Anyone near the corner of 18th & K Streets last week would immediately align themselves with remarks attributed to Singaporean leader Lee Kuan Yew regarding air conditioning’s role as the breakthrough technology that helped transform Southeast Asia’s post-colonial commodity-dominated economies into some of the world’s fastest-growing financial and industrial markets.

In addition to enabling ASEAN leaders’ economic plans to be realized, nuclear power can play a significant role providing electricity for running those air conditioners. Adopting safe new-generation nuclear power plants should be a major area for U.S.-ASEAN cooperation. It is an effort that supports our mutual economic and national security interests.

There is no operational nuclear power plant in ASEAN today. However, of the 10-member nations comprising ASEAN, all except Brunei and Laos have active plans for adding nuclear power into the electricity generating mix. In terms of scale, Vietnam has the most aggressive nuclear power ambitions. It recently announced plans to build eight plants by 2030, producing 15,000 to 16,000 megawatts (MW) of electricity. Indonesia plans to have four nuclear plants producing 6,000 MW by 2025. Thailand has plans to develop two nuclear plants to generate 2,000 MW by 2022. Singapore, which generates the majority of its power from increasingly scarce gas, has a feasibility plan for nuclear power under way. Other countries are developing similar plans.

Nuclear power is an important option for ASEAN, whose electricity demand is estimated by the International Energy Association (IEA) to increase 76 percent between 2007 and 2030 at an average annual rate of 3.3 percent growth, compared to an estimated 2.5 percent annual growth in demand in the rest of the world over the same period. Meeting the ASEAN countries’ electricity demand will require investing more than $1.1 trillion in the next 25 years.

Contemplation of nuclear energy for ASEAN countries is not new, but today, with growing demand for imported fossil fuels and concerns over the environment, it is much more serious. ASEAN nations are bound by the Treaty on the Southeast Asia Nuclear Weapon-Free Zone signed in Bangkok, opened for signature on December 15, 1995, and entered into force on March 28, 1997. The treaty states that there will be no prejudice toward the peaceful use of nuclear energy (Article 4). It also states that prior to embarking on nuclear programs, political buy-in is needed from the International Atomic Energy Agency (IAEA) and from other ASEAN nations.

Nuclear nonproliferation concerns and safeguards will be very important as ASEAN proceeds in developing its nuclear power capabilities. Only one ASEAN country, Burma/Myanmar, is alleged to be developing any plans for nuclear weapons. Those allegations are being investigated by the IAEA and are denied by Burma’s military leaders.

Under the Nuclear Non-Proliferation Treaty (NPT), the IAEA established safeguard standards suitable for application to both simple nuclear activities and to complex nuclear fuel cycles, i.e., a system applicable to reactors and to conversion, enrichment, fabrication, and reprocessing plants that produce and process reactor fuel. Under IAEA guidelines, when a safeguards agreement enters into force, a state has an obligation to declare to the IAEA all nuclear material and facilities subject to safeguards under the agreement. The state must update this information and declare all new nuclear materials and facilities that subsequently become subject to the terms of the agreement. (Source: Treaty on the Non-Proliferation of Nuclear Weapons entered into force on March 5, 1970, as amended and date signed).

The IAEA has clear accountancy and monitoring rules for tracking declared nuclear material. To be effective, this system requires a high level of confidence, trust, and transparency. These are guidelines ASEAN governments would have every interest in following, but strong engagement from the international community would be helpful. In fact, there is already a strong alliance between the United States and Japan in the new nuclear power plant designs.

ASEAN nations must also negotiate bilateral civil nuclear cooperation agreements with the nuclear supplier countries (including the United States, Japan, France, Russia, Canada, and Australia, among others) before they can receive nuclear reactors, fuel, equipment, services, and technology. Some ASEAN countries already have such agreements in place. As part of this process, ASEAN countries will need to demonstrate their commitment to maintaining international standards of nuclear safety, security, and nonproliferation.

Given the Obama administration’s interest in building international partnerships and consensus on nuclear nonproliferation and climate change, and the president’s commitment to engage ASEAN at new and substantive levels, the nuclear energy field seems a logical area for immediate and expanded cooperation. This engagement is also consistent with the Obama administration’s goal of doubling U.S. exports in the next five years. American companies are among the world’s leaders in various aspects of nuclear power from design/build to energy-related services, but face stiff competition from France, Russia, and Japan. Further, the president has capable leaders to lead this effort. Dr. Stephen Chu, the U.S. secretary of energy, has a strong technical background and mandate to work on related issues. President Obama could initiate this process in the broader context of U.S.-ASEAN energy cooperation, which could include a wide range of issues from renewable energy to energy conservation. One format for such cooperation could be a U.S.-ASEAN Energy Bilateral that would be a step toward the U.S. energy secretary participating in the annual ASEAN Ministers for Energy Meeting (AMEM).

As the mercury rises inside the beltway, U.S. policymakers would be wise to take the opportunity to stay indoors, hydrate aggressively, and open a new chapter of U.S.-ASEAN cooperation on nuclear power. The initiative would serve both ASEAN’s and America’s economic and national security requirements.

This article first appeared here at CSIS.

Ernest Z. Bower is Senior Adviser and Director of the Southeast Asia Program, Center for Strategic and International Studies, Washington.

