A recent decision by Papua New Guinea’s (PNG) government to strengthen the nation’s criminal code has re-awakened the debate over the role of deterrence in reducing crime.

Much of the commentary surrounding the proposed changes has focused on the reinstatement of the death penalty. But PNG’s parliament is also considering a range of harsher measures including life imprisonment for rape, 50 years for drug cultivation, 30 years for armed robbery, 20 years for illegal brewing, and the criminalisation of sorcery.

The rationale behind imposing harsher sanctions for convicted offenders is relatively straightforward and appears to be popular among the citizens of PNG. The theory is that PNG’s young men, who are responsible for much of the high crime rate, will assess the harsher penalties and conclude that their actions are not worth the risk.

But some groups are less enthusiastic about tougher measures for criminals. Their reservations primarily relate to concerns about ‘human rights’ violations in the case of the death penalty. Many also assume that ‘root causes’ such as inequality and a lack of job opportunities force the nation’s surplus of unemployed young men to commit crime. They suggest that rehabilitation and jobs are a much better way to attack PNG’s crime rate.

Before unpacking the shortfalls of this approach, two broad observations about PNG’s current criminal justice system should be made. First, criminals are very unlikely to be ‘caught in the act’ in PNG. The size of the Royal Papua New Guinea Constabulary (RPNGC), measured as a ratio of 5000 police officers to 7 million citizens, is roughly 1:1400. In some parts of the country the ratio is as wide as 1:2700. The average citizen, let alone a criminal who is seeking to avoid police contact, is therefore unlikely to come across an RPNGC officer.

Secondly, PNG does not appear to put many offenders in prison. Despite its reputation for violent crime, its incarceration rate is a very low 58 per 100,000 people (ranked 187 in the world). As evidence from other parts of the world suggests, the average criminal is likely to commit multiple crimes rather than just one. Incapacitation often has a tremendously high but under-acknowledged impact on reducing crime. Yet PNG’s low imprisonment rate prevents this benefit from being fully realised.

It is therefore difficult to conclude that state-led deterrence has been properly applied in recent years. This may undermine the case for pursuing a tougher criminal code, particularly given that criminal punishment in PNG can take place in ‘non-state’ forms, such as retribution from rivals or through community justice mechanisms. But the ‘non-state’ approach to justice, especially through community mechanisms, has its own problems. The emphasis on mediation over punishment, which has long been a foundation of cultural justice in PNG, is difficult to sustain in the face of poor results and a changing cultural landscape.

Establishing large-scale job programs to dissuade young men from crime also has its own challenges. Calls for this approach are not unique to PNG. For example, similar hopes of providing jobs to crime-prone youth were a main motivation behind the ‘Great Society’ programs in the United States in the 1960s. But some studies indicate that these programs had a limited impact on crime reduction, despite high-resourcing and political investment.

Other research has found that the link between unemployment and crime is tenuous. To again draw from the United States, even during the Great Depression, when unemployment reached 25 per cent, crime did not skyrocket as many would presume but stayed relatively flat, consistently with other times of high unemployment in US history. As one theory asserts, jobless parents may have helped to deter adolescent delinquency through an unusual period of domestic supervision. This would also apply to PNG, where a re-emphasis on family bonds and ties may serve as a particularly strong ‘domestic’ or household deterrent to crime.

In response to the recent violence that has taken place in PNG, simply saying ‘there is no empirical evidence’ for deterrence may be too premature, especially of what may be the ultimate deterrent: the death penalty.

But tightening criminal legislation in PNG may be futile without corresponding moves to implement a comprehensive state criminal justice apparatus. The relationship between a nation’s criminal code and its underlying society can produce some surprising results. To use gun ownership as an examplec, some countries can have high rates of legal gun ownership but very low murder rates, as witnessed in Israel, New Zealand and Finland. By contrast, some countries — Russia, Brazil and Mexico for example — employ strict gun control laws but endure stubbornly high murder rates.

Ultimately, youth job creation and tougher penalties for criminals in PNG need not be opposing options. Both strategies are worth pursuing. In the coming years, combining a swifter and more deliberate criminal justice system with a commitment to strengthening families, a better-quality police force and opportunities from an expanding market economy, could create scope for crime reduction in PNG.

Sean Jacobs is a former Australian youth volunteer in the Pacific and has worked with all levels of government in PNG.

Over the last two decades, Chinese governments have approved the construction of a cascade of large dams on the stretches of the Mekong River that lie within its borders, prompting disquiet amongst downstream riparian states.

Those states — Cambodia, Laos, Thailand and Vietnam — are now set to wage their own battle for control of precious water resources, with China looming large through its role as a willing creditor.

Despite hydropower plans for the Lower Mekong dating back to the 1950s, the river still flows freely south of the Chinese border. That may not be the case for much longer. The governments of Cambodia, Laos, Thailand and Vietnam have proposed to build eleven dams on the Lower Mekong — nine in Laos and two in Cambodia. Much of the electricity generated would ultimately be consumed in Thailand and Vietnam through contract agreements between the four states. The first of these proposed dams is already under construction; and on 7 November 2012, Laos and Thailand held a ground-breaking ceremony at the site of the Thai-funded Xayaburi Dam, defying the Mekong River Commission’s call for a 10-year moratorium on dam-building along the Lower Mekong.

