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Sunday, April 29, 2012

PacificUS moves to new website

Please update your bookmarks! PacificUS has a new image, and is now located at a new address:

www.PacificUSForum.com

Friday, April 13, 2012

Myanmar on the Precipice: How Suu Kyi & the NLD May Learn from History

Myanmar’s April 1 by-elections are over, but tensions and uncertainty still hover – will the National Democratic League elected officials be able to maintain their seats within Parliament for the remaining term without military interruption?  Will the new government be able to effectively pass progressive reforms despite the military grip on power? How will the celebrity of Aung San Suu Kyi impact the party’s effectiveness and foster an environment for a fair democracy? All these questions and more are swirling around the media, academia, and importantly are in the minds of the Burmese. The relatively smooth elections on April 1 were a positive sign despite corruption allegations. The next three years until the general election may seem like a decade if reforms move at a staggered pace.  Lessons can be learned from Myanmar’s rich history, including its struggles with democracy, civil war and involvement of outside powers. 

The transitions of power between democracy and coups from the 1940s to 1980s demonstrate the perplexities in Burma/Myanmar politics and the ways that individuals and parties have tried to cling to power. In the early 1940s Aung San, Suu Kyi’s father, attempted to lead an ‘independent’ Burma free from British rule, Aung San and his colleagues courted the Japanese; they spent months training and fighting with Japanese soldiers and even wore kimonos during their flirtation with Fascism.  Aung San wrote “There shall be one nation, one state, one party, one leader…there shall be no nonsense of individualism.  Everyone must submit to the state which is supreme over the individual.” (Thant, 2006, p. 229)  The slogan of the Burma National Army in 1943 while he was War Minister still reigns today – “One Blood, One Voice, One Command”.   Luckily Aung San turned against Fascism just in time in 1946 to help Burma in its first democratic elections; however, he always held onto his belief in statism and the determination that his party’s views were best for the country.  When Aung San negotiated with the Japanese and the British to enable an independent Burma, he demanded that his party automatically receive a majority in the provisional government council, with more rights than other parties and in disregard of ethnic minoritiesIn a way, Aung San eventually led the U Nu government to democratic power through the 1947 Constitution.

Burma has yet to achieve sustained democracy; greed, corruption, military strength and politicians that feel they’re infallible have impeded its perpetuity.  By the late 1950’s, Independent Burma’s first elected government under Prime Minister U Nu experienced a decline in influence.  After ten years in power and in spite of electoral success, U Nu’s party began to break apart.  The league had been a mixed grouping of competing interests, goals and loyalties, sealed by relationships at the very top. (Thant, 2006, p. 283) The friends and colleagues in government grew tired of each other and mutual confidence began to wane.  The league lost much of its support and started to rely on extremist wings for continued support in Parliament, causing worry amongst the military.  In September 1958, rumors of a coup d’√©tat circulated; eventually forces under command of future NLD leaders surrounded the government buildings as a “preemptive coup”; several days later U Nu announced that he had asked General Ne Win to assume a “Caretaker Government” due to the current security status of the country, until new elections could be held.

The Caretaker Government that lasted until 1960, stabilized the country reducing crime and making some inroads regarding ongoing ethnic conflict. (Thant, 2006, p. 284) However, when time came for the next national election, the military leaders failed to win over the public, and U Nu’s former government easily regained power.  General Ne Win projected an unconcerned image publicly to the media, but his military “believed they had acquitted themselves admirably and could run the country better than anyone else. They wanted another chance, this time without any electoral deadline looming overhead.” (Thant, 2006, p. 285)

General Ne Win took over Burma with a military order for the second time in 1962; the ruling party had helped the country move forward and could not understand why the military-backed party didn’t gain the people’s trust for another term.  The first military government used technocrats to rule effectively; the new military government, however, worked in an opposite way, distrusting and firing educated civil servants, academics, and others within the educated professional class.  The government abolished many foreign aid agencies, international education exchanges, and closed Burma to the outside world.  The effects of decades of inefficiencies, military rule and the path toward a totalitarian state by General Ne Win from the 1960’s to 1988 can still be seen and felt across the country.  Rather than turning Burma into a national-socialist utopia, Ne Win turned it into one of the poorest and least developed countries in the region.  Now with a civilian leader in charge – but strongly backed by the old ruling military order – the country may yet fall back into disarray come next election.  A major difference this time, however, is that the world is watching and advocating for democratic normalcy and greater freedom, with its ASEAN neighbors and the US noting every step. 