1. Japan’s nuclear crisis sparks concerns over nuclear power in China
2. Nuclear power and spent fuel in East Asia: Balancing energy, politics and nonproliferation
3. Rethinking nuclear power in Asia after Fukushima

Hadi Marwoto Soesastro passed away on May 4, 2010 at 5.30am just a few days after his 65^th birthday. He had been in a coma for 10 days. According to his family he passed away peacefully with a smile on his face. This is so reminiscent of the Hadi Soesastro, or Mingkie (his nickname, derived from his Chinese name), who we all knew and loved – calm, smiling, and always providing comfort or a solution.

I wish I had been there to take one last look. Before I left for my trip to Shanghai and the US, I went to the hospital to take my leave, perhaps subconsciously realising that this was probably the last time that I would see him. Even though he was already in a deep coma, I would like to think that he could still hear me telling him that, if he had to go, he should go in peace knowing that we would still be here to continue his work.

And his work was truly significant. Hadi Soesastro’s tremendous legacy of an active and vibrant Indonesia, both within the Asia-Pacific region and globally, is a footprint that should never be diminished. It is beholden upon us to realise his legacy so that the marks that he left behind are not merely washed away by the next tide.

In writing this piece I began to think about the length of time I had known Hadi Soesastro. As I began to piece together the three different stages of our friendship, I realised that there was a common thread that underpinned all three.

My first recollection of meeting Hadi Soesastro was as a sulking 15 year old teenager accompanying my parents to Bali for a CSIS seminar in 1972. I have a strong recollection of an animated discussion with ‘Om Mingkie’ (Uncle Mingkie) on the beach outside Sanur Beach Hotel. At the time I was sulking because I did not want to hang around with a bunch of boring adults, and upon meeting Om Mingkie, I remember thinking that perhaps some adults were not so bad after all. Om Mingkie would have been a youthful 27 at that time, but was already an intellectual force as one of the founding members of CSIS.

A few years later, when I was an economics student, my father ‘encouraged’ me to go to CSIS for my holiday work. This brought about the second stage of my interaction with Hadi Soesastro. I loved to go to CSIS because of the library and the computer room (computers were still a novelty then!). But most of all, I loved my visits there because of Om Mingkie with his powerful intellect and kindness. Despite his rarefied position within CSIS, Om Mingkie always had the time of day to talk to this student who pretended she knew a lot of economics.  This tradition of welcoming students and young researchers was, and remains, a hallmark of CSIS culture. Many renowned scholars and interns found their way to CSIS, sometimes staying in those famous fifth floor apartments.

The final stage of my relationship with Hadi Soesastro began when I joined CSIS. At this time, our relationship evolved and deepened. I was first a member of Hadi’s staff, then a colleague, and ultimately, he became an inseparable part of my life.

It is worth discussing the influence of Hadi Soesastro upon CSIS and the Asia-Pacific region in detail.

My late father, who died one week after I returned home with my Ph.D, had spent his last few days telling everyone that he expected that I would work in CSIS and asking everyone there to take care of me. When I joined CSIS several weeks after he passed away as a staff member of the Department of Economics, I found an intellectual and egalitarian work environment. At the center was Hadi Soesastro. His visionary thinking created an open and intellectually stimulating place that was a heaven for independent minded thinkers and researchers. There was a sense of equality and tremendous camaraderie that made CSIS an irreplaceable place to grow as a scholar and person.

Through his work at CSIS, Hadi Soesastro was involved in most of the important strategies that shaped the evolving regional architecture of the Asia-Pacific. He was present from the beginning of the evolution of the Asia Pacific vision in the early 1980s and what became APEC in 1989, and oversaw the birth of deeper cooperation in ASEAN and its evolution, including contributing to the creation of the ASEAN Community vision. More recently, his leadership was felt strongly in the region’s navigation of various crises, and he was crucial in fostering the post-crisis emergence of East Asia as the world’s highest growth region.

Simply put, Hadi Soesastro’s footprints are everywhere in the architecture of the Asia-Pacific. Most recently, at a time when he was undergoing treatment, he urged the formation of new regional arrangements, arguing that;

‘Asia looms large in the new global economic (and political) reality… resolving global challenges (economic, political, social, human security and environmental) in the 21^st century will require strong international norms, rules and cooperation as well as effective regional mechanisms for implementation and action. ….this suggests the importance of re-examining Asia’s regional institutional architecture.’

Personally, I could not have wished for a better ‘boss,’ although his humility drove him always to correct me when I introduced him as such. Not only did he provide an intellectual example and sense of vision, he was always looking out for me, and was always there for important occasions.  Checking out (and nodding with approval at) my husband to be; arranging for my wedding party (including the décor, the church and the wedding dress); coming to visit me in Malaysia close to the birth of Raymond my first son and his god son; bringing little presents (especially books) for my children; and reassuring me when, ten years after joining CSIS, I was asked to take over from him as Executive Director. He was always sending through messages of concern – and his advice was indispensable whether it related to public or personal matters.

So what is the common thread that I have found in the three stages of having the privilege of Hadi Soesastro being part of my life? Simple – he was an extraordinarily decent and brilliant man.

I can only close with a quote from his Christmas letter to friends, where he explained the alternative treatment he was undergoing;

‘Christmas 2009 is meant to be one that changes the way I view life. …And yet, I see no reason why this Christmas is not a cause for celebration. There is something important about the notion of these two simple words, ‘to be’ (existence, life, relations to nature and the higher order of things) that I am learning from the experience of trying to deal with an illness. And, I want to share this with you…Please join me in lighting a candle to life and all there is to it.’

Mari Pangestu is the current Minister of Trade of Indonesia.