Although China’s upstream activities on the Mekong have generated distrust and disapproval further down the river, recipient governments have still enthusiastically welcomed large Chinese investments in Southeast Asia. Laos is a case in point. Of the nine proposed Laotian Mekong mainstream dams, Chinese financiers and developers have interests in at least four. China also has a stake in about half of the proposed 63 dams on Laotian Mekong tributaries. Outside of hydropower, Laos’ ruling politburo is now negotiating the terms of a US$7.2 billion Chinese loan to finance construction of a long-awaited high-speed railway between the two countries. That loan represents nearly 90 per cent of Laos’ US$8.3 billion GDP.

As a water engineer in Laos, China is acting in direct accordance with its strategic interests. It is locking up electricity supply deals and protecting regional geopolitical interests by securing crucial developing Southeast Asian neighbours as long-term debtors through high-interest loans. For the Laotian government, a potential future for their country as the ‘battery of Asia’ could just be a pathway to greater economic independence and long-awaited development.

However, Chinese dam building in Laos could also have serious negative consequences. The potential environmental impacts of large dams are well-documented — sediment build-up, landslides, destruction of fisheries, even seismic shifts. The Lower Mekong Basin is currently the largest inland fishery in the world. Laotians and Cambodians are particularly reliant on fish caught from the river to meet their protein needs; construction of the 11 planned dams would lead to an estimated 26–42 per cent loss in annual fish production. Even the apparent economic benefits of major investments in dam infrastructure and other major projects could prove to be a double-edged sword — inflation exacerbated by such large influxes of capital could cause cost-of-living pressures for many Laotians.

How China distributes its largesse across Southeast Asia, including in Laos, will significantly determine the degree to which it builds crucial regional support in a multi-polar geopolitical order. Perceptions that China uses aid and development assistance to win friends and buy political leverage in its neighbourhood will likely enhance suspicion of its long-term intentions. The region south of China’s border is already part of the ongoing contest between the United States and China for support in the Asia Pacific. The United States has launched its own Lower Mekong Initiative and in July 2011 Congress adopted a resolution opposing the development of the Xayaburi Dam, which could reflect an intention to limit Chinese influence in Southeast Asia. Meanwhile, China has deployed armed police vessels along rivers in Northern Laos and Myanmar to quell piracy.

As Chinese influence increases and smaller Southeast Asian neighbours are increasingly attracted to the large loans China offers, the already limited effectiveness of forums for cooperative management of trans-boundary issues may become even more pronounced. The Mekong River Commission’s call for a moratorium on dam building on the Lower Mekong has, for example, been ignored by both Thailand and Laos. Whether Chinese economic and military superiority will be sufficient to ensure ongoing peace in Southeast Asia in the absence of such forums remains to be seen. The way in which large Chinese-funded dam projects in Laos are received by Thailand, Cambodia and Vietnam will be an important litmus test.

Huw Pohlner is Manager of Strategy at Asialink. He will shortly commence graduate studies on the governance of water in China as a General Sir John Monash Scholar at Oxford University.

Myanmar’s abundant energy resources and key geostrategic location between India and China has seen a miniature ‘Great Game’ develop since its recent democratic opening and re-entry into the international community.

While several countries have become players in Myanmar’s development, India and China have taken the lead with the construction of multi-billion dollar deepwater ports and energy projects.

The increasing Buddhist nationalist violence against Myanmar’s Muslim minority is creating instability in regions of Myanmar critical to India and China. On 22 March 2013, Myanmar imposed a state of emergency in Meiktila, a town in central Myanmar, after three days of anti-Muslim rioting left over 40 people dead, 12,000 displaced, and more than 1,000 homes and buildings destroyed. Demonstrators attacked a madrasa, hacked 20 students to death, and burnt their bodies in ceremonial triumph. Meiktila’s Muslims, 30 per cent of the town’s population, were forced out of the city by armed Buddhist nationalist demonstrators, and remain in displaced persons camps on the town’s outskirts. The events resembled the violence against Rohingya Muslims in Sittwe and other locations in the state of Rakhine in June and October 2012 that displaced approximately 100,000 people.

The widening anti-Muslim agitation in Myanmar increasingly resembles anti-Muslim violence in Bosnia in the early 1990s. It is fuelled by the Buddhist nationalist extremist ‘969’ movement, which calls upon Buddhists to protect their country from the ‘Muslim threat’ to the Buddhist way of life and nation. Local ‘969’ committees distribute propaganda, and organise anti-Muslim activities which include boycotting economic transactions with Muslims through a campaign of intimidation and vigilante violence.

Much of the anti-Muslim violence has been concentrated in areas crucial to Chinese and Indian interests. A critical component of India’s ‘Look East’ strategy, India’s presence in Myanmar assists it to project power deeper into Southeast Asia and offset Chinese domination of the region. India financed and built Myanmar’s deep water port in Sittwe, which is north of Myanmar’s offshore natural gas fields. The Sittwe port is the cornerstone of India’s massive Kaladan Multimodal Transit Transport Project, which aims to connect eastern India with Myanmar through a sea route between Kolkata and Sittwe and a road and river route from Sittwe to India’s eastern Mizoram state.

But Sittwe has also been the site of Myanmar’s worst anti-Muslim violence. Sittwe’s strategic infrastructure would be extremely vulnerable to attack if Rakhine’s Rohingya Muslims seek assistance from outside jihadist organisations. Mizoram and the other six eastern Indian states neighbouring Myanmar are also all grappling with their own separatist insurgencies. These insurgent groups have cooperated in the past with Nepalese Maoist guerrillas as well as Pakistani jihadist organisations. They would likely cooperate with Islamist militants in Myanmar.