When Suu Kyi returned to Burma in 1987 to take care of her mother, she also prepared herself for potentially having to nurse the country back to health.  A strong and determined leader, she has claimed her place in history but is just getting started.  Suu Kyi’s discussions with US Secretary of State Hillary Clinton, United Nations delegations and other diplomats demonstrate the faith and authority that the international community has in her opinion and commitment to a free Burma.  It is amazing that Suu Kyi has made it this far despite assassination attempts, but the current leadership knows that they need to keep her placated to survive.  Prior to the election, Joshua Kurlantzick wrote in Foreign Affairs that Thein Sein would actually be at a loss if Suu Kyi did not win her parliamentary seat; the international community and Burmese would not accept the election results as being accurate.  In this way, one hopes Suu Kyi is in fact fostering a more genuine democratic spirit amongst military leaders.

Suu Kyi has changed Myanmar’s fate, but can she continue to move the country forward? As much as Suu Kyi is the focus of the changing political landscape in the country, her party lacks enough parliamentary seats, internal experts and policies recommendations to peacefully develop the country; as well, they need to foster more leaders to counter the stubbornness Suu Kyi shares with her late father. Furthermore, a collaborative effort will be necessary to make the economic and political changes necessary to restore a collective national pride and governmental legitimacy.  The NLD will need to keep its relations with the ruling government amiable in the same way that Thein Sein, the Union Solidarity and Development Party and the military need a peaceful environment with the NLD to maintain their status.  All sides will have to compromise in one way or another to keep ASEAN on its side. 

The April 13 visit by British Prime Minister David Cameron to Myanmar is a striking sign that the West is interested in Myanmar’s development; that decided to take a business group to investigate leaves me on edge that the country’s natural resources or economic market could potentially be ruthlessly exploited.  The bilateral and multilateral meetings to come in the next few months should provide greater insight into how things will develop in Myanmar.  The more unfiltered information sent out to the international press and the more access foreign press and nonprofits are able to gain within the country, the better.  The international community no longer seeks to alienate the government of Myanmar but they must not let the state reign ‘supreme over individuals’.

Aung San Suu Kyi, like her father, has found herself at an important precipice in Myanmar’s politics. The fragile balance that has emerged out of the most recent elections could point toward a more stable and more prosperous future for Myanmar’s people, but also looms at the edge of renewed military rule. The hope is that Suu Kyi and that NLD can navigate this situation without repeating mistakes of the past.

*Note: this post uses the name “Burma” to refer to the time before the country was renamed “Myanmar”. The people of Myanmar are referred to as “Burmese”.

Reference: Thant, Mynt-U (2006). The River of Lost Footsteps: A personal history of Burma. Farrar, Straus & Giroux, New York, NY.

Sunday, April 01, 2012

A Review of Water: Asia’s Next Battleground

In much of Asia, the growing middle class is driving up demand for freshwater supplies, water-intensive crops and resource-intensive goods that have been taken granted for in the West.  With only one-third of global water resources for three-fifths of the world’s population efficient use and management of water is critical to social, political and economic stability in Asia.  Climate change and increased demand are putting strain on the global water supply and uncertainty of future reserves and access to existing stores is making water a disputed commodity. 

In Water: Asia’s Next Battleground, Dr. Brahma Chellaney explores the geopolitical consequences of water management policies in Asia set against the landscape of a water-stressed continent.  A fantastically detailed look into the domestic and international issues of several key states in Asia, the book demonstrates that the management of the increasingly scarce and necessary resource is invariably complex and can create tensions among neighbors.  As potential solutions to an impending crisis, Chellaney calls for the establishment of Asian norms for transboundary water resources, inclusive and coherent basin organizations, and a holistic approach to planning, conservation and water quality.  China is at the heart of the problems and solutions of the impending water crisis in Asia, with its reluctance to be a leader for multilateral arrangements, its focus on dam-building and neglect of the environment.  