1. Hadi Soesastro, 1945-2010
2. Tribute to Hadi Soesastro: CSIS’ best mind
3. Kevin Rudd’s architecture for the Asia Pacific

From CSIS in Jakarta, of which he was the distinguished Executive Director for many years, he provided the intellectual foundations for Indonesia’s positive regional and global engagements. In the contest of noble against less noble ideas, he was among the most noble and gracious of contestants. After this Forum was established, he naturally became one of its most influential contributors. He never rested in the search for the Holy Grail. In the past year, despite his illness, he seized the moment in defining the way forward for Indonesia, and other Asian players (among which he always included Australia), in global governance through the G20 and continued to work on this mission until his death.

There wasn’t a major constructive initiative in regional economic cooperation over the last several decades in which Hadi did not play a key role, in his quiet, persuasive, unassuming but decisive way. He was one of Indonesia’s finest sons. And we all claim him as our own – because he was, in so very many ways.

Peter Drysdale

1. Tribute to Hadi Soesastro: CSIS’ best mind
2. Hadi Soesastro’s permanent footprints on the Asia-Pacific
3. East Asia, the GFC and the G20 – Weekly editorial

The newly formed cabinet under the leadership of the popularly elected Susilo Bambang Yudhoyono (SBY) has been dubbed a ‘return the favour’ cabinet (kabinet balas budi), a cabinet of political mates (kabinet perkoncoan), a rainbow cabinet (kabinet pelangi), and a power/cake sharing cabinet (kabinet bagi-bagi kekuasaan atau kue).

The idioms used to describe the new cabinet convey the three big concerns about the structure of the cabinet. The first is the high level of representation of political parties instead of technocrats in the cabinet. The second is that the ministerial selection is still dominated more by political than professional considerations. The third is the accommodation of most of the political parties which gained seats in the parliament, and a weakened ‘opposition’ side. The cabinet is also very large.

Twenty of the thirty four cabinet posts are filled by political party officials. Six of the nine parties in the cabinet have representatives in the cabinet: the Demokrat Party with six posts, PKS with four, Golkar with three, PAN with three, PPP with two, and PKB with two. PKS, PAN, and PKB have their party chairmen in the cabinet, while PAN has its secretary general and Golkar has its vice chair. Five of the six political parties are members of the coalition that supported SBY’s presidential bid earlier this year. Many of Golkar’s top officials support SBY, although the Party officially did not. These six parties control around three quarters of the national parliamentary seats. All in all there is a high degree of pessimism among critics about whether the new SBY administration will be able to push major reform forward in Indonesia.

These concerns have some merit. But they fail to take into account the political reality in Indonesia. It is difficult for any Indonesian president to have an effective government without accommodating the interests of a sufficient range of the political parties. It is true that SBY won a landside in a popular and direct election. To get legislation through will require more than the popular support, particularly where the situation requires him to push for unpopular policies. There is no way to detach the desire for a more effective government from the need to accommodate various political interests. Ignoring that would make the SBY administration vulnerable to deadlock in the parliament and this is the risk that he was not willing to take.

The cabinet may not be ideal but at least it is fashioned out of political realism and reasonableness and this may promise more not less success in advancing reform.

There is similar parliamentary support for SBY in this second term as there was in his first term. But in his first term, the parties which supported SBY controlled less than 50 per cent of the parliamentary seats. With the success of Jusuf Kalla in capturing Golkar chairmanship and the decision of several political parties to jump on SBY’s bandwagon, in effect only PDI-P and PDS are left opposing the SBY administration. Now there is concern about a weak opposition and the lack of checks-and-balances.

Yet SBY will not be able to automatically rely on support from the members of parliament from parties represented in his cabinet. This is one reason why the SBY camp in these past several weeks attempted to court PDI-P into the cabinet too. The fluidity of support from his so called ‘coalition’ partners requires SBY to seek support beyond a simple majority of the parliament.

Indeed, the chances are that it will be even more difficult in the second term than it was in the first for SBY to lock in parliamentary support. For one thing, intense internal party conflict within Golkar, PKB, PPP, and PAN is an ongoing assumption in the political landscape. For another, the change of the electoral system from a semi-open-list in 2004 to a pure-open-list system in 2009 meant that MPs are less beholden to their party’s support because of more reliance on their own popularity, resources, and networks, and potentially more independent from party leadership and control.

The political checks-and-balances in SBY’s second term will not come primarily from the formal ‘opposition’ but rather from MPs from across the range of political parties aligned with SBY beyond his own Demokrat Party.

The test will be in how SBY and his cabinet handle high public expectations, as well as intense scrutiny and public criticism. He has the political support and public legitimacy; he has also brought on board experienced, tested, and capable technocrats such as Mangkusubroto, Mulyani, and Pangestu in his cabinet; and loyalists such Silalahi, Rajasa, Yusgiantoro, and Mallarangeng. The rest will be up to him, and his leadership.

Sunny Tanuwidjaja is a Research Fellow in the Department of Politics and International Relation at the Centre for Strategic and International Studies, Jakarta.

1. Indonesian parties prepare for the presidential election
2. Indonesia’s new cabinet: A boost for economic policy and reform
3. Indonesian politics: prospects for the coming presidential election

This post looks at the interaction between economic and political institutions.

A theoretical study of a simple strategic complementary game with private and public information among partially informed agents such as central banks shows that initial fundamentals might give rise to different levels of transparency. Empirical studies show that both the economic fundamentals of a country, (such as the reserve ratio of broad money to foreign exchange reserves) and the non-economic fundamentals of a country ,(such as its level of democratisation or its experience through a financial crisis) affect the transparency of central banks. Using this type of analysis when looking at the coordination effect of information in East Asian financial integration, it is found that East Asian financial integration might depend more on political circumstance than on economic fundamentals.

