The South China Sea Issues

The Khmer Times, 24 March 2017 

The South China Sea issue is a complex, multi-layered one. It is not only a bilateral and regional issue, but also a global issue due to its strategic location and economic significance to world peace and development.
To effectively manage the disputes, the direct claimant states need to find common ground for bilateral settlement. Asean-China consultation serves as a tool to build trust and confidence and prevent conflicts.
The joint statement between Asean and China on the full and effective implementation of the Declaration on the Conduct of the Parties in the South China Sea (DOC) reaffirms the commitment to adopt a Code of Conduct in the South China Sea (COC) based on a consensus.
After 15 years of negotiations on the COC, the framework agreement is expected to be concluded this year. The negotiation has been a painstaking process; it requires strategic patience. The process nevertheless is as important as the outcomes of the negotiation.
The COC is expected to be a legally binding agreement compared with the DOC, which was signed in Phnom Penh in 2002 as a collective political will.
China has been cautious of using the word “code,” which has strong legal implications and obligations. A lack of trust and the gap between words and actions have prevented related parties from having meaningful negotiations and reaching a consensus.
The COC framework agreement, although it will be not as substantive and legally rich as expected, will be a critical step towards the conclusion of the COC and a milestone in strengthening trust between the direct claimants and enhancing the Asean-China partnership.
The improved relations between China and the Philippines, the rotating chair of Asean this year, and between China and Vietnam create a favorable and conductive environment for China and Asean to reach an agreement on some the core elements of the COC.
A peaceful settlement of disputes and the principles of international laws including the 1982 UN Convention on the Law of the Sea are stressed, while trust and confidence building measures will be enhanced through hotline communication and CUES (Code of Unplanned Encounters at Sea).
Last year, Asean and China issued a joint statement on CUES in the South China Sea with the aim of improving the operational safety of naval ships and naval aircraft in the air and at sea and to ensure mutual trust among the parties.
CUES serves as a means to reduce the risk of strategic miscalculations that potentially lead to conflicts. However, it is a non-binding agreement and applies to the navies, not coast guards.
Hotline communications among the coast guards is needed to promote maritime safety and common understanding on maritime law enforcement.
In February, China and the Philippines discussed the establishment of a direct communication line between the coast guards of the two countries.
Some Asean members have suggested expanding CUES to include air-to-air encounters in the South China Sea to avoid an unsafe encounter in international airspace. It remains unknown whether China is agreeable to this.
The South China Sea dispute is a long-term issue which requires a long-term strategic calculation and approach and collective efforts.
In the short and medium term, China and Asean should be able to build functional and sustainable confidence-building measures and preventive diplomacy.
The COC is not projected to resolve territorial disputes, but to serve as a critical mechanism to build trust and confidence, to prevent and manage conflicts and tensions in the disputed waters.
Asean and China must work closer together to protect the freedom of navigation, the foundations of international peace and prosperity and promote a rules-based maritime order – with the emphasis on the respect and enforcement of international laws.
The extra-regional powers are welcome to play their role if they genuinely work on maintaining freedom of navigation, addressing non-traditional security threats such as piracy, illegal fishing, smuggling and protecting the marine environment.
Capacity building of the literal states on maritime domain awareness, maritime law enforcement and bilateral and multilateral exercises are the key areas of maritime security cooperation.
Strategic and power competition between China and the US in the South China Sea is not conductive for regional dialogue. All Asean member countries are not interested in choosing sides.
If they are forced or coerced to choose sides, then the whole region will again be divided and unstable.
Therefore, healthy and stable China-US ties is the cornerstone of regional peace and development.
China and the US must work together to narrow their differences and expand their areas of common interest and cooperation. They are both responsible for peace and stability in the Asia-Pacific.