Poised to become the scarcest essential resource in the world, water scarcity affects internal and external security of states.  Compared to all other regions, Asia has the least amount of freshwater per capita and one of the lowest levels of water productivity and efficiency.  Chellaney defines water shortage as “an absolute deficiency where the level of available water cannot meet basic societal and economic needs”, and water stress as having “less than 1,000 cubic meters of water per capita”.  The goal of water security is for every person to have dependable access to sufficient, safe and affordable water, while keeping the ecological systems intact and thriving.  Asia is, according to Chellaney, negligent in its use and management of natural resources, and water is no exception.  Inadequate supply, increasing pollution and diminishing natural wetlands are critical issues faced by the rapidly-developing states at a time when demand continues to rise.

Improvements in irrigation technologies and better widespread use of drip irrigation may improve Asia’s water security.  While the rest of the world uses rainwater as its primary source for agriculture, Asia has a much higher percentage of cultivated land using irrigation than any other continent.   Chellaney calls Asia “the global irrigation hub” and notes that the Asian method of irrigation is making the land less productive than rainwater-fed land.  Throughout the book, Chellaney reiterates the need for more investment in drip irrigation, particularly in India, and steadily criticizes China’s South-North Water Diversion Project as another troubled megaproject.  Large-scale irrigated farming has helped to reduce rural poverty and enabled greater agricultural self-sufficiency in many Asian countries.  As top water-intensive crops, rice and cotton continue to be critical to Asian livelihoods.  Despite food security underpinning the rise of Asian economies, the increasing population and their desire for water-intensive products are fueling rivalries and tensions. 

The Tibetan Plateau and Brahmaputra River are examples of significant areas where access to water is being controversially modified.  With control of the Tibetan Plateau, China has attempted to tap resources from each international river originating in the area; Chellaney suspects that a central part of the Great South-North Water Diversion Project in China is the diversion of the Brahmaputra River.  As the essential river for Bangladesh and a critical basin for India, any plans to modify the flow or affect the ecosystem of the Brahmaputra River will impact millions of people.  The increasing number of Chinese-led megaprojects exploiting rivers flowing from the Tibetan Plateau are worrying their neighbors and making water a divisive issue.  Chellaney lambasts the Chinese government, run by individuals with engineering backgrounds, for perpetuating Mao’s idea of controlling nature rather than bending to it (ignoring potential environmental damage and disruption to wildlife) and for resettling entire villages and towns to make way for megaprojects.  China has more dams in operation than all other countries combined, and has over 100 dam projects in dozens of countries.  However China continues to publicly claim that is has no plans to divert the Brahmaputra River, and Indian suspicion of this claim is growing.  Despite its unique position supplying river waters to the most individual countries, China does not have a water-sharing agreement with its neighbors or co-riparians and is instead embroiled in disputes with riparian neighbors; rather than joining the Mekong River Commission or other multilateral solutions, China’s preference for bilateral arrangements somewhat undermine the Commission and future efforts.

Much of the conflict – current and potential – over water access seems to be on racial and ethnic lines.  Tensions among different ethnic groups within Bangladesh, Uzbekistan, Sri Lanka and India are made worse by water disputes.  Chellaney’s case studies demonstrate limited ability of a purely supply-side strategy to meet the challenges brought on by water distribution.  In each of these states, governance is poor and water disputes are associated with “deeper socioeconomic discontent, fueling a cycle of unending unrest and sporadic violence”.  When citizens lose confidence in the ability of their government to be fair and impartial, new threats arise from an erosion of the rule of law.  Chellaney offers a direction for relevant states in Asia to mitigate their water-sharing disputes and challenges, but the book would benefit from a more detailed prescription and less repetition of his outwardly anti-China rhetoric.  

For both domestic and international disputes, Chellaney prescribes a holistic approach that is long-term, adequately integrates both demand management and supply-side approaches, focuses on quality as much as quantity of water, and utilizes input from diverse stakeholders and management at  different levels.  Cooperative relations are necessary to solving water disputes and protecting resources for the future; these relations can then broaden to include additional areas of cooperation.  There must be trust among co-riparians, with competition for resources minimized to enable a foundation for a contemporary water-sharing agreement.  While Asia could use another green revolution to institute more practices for efficient water use, another significant need is to build institutions to facilitate a water-sharing framework in transboundary basins.  Strategic planning and resource management are key to supervising stocks of Asia’s water supply; however without unified norms and institutions accountability and structure will be lacking.