China’s strategic investments are perhaps even more at risk. About 100 kilometres south of Sittwe, China has been developing a rival deep water port in Kyaukphyu, south of Myanmar’s offshore natural gas fields, which would provide it with a long-sought-after, land-accessible port on the Indian Ocean. China is also currently constructing oil and gas pipelines that would carry energy from Kyaukphyu directly to China’s Yunnan province. The Sino–Burmese oil pipeline will provide China with an alternative route for Persian Gulf energy, which would alleviate China’s need to transport oil through the increasingly disputed territorial waters of the South China Sea, and therefore give it greater freedom of action in the conflict.

Yet the Sino–Burmese pipelines pass through Mandalay, the state where the most recent anti-Muslim violence has taken place. The 771-kilometre-long twin pipelines would be extremely vulnerable to sabotage by outside Islamist militant organisations. The Kachin separatist insurgency in Myanmar’s Kachin state has already ostensibly forced China to halt its construction of the Myitsone hydroelectric dam designed to supply electricity to Yunnan province. China cannot afford to ignore the possible repercussions of jihadist violence in the region bordering its Yunnan province. After Xinjiang and Tibet, Yunnan is perhaps China’s most restive province. Approximately 40 per cent of Yunnan’s population consists of non-Han Chinese minorities, including a small ethnic Kachin community. Similar to India’s eastern states, a jihadist presence within Myanmar could assist disaffected minorities in Yunnan and markedly increase their capabilities.

Heavy direct foreign investment from India and China has allowed Myanmar to ignore protests from ASEAN, the Organisation of the Islamic Cooperation, and the United Nations about the ongoing violence. Like Bosnia two decades earlier, the failure of international powers to halt such gross human rights abuses will turn Myanmar’s oppressed Muslims into a cause célèbre in the Muslim world and attract jihadists to Myanmar capable of attacking infrastructure projects, particularly following crackdowns on al Qaeda-affiliated, jihadist organisations in Indonesia, Malaysia, Thailand and the Philippines. If jihadist militancy materialises in Myanmar, it would place both India’s and China’s strategic interests at risk, and potentially blow back across each country’s borders.

Dr Micha’el Tanchum is a fellow in the Middle East and Asia Units at the Hebrew University’s Truman Institute for the Advancement of Peace.

With the yen falling to below JPY100/US$1 for the first time since 2009 and the Nikkei posting five-year highs, analysts have begun declaring victory for the Abe administration’s campaign against deflation and slow growth.

But it is far too early to draw conclusions about the success of Abenomics — given that deflation continues — and there remain a number of unanswered questions surrounding the Abe government’s economic program.

Ultimately, the success of an economic program must be measured not just in terms of corporate balance sheets but also in terms of the economic wellbeing of citizens. If wages remain stagnant or if Japan experiences a jobless recovery, can Abenomics be declared a success?

It remains to be seen whether monetary stimulus will translate into wage hikes or increased hiring, though the government is trying to encourage corporations to do both. It may also depend on whether the government is able to reverse the rise of Japan’s non-regular workforce: the short-term contract workers who make up between a third and a half of the labour force, and enjoy few benefits, little-to-no job security, and virtually no opportunities for advancement. There’s a risk that without a plan to overhaul the Japanese labour market, exhortations to raise wages might result in corporations’ raising wages for regular workers but maintaining or cutting low wages for non-regular workers, thereby deepening the inequality that exists between regular and non-regular workers. The Abe government and the LDP are not blind to this problem, but it is not clear how they plan to resolve it.

The same goes for gender balance in the labour force. To his credit, in his speech last month at the Japanese National Press Club, Abe spoke of gender equality as not a social policy issue but as a central piece of his growth strategy. Yet pretty much the only specific proposal Abe mentioned in his speech was the proposal to increase the number of women in corporate management positions, which would only affect a fairly small number of women.

Reforming the labour market is part of the so-called ‘third arrow’ of the Abe program, the Abe government’s growth strategy. Once again, Abe’s rhetoric is at least encouraging — he has spoken about public-private partnerships to move Japan from inefficient to high-value-added sectors — but it is hard to evaluate the possible success of the strategy until the government’s detailed plans are released in June. It is worth noting that the Abe government is not the Koizumi government redux: whereas Koizumi talked of moving from the public sector to the private sector, Abe has stressed the role of government in promoting growth in new sectors, with all the risks that come with efforts by government to pick winners.

Abenomics (and the latest round of quantitative easing in the United States) has also raised fears of currency wars breaking out between Japan and its competitors. South Korea’s central bank has already moved to cut rates in light of the ongoing decline of the yen against the won, as did Australia’s central bank recently. European exporters — especially Germany’s — are feeling the pain from the yen’s decline against the euro. If other governments engage in competitive devaluation with Japan, the benefits to Japanese exporters from a weaker yen will be muted (if this isn’t already the case). Though the G7 finance ministers’ meeting in the UK recently did not necessarily single out Japan for criticism, the fact that the meeting was held does suggest that Japan’s policies are under close scrutiny abroad.