There is currently a need for an independent regional surveillance institution. This would enable the activation of Chiang Mai Initiative (CMI) credit lines, the first step towards East Asian financial integration. The current Economic Review and Policy Dialogue has been unable to perform as a surveillance function as it is staffed by officials who often feel that revealing financial data is sensitive and typically refrain from pointing fingers at wrong-doers.

An independent surveillance institution could also set a precedent for broader East Asian financial integration. Financial integration among the ASEAN+3 countries currently faces sovereignty and political issues. Based on the Bali Agreement, signed in May this year, the ASEAN+3 countries have already created a panel of experts assisted by the ASEAN secretariat and the Asian Development Bank (ADB). Eventually the ASEAN+3 countries will need their own regional surveillance institution, with its own secretariat that can extract the CMI program from the IMF surveillance process.

An independent surveillance institution can overcome the institutional issues facing ASEAN+3 financial integration. Sovereignty and political issues that the ASEAN+3 countries are currently facing are much more difficult to overcome (than economic issues). Political reforms and democratisation can take decades. To bypass poor political fundamentals that affect the transparency of economic institutions, the introduction of an independent surveillance institution is more efficient than trying to solve sovereignty issues and institute political reforms. If the decision to reveal financial data is left to the discretion of senior officials representing individual countries, they may never reach a level of fiscal transparency sufficient for a program such as CMI credit lines, which are essential for regional financial integration. This aversion to transparency might be abated by the reputation effect. Some of the ASEAN+3 countries are still non- or only partially democratic. Moreover, there is a collective action or a free-rider issue in that no country wants to be the first to become financially transparent even though a broad regional movement towards transparency would make individual nations better off.

Empirical evidence shows that countries that have experienced a financial crisis are more likely to have higher levels of transparency, supporting the conjecture that individual countries do not self-interestedly seek to reveal information: there must be some incentives for them to do so. Hence, if an independent regional surveillance institution can be fully established, it will be a significant step towards institutionalizing an East Asian financial arrangement. Furthermore, transparency through an effective independent regional surveillance institution has a multiplier effect because with such an institution, regional financial arrangement can be institutionalized, which increases economic fundamentals, and this in turn, can increase the incentive for transparency.

Maria Monica Wihardja is an Associate Member of the Centre for Strategic and International Studies, Jakarta (CSIS), and a lecturer at the University of Indonesia.

For further reading see Maria’s full paper on the topic here [pdf].

1. The ASEAN Charter and remodeling regional architecture
2. The ASEAN Regional Forum is a dead-end, so what?
3. ASEAN+8 – A recipe for a new regional architecture

Climate change is perhaps the most controversial international issue today. The scientific debate on the need to limit GHGs (green house gases) that are responsible for global warming has not ended, but it is no longer the main issue at this point in time. The Declarations of both the G8 and the Major Economies Forum (MEF), held in L’Aquila (Italy) in July 2009, stated the leaders’ agreement [pdf] with ‘the scientific view that the increase in global average temperature above pre-industrial levels ought not to exceed 2 degrees celcius’.

The real issue is how this would be achieved. As of today, the planet is already 0.8 degrees celcius warmer than at pre-industrial time, and the rise in the world’s average temperature has continued to accelerate. Establishing an international climate regime is seen as necessary to deal with this global problem. This effort began with the agreement in 1992 of the UN Framework Convention on Climate Change (UNFCCC) that led to the adoption of the Kyoto Protocol in 1997 and its entry into force on 16 February 2005.

The first commitment period of the Kyoto Protocol that started in 2008 will end in 2012. It is not likely going to deliver much as the world’s largest emitter, the United States, has not ratified it, essentially because developing countries were exempted from commitments. To produce an improved, successor agreement to the Kyoto Protocol in Copenhagen at the end of this year, parties to the UNFCCC have entered into a full negotiating mode in 2009, particularly since the second session last June in Bonn to be followed by three other sessions. An improved agreement is understood to be one that is seen as fair by all parties and goes beyond the narrow focus on mitigation.

President Obama has pledged to provide U.S. leadership within the multilateral effort to produce a new international climate agreement. The U.S. House of Representatives has recently passed the American Clean Energy and Security Act, and the U.S. Senate is developing its own bill, the American Clean Energy and Leadership Act, to tackle climate change. It remains to be seen whether the final legislation will help or hamper the US to effectively play that role. Many developing countries are now giving greater attention to the issue of climate change mitigation and adaptation and are participating more actively than before in the global negotiations, as they have better appreciation of the risks of climate change. These are positive developments.

The economic crisis could have some positive effect if it leads to the adoption of ‘green’, low-carbon growth strategies in pursuing economic recovery and beyond. But it could negatively affect the negotiations that are currently underway as governments tend to hold back on their climate agenda. The crisis has weakened the resolve in many developed countries to introduce meaningful GHG emissions reduction measures as concerns are mounting that these could further erode the international competitiveness of their industries. This is especially so, since major emerging developing economies are not seen to be willing to make similar commitments. The UNFCCC commits developed countries to ‘move first’, justified on the basis of their ‘historical responsibility’. In the recent G8 Summit developed countries failed to agree on specific targets to reduce GHG emissions in the near term (2020). The G5 leaders that met in parallel have urged developed countries [pdf] ‘to pledge to fulfill quantifiable, ambitious and comparable goals to reduce emissions, through the reduction of their combined emissions in 2020 to a level that is at least 40 per cent lower than those of 1990’, as proposed by the Intergovernmental Panel on Climate Change (IPCC).