Sunday, March 18, 2012

Don’t Go Overboard: China’s Naval Modernization & the US Response

With the impending launch of its first aircraft carrier, increasing out of area operations and territory disputes in the South China Sea, China’s naval modernization continues to be pertinent for Asia-Pacific security. On Monday March 12, I attended a book talk at Johns Hopkins University entitled “The PLA Navy: Expanding Capabilities, Evolving Roles”. The book can be downloaded here.  The topics and perspectives given were strikingly similar to the February 2012 Congressional Research Service report on China Naval Modernization; however, the discussants were more optimistic about the future of US-China relations and the struggle for power in the Asia-Pacific. While the rise of China and its military capabilities may be inevitable, the decline of the US in the near term is not. This post will highlight several features of China’s naval modernization and its impact upon the American pivot toward the Asia-Pacific region. 

The continued increase in naval spending by China (and India, for that matter) should be viewed as normal rather than a threat to regional stability. China’s naval modernization began in the 1990s and “encompasses a broad array of weapon acquisition programs, including programs for anti-ship ballistic missiles (ASBMs), anti-ship cruise missiles (ASCMs), land-attack cruise missiles (LACMs), surface-to-air missiles, mines, manned aircraft, unmanned aircraft, submarines, aircraft carriers, destroyers, frigates, patrol craft, amphibious ships, mine countermeasures (MCM) ships, hospital ships, and supporting C4ISR10 systems.” The effort also includes “improvements in maintenance and logistics, naval doctrine, personnel quality, education and training, and exercises.” (CRS, 3) A rising naval power does not always mean more conflict.  At the time of its ascent, the US did not use its increased power with rivals the UK and Soviet Russia.  It’s only fair that when a state develops economically that it should also be able to add new technologies to its capacity.  China will be the last of the permanent UN Security Council members to obtain an aircraft carrier.  A lot of fuss has been made about China reaching that level of naval strength, but it is not surprising that the state would seek out such capabilities.  Even so, it will take the Chinese military time to learn to manage the carrier and to use it as an effective part of its defense.  

According to panelists at the book discussion, a twenty-year long debate within the PLAN has shown that ‘there is no real strategy yet’.  However, China is working to create a comprehensive strategy instead of relying on operational guides, and is likely to continue to expand its range and type of operations. Several of the emerging trends in China as noted by Christopher Yung have been submarine development, out of area operations (such as in the Gulf of Aden), operationalization of anti-ship missiles and the arrival of the aircraft carrier.  New missions include naval diplomacy, the use of a hospital ship (great imagery with China’s flag in background assisting others), the PLAN being seen as the protector of the economy (vital to protect shipping lanes), and Hu Jintao’s ‘new historic missions’.  The CRS report also noted that China’s naval modernization effort is increasingly directed in pursuit of the following goals unrelated to Taiwan:

  • asserting or defending territorial claims in the South China Sea and East China Sea;
  • enforcing China’s view that is has legal right to regulate foreign military activities in its 200-mile maritime exclusive economic zone (EEZ);
  • protecting China’s sea lines of communications;
  • protecting and evacuating Chinese nationals living and working in foreign countries;
  • displacing US influence in the Pacific; and
  • asserting China’s status as a major world power. (CRS, 4-5)
These goals are of course very realist in nature, as would be expected by American analysts and policy advisors.  China’s naval modernization effort and pursuits of its interests are moving at a respectable pace, leading many eyes to watch developments in the Pacific as it develops a more comprehensive naval strategy.

Anti-access and area denial are American-introduced terms which are now used to describe attempts by China to prevent the US from intervening if China sought to attack Taiwan.  The emerging maritime anti-access force is similar to the seadenial force developed by the Soviet Union during the Cold War to deny American “use of the sea or counter US forces participating in a NATO-Warsaw Pact conflict.” (CRS, 4)  However, China’s force also includes anti-ship ballistic missiles (DF-21) with the ability to hit moving ships.  “The basic idea is to prevent approaching US Navy aircraft carrier strike groups from getting within tactical aircraft operating ranges.” The US government views this as a method “to challenge US freedom of action within the region”. Observers herald the DF-21 a “game changing” weapon, because the US has not previously faced this threat from anti-ship ballistic missiles. China is somewhat conflicted in its desire to keep other states from intervening or being effective in the region (by utilizing its anti-access and area denial capabilities) and while also seeking to reach out to other regions. The potential for Chinese power-projection grows stronger as its naval power develops. A central tenet of the US policy of deterrence is believability, and so when it can the US tries to take a stern stance on China’s power projection in the region.  The Obama administration’s tour of the Pacific last year including the harsh words sent to Chinese leadership and the stationing of US troops in Darwin, Australia contributed to the deterrence strategy. Moreover, the US already has Air Sea Battle plans to balance anti-access and area denial capabilities; the maritime strategy is apparently “not directed at any single country, but China is the only one with anti-access arms.” (CRS, 41)