There are also lingering questions about Japan’s fiscal situation. With the Bank of Japan (BOJ) stepping in to buy government bonds, the Japanese government can continue to borrow without having to worry about rising interest rates. But the risks of Japan’s ever-growing debt remain — and if the BOJ has in fact succeeded at convincing market actors that it is committed to raising inflation, there is the risk that it will be unable to control inflation once it has met its target, hastening the day when interest payments will rise and break the government’s budget. The government is in a race against time. It needs to trigger sustainable long-term growth that can raise tax revenue before interest rates rise. The Abe government has indicated that if economic conditions are still sluggish it will delay the consumption tax increase, passed by the Noda government, thereby postponing a useful means of closing the government’s annual deficit of 10 per cent of GDP.

Finally, the question of Japan’s demographics looms over the debate about Abenomics. Edward Hugh offers a sobering account of how demographics may forestall the Abe government’s program. If Japan’s persistent demand shortfall is actually the result of a ‘shrinking population trap’, rather than a prolonged balance sheet recession, then the government’s monetary policy experiment risks triggering capital flight as elderly Japanese investors seek higher returns elsewhere.

The point is that it is impossible to know whether Abenomics has succeeded until the whole program is put into action. Abe probably has about as favourable a political environment as a Japanese prime minister could ask for — dysfunctional opposition parties, few challengers within the LDP and high public approval ratings — which suggests that he may well be able to follow through on his ambitious agenda. That being said, if Abe cannot reverse Japan’s economic woes with all of these factors working in his favour, one has to wonder if anyone can.

Tobias Harris is a Japanese politics specialist who worked for a DPJ member of the upper house of the Diet 2006–2007.

A version of this article was first published here in Observing Japan.

The lead-up to Pakistan’s historic 11 May elections was bloody. From the beginning of April to polling day more than 120 people were killed in election-related violence and many parties were severely restricted in their ability to campaign due to threats of brutality, primarily from the Taliban.

On election day, more than 600,000 security personnel were deployed to protect 70,000 polling stations, half of which were considered to be in ‘sensitive’ locations and vulnerable to attack. Despite heightened security, voting was marred by violence: at least 38 people were killed and over 130 were injured. The Election Commission of Pakistan had to defer elections for three seats of the National Assembly and six seats of the provincial assemblies because candidates had died — some of natural causes; others were killed. Many candidates were kidnapped, including former Prime Minister Yousaf Raza Gillani’s son, who was taken by militants while campaigning for a seat in Multan.

Despite the threat of violence, over 60 per cent of Pakistan’s 86 million registered voters (including 36 million newly registered voters) waited in long lines in the hot sun for the chance to vote — one friend told me that she waited three hours to cast her ballot.

The 2013 elections saw twice as many female candidates in the running than in 2008 and women voted in record numbers. Still, for a country that has had a female prime minister and has 60 seats reserved for women in Parliament, women’s democratic participation is still stifled in some parts. In many conservative areas religious clerics banned women from voting, threatening violence against them and their families if they disobeyed. In Lower Dir, in the province of Khyber Pakhtunkhwa, political parties made secret deals with militants to prevent women from voting. According to the Gender Election Monitoring mission, not a single woman voted in six polling stations in Lower Dir, while in Upper Dir only a single woman cast her vote.

Dawn, the English daily, interviewed voters after they had cast their ballots, revealing many who were sick of the status quo. One voter in Chakwal said: ‘We are fed up with PML-N (Pakistan Muslim League Nawaz) and PPP (Pakistan People’s Party). Now we want change, which only Imran Khan can bring’. Another voted for religious party Jamaat-e-Islami (JI), reasoning that ‘JI is the only party that can bring an Islamic system to the country’. But in the end the PML-N won the most seats, with voters backing Nawaz Sharif. One voter, who cast his ballot for PML-N said, ‘Only experienced people can rid the country from the prevailing crises, not newcomers’.

There are definitely some quirks to the Pakistani electoral system that don’t exist in other countries — the biggest being that candidates can try their luck in more than one constituency. For example, cricketer-turned-politician Imran Khan, leader of Tehreek-e-Insaf (PTI), stood for election in four federal seats, winning three. The leader of PML-N, Nawaz Sharif, stood in two electorates, while the former PPP foreign minister Shah Mehmood Qureshi stood in four seats, but this time running on the PTI ticket. Candidates choose which seat they want to keep, with the leftover seats re-contested in by-elections.

The incumbent party, the PPP, did not hold on to enough seats to form government. Its failure can’t just be attributed to the defections of senior party members like Shah Mehmood Qureshi to the PTI. In addition to being tainted by corruption and being perceived as incompetent, the party leadership could do little campaigning in public because of merciless threats from the Taliban. The party’s leader, 25-year-old Bilawal Bhutto, remained holed up in Dubai for most of the campaign because the risk of assassination was too great for him to appear anywhere in public.

Following the election the horse-trading has begun as the PML-N and Nawaz Sharif work to pull together a coalition government. Nawaz is an experienced politician and has led Pakistan twice before, in 1990–93 and in 1997–99. His second term was cut short, when he was ousted by a military coup. Most predict the Army will leave this PML-N-led government alone — simply because the military leadership are not interested in fixing Pakistan’s myriad political, economic, security and social problems.

It will be telling what the PML-N decides to prioritise during its first 100 days in office. There are signs that relations with India will improve. Indian Prime Minister Manmohan Singh has already invited Nawaz to visit India, while the party has promised a broad review of foreign policy in the coming months. The party promised to bring about an ‘economic revolution’ and ran on a platform of economic revival. Traders and industrialists are at the heart of PML-N’s support base, and Nawaz Sharif is a successful businessman in his own right, making billions in the steel industry. But pundits will have to wait to see if the government can implement successful policies to overcome Pakistan’s deep economic malaise. Stay tuned for what Pakistan’s new government can do for the people of Pakistan.