ASEAN: Mind the Gaps

Khmer Times, 10 March 2017

It seems that globalization is in retreat and multilateralism and regionalism have hit a roadblock amid rising populism and protectionism in Europe and the US.
Asean is under mounting pressure to maintain its relevant role by promoting an inclusive and open regional institution in which every member state should share fair benefits and responsibility.
An inclusive and participatory national development and regionalism are the necessary foundations for long-term regional peace, stability and prosperity.
A collective leadership and efforts are required to realize a people-oriented and people-centered Asean, a vision of Asean community building.
If Asean is unable to deliver, the less developed members will be forced to rely more on major powers for their own survival and economic opportunities.
Development disparity, the widening gap between the rich and the poor, between the urban and rural areas, breeds political and social ills. It also puts Asean’s cohesiveness, unity and centrality at greater risk.
A two-tiered or multi-tiered Asean may lead to regional disintegration and instability. Nationalist and populist movements in some member countries may cause disruption to regional integration.
Cambodia, Laos and Myanmar are the new members and less developed economies in Asean. Their average per capita income is slightly more than $1,100.
The institutional capacity and connectivity infrastructures of these countries are far behind those of the more developed member countries.
However, some efforts have been made to address development disparity and inequality within Asean.
At the 6th Asean Summit in Hanoi in 1998, Asean leaders expressed their political will and commitment to “narrow the development gap among member countries to reduce poverty and socio-economic disparity in the region.
The Hanoi Declaration on Narrowing the Development Gap for Closer Asean Integration in 2001 gives a roadmap and political commitment to address development gaps.
In addition, the Vientiane Action Program of 2004-2010 outlines regional projects to narrow the development gaps.
The most important regional framework is the Initiative for Asean Integration (IAI), which was launched in 2000. The IAI aims to specifically narrow the development gaps and accelerate the economic integration of the new members.
However, the implementation of the initiative is very limited due to a lack of financial resources.
The IAI Work Plan 2016-2020 adopted last year consists of five strategic areas – food and agriculture, trade facilitation, micro, small and medium enterprises, education and health and well-being.
Moreover, the IAI Task Force was also created to monitor the implementation of and give guidance to the initiative. However, implementation remains an issue.
So how can the development gaps be narrowed?
To narrow the development gaps, the more developed Asean members and the dialogue partners of Asean need to put more resources to implement the IAI and other regional policies on narrowing the gaps.
Asean needs to revitalize and energize the role of IAI by identifying the development gaps, suggesting policy interventions, and mobilizing resources to implement the policy.
More technical assistance is needed to assist the less developed members to catch up with others, especially in institutional capacity building, infrastructure development and human resources development.
The less developed members must expedite their reforms as well. They need to strengthen good governance, promote trade facilitation policy, attract more foreign investment, invest more in education and healthcare and promote innovation.
The partnership between the state, the market and society, which is under-utilized, needs to be strengthened to better develop policy and deliver results.
The government leaders of Asean’s less developed nations should allocate some of their national budgets on social innovation to address social needs and provide novel solutions to social issues.
The more developed members and the dialogue partners of Asean should provide more technical and financial support to promote social innovation in Cambodia, Laos and Myanmar.

 