Taiwan is only one security issue among many for China, and the probability for war between the two states is on the decline.  To the PLAN event discussants, that meant there are more avenues and opportunities for cooperation between China and the US rather than armed conflict; it is difficult to imagine the two powers engaging in war over circumstances other than Taiwan’s safety. For example, freedom of navigation and the protection of shipping lanes would be of mutual benefit. For the CRS Report, even “in the absence of such a conflict…the US-Chinese military balance in the Pacific could nevertheless influence day-to-day choices made by other Pacific countries, including on choices whether to align their policies more closely with China or the US.” (CRS, 1) Once China’s aircraft carrier is fully functional, it will have a political as well as strategic impact on the region. Both the US and China are concerned about the ‘political evolution of the Pacific, which in turn could affect’ their abilities to pursue particular policies in the region and elsewhere. (CRS, 2) Budget cuts have affected other parts of the US Department of Defense, but the US government was clear that US Naval forces in the Pacific will remain strong.

With such different geostrategic environments the navies of the US and China have evolved and been used in different ways. The US Navy is not as concerned with protecting its coastline as the PLA Navy; not only are their perspectives different but their immediate security concerns vary. It is important for the US and China to maintain a dialogue of shared goals and concerns; as much as China’s military modernization has turned heads, so too has the US pivot to the Asia-Pacific. 

Wednesday, February 22, 2012

Chinese Firm's Investment Challenged – Crafar Farm Deal on Hold

Recently, the High Court of New Zealand overturned a decision by the Overseas Investment Office to allow Chinese company Shanghai Pengxin to purchase the Crafar Farms, sparking worries about the ability to attract future FDI, maintaining positive trade relations with China, and the situation’s implications for future partial sales of state owned assets.  A new decision should be reached within days, with some foreseeing the inevitability of the sale due to the potential increased export business driven by Shanghai Pengxin’s connections.  The court ruling in NZ and the frenzies surrounding the potential farm sale demonstrate our simultaneous fascination for and wariness of China.  With significant experience in FDI and trade agreements, China can easily perceive the public relations issues and react with public diplomacy and economic incentives.  This brief post is the first of a series examining the Crafar Farms case.

China is NZ’s second-largest export market, and NZ is the only developed country with a free trade agreement with China.  The Overseas Investment Office’s initial decision to approve Shanghai Pengxin’s purchase of Crafar Farms, then, according to some was swayed by Chinese lobbyists or an effort to keep trade relations blooming.  In August 2011, Treasury and OIO officials met with the Chinese political consul to discuss foreign investment rules in NZ, but apparently did not discuss the Crafar Farms deal.  In order for foreigners to gain ownership of ‘sensitive assets’, they must prove that their ownership will provide ‘substantial and identifiable benefits’ to NZ; Shanghai Pengxin attempted to display benefits, which were agreed to by locals and importantly, Fonterra.  In the High Court ruling, however, Justice Miller stated that an overseas buyer not only has to prove such benefits to NZ, but they must “offer a deal more beneficial than any local sale”.   In this case, he ruled that the OIO overstated the benefits which Shanghai Pengxin would offer to NZ.  Tim Watkin illustrates:

"Like some robed bouncer, he's told Shanghai Pengxin – and all potential foreign investors – that we have a dress code in this country and if they want to come in they'd better polish their shoes and put on their best suit. And given the value of productive farm land to our country's wealth, our national identity and our great-grandchildren's prosperity, that's probably not a bad view to take."

In fact, the OIO decision originally established the following:
"The Chinese Government recently confirmed that it saw New Zealand as an attractive place for investment and was encouraging Chinese companies to invest in strategic assets such as dairy farms. If this Application is refused without convincing reasoning linked to non-compliance with the Act or the Regulations (which we submit is not the case), that decision will be widely reported both domestically and internationally and will be likely to send a negative message about New Zealand's attitude towards Chinese investment and about whether the commitments made in the New Zealand-China FTA are being honoured.