Alicia Mollaun is a PhD candidate at the Crawford School of Public Policy, Australian National University, and is based in Islamabad.

This year marks the 10th anniversary of the China–ASEAN strategic partnership.

Early this year, Chinese Foreign Minister Wang Yi visited the ASEAN Secretariat and four ASEAN member countries to strengthen mutual understanding and strategic trust, and show support for ASEAN community building. Chinese Defence Minister Chang Wanquan also visited Brunei and held a consultative meeting with the 10 ASEAN Defence Ministers on the sideline of the seventh ASEAN Defence Ministers Meeting to exchange views on regional security issues and discuss measures to reduce tensions in the region, particularly in the South China Sea. Yet there is still a long way to go before a true partnership between ASEAN and China can take hold, with greater investments in strategic trust required.

The US pivot to Asia and the increasing role of other middle powers in the region has challenged China’s regional policy. In its 2013 Defense White Paper, China observes, ‘The Asia-Pacific region has become an increasingly significant stage for world economic development and strategic interaction between major powers. The US is adjusting its Asia-Pacific security strategy, and the regional landscape is undergoing profound changes’. In response to this changing political and strategic context, China needs to review and redefine its regional strategy by enhancing and nurturing regional dialogue and consultation mechanisms and institutions.

In the last two decades, China has successfully implemented its soft-power policy in the region. Since the 1990s, China has softly approached Southeast Asia through deepening economic ties, development cooperation and cultural diplomacy. During the Asian financial crisis in 1997, China did not depreciate its currency; instead, China helped regional countries to cope with the crisis through both economic and financial measures. China is becoming the region’s key development partner and development assistance provider, especially in the less-developed economies like Cambodia, Laos and Myanmar.

Economically, China has pursued its soft power agenda through the establishment of the ASEAN-China Free Trade Agreement (ACFTA), which came into force in 2010. In 2012, the volume of trade between China and ASEAN was US$400 billion and the bilateral investment volume reached US$100 billion. China has also provided scholarship and training opportunities to students and government officials from ASEAN member countries.

China has actively engaged in developing rules-based regional relations to enhance diplomatic and political trust. It became the dialogue partner of ASEAN in 1996. In 1997, the first ASEAN–China Summit issued a joint statement highlighting a 21st century-oriented partnership of good neighbourliness and mutual trust. In 2003, China acceded to the Treaty of Amity and Cooperation to further ensure peaceful development of China with its neighbours and started to implement a comprehensive strategic partnership between China and ASEAN.

China is also active in strengthening regional security institutions such as the ASEAN Regional Forum, and the ASEAN Defence Ministers Meeting Plus. Here, non-traditional security cooperation is the principle area of cooperation between China and its Southeast Asian neighbours. China has supported regional countries in capacity building and collectively addressing human security issues such as natural disasters relief and humanitarian assistance, transnational crimes, terrorism and maritime security. On the issue of the South China Sea, China and ASEAN have made some painstaking progress towards a code of conduct.

Yet China needs to work much harder to earn strategic trust and improve its relationship with Southeast Asia. Without a strong relationship, China will face substantial challenges in projecting its power to the wider Asia Pacific region and the world at large.

The principle impediment to a deeper relationship is China’s maritime power projection and marine economy, together with the increasing assertiveness and presence of Chinese civilian and military forces in the South China Sea. These factors are increasing tensions between China and other claimants, particularly the Philippines and Vietnam. This tension increases some perceptions of China as a threat in the Southeast Asian region and breeds distrust. It threatens to derail the hard-won good relationships between China and its Southeast Asian neighbours. If it does not effectively address these challenges, China may lose certain strategic advantages to other major powers in establishing and enlarging strategic and economic space in the region.

China and ASEAN share a commitment to not allow tensions in the South China Sea to negatively affect their bilateral relations. But they still need to do more to adjust to the new and dynamic regional security landscape. Of crucial importance is the development of strategic capital, which includes trust, confidence, mutual respect and mutual interests. Harmonising national and regional interests is key to this.

Through the development and improvement of the ASEAN-centered regional institutions, the enhancement of strategic transparency, and the maintaining of frank and sincere consultation and negotiation at both bilateral and multilateral levels, China and ASEAN can enhance their strategic capital and realise their common interests. Otherwise, the region will remain strategically divided, which is in nobody’s interest.

Vannarith Chheang is Executive Director of the Cambodian Institute for Cooperation and Peace.

Earlier this year, Bank Indonesia (BI) issued a package of nine regulations that indicate the Indonesian government is taking a new nationalistic approach to the financial sector.

The package provides more protection to domestic banks, particularly public sector banks, by imposing more restrictions on foreign banks. But will the new regulations help Indonesia?

The regulations will require foreign institutions to invest in domestic businesses. The new capital equivalent maintained assets (CEMA) regulation requires foreign banks to invest a minimum amount of capital in their Indonesian branches. The regulations also require foreign banks to serve small and medium enterprises (SMEs) and open up branch offices outside Java. Additionally, domestic banks will stay in local hands. Foreigners used to be able to own up to 99 per cent of domestic banks; now the total share that can be owned by foreigners will be limited to 40 per cent.

The stricter regulations end the red-carpet treatment previously extended to foreign banks and investors who do business and establish offices in Indonesia.