The crisis also affect the ability, if not the willingness, on the part of developed countries to provide substantial resources to finance the efforts by developing countries to undertake meaningful mitigation and adaptation efforts. The UNFCCC also commits developed countries to compensate developing countries for ‘the agreed full incremental costs’ that they will bear for any action they should choose to take to mitigate climate change (Article 4.3). China, for instance, has argued [pdf] in its May 2009 submission to UNFCCC that developed countries should provide funding, mainly through the public sector, of 0.5 to 1 per cent of GDP on top of existing ODA. Without securing such a commitment from the developed countries, the developing countries are not likely going to make a major move.

If anything, the crisis merely reinforces and accelerates a trend that is already happening, that is the decline in the ability of key developed countries (the US, the EU, and Japan) to lead in the crafting of new global agreements, whereas the newly emerging economies (China, India, and Brazil) that aspire to play a greater role in global governance are not ready as yet to make the big leap and to take on a greater share of the responsibility in accordance with their increased international profile. They conveniently place one foot within the grouping of developing countries (G77) to avoid having to make binding commitments by using UNFCCC’s principle of ‘common but differentiated responsibility’. They are holding on to this as a first principle for fear that making binding commitments could obstruct economic growth, the catching-up process and poverty reduction efforts.

The US position is that all countries should be put on an equal footing. Going into the negotiations, developing countries have pledged to take mitigation measures, but will do this on their own, and they have agreed to submit so-called nationally appropriate mitigation actions (NAMA). The US and other developed countries no longer insist on binding emission targets for developing countries but demand that the actions (instead of the outcome of actions) be made binding, and that they are transparent, subject to measurement, reporting and verification.

Four months into Copenhagen, there are some improvements in the negotiations agenda, such as the inclusion of deforestation issues which was previously left out in Kyoto. Yvo de Boer, Executive Secretary of UNFCCC has outlined [pdf] four ‘political essentials’ to unleash action that will ‘make or brake’ a deal. They are, clarity about: (a) willingness of developed countries to reduce their GHG emissions; (b) willingness of major developing countries such as China and India to limit the growth of their emissions; (c) availability of financing from developed countries to assist developing countries in mitigating emissions and adapting to climate change; and (d) the governance (institutional) framework to deliver the support for mitigation and adaptation.

The negotiations have hardly moved beyond statements by leaders and ministers as expressed in the media. It seems that the situation has become very polarized. Todd Stern, the US climate envoy, sees this divide between the developed countries and the developing countries as ‘deeply woven into the fabric of climate change diplomacy’.   Some have described this situation as the ‘climate trap’.

The outlook is not promising. But perhaps there is a way out of this trap.

Major emerging economies have placed only one foot in the G77. The other foot is still stepping and tapping on different stones to explore options for moving ahead outside of the UNFCCC. Here, China is clearly at the forefront. It is trying to develop a strategy to overcome its dilemma. Since its ability to make binding commitments under the UNFCCC is limited, it will need to demonstrate real efforts to respond to the challenge of global warming. It has embarked on ‘unilateral actions’ involving major economy-wide efforts to improve energy efficiency and to increase the use of renewable energy resources. As a member of the G5, China actively participates in the efforts to promote cooperation with G8 members, in a somewhat awkward ‘minilateral’ setting, in such areas as energy technology transfers, R&D, and the development of biofuels, through the Heiligendam process. China is also a party to an ad-hoc multilateral process, the Asia Pacific Partnership on Clean Development and Climate, launched in 2006, which focuses on the development of less carbon-intensive technologies.

But China appears to put greatest emphasis on bilateral cooperation with key developed countries, in particular the United States. Indeed, there seems to be a shift towards ‘bilateralization’ of negotiations between major developing countries and developed countries on climate issues. China’s multi-pronged strategy accords with that of the United States, which is being pursued on three fronts: (a) the UNFCCC negotiations process; (b) the establishment of the Major Economies Forum (MEF) on Energy and Climate to facilitate an informal dialogue process; and (c) a focus on key bilateral relationships, especially with China. Thus the G2 is something that would seem to emerge logically, and should be seen in this light. It may, in fact, hold an important key to the crafting of an international climate regime.

In parallel to China’s efforts, other developing countries in East Asia could make similar initiatives, individually or as a group, to produce a concerted regional action plan that contributes to increasing the chances of success of the emerging multi-pronged strategy towards an international climate agreement. Elsewhere, a similar initiative has been proposed to make Asia a ‘game changer’ in global climate change negotiations. The suggestion is for the regional countries to use their national energy efficiency and sustainable development plans and targets to demonstrate initial commitments to GHG reductions.

In line with this initiative, a set of medium-sized countries in the region could come forward to agreeing on setting unilateral emissions reduction targets with a pledge to make further cuts if others follow suit. Australia has indicated its readiness to do so. Korea and Indonesia can do the same.

These initiatives will complement the many other efforts outside of the UNFCCC such as G5, G8, MEF, and G20. Climate change will become a more prominent item in the agenda of G20 as G20 finance ministers have been asked to come up with a global climate financial framework. But the East Asian initiative should primarily be seen as a strategic effort to change the international climate for global climate change negotiations.

The UNFCCC process of negotiations may indeed resemble the process of multilateral trade negotiations under the WTO. Kyoto was the first round, Copenhagen the second round, to be followed by further rounds of negotiations that hopefully will take place under a progressively improved climate for negotiations.

East Asia should help ensure that these rounds of global climate change negotiations do not end up in a Doha Round type of situation.