"The transaction will also confirm New Zealand’s compliance with the New Zealand-China FTA and therefore enhance New Zealand’s strategic interests."

Strategic assets such as farm land will continue to be sold in NZ, and in fact much farm land has already been sold to foreigners as of late; over the past 18 months, 72 farms were sold to foreign buyers out of a total pool of 10,000 dairy farms and 35,000 sheep and beef farms. This statistic was noted by PM John Key in reaction to a new poll stating that 76 percent of voters want tougher restrictions on sales of land, including farms, to foreigners.  With the media publicity, High Court ruling, trade relations with China being so critical and the significance of the dairy industry to the NZ economy, the Crafar Farm deal has struck a chord with New Zealanders that the Government is attempting to mask.  Given that the potential New Zealand buyers are trying hard to win over the public and the courts, and that the Chinese government created a new fund to assist with financing international takeover bids, the public perception of the value of foreign direct investment will likely become a more consistent topic.  The NZ Government, then should be transparent in its influence with foreign investors when they are in direct competition with locals for strategic assets.

Sunday, January 29, 2012

New US Strategy to Modernize, Coordinate & Secure Global Supply Chain

“In an anarchic world with no central authority, the United States has the ability to either physically force other countries into compliance with violence, or the country can seek co-operative partnerships to reach its goals – partnerships in which it can wield significant influence because it is a great power. The United States has chosen the latter.”  (Grillot, Cruise and D’Erman, VJ 2010)


International trade can provide stability in access to goods as well as acting as an engine for growth.  As technology improves, the global supply chain becomes more advanced and more actors become involved.  The threat of more frequent natural disasters and the potential for terrorism or transnational criminal activities facilitated by global transportation networks, there is an ever-greater need to ensure the security and efficiency of supply chains.  This past week at the World Economic Forum in Davos, Switzerland, US Secretary for Homeland Security Janet Napolitano unveiled the latest National Strategy for Global Supply Chain Security (the Strategy).  The launch of this updated policy is timely given President Obama’s desire to boost American manufacturing, new bilateral trade pacts with Colombia and Korea and the impending Trans-Pacific Partnership.  This post seeks to shed light on the policy and briefly demonstrate the importance of ensuring an operational global supply chain security regime.
Each year 12 million containers are shipped into the US alone. (US Dept. of Transportation, 2009) It is no wonder, then that the Strategy has two primary goals: promote the efficient and secure movement of goods, and foster a resilient supply chain.   Security will be integrated as a key component of supply chain operations, but not in such as way as to slow down shipments.  For this goal, the US seeks to:

·         Resolve threats early to expedite the flow of legitimate commerce.
·         Improve verification and detection capabilities.
·         Enhance security of infrastructure and conveyances in order to protect the supply chain and critical nodes, through limiting access to cargo, infrastructure, conveyances, and information to those with legitimate and relevant roles and responsibilities.
·         Maximize the flow of legitimate trade by modernizing supply chain infrastructure and pro­cesses to meet future market opportunities; developing new mechanisms to facilitate low risk cargo; simplifying our trade compliance processes; and refining incentives to encourage enhanced stakeholder collaboration.

Furthermore, disruptions to the global supply chain due to natural disasters or disease can have staggering consequences. Therefore to improve its sustainability, the government aims to:

·         Mitigate systemic vulnerability to a supply chain disruption prior to a potential event by using risk management principles to identify and protect key assets, infrastructure, and support sys­tems; and promoting the implementation of sustainable operational processes and appropriate redundancy for those assets.
·         Promote trade resumption policies and practices that will provide for a coordinated restoration of the movement of goods following a potential disruption by developing and implementing national and global guidelines, standards, policies, and programs.