The CEMA requirement will serve as a kind of soft capital control because foreign banks will have to provide additional liquidity to local capital markets. The bond and capital markets in Indonesia are narrow and shallow because in the financial repression era the corporate sector did not need to use them to raise funds.

The new regulations are understandable because Indonesia badly needs foreign banks to finance development. Domestic banks do not have the capacity to raise long-term foreign currency from international markets, but this is necessary if corporations and the government are to pay for risky, long-term projects in mining and manufacturing. Foreign banks provide contingency loans to BI and the Ministry of Finance in times of need and invest in BI’s foreign currency reserves. The foreign banks come to serve large multinationals from their home countries which are operating in Indonesia in mining and large manufacturing. They also provide loans to large domestic corporations, including state-owned companies such as Garuda and Telecom, that cannot be provided by domestic banks. Because of this, the suggestion made by Perbanas (the Indonesian banking association) to convert the subsidiaries of foreign banks into locally incorporated subsidiaries is counterproductive. The financial help given to subsidiaries is more restrictive because it is subject to the risk rating or premium of the recipient country, which raises the rate of interest that the companies pay.

There are more problems with the new regulations. It is not fair to require foreign banks to devote at least 20 per cent of their loans to SMEs and to open branch offices in remote places off Java. BI has divided Indonesia into six zones based on how many bank offices there are per person in each area. Jakarta belongs to Zone I and the less-developed and sparsely populated areas with few bank offices — such as West Papua and Gorontalo — are in Zone VI. Banks that operate in Zone VI, for example, will face a more favourable regulatory environment.

The problem is that, apart from foreign cooperative and rural banks like Rabobank of Holland and Norinchukin of Japan, multinational banks do not have the experience required to serve such a rural class of customers. Serving the financial needs of SMEs in rural areas is supposed to be the responsibility of companies like Bank Rakyat Indonesia and Bukopin, the cooperative bank. Local regional development banks, not large multinationals, should help finance remote areas.

The regulation package of 2013 does relax restrictions on cross-ownership by allowing holding companies to own more than one bank, and BI can eventually grant permission for foreign investors to own more than 40 per cent of a bank’s equity if they meet BI’s standard on prudential rules and regulation. But overall, BI is trying to force foreign banks to perform functions to which they are not suited. Instead, what Indonesia really needs is structural reform of its financial industry.

Anwar Nasution is Professor of Economics at the University of Indonesia and Senior Institution Specialist at the Support for Economic Analysis Development in Indonesia (SEADI).

An important aspect of the current reform era in Myanmar is the retreat of the Tatmadaw (the Myanmar Armed Forces) from the day to day workings of government.

This is the case despite (or perhaps because) the current Union of Solidarity and Development Party government is comprised primarily of serving or retired military officers. In particular, the reconfiguration of the political system and the relaxations on civil society has allowed and encouraged  new participants in the political process. The military is now prepared to work with their former enemies, as demonstrated by the growing prominence of Aung San Suu Kyi and the National League for Democracy Party in Parliament, and improved relations with the West.

These changes are an important development for an underpinning rationale of the Tatmadaw’s rule — that is, the ‘praetorian ethos’ or belief that they are the only institution capable of defining and protecting the interests of the state in a perceived hostile environment of multiple threats. By engaging with other participants, the Tatmadaw are opening new pathways which could fundamentally change this stance.

Yet the Tatmadaw retains authority in constitutional matters and control of security portfolios, which demonstrate the persistence of the praetorian ethos. They are an independent organisation not subject to parliamentary oversight, with direct control of the ministries of Defense, Interior and Border, and have a majority on the powerful National Defense and Security Council, the country’s most important executive body.

If Myanmar is to continue to evolve into a free and democratic system, civil–military relations must be fundamentally transformed. But encouraging the military’s continued retrenchment from the government will be a long-term process. It will most likely be made up of incremental changes so that the Tatmadaw can carve out a new institutional identity and position within the political structure. The immediate challenge is to create room for civilian involvement in security matters, but the eventual goal would be for the military to move from a position of completely directing the process to one of advising the government and carrying out directives.

Ethnic unrest is the major arena for determining the future of civil–military relations. Burma’s ethnic minorities, who represent a third of the population, have been victims of decades’ long military campaigns and atrocities, so they are weary of the military’s continued political involvement. Although initially overshadowed by a focus on democratisation, ethnic matters are one of the most important issues facing Myanmar and moves towards a federation will most likely be the next major area of reform.

But ethnic tensions go beyond adversarial relations with the military and exist in a larger societal context of ethnic mistrust and hostility. The military and police have also been accused of allowing civilians to attack ethnic minorities, raising suspicions they are promoting ethnic strife. If the breakdown in ethnic relations led to Myanmar’s destabilisation, the military could use this situation as justification for reasserting itself in the political sphere.

The Myanmar government (and the opposition as a potential government in waiting) must take certain steps if they want to reduce ethnic tensions, and build new relations with ethnic minorities. They must be willing and able to strictly control military activities in ethnic regions. The military as a national institution has a vital role to play in this process of reconciliation but civilian control must be cemented to ensure ethnic violence does not become a strictly ‘security’ matter under the exclusive purview of military authority.

Myanmar is in a period of transition from direct military rule to civilian control, but there is no guarantee the political system will eventually be free from the Tatmadaw’s interference. The process of democratisation stemming from military rule in other Asian states such as South Korea, Indonesia and more problematically Thailand included a transition period marked by the gradual retrenchments of the military from the political system. So reformers in Myanmar must cautiously and slowly work with the military to rearrange their duties and responsibilities while making deeper normative changes in the civilian–military relationship. Already there are tentative signs this process is underway in the division of foreign relations, with Tatmadaw generals meeting their military counterparts and leaving diplomatic meetings to government representatives.