Beijing is opening its economy

The Khmer Times, 6 March 2017

The 12th National People’s Congress (NPC) kicked off yesterday at the Great Hall of the People in Beijing.
Stability and reform are the two key terms in the government report delivered by Premier Li Keqiang. It is estimated that China’s GDP growth rate will be about 6.5 percent this year.
As the second largest economic power after the United States, China’s continued growth and commitment to a liberal economic order are vital to the global economy.
As the largest trading nation in the world, China is committed to maintaining an open trading system. The US, European Union and Japan are China’s three main export markets.
A recently strained relationship between the US and China, accompanied with high uncertainty, paints a gloomy global economic and security outlook.
The world economy will fall into recession if both economic powers choose to wage a trade war.
While the US is moving towards a unilateralist and protectionist external economic policy, China is striving to maintain an open global economic order.
“China wishes to work with all interested parties to move ahead with trade and investment liberalization and establish an international economic and trade system that is balanced, inclusive and beneficial for all,” stated the 12th NPC report.
The report outlines China’s foreign economic policy as follows. First, China will be more open to the outside world with unwavering resolve.
Second, China will work to deliver concrete results of the Belt and Road Initiative. Policy consultation, institutional coordination, custom clearances and the building of international logistics networks, overland economic corridors, cross-border economic cooperation zones and maritime cooperation hubs are the key cooperation areas among the countries along the Belt and Road initiative.
China will further promote connectivity, economic and trade cooperation and cultural exchanges with countries along the Belt and Road.
“With a commitment to achieving common development and shared growth through joint consultation, we will ensure that the Belt and Road Initiative creates bonds of peace, friendship and common prosperity,” the report said.
Third, China will work to achieve greater industrial capacity cooperation with other countries through implementing fiscal, tax and financial policies, establishing an RMB overseas cooperation fund and effectively utilizing bilateral industrial capacity cooperation funds.
Fourth, China will develop innovative ways to promote foreign trade by improving the structure of export tax rebate rates, expanding cross-border e-commerce, increasing trade in services and cultural goods, supporting enterprises in developing and increasing imports of advanced technology and equipment as well as parts and components.
Other trade facilitation measures include supporting overseas warehouses to help in the export of products, promoting the development of enterprises that provide comprehensive foreign trade services and introducing a more efficient national single window system to facilitate trade.
Fifth, China will work to make better use of overseas investments through relaxing market access restrictions on investment, further liberalizing the services sector and manufacturing sector, simplifying procedures for establishing companies and improving the investment climate.
Sixth, China will accelerate implementation of the free trade zone strategy through negotiating and signing the Regional Comprehensive Economic Partnership agreement – a free trade agreement between Asean with other six trading partners.
China has a strong interest in accelerating the negotiation on the establishment of the China-Japan-Republic of Korea free trade area, which has been derailed due to a complex interplay between geopolitics and domestic politics.
Negotiations on investment agreements between China and the US and European Union need new momentum which is difficult at this moment. China is taking a proactive approach towards the establishing the Free Trade Area of the Asia-Pacific.
Lastly, China will continue to promote innovative growth and improve global economic and financial governance.

Making an Inclusive Cambodia

The Khmer Times, 23 February 2017 

http://www.khmertimeskh.com/news/35755/making-an-inclusive-cambodia/

Cambodia is regarded as one of the most successful post-conflict developing countries – transforming from a war-torn country to a liberal market economy with a high degree of economic openness and high economic performance.
In 2016, Cambodia’s total export volume was $9.2 billion – accounting for 46.3 percent of GDP. Total import volume reached $12.8 billion – accounting for 64.2 percent of GDP. These figures clearly demonstrate that Cambodia’s economy is well connected to the global economy.
So maintaining an open and robust international economic system benefits Cambodia.
The Asian Development Bank (ADB) calls Cambodia “Asia’s New Tiger” after two decades of high economic performance with a GDP average growth rate of above seven percent.
The poverty rate has dropped to 13.5 percent and 82.8 percent of the population aged 15 years and above is employed.
The per capita income has increased from $288 in the year 2000 to $1,307 in 2016, making Cambodia a lower middle-income country.
The accumulated foreign direct investment (FDI) inflow reached about $20 billion from 1994 to 2014, as reported in a survey jointly conducted by the National Bank of Cambodia and the National Institute of Statistics last year.
The manufacturing sector was the top receiver of FDI with $4.6 billion, followed by real estate with $2.9 billion, agriculture with $2.7 billion, the financial sector with $2.3 billion, energy with $2.1 billion, the services and hospitality industry with $2.1 billion as well as another $2.5 billion in smaller sectors.
“Cambodia’s large supply of inexpensive, low-skilled labor has attracted substantial foreign direct investment into the production of garments and footwear for export,” said the Asian Development Outlook for 2016.
However, the development disparity between urban and rural areas and the inequality in income and opportunities have been widening over the years, which in turn adversely affects public trust and confidence.
Weak governance, the depletion of natural resources, climate change, indebtedness, landlessness, a lack of access to education and healthcare, poor hygiene and sanitation and fluctuations in the price of agricultural products are the main threats to the livelihoods of the households in rural areas, which constitute about 75 percent of the total population.
Therefore, the national development strategy needs to be revised by introducing a more inclusive and sustainable development model to ensure that every Cambodian will enjoy the fruits of economic development.
A study by the ADB in 2014 identified five main constraints in promoting inclusive development in Cambodia, which were (a) human capital (a poorly educated population and inadequately skilled workforce), (b) the electricity supply (restricted availability, expensive and unreliable), (c) the transport network (poor rural roads, inadequate ports and inland waterways), (d) corruption, and (e) weak governance, as well as low access to health services, water and sanitation.
Cambodia needs to address these constraints by investing more in inclusive education and skills development, affordable health services, urban-rural infrastructure linkages, rural infrastructure development, access and affordability to electricity and quality public services.
The World Economic Forum’s 2017 report introduces five key instruments in promoting inclusive growth and development, which include (a) the building blocks of human potential and opportunity, (b) sound institutions, business and political ethics, (c) the productive allocation of financial resources, (d) decent jobs, wages and livelihoods, and (e) equitable taxation and social protection.
The report suggests that national governments need to “reconceptualize domestic structural reform” to better diffuse and redistribute the economic gains and opportunities and national income – thereby deepening the foundations and broadening the base of growth.
For Cambodia to sustain long-term stability and development, it needs to develop a policy and institutional ecosystem that supports inclusiveness, especially through implementing inclusive education, inclusive healthcare, inclusive finance, rural infrastructure, gender, climate change adaptation and social protection to mitigate crisis or external shocks.