As with other public government strategies, the Strategy “provides strategic guidance to departments and agencies within the United States Government and identifies our priorities to stakeholders with whom we hope to collaborate going forward.”  With the focus on the “worldwide network of transportation, postal, and shipping pathways; assets and infrastructure by which goods are moved from the point of manufacture until they reach an end consumer; and supporting communications infrastructure and systems,” the policy to “strengthen the global supply chain” naturally relies upon external actors (including other states, multinational corporations and multilateral bodies, to name a few) to be successful.  As the opening quote suggests, the US does not plan to facilitate detailed actions on its own.  Rather, the government is encouraging feedback and involvement “from host governments, industry partners and other stakeholders” to produce the best initiatives and actions to secure the global supply chain.
There are already frameworks and initiatives in place to facilitate global supply chain security, affecting actors differently.  The Container Security Initiative and the SAFE Frameworks of the World Customs Organization (WCO) have been critical to these efforts.  However, needing to follow or fulfill requirements of different states can become costly and strenuous for businesses of different sizes.  On 1 January 2012, a new version of the Harmonized System Nomenclature entered into force by the WCO as “the world’s global standard for classifying over 98% of goods in international trade”.  The WCO is the ideal mechanism for dialogue and implementation of security concepts and standards; the SAFE Framework provides such standards to synchronize varying initiatives. Mutual recognition of security regimes, then, “could become a reality in the future”.
Compliance with regulations falls on the responsibility of the stakeholders (at various levels in the international trade sector), who therefore they must bear much of the cost.*  This increased financial burden can have several impacts upon actors and the economies in general.  First, those with more financial resources will be in a more favorable position to comply with requirements over those with less experience or resources.  Second, investors may turn away from those countries that are less integrated into the “international transport structures for supply chain security.  Third, the lack of funding by the WCO and other international organizations for implementation may lead to marginalization or decreased competitiveness of those less able to incur the necessary costs.  Keeping current with customs regulations, fees and security requirements can become burdensome; however the Strategy and its ultimate initiatives aim to speed up rather than slow down global trade, and is anything but inward-looking.
In May 2011, New Zealand and the United States signed a joint statement on global supplychain security cooperation.  The Asia-Pacific region has a significant role in international commerce and within the supply chain.  The two states saw the agreement as a way forward for further collaboration on similar issues.  In fact, through Project Global Shield (launched in 2010), New Zealand, the US and close to 60 other countries “share information with each other to ensure that chemicals entering their countries are being used in safe and legal ways, leading to successful interdictions of a number of suspicious shipments and providing promising investigative leads on the smuggling of precursor chemicals into Afghanistan and Pakistan”.
Overall, “container transit is far from being completely ‘visible’ and safe”.*  There will always be challenges to security, or threats to shipments from nature.  That the US took its time in developing a cohesive Strategy and plans to continue collaboration and dialogue with stakeholders is a positive move.  The Strategy acknowledges cooperation is needed, which is a good perspective for policymakers to have.  The aim has been for containers to be inspected and cleared for dangerous and unlawful contents before they get close to US borders, so effective and secure networks will be essential.

 For further reading:

Frank Altem√∂ller. “Towards an international regime of supply chain security: an international relations perspective.” World Customs Journal.  Volume 5, Number 2. [http://www.worldcustomsjournal.org/media/wcj/-2011/2/Altemoeller.pdf]

Monday, January 09, 2012

US and China Outline New Year Policies Affecting Home and Abroad

The New Year has started with immediate action in the Asia-Pacific region and Sino-US relations.  On January 1, Chinese President Hu Jintao published a highly charged article in the Communist Party journal Seeking Truth about culture and the threats China faces.  On January 6, President Barack Obama stood alongside military leaders to launch his administration’s new defense strategy “Sustaining US Global Leadership: Priorities for 21st Century Defense”.  Both events were media spectacles spurring speculation and hype among pundits.   Across multiple fronts, the US and China are in a stage of ‘transition’, with the current administrations both facing potential (in US) and real (in China) leadership changes at the end of 2012. The contents of Hu’s essay and the Obama administration’s defense strategy demonstrate the leaders’ mutual need to shore up domestic support and enthusiasm. 

For some in the US, Hu Jintao’s essay declared a new ‘culture war’ directed at America, harkening back to Mao Zedong.  Hu wrote in the essay and speech: “We must clearly see that international hostile forces are intensifying the strategic plot of Westernizing and dividing China, and ideological and cultural fields are the focal areas of their long-term infiltration.”  The Wall Street Journal argued that “Hu Jintao has launched another culture-rectification campaign with goals that Mao would recognize: step up ideological struggle and fight back against Western encroachments.”  In a response to US reactions, the Chinese Culture Minister quickly replied by clarifying that 2012’s proposed ‘culture work’ does not mean it will “engage in so-called Great Leap Forward”.  Instead, China’s plan is to perpetuate soft power and to promote internal and international stability.