The inability to resolve ethnic conflicts poses a great threat to national unity. Ethnic relations is the issue which will determine the extent to which civilian authorities can become involved in security issues and include them in a wider policy process of ethnic reconciliation. The military’s acceptance of the legitimacy and competency of civilian governments to direct and determine security policy will be put to the test. Ultimately, the willingness of the Tatmadaw to abandon its praetorian ethos of directing the political process, specifically over security policy areas, will determine whether the system remains primarily in the service of regime maintenance or becomes an arena of increasingly diverse, free and fair political discord with the possibility of power being assumed by those that are non-military.

Adam P. MacDonald is an independent researcher based in Halifax, Canada.

Japan’s Prime Minister Abe and the ruling LDP are capitalising on their popularity and the deterioration in Japan’s regional security environment to launch a reinvigorated campaign to amend the Japanese Constitution. In April 2012, the LDP released new draft proposals for revising the document, the most important legacy of the US Occupation of Japan.

Despite the Abe cabinet’s 65 per cent approval rating, the LDP does not necessarily speak for a national majority on the need for constitutional change, let alone for the nation as a whole. The draft proposals reflect its own version of desired constitutional reforms, while public opinion polls reveal a nation divided on the proposed changes as well as on the broader question of constitutional reform. A recent NHK poll revealed only 31 per cent supported the need to amend the constitution (NHK News 7, 14th May 2013).

At the same time, some aspects of the current campaign present a particularly strong challenge to the constitutional status quo.

First, Abe has taken aim at Article 96, which sets the legal requirements for amending the Constitution: a minimum two-thirds majority in both houses of the Diet and approval by a simple majority in a national referendum. These represent a high political hurdle — but no higher, relatively speaking, than in most other democracies with written constitutions — and may help to explain why the Japanese Constitution remains unamended since its 1947 enactment, although equally, it may indicate insufficient support for change. Abe wants to make amendment easier by lowering the bar to a simple majority of Diet members in both houses. The referendum stage would remain.

Second, if Abe is successful in amending Article 96 the LDP will be free to present its full draft of proposed constitutional amendments. The change longest in the making is the proposal to amend the Constitution’s ‘peace clause’, Article 9. The LDP wants to convert the Self-Defence Forces (SDF) into a National Defence Force, thus granting, at a minimum, constitutional recognition to what has been reality since the SDF Law was passed in 1954 — Japan’s possession of military forces.

The need to change Article 9 has been exaggerated. Article 9 places no constraints on the capacity of the SDF to defend Japan. Nor does it impose an insuperable barrier to Japan’s participating in collective defence. The latter requires a change in the interpretation of Article 9, and would be just another step in the process of ‘revision by reinterpretation’ that Article 9 has undergone over the years. The biggest constraint on Japan’s ability to defend itself is the parlous state of government finances, not the Constitution.

The price of formally amending Article 9 will be high, particularly in terms of Japan’s foreign relations. China and South Korea will ‘over-interpret’ the move as signifying a dramatic change in the status quo and the rise of a potential Japanese military threat. Moreover, Japan will no longer be able to lay a strong claim to being a ‘ peace state’, which has been an important source of its soft power. The proposal to revise Article 9 could, therefore, have a destabilising effect in the region and come at the cost of Japan’s international standing and soft power.

Third, other proposed changes in the LDP’s draft pose dangers to the liberal democracy the Constitution guarantees. Two particular changes stand out. The LDP’s draft adds a provision that prioritises ‘order’ and ‘the public good’ over ‘fundamental human rights’. For example, with respect to ‘freedom and rights’ (Article 12), the draft has added the provision, ‘[The people] must be aware that [freedom and rights] are accompanied by responsibility and obligations, and must not go against the public interest or public order at any time’. With respect to ‘freedom of assembly, association, speech, press and all other forms of expression’ (Article 21), the draft has added, ‘The conduct of activities aimed at harming the public interest or public order and associating with others for the same purpose are unacceptable’.

Human rights in Japan are not absolute but are already constrained by considerations of public order and safety. For example, there are public order limits on rights of demonstration and association written into Japanese law. So the point of this proposed change can only be to bring about a major shift in the current balance between state power and individual rights.

What the LDP draft is proposing is anti-liberal and potentially anti-democratic. Writing notions of public order and citizens’ obligations to the state into the Constitution has a highly conservative and statist (kokka shugi) flavour. Moreover, by arguing on cultural grounds for these changes — that concepts of universal human rights are ‘ill-suited for Japan’s traditional culture and values’ — Abe and his affiliates in the LDP are effectively saying that liberal democracy is incompatible with Japanese culture. This puts them closer to cultural traditionalists in China (and even the Taliban) in political ideology than to the United States and other liberal democracies.

Abe’s agenda for constitutional change is one manifestation of a broader agenda of historical revisionism, which is, in turn, an expression of his particular brand of Japanese nationalism. This is why the constitutional course that he is proposing is so perilous. It allows a group within the LDP, and likely a minority at that, to justify constitutional change for reasons of restoring national pride, rather than for reasons of improving the operations of the government system itself.

