law and order within the island-pacific. The short-term strategy entails members of the Pacific Island Forum, as a collective entity, under-writing law and order in each of its member nations. This will require members first agreeing to a regional external intervention should laws of any state be usurped. This does not tread on their sovereignty since each individual state has the right to form its own laws; but then has to abide by these laws which have already been approved and legislated by its own legislature.

Credibility is critical for this strategy to deliver on intent. Multilateral commitment would be necessary for the above. The South Pacific Forum is the natural home for such an agreement. Read more…

Author: Shiro Armstrong

The Japan-China relationship is improving.

That’s the result of a survey conducted by the China Daily and Tokyo-based non-profit group Genron-NPO, which polled 1,557 Chinese urban residents in five major cities including Beijing, Shanghai, Xi’an, Chengdu and Shenyang, and 1,037 students in five Chinese universities. 1,000 urban residents and 400 ‘intellectuals’ were surveyed in Japan in June and July.

While each group surveyed responded more positively than the year before, the differences among the groups within the countries is stark. But more interesting is the disconnect in perceptions between the two countries.

Read more…

Author: Peter Drysdale

In this month’s Tokyo-based East Asian Insights, Hitoshi Tanaka, former Deputy Minister of Foreign Affairs and now Senior Fellow at the Japan Centre for International Exchange, argues that the dramatic transformation of the global system taking place as the distribution of power shifts from West to East, the ongoing crises over Iraq, Afghanistan, Iran, and North Korea, and the sharp rise of oil and food prices resulting from the swift upsurge in demand for primary commodities in the emerging economies have thrown systemic problems in the global community into sharp relief.

Viewed from Tokyo, these developments, together with the recent decline in US global leadership, cast doubt on the future sustainability of the existing network of international institutions. The G8 Summit in Hokkaido, which involved limited participation of a number of emerging economies and intergovernmental organizations, provided ample evidence, Tanaka argues, that the advanced democracies are no longer capable of solving global challenges by themselves.

Without a new order that incorporates China and India (as well as Brazil, Russia and South Africa) the system of global governance is flawed. East Asia, he argues, has to be at the centre of the reform of global governance.

Read more…

Author: Ryan Manuel

As noted yesterday, the recent events in Thailand appear of great significance to the region as a whole. For more up-to-date and comprehensive analysis of the situation, we commend the New Mandala blog to you. The following piece can also be seen there.

Reactions thus far to the Thai events in China appear to be along the lines of those in Western newspapers, with many papers using the Reuters Chinese language feed to shape their reportage.

Longer opinion pieces however reveal some interesting slants on the crisis.

Read more…

Autors: Peter Drysdale and Christopher Findlay

Graeme Dobell (link) and Mark Thirwell (link) have comments on the Lowy site on our paper last week on Chinese foreign direct investment in the resource sector.

Graeme Dobell noted:

…Professor Peter Drysdale and Professor Christopher Findlay…In their view, policy on Chinese foreign direct investment in Australian mining has fallen into confusion over the last year. Or as they pose the problem: ‘It may seem a puzzle as to how we got ourselves into this pickle over Chinese FDI.’ The Drysdale-Findlay solution is for Australia to step back from its effort to place additional hurdles in the way of Chinese state-owned firms.

Mark Thirwell says that we come to ‘pretty much the same conclusion’ as he did in anop ed in The Australian in July when we conclude that: ‘There is no persuasive case for any change in direction over control of foreign direct capital inflows in response [to] the recent surge of interest of Chinese foreign direct investors in the Australian resources sector.’ So there will be no argument from him.

That said, he ventures two ‘additional’ arguments to which we should respond.

Read more…

Author: Ryan Manuel

The recent events in Thailand have led to considerable debate, and some confusion, regarding their impact upon the region.The battle between the Royalist, elite PAD forces and the democratically elected Samak-led government appears more than an argument over the current state of the nation. Rather, it appears to be a battle over what model of government Thailand will have in the future as the ageing King Bhumibol approaches the end of his reign.

Samak is seen by his opponents as somewhat of a puppet for former leader Thaksin Sinawatra. However, this does not dismiss the fact that his government remains the democratically elected leadership of the nation. Moreover, the opposition PAD party doesn’t wish new elections- as it is pretty sure it will lose them. Rather, they seek a model whereby 70% of the government are appointed by the monarchy.

Clearly, the outcome of this struggle will have a large impact upon the broader region as a whole. Thailand remains a significant power within the South East Asian region, and in a region not short of governments with authoritarian tendencies, a reconfiguration of governance in Thailand will have implications well beyond the current struggle.

For those readers who are interested in far more comprehensive coverage of this situation, we commend the New Mandala blog based at the ANU to you. An overview of the current situation here, whilst their recent summaries of academic writings on the matter can be found here and here. The Bangkok Pundit also seems to be an excellent source of relevant quick information.

Author: Nagesh Kumar, RIS

With a combined population of nearly half a billion and GDP of over a trillion dollars, ASEAN countries provide a large market for Indian companies.

The conclusion of India-ASEAN FTA after four years of negotiations in Singapore at the ASEAN EconomicMinisters meeting last week will pave the way for India to play its due role in emerging broader regional architecture in Asia.

India had begun to engage ASEAN since 1992 as a part of the Look East Policy. Look East was perhaps a response to the growing recognition of East Asia’s potential to emerge as the centre of gravity with rapid growth sustained over the past three decades in contrast to rather subdued economic performance of the western world. It also had something to do with the rise of the economics of neighbourhood that was leading to formation of regional trade blocs all over the world from EU to Nafta to Mercosur.