I agree more with Damien Ma’s interpretation in The Atlantic that the ‘culture war’ is not meant as an implicit threat to the US. Rather, it is “part of a battle to sustain the confidence of its own people – via nationalist, Confucian tenets, wealth, cultural renaissance or whatever substitute that can be dreamed up -- or risk the consequences. The war is, and has always been, about defining the soul of the modern Chinese nation.”  Furthermore, the warnings are a call to the Communist Party to remain relevant to China’s populace.  The forthcoming political transition at the end of this year and the Chinese population’s growing benefits from economic and technological development led to a fear of waning power and influence.  Building on nationalist sentiments and stirring up the public by flexing its diplomatic muscle is one way for Hu’s Administration to calm its nerves.

Meanwhile in the US, the Budget Control Act of 2011 mandated that the Pentagon budget be trimmed by “by about $487 billion in the next decade, a roughly 8 percent decrease.”* The recent Defense Strategy Review is an attempt to redefine America’s strategic interests and goals, and to focus on priority areas for future funding.  As the US reaches the last year of President Obama’s first term, withdraws military forces from Iraq and deals with a continuing government budget and wider economic crisis, the country faces a point of ‘transition’ which makes the time ripe for this discussion.  By surrounding himself with top Pentagon officials, President Obama tried to strengthen his stance against an unwieldy Congress and direct an image of authority in an election year.  The need to reduce the budget was evident on every page of the report, with the key being “Whenever possible, we will develop innovative, low-cost, and small-footprint approaches to achieve our security objectives”. (p. 3)

Interestingly, at no point in President Obama’s defense policy launch did he mention China.  The Defense Strategy Review, on the other hand, warned that China’s emergence could affect the economy and security of the US in a number of ways depending on the path taken.  Additionally, China’s military power growth “must be accompanied by greater clarity of its strategic intentions in order to avoid causing friction in the region.”  In a menacing tone, the Review said the US would “continue to make the necessary investments to ensure that we maintain regional access and the ability to operate freely in keeping with our treaty obligations and with international law.” (p. 2)

As you can see, budget reductions are a priority, but they do not stand in the way of military readiness and competitiveness.  In an effort to sound practical, the Review argued for a reduction in the “cost of doing business”, to which many Americans would agree. However military personnel have sacrificed much over the last decade and will bear the burden of budget cuts: “As DoD takes steps to reduce its manpower costs, to include reductions in the growth of compensation and health care costs, we will keep faith with those who serve.” (p. 7)  Cutting health care benefits from veterans has not been as controversial as one may think in Congress however unpopular it may be to the American public; hopefully, this move is not foreshadowing irrational motives sparked by China’s emergence.

As Presidents Obama and Hu pit tough rhetoric against each other to hold or challenge the balance of power, they also seek to prove dominance to their domestic populations.  Competing party and government politics have been the main driver of their warnings and stern tones.  Economically, China and the US are so interdependent that the leaders’ domestic pandering should not affect their strategic relationship; the US in particular finished 2011 with a negative stance toward China, causing international headaches.  But both powers share the mutual interest of stability, and while the US has less concern for other states’ sovereignty than China, the Obama Administration should prevent domestic issues and government in-fighting from leading to a dampened bilateral relationship.

Last year was, and no doubt 2012 will also be, a busy year for Sino-US relations and multilateral cooperation in the Asia-Pacific.  On January 7, US Assistant Secretary of State Kurt Campbell arrived in Tokyo to discuss the situation on the Korean Peninsula and said “Even while the United States is making an adjustment in its global military posture, we are intent on maintaining a very strong, enduring military presence in the Asian-Pacific region”.  China, likewise, intends to increase its diplomatic efforts this year and boost cooperation in the Asia-Pacific in issues of mutual interest; China’s government is anticipating high-level meetings such as the “Seoul Nuclear Summit, the BRICS Summit in India, the Asia-Europe Meeting in Laos, and the East Asia Summit in Cambodia”.  During these meetings, China plans to “enhance strategic coordination and mutual understanding with Asian countries”.  With both China and the US boosting diplomatic efforts in the Asia-Pacific, the hope is that eventually the two powers will forge a more cooperative and mutual partnership together instead of solely other neighbors.