 

The rise of world-wide populism

The Khmer Times, 20 February 2017

http://www.khmertimeskh.com/news/35608/the-world-wide-rise-of-populism/ 

Populism, a highly contested and controversial term, has become the buzzword in contemporary politics. It is generally understood as the rhetoric that aims to challenge and change the status quo.
Populism normally associates with nationalism, criticism against foreign influence, xenophobia and anti-system rhetoric. Populist policy, however, does not have substantive explanation and concrete action plans. Generally, it just aims to resonate the general feeling and grievances of the people.
Populism, defined and implemented in various forms and practices, has cut across geographical borders, ethnic differences, historical eras and ideological frames. From Europe to America, from Asia to Africa, populism is omnipresent.
Populism can be harmful and disastrous if it goes extreme, much beyond the institutional capacity and resource endowments of the state. If the people’s expectations and hopes cannot be realized, the political and social order will fall into decay.
In Europe, populism is threatening the unity and integration of the European Union (EU). Populist politics gained steam after the Brexit referendum in the UK in 2016. Elections in France, Germany and the Netherlands may lead to a further disintegration of the EU. If that happens, it would be a serious setback for Europe.
In the US, President Donald Trump has started implementing protectionist and nationalist economic policies and anti-immigration policies based on the pretext of the threat of terrorism. His populist policy may lead to the further decline of the US.
In Southeast Asia, populism re-emerged in Thailand during Thaksin Shinawatra’s era in the early 2000s, with a policy on affordable healthcare, agrarian debt relief and village funds.
His policies also aimed at challenging the traditional center of power dominated by the Bangkok elites – the unbreakable alliance between the monarchy networks and the military.
In Indonesia the former Jakarta major, Joko Widodo who is commonly known as Jokowi and who was a carpenter, came to power in 2014 through is populist political campaign focusing on building direct contact with the electorate and promoting redistributive policies.
His economic policy is more nationalistic and his foreign policy is more inward looking compared with his predecessor Susilo Bambang Yudhoyono.
In the Philippines, the former provincial governor of Davao Rodrigo Duterte won a landslide victory in 2016 against his opponents from the elite. His ant-establishment appeals and blunt communication with the public have somehow earned him significant support.
Meanwhile, his populist policies resonate well with the public sentiment and grievances, which are concerns on corruption, crime and drugs.
The populist policies have mixed results. In Thailand, it led to a decade of political instability. The reforms in Indonesia remain slow. The future of Mr. Duterte’s policy remains uncertain – no one is certain how much he can deliver.
In Cambodia, populism has been on the rise since the general election in 2013. The opposition Cambodia National Rescue Party (CNRP) surprisingly won 55 seats of the 123 in the National Assembly.
The CNRP’s populist policies focus on anti-establishment and political change. Its social and economic policies emphasize the livelihoods of factory workers, farmers, elderly people and other vulnerable groups.
The ruling Cambodia People’s Party (CPP) has implemented populist policies too, but at a more realistic level through a social protection policy and rural development with certain improvements in the livelihoods of factory workers and farmers.
While the CPP has its own version of populist politics, it also promotes a moderate policy agenda to halt the advance of the populist politics of the CNRP through explaining why the populist version of the CNRP policies may lead to bad outcomes and developing alternative policies that can offer better outcomes.
The commune elections in June this year and general elections in July next year will be a test of populist politics. Which version of populist politics would be more effective? Change before reform or reform without change?
It remains to be seen whether the existing elites would be able to change the political rhetoric by providing a more attractive and better policy framework and outcomes.