As a part of the Look East, India has evolved a multifaceted partnership with ASEAN and other East Asian and Pacific countries. Read more…

Author: Satish Chand

The level of access to basic services such as primary education and basic healthcare varies considerably across the nations of the Southwest Pacific. PNG ranks low, if not the last, on this count. Its geography in the form of the rough terrain and archipelagic nature, history in terms of a highly fragmented and sometimes strongly divided society, and climatic conditions which makes malaria (and other vector-born diseases) endemic to the nation is major handicaps to universal and effective delivery of basic services. The recent arrival and galloping spread of HIV compounds the problems many fold.

Education is critical for development. Read more…

Author: Aaron Batten

Just like the 1990’s trust accounts are shaping up to be a defining component of how PNG manages its resource revenues in this decade. Unlike the 1990’s however current revenues are being channeled into numerous smaller trust accounts instead of the single consolidated Mineral Resource Stabilization Fund (MRSF). Has PNG learnt from its mistakes or is it heading towards a repeat of the past? To answer these questions it is necessary to understand why these trust accounts have increased so much in prevalence over the last few years and what implications this has for fiscal management.

Read more…

Author: Peter Drysdale and Christopher Findlay

The last nine months has seen Chinese foreign direct investment in the Australia resource sector become an issue of policy interest. There are two big questions that the prospects of a significant rise in foreign direct investment (FDI) from China into the Australian resources sector have raised. Is the surge of FDI into Australian mining and energy consistent with achieving the traditional gains from foreign investment? And are there any particular problems associated with investment from foreign state-owned enterprises or state managed sovereign wealth funds?

These are among the questions addressed in a paper we presented today at a Crawford School Public Seminar (view the full draft paper here). We argue in the paper that there are no issues that cannot be dealt with under the umbrella of the established test of ‘national interest’ in managing the growth of Chinese FDI into the Australian minerals sector. Confusion has been introduced into Australian foreign investment policy over the questions of state-ownership and supplier-buyer relations in respect of Chinese investments and clarifying these issues is likely to be important to Australia’s capturing the full benefits from the growth of Chinese resources demand and longer term economic and strategic interests in China. Read more…

Author: Satish Chand

A recent report by the CIS, describes the emergence of a dual or ‘bi-polar’ Pacific where two groups of islands have displayed markedly different demographic characteristics and different employment social and educational outcomes. The conflict in the Solomon Islands, Fijian coups, raskol gangs of Papua New Guinea, and stagnation of Vanuatu are contrasted with the relatively high growth success stories of Cook Islands, French Polynesia, Guam, New Caledonia and Samoa..

So what can be done to help the Pacific correct its ‘bi-polar’ tendencies? Read more…

Author: Tobias Harris, Observing japan

The word in the Japanese media is that Fukuda Yasuo’s resignation came as a complete surprise, reportedly made even without consulting with his wife.

The LDP was blindsided. The public, it seems, is angry over Mr. Fukuda’s “irresponsibility.” The DPJ has already called for a general election.

I was not among those who wrote Mr. Fukuda off last year as a mere caretaker. I gave him credit for being a better politician than he appeared and not simply a reversion to the old LDP. I still think that. But I’m convinced that Mr. Fukuda was the right man at the wrong time.

His various public statements, including his first policy address, his speech to the LDP national convention in January, his second policy address, and his May foreign policy address all evince a clear understanding of the nature of Japan’s crisis. Mr. Fukuda clearly understands how Japan has to change; indeed, he may understand better than just about everyone in the LDP, Mr. Koizumi included. Read more…

Author: Peter McCawley, ANU Indonesia Project

Stephen Grenville pushed a piece in the Australian Financial Review last week on one of the most difficult issues of current public policy in Indonesia – corruption. Stephen considered the possibility of tackling corruption with a “big bang” approach but decided that this was impractical.

Stephen notes that the judicial system (and, indeed, much of the rest of the public sector) is “market-based”.  And this, indeed, is surely part of the core problem – that the line between “non-market goods” on one hand, and “market goods” on the other, is blurred in Indonesia and in many other poor countries.  This is an enormously complex problem to which there is no easy answer. Read more…

Author: Tobias Harris, Observing Japan

With Fukuda Yasuo’s resignation, there is little question that the frontrunner to replace him (perhaps the only candidate to replace him) is Aso Taro.

Mr. Aso may regret it.

Taking the helm with the LDP in even greater shambles than it was when he ran against Mr. Fukuda in September 2007 to succeed Abe Shinzo, a Prime Minister Aso would have to rush to sort out a new cabinet lineup (or would he keep Mr. Fukuda’s second?) and sort out his agenda. Provided that he can wave off demands for a general election, the autumn extraordinary session will now be starting closer to the end of September, leaving the government even less time to push its stimulus package and an extension of the MSDF mission through the Diet. The latter looks increasingly unlikely, no matter how resolutely Mr. Aso asserts that it must be done. Moreover, it is unlikely that Mr. Aso would have any more control over Komeito than Mr. Fukuda, Mr. Aso’s supposed “pipeline” to Komeito notwithstanding.

In these circumstances, the pressure for a general election immediately may prove irresistible. Read more…

Author: Razeen Sally, LSE

Yet another attempt to salvage the Doha Round of trade negotiations has collapsed. This time, though, the collapse may be terminal. Trade ministers could not agree to broad headline cuts in protection on trade in agriculture and industrial goods. This failure is regrettable. But it was predictable. The Doha Round had a terrible gestation in the wake of Seattle. Induced labour followed after 9/11 — in the desire to restore confidence in the world economy. Then the Round was born deformed and disfigured, with an impossibly large, unwieldy and contradictory agenda. It has been on life support ever since.

The Doha collapse reflects a deeper malaise. Policies governing international trade and investment have become hopelessly outdated. They are stuck in anachronistic twentieth-century mindsets, institutions and regulations, increasingly disconnected from today’s business realities. Read more…