The question is whether the majority of the Japanese people even realise and accept the true import of the changes that are being proposed. The voice of the ‘old left’ — the traditional protectors of the Constitution — has been drowned out by those in the ‘old’ and ‘new’ right parties who mainly appeal to voters on other issues.

If the proposed changes are successful, they will have been driven from the top down by Abe and his backers without any groundswell of public support. High approval ratings for the Abe cabinet are not for the prime minister’s constitutional reform agenda but for Abenomics, his short-term fix for the economy. He should not confuse the two.

Aurelia George Mulgan is Professor at the University of New South Wales, Australian Defence Force Academy, Canberra.

With the release of the Defence White Paper 2013 on 3 May, Australia officially has a new region, the ‘Indo-Pacific’: a strategic arc ‘connecting the Indian and Pacific Oceans through Southeast Asia’.

Given the long history of linking Australian foreign policy to the ‘Asia-Pacific’, this is a significant change in terminology. How did we get to this point and what are the implications?

The ‘Indo-Pacific’ is not a new term in Australian debates. According to the Lowy Institute’s Rory Medcalf, the ‘Indo-Pacific’ was used in the 1950s to discuss decolonisation in the 1960s at two seminars held by the Australian Institute of International Affairs and the ANU, and again in the 1970s. Yet for around 30 years the term was not prominent until its re-emergence in 2005 in a paper by the Institute of Southeast Asian Studies’ Michael Richardson who saw the inclusion of India, Australia and New Zealand in the East Asia Summit (EAS) as symbolising a more unified ‘Indo-Pacific’ region.

The term ‘Indo-Pacific’ subsequently started to appear in Australian foreign policy discourse, including speeches by Minister for Defence Stephen Smith and Department of Foreign Affairs and Trade Secretary Peter Varghese. But it remains contested, and there was significant debate around the wisdom of adopting the concept.

Proponents of the term have argued that it realistically describes the region in which Australia is situated. Rory Medcalf views the Indo-Pacific as ‘a valid and objective description of the greater regional system in which Australia now finds itself’. In his book There Goes the Neighbourhood: Australia and the rise of Asia, Michael Wesley writes that the concept emerged due to the reality of growing economic and strategic links through Asia: what he terms the ‘Indo-Pacific power highway’.

At the same time, there has been criticism of adopting the Indo-Pacific concept too readily. For example, Nick Bisley and Andrew Phillips have expressed concerns about what the term means and whose interests it serves; it should not be code for ‘dialling up Australia’s alliance commitments to 11’.

The debate between these two camps was fairly even until May 2013 as the Indo-Pacific was not yet embedded into foreign policy. The 2012 White Paper on Australia in the Asian Century mentioned the concept only twice. This was a long way from giving the concept official endorsement.

This situation changed with the Defence White Paper 2013. Presenting the Indo-Pacific as a ‘logical extension’ of what the 2009 Defence White Paper called the ‘wider Asia-Pacific region’, the 2013 White Paper adopts the concept and ‘adjusts Australia’s priority strategic focus to the arc extending from India though Southeast Asia to Northeast Asia, including the sea lines of communication on which the region depends’. The White Paper sets ‘a Stable Indo-Pacific’ as one of Australia’s four key strategic interests, making the capacity to ‘contribute to military contingencies in the Indo-Pacific’ one of the Australian Defence Force’s four principal tasks. It is hard to imagine a fuller incorporation of the concept into a government policy document.

There are a number of implications of adopting an Indo-Pacific worldview.

First, Australia will need to assess the implications of the Indo-Pacific concept for its key relationships with the United States and China; in particular, whether adopting the Indo-Pacific concept may be perceived to tie Australia closer to the United States and alienate China. Early indications of China’s response to the 2013 White Paper were positive — it seems the term ‘Indo-Pacific’ is less of a concern to China than the characterisation of China as a potential threat.

Second, Australia must consider how to build relationships with Indo-Pacific powers as it adopts the Indo-Pacific concept into its foreign policy. Australia will need to engage strongly with many other regional players, for example India, Indonesia, Japan, South Korea, Vietnam, Thailand and key African countries, as well as China and the United States. This could include security dialogues and operational cooperation.

Third, Australia will need to invest time and effort in building Indo-Pacific institutions. These institutions include the Indian Ocean Rim Association for Regional Cooperation (IOR-ARC) and the EAS. Given that Australia is set to take over the chair of IOR-ARC in late 2013, it is well-positioned to promote greater facilitation of regional cooperation. The EAS also includes the major Indo-Pacific powers, providing a space for cooperation and discussion of regional issues. The EAS has been reported to be a key part of Australia’s foreign policy as part of a ‘six + two + N’ formula for setting priorities. This suggests that Australia’s multilateral focus is increasingly turning towards Indo-Pacific institutions.

The adoption of the Indo-Pacific concept in the Defence White Paper 2013 may have surprised some observers. Many other Indo-Pacific powers are in a similar position to Australia; this means that Australian debates receive attention for indications of how others will respond to similar forces. As something of a bellwether state, Australia’s new conception of its region as the Indo-Pacific will not go unnoticed.

Melissa Conley Tyler is National Executive Director of the Australian Institute of International Affairs. Samantha Shearman is a Research Intern at of the Australian Institute of International Affairs. The views expressed in this paper are the authors’ own. This piece is an abridged version of an article which will appear in the proceedings of the Asian Relations Conference IV ‘Geopolitics of the Indo-Pacific Region: Asian Perspectives’ published by the Indian Council of World Affairs.