 

 

No Real Winner in Political Strife

Insideasean, 13 February 2017  (http://insideasean.com/cover-story/No-real-winner-in-political-strife-4153/)

After prolonged political tension embedded with strategic twists and turns, Cambodia is on the verge of political turmoil. Unless political reconciliation is back on track, it will be an opportunity loss for Cambodia to catch up with other ASEAN member countries.

Trust deficit between the main political parties — the Cambodia’s People Party (CPP) and the Cambodia National Rescue Party (CNRP) — is the core issue that needs to be swiftly fixed.

With the lack of effective conflict resolution mechanism, a cut-throat power competition or a zero-sum game between the two parties will put Cambodia into a crisis.

Amid a looming political threat of being dissolved after remarks by Prime Minister Hun Sen last month on amendments of the law on political parties, the CNRP is forced to make a critical choice to keep the party united and stay relevant for the upcoming election.

The exiled head of the CNRP, Mr Sam Rainsy, took a swift strategic move by announcing his resignation last Saturday, citing “personal reasons” with no direct link to the proposed law on political parties.

“I resign as CNRP leader for the sake of the party,” he wrote on Twitter.

He further said on his Facebook page that “in all circumstances I continue to cherish and to uphold the CNRP’s ideals in my heart.”

“Whatever my position in the party, I maintain the spirit of resistance to the autocratic and corrupt Hun Sen regime, and this is what matters in the minds of the Khmer people,” he added.

Acting CNRP President Kem Sokha applauded Mr Sam Rainsy’s position, stating that his resignation is “honorable” and in the best interest of the nation.

The CNRP’s steering committee meeting last Sunday accepted Mr Sam Rainsy’s resignation and endorsed Mr Kem Sokha as acting president until a new president is elected. With this development, the power struggle between Mr Sam Rainsy and Mr Kem Sokha will get more intense.

There is a rumour that Mr Sam Rainsy has proposed that his wife, Mrs. Tioulong Saumaura, be made the next president of the party.

Mr Hun Manit, the son of Prime Minister Hun Sean and chief of intelligence of the Ministry of National Defence, posted on his Facebook page: “Is Kem Sokha not good enough for the job? Is Saumaura better than Kem Sokha?”

The political power play has raised several questions: What is the main motive behind Mr Sam Rainsy’s resignation? What will be the next steps that he will take? What will be the future of the CRNP? How will the CPP react to this?
What could be the main reasons for his resignation?

Some political pundits have argued that Mr Rainsy’s resignation was aimed at protecting the CNRP from being dissolved by the proposed law on political party, orchestrated by the ruling CPP.

Others said that the resignation was a smart strategy to maintain the political powerbase and popularity of the CNRP, while Mr Rainsy remains as the heart and soul of the opposition and resistance force.

There is no official reaction from the ruling CPP, which has always been successful in weakening the leadership and organizational structure of the CNRP.

What will then be Mr Sam Rainsy’s next steps?

He will certainly remain politically active, but in different form. As a social activist, he may lead a social movement or people’s movement to realize his so-called “national rescue mission.” He might even galvanize international diplomatic pressure on the CPP-led government.

And what will the CNRP’s future be?

Mr Sam Rainsy’s resignation has surprised and shocked members and supporters of the party. Policy change and factional strife may occur in the absence of a strong leadership.

Internal rupture will lead to the weakening of the CNRP which, in turn, creates public distrust of the party. The CNRP needs to assure the public that the party’s leadership and unity are resilient and strong.