This piece is drawn from a presentation at the Senior Policy Seminar of the East West Center, ‘The Global Economic Crisis and Implications for Asia Pacific Region’, Honolulu, Hawaii, 3-5 August 2009

1. US: Waxman-Markey Bill changes the landscape of international climate change negotiations
2. Can China rescue the world climate change negotiations?
3. Finding a way forward to a post-Kyoto global agreement on climate change

On July 17, 2009, the Canberra-based Australian National University (ANU) conferred a Doctor Honoris Causa degree in economics on Hadi Soesastro. He is the third Indonesian to receive such a degree, following the conferrals many years ago to Dr. Masri Singarimbun, a demographer, and Dr. Thee Kian Wie, an economic historian.

Dr. Singarimbun was honored for his achievements in the field of demography, and for paving the way for Indonesian students to study at the ANU. Dr. Thee was honored for his long standing and extensive cooperation with the university.

The ANU honored Hadi for his achievements in promoting the idea of regionalism in East Asia and the Asia Pacific. He has tirelessly developed the idea and given it a conceptual framework through various Track Two processes since it was first proposed in the 1970s. He has been instrumental in developing the Pacific Economic Cooperation Council (PECC) into what it is today, and for the establishment of the Economic Institute for ASEAN and East Asia (ERIA). In addition, he is appreciated for his contribution to Indonesian-Australia relations, especially in economics.

Hadi is one of the most prominent scholars in ASEAN whose thoughts and contributions help shape some of the Track Two activities. A case in point is the ASEAN People’s Assembly (APA), which he developed together with another notable ASEAN scholar — Dr. Carolina G. Hernandez, from the Philippines. Through the network of the ASEAN Institutes of Strategic and International Studies (ASEAN ISIS), the APA started convening in 2000 with the goal of bridging civil society organizations with the governments of ASEAN countries.

Hadi is an advisor to the Asian Development Bank (ADB) and the World Bank, too, often turns to him for advice. Since the foundation of the CSIS in 1971, he has been advising the Indonesian government, especially the Departments of Foreign Affairs, Defense, Trade, and Finance. He is also currently a member of the Indonesian Sherpa for the G20 meeting.

Hadi was trained as an aeronautical engineer in Aachen, Germany, returning to Indonesia to join the recently founded CSIS in 1971, and became one of its founders. In 1974 he went to study economics at the Rand Graduate Institute in Santa Monica, California, US, under the tutelage of Charles Wolf, Jr, who has since become his mentor.

His dissertation is on Indonesia’s Five-Year Plan program, which was useful for the government in formulating the Second Five-Year Plan. He finished his PhD in Policy Studies in three and a half years. Hadi taught at the ANU and Columbia University, New York, US, where he was a popular professor among students.

At CSIS, he is our best mind, always lucid, quick, and open to discuss not only economics, where he mostly excels, but other fields too. He may be the best strategist we ever had, able to combine various disciplines into one idea or concept in his problem-solving efforts. We are lucky and proud to have him at CSIS, where he has dedicated most of his professional services and contributions to the development of the institute, including serving several times as the Executive Director.

He currently has the ongoing task of assisting the institute he helped build to train the younger generation of scholars. In addition to his busy schedules, he dedicates much of his time and energy to improving the institute’s journal, The Indonesian Quarterly. The journal finally has the respectable editor it deserves, and we at CSIS are really proud of it.

As a person, Hadi is humble, unassuming and unflappable, and his demeanor is always excellent. His greatest achievement is in building and sustaining the CSIS as a real think tank for Indonesia, and nurturing young scholars to be able to continue the work of the institute for the generations to come.

I congratulate Hadi and his family for the honor bestowed by the ANU. I believe there will be more honors and accolades to come in the future.

And, on behalf of CSIS I just would like to say that Hadi’s latest accolade is well-deserved, and it is an honor for CSIS, too.

This article was first published on 22 June in the Jakarta Post.

1. Hadi Soesastro, 1945-2010
2. Hadi Soesastro’s permanent footprints on the Asia-Pacific
3. Tribute to Peter Drysdale

Quick counts show that Susilo Bambang Yudhoyono and Boediono won the election with a landslide with around 60 percent of support, followed by the Megawati Soekarnoputri-Prabowo Subianto pair with around 27 percent of votes, and Jusuf Kalla (JK)-Wiranto winning around 13 percent of votes.

Many have said that SBY’s achievements as president, his charisma, and his style, which are considered by many as presidential, are the key factors in explaining this landslide. However, we should not forget that the result of this election is also a function of the other two candidates.

Considering that the goal of JK and Mega was to make this election go to a second round, we can say that Mega’s team has done their job while JK’s has failed. The failure of JK and his team to get adequate support to push this presidential election into a second round is due to several factors.

Unlike Megawati, JK does not have a loyalist base. In addition, party wise, the Indonesian Demcratic Party of Struggle (PDI-P) is much more disciplined and solid compared to the highly fragmented Golkar elite and highly independent Golkar voters.

Although SBY has been considered as a highly hesitant and timid president, in the case of competing in the presidential election it was JK that was highly indecisive. Knowing that his level of electability was very low in mid 2008, JK was still weighing up between challenging or running with SBY again. He still expected Golkar to do very well and even better than SBY’s party, which he thought would allow him room to bargain with SBY.

The failure of Golkar to perform well in the April legislative elections and the success of the Democratic Party in tripling its vote made JK indecisiveness costly for him. He no longer had the upper hand on the bargaining table with SBY. SBY even asked Golkar to provide him with several vice presidential candidate names, not one.

JK’s hesitation also limited his ability to start boosting his electability early. JK believed that campaigning early in Indonesia was not going to be effective. JK was wrong. After SBY raised the fuel price mid last year and experienced the lowest public popularity in his 4 years leadership, SBY started an aggressive campaign to improve his position vis-à-vis his competitors.

He was able to gain ground by implementing populist policies and taking all the credit for the government achieving economic stability. Meanwhile JK, still unsure about what he wanted to do in the presidential election, could not do anything other than support SBY since he was part of the government. JK could not separate himself from the government because he did not want to sever his relationship with SBY which would have ruined his chances of running with SBY again. However, by not separating himself early from SBY, JK allowed SBY to take all the credit for the government’s populist policies.

When everything is said and done, polls after the legislative elections showed that SBY’s popularity reached the 60-70 percent mark. JK’s indecisiveness proved to be detrimental. He could not overturn the already established perception that the government’s success was SBY’s and not his. This shows that an effective early campaign, and the ability to maintain it, is a prescription for success. Late comers struggle to reverse already established public opinion.

The election was already over, so let us get back to SBY’s new position. Having such a huge mandate from the public does not relieve SBY from the political pressure of his supporters. SBY’s main agenda is to maintain economic and political stability, which are inter-related. Although he has the much stronger Democratic Party to support him in the parliament, he still needs to accommodate the interests of other political forces.

Economically, the key is to select capable individuals for his economic team. Much of his past successes can be attributed to his choice of individuals to fill his economic team. We know many are eying for these positions, including those who came from the big businesses and those who came from the political parties. Can SBY resist such pressure and make his selection based truly on merit is the big question.

The writer is a researcher in the Department of Politics and International Relations at CSIS Jakarta. He is a PhD candidate at Northern Illinois University.

1. A landslide victory for SBY: What next?
2. Indonesian politics: prospects for the coming presidential election
3. Indonesian parties prepare for the presidential election

By now a number of Indonesian polling agencies have perfected their method to do quick counts of the election results. The public has accepted their counts as being close to the official final result. In just a few hours after the closing of the voting booths Indonesians have a pretty good idea of the outcome of an election. This happened on 9 April 2009 with the legislative elections and again on 8 July 2009, the day Indonesians cast their vote to elect their President and Vice President for the period 2009-2014. This is a remarkable development.

The final, official count will be known in only about 10 days to two weeks. But at about 4pm on the day of the election, just three hours after the booths were closed in western Indonesia, it was clear that the incumbent, Susilo Bambang Yudhoyono (SBY), was the winner. By about 6.30pm when the quick counts have covered 90 to 99 per cent of the sample, there was no doubt that SBY and his running mate, the economic technocrat Dr. Boediono, won the election in the first round. There is no need to have a second round like in 2004.

It is a landslide victory. Nationally, SBY gets about 60 per cent of the votes, followed by Megawati with about 27 per cent, and Jusuf Kalla reaping the remaining 13 per cent. To win, there is also the requirement to have more than 20 per cent of the votes in 50 per cent of the 33 provinces (or 17 provinces). In all but one province (South Sulawesi, Jusuf Kalla’s stronghold), SBY has gained more than 40 per cent of the popular votes, and the simple average of the votes for him in those 32 provinces is about 59.4 per cent. His support in Aceh is as high as 94 per cent. This is a strong mandate for SBY to run the country for a second (and last) term. His campaign slogan — Lanjutkan! (Continue!) — appears to have worked. Is it because the people acknowledge his achievements? Or is it essentially his personality? Or are other factors at play: political machinery, skillful campaigns? It may well be a combination of all those.

A close observation of SBY’s style of running the country over the past 56 months suggests that he must have had the determination from the start to run the country for the maximum 10 years allowed by the Constitution. Hence his cautious stance on most issues that borders on timidity as he wants to please everyone and avoid “rocking the boat” unlike his predecessor Abdurrahman Wahid who destroyed himself in the process. SBY was accused of engaging himself mostly in a strategy of tebar pesona, namely of spreading enchantment. But his ‘politik santun’ (well mannered politics) has been praised. He has kept his good, and correct, appearance in public. These all have paid off well for him.

It is what will come next that is more important now for SBY and for the country. He should realize that he has won his re-election on his own and does not owe any political party in his formal (and nominal) coalition anything. Of course he should be thankful to several of his ministers, in particular the technocrats, who have served him well. He should also acknowledge that his Vice President, Jusuf Kalla, did a lot for him. The lesson for him is that he can count on the professionals to help him run the country but that they will have to be given full political backing. To some extent that was what Jusuf Kalla did when his was not forthcoming. Now SBY himself has to step forward to provide that political backing.

At an informal breakfast of six, including the author, the day after the G20 Summit in Washington, D.C. in November 2008, the President clearly said that if re-elected he would be more decisive. He spoke about why he had taken a cautious posture as he thought that he needed to avoid a confrontation with the parliament as it could end in a situation as experienced before by Abdurrahman Wahid. With the mandate he receives now he can exert stronger leadership. He could appeal to the people that have elected him directly in case the parliament blocks him. Some thought he should have done that before given that he also got over 60 percent support in the 2004 election. But it is important that he continuously communicates with and educate the people on key policy issues, not only during political campaigning. In addition, in his second term he could be less risk averse as he has much less to loose, except for a good legacy that will indeed be lost if he cannot demonstrate leadership.