How will the CPP react?

At first glance, the resignation is good news for the CPP. The CPP will likely gain more confidence in securing victory in the upcoming elections.

For the time being, the CPP is cautiously optimistic and remains wary of Mr Sam Rainsy’s next moves. But one thing is certain: the CPP will continue to eliminate the sources of potential threats to the status quo.

 

 

Looking Towards ASEAN 2025

The Khmer Times, 7 February 2017

It started as a humble and loose regional organization five decades ago, but now Asean has proved to be a beacon of regional peace and stability and a fulcrum of regional security and economic architecture in Southeast Asia and the Asia-Pacific.
Through gradually implementing institutional reforms and collective diplomacy, Asean has earned political trust and legitimacy from the international community.
Asean is also widely regarded as a benign de facto regional leader, honest broker and shaper of international relations norms.
Asean has emerged to be one of the core pillars in the evolving multipolar world. The role of Asean in directing regional agenda and moulding regional architecture has been acknowledged.
There is no country in the Asia-Pacific that has as strong a legitimacy as Asean in mediating the differences, preventing major conflicts and anchoring a trust-based, rules-based regional order.
The Asean way of non-interference, consultation and consensus, constructive engagement and peaceful settlement of disputes has proven to be an effective way in securing unity and is the relevant role of Asean.
Asean centrality, regardless of its conceptual vagueness and confusion, has become the key term of Asean. Politically and diplomatically, it refers to the collective leadership and power of Asean in setting regional agenda and shaping regional architecture.
Strategically, it aims to manage major powers’ competition and rivalry. Normatively, it aims to advance Asean values and norms.
Asean centrality cannot be realized without Asean unity, Asean neutrality and the Asean way. Asean’s community building is a process and a journey which requires a shared vision, commitment and responsibility, collective efforts and leadership and inclusive participation from all the stakeholders.
Imbalance and uneven progress of implementing the three pillars – the Asean Economic Community, the Asean Political Security Community and the Asean Socio-Cultural Community – has hampered Asean from realising a true community.
Other issues and challenges faced by Asean are the lack of coordination between the three community councils, a lack of inclusive dialogue among the various stakeholders and a lack of institutional capacity as well as leadership in implementing the community building blueprints.
The people of Asean have not fully participated in and benefitted from the regional integration. Some are left behind, some are neglected. Therefore, an inclusive and people-centred Asean is essential.
The Asean 2025 blueprints have been created to continue deepening regional integration and strengthening the regional community. The main goals of Asean 2025 are to build a united, inclusive, resilient, sustainable and innovative community.
A public and policy driven communication strategy for Asean 2025 is required to further promote a public awareness campaign, academic research and information sharing, institutional capacity building, leadership development and implementation.
Regional and national forums should be established to promote multi-stakeholders’ dialogues and inform the public and policy makers on the progress, obstacles, challenges and prospects of realizing Asean 2025.
Amid the rising global wave of nationalism, populism and protectionism, Asean is under huge pressure to narrow the development gap, reduce socio-economic inequality and promote an inclusive Asean.
To realize an inclusive Asean, we need foremost inclusive dialogue on cross-cutting regional issues by involving relevant stakeholders across the government agencies, legislative, private corporations, international organizations, the academic community and civil society.
The state is responsible in enabling and empowering civil society to take a leadership role in promoting an Asean socio-cultural community, facilitating and supporting the private sector in realizing the Asean economic community blueprint.
Asean needs to invest more in comprehensive innovation, including public sector innovation, technological innovation and social innovation. The state institutions need to be robustly reformed to adapt to and keep pace with social transformations, market dynamics and technological revolution.
Asean-centric regional order needs more articulation. Asean needs to work out its plan to enhance its role as a stabilizing force in the region within the context of soaring geopolitical complexity and uncertainty.
To realize a people-centred Asean, the regional political leaders must genuinely embrace democratic values and provide a safe and constructive space for civil society to effectively get involved in regional dialogues and community building.
Multi-stakeholders’ dialogues and partnerships are necessary to generate social consensus, which is the foundation of realizing a people-centred and inclusive Asean.