Despite the strong mandate, SBY must uphold good governance and strengthen the democratic process. Indonesia’s democratic process has come a long way. The 2009 legislative and presidential elections attest to this. It was unfortunate that the Election Commission is so incompetent, but fortunately this could be overcome at the eleventh hour with the decision by the Constitutional Court to allow voters to use their ID in the presidential election if they encountered problems with the registration. This critical decision was greatly facilitated by the attitude of SBY’s competitors, Jusuf Kalla in particular. In fact, by having the confidence to participate in the presidential competition, Megawati and Jusuf Kalla had saved the democratic process. From the beginning of the year polls have indicated that SBY is likely going to win with a very large margin. But both Megawati and Jusuf Kalla believed in the system and were willing to give it a try. They were also serious in participating in the three rounds of debate amongst the presidential candidates. These all bode well for Indonesia’s democratic consolidation.

A lot of resources were spent for the campaigns by all three candidates. It may be wasteful but is cannot be done without. It is an interesting subject for in-depth studies whether the campaigns have made and can make a big difference. Casual observation suggests that this has not been the case. There was nothing new the public can learn from the campaigns, but the fun of it should be seen as an integral part of the process. People’s opinion, it seems, is gradually formed over a longer time period. Therefore, the incumbent has an advantage, but it depends on whether that advantage can be capitalized on. SBY had done well on this score. An important task for him now is to create an enabling environment to grooming a new generation of political leaders that will take over the leadership from him in 2014.

1. Indonesia: Unsurprising election landslide, uncertain future
2. Indonesian politics: prospects for the coming presidential election
3. Indonesia’s Presidential election: Who is Jusuf Kalla?

In about a week’s time, on the 8th of July, the Indonesian presidential election will be held. All presidential contestants have been under intense scrutiny recently including the incumbent vice-president Jusuf Kalla. He had announced in February 2009 that he would not be returning as the running mate of the current President Susilo Bambang Yudhoyono (SBY). Instead, he would be jockeying for the coveted position himself under the covering fire of former military strongman General Wiranto.

Writing about Jusuf Kalla (JK) in the 2009 presidential election is an encore for me because I wrote an op-ed piece for the Financial Times on the 2004 presidential election. I remember my stance on Jusuf Kalla then was negative because there was popular belief that as a student activist, he was behind the burning of churches in Makassar in 1967. That is how he was branded as being anti-Christian.

Kalla inherited and developed the family business after the demise of his father, Hadji Kalla; and as a businessman he inevitably had to compete with other businessmen, be they Chinese-Indonesian or foreign. It was then that he was branded anti-Chinese and anti-foreign.

However, my view of Kalla gradually became positive because of the role he played in resolving the Muslim-Christian conflicts in Maluku (the Malino I Agreement) and Poso, in Central Sulawesi the (Malino II Agreement). He achieved this single-handedly during his time as coordinating minister for the People’s Welfare during Megawati Soekarnoputri’s presidency. He was successful because he had the legitimacy of being an East Indonesian leader. That dispelled my basic distrust of him as being anti-Christian.

As Vice President, Kalla showed much-needed leadership and resoluteness in facing Islamic extremism in Indonesia. A case in point was his quick action following the death of key Jamaah Islamiyah activist Dr. Azhari, in Batu, East Java, in November 2005, when he ordered the seizure of  propaganda materials and CDs containing JI’s extremist ideology.

Kalla was taken aback by those materials, and took the initiative of calling the leaders of Muslim organizations (including very conservative ones) to a meeting at his residence to show them the materials. He demanded of them whether that was the kind of ideology they wanted to adopt in Indonesia. If it wasn’t, he challenged them to find ways of confronting it and winning over its adherents.

The leaders present made a pledge to counter extremism in their own ways and to cooperate to prevent the subversion of Islam in Indonesia. As a leader, Kalla has the commitment and authority to exert his influence over Muslim leaders to fight extremist activities.

His main achievement was undoubtedly the Aceh Peace Agreement, which put to an end 23 years of civil war and insurgency. On his own initiative, he began approaching the leaders of the Free Aceh Movement (GAM) in October 2004, before his move to the vice president’s office. The suffering and destruction wreaked by the tsunami in 2006 led Kalla to use it as an impetus to strengthen his efforts to seek the final resolution of the Aceh conflict.

In addition, he made great efforts to help and support the Papuan quest for special autonomy, although the situation in that province was more complicated, due partly to the tribalism that prevails there.

Overall, Kalla has done a lot to support the SBY government, especially in economics. He is pragmatic in his economic outlook, and has been open enough in his view on globalization, despite retaining some previous biases from his business days about how Indonesia has to build its national economy.

The current economic crisis calls for a strong role of government, but examples of the failures of socialism are still fresh, and globalization remains the main trend in the international economy. Kalla should be able to balance these two aspects of the economy.

Another asset is his quick mind and willingness to answer questions.  However this openness and egalitarian approach sometimes translates into shallow thinking – some of his answers are gut reactions, especially on issues he does not know very well.

More troubling for Indonesia is the criticism concerning the businesses he and his family operate. While everybody is entitled to do business, holders of elected office must make sure there is no whiff or smell of conflict of interest between the family and the state.

People’s trust in clean government is absolutely necessary, without it office holders are not able to run the government. It is a sacrifice, but a necessary one for the good of the people and for the practice  of good governance. This is especially important in Indonesia’s young democracy.

Jusuf Wanandi is vice chairman for the CSIS Foundation’s board of trustees.

This article is adapated from an earlier version, first published on 23 June in The Jakarta Post

1. Indonesian politics: prospects for the coming presidential election
2. Indonesian parties prepare for the presidential election
3. Indonesia: Unsurprising election landslide, uncertain future