Friday, September 19, 2014

China's dirty coal ban causes waves

To its critics it has confirmed their views, and to its investors it is all a monumental media beat-up.

Either way, China's decision to ban imports of poorer quality thermal coal, which is used mostly to generate electricity, and to cut imports generally by 50 million tonnes by year's end throws more fuel on the fire of the climate change debate – and coal's role.

And coming ahead of a new round of UN climate change talks in New York next week, the timing of the announcement is impeccable. But as with many things in China, even though the decision is portrayed as aiming to improve local air quality, at its core are efforts to bail out its troubled local coal miners and power generators as its economy continues to weaken.

China says it will ban from January 1 the importing of coal with more than 16 per cent ash and 3 per cent sulphur to the Yangtze River Delta near Shanghai  and the Pearl River Delta near Hong Kong. They will join the conurbation of Beijing-Tianjin that already has the tougher restrictions in place.


This will potentially hit as much as 25 million tonnes of Australian coal sold annually to China, according to the Bureau of Resource Economics. Some of this coal can be washed, or blended, to reduce the level of ash, but it comes with a cost to an industry already axing jobs and slashing costs.

"They've been tossing these numbers around for a while and only now come to a landing," says Mark Melatos of the School of Economics at Sydney University. "It seems to be interesting timing," he says, since it comes directly ahead of the next round of UN talks.

"In making these changes, they are pushing the environmental benefit. They've definitely done part of it with the pollution issue in mind, but more broadly the changes should be seen in the context of China's economic slowdown."

And for China, which has fallen foul of the World Trade Organisation on previous attempts to impose tariffs to assist domestic industries, changing regulations can sidestep an obvious pressure point.

"Rather than using tariffs, adopting a standards-based approach" may be the way China handles trade policy in the future, he says. "There may be very good reasons to burn cleaner coal, but it also assists your power generators and miners.

"Tariff rules are more concrete, but standards are more difficult to nail down. There may be, for example, very good scientific reasons for the decision, but with a protectionist agenda in the background."

Industry specialist Wood Mackenzie cautions against confusing China's measures aimed at tackling air pollution with its greenhouse gas emissions policies, which will be centre stage at the UN meeting next week.

"China's air pollution plan is not about penalising coal, but using it more cleanly," says Rohan Kendall, Wood Mackenzie's metals and minings manager for eastern Asia. "Coal dominates China's electricity supply and it can't move away from it easily. Until 2035, coal will still dominate, therefore the focus is on emission controls in heavily populated areas."

Kendall says the higher ash product some Australian thermal coal exporters are supplying China was developed at the behest of the Chinese buyers. On his reckoning, the new regulations can hit as much as 40 million tonnes of Australian shipments. This is worth close to $US3 billion ($3.35 billion) at present prices.

Coal miners can wash the coal, but whether the Chinese buyers will pay a premium for cleaner coal is doubtful.

Indonesia, by way of contrast, is in a better position because, even though its coal is generally of a lower value than Australian coal, it has lower ash, so it can more easily meet China's planned regulations.

For an industry long used to deep cyclical swings, the prospect of the loss of about $US3 billion in sales when it is already struggling to slash costs will at the very least prolong the downturn.

"I don't see any significant change to the demand growth profile for coal," says one of the country's richest businessmen, who has made his fortune by riding successive waves of the coal boom. "The reality is the industry is in over-supply."

Earlier this month, one of mining giant Glencore's top executives Mick Buffier, who heads its extensive Australian coal operations, said as many as a third of local coalmines were losing money. The strong Australian dollar was one factor and, if the weaker trend was sustained, it might give the industry some further breathing space.

So far this downturn, there has been close to 10,000 direct mining jobs lost across the industry after mining jobs fell to close to 50,000 from about 60,000 at the peak of the cycle, according to CFMEU data. Much of those losses have been in Queensland, but more than 3000 jobs have been lost so far in NSW.

Peter Colley, the national research director with the CFMEU's mining and energy division, says the industry anticipated substantial job cuts in the second half of 2012 and the first half of last year, but with the cuts slowing since then as some mines expand and others hire.

In May there were 21,986 miners in NSW, down from the peak in mid 2012 of about 25,000, he said.

The last big downturn in the coal industry was in the late 1990s, which prompted the likes of Shell and Peabody to bail out.

Yet about five years later, Peabody was back, paying $2 billion for Tony Haggarty's Excel Coal in 2006 then a hefty $4.8 billion for Macarthur Coal in 2011, at what was probably the market's peak.

Since then, the price of coking coal, which is used in steel making, has slumped from about $US300 to $US120 a tonne over the past three years and the thermal coal price has slid from about $US135 a tonne to less than $US70 a tonne in recent sales.

Along with the billions of dollars spent just on expanding coal production capacity – shipments through the world's largest coal export port at Newcastle are running at more than 170 million tonnes annually – there has been more than $1.2 billion spent to upgrade the railway network over the past five years and more than $3.5 billion on coal terminals at the port.

And with many exporters locked into supply contracts that force them to ship coal even if they lose money, the pain is not likely to be relieved until the thermal coal price gets back towards $US100 a tonne at least.

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Terror raids: The rising fear in Sydney's suburbs

It was a terrorist plot marked by its brutality and simplicity, and the ease with which it could be rolled out at a moment's notice: kidnap innocent bystanders, whisk them back to a secret location and execute them by means of decapitation.

After the murderous spectacle of passenger jets ploughing into buildings on September 11, 2001, and the nightclub bombings in Bali that left hundreds dead, this week's alleged plot was decidedly low tech.

But it had all the ingredients that make for a successful terrorist act - to terrify, to prey on the deepest human instincts to create widespread fear.

As Prime Minister Tony Abbott observed on Friday, "all you need is  … a knife, an iPhone and a victim".


Allegedly coordinated to take place in Sydney and Brisbane, the executions would be spectacular, shocking, random and barbaric.

The instruction allegedly came from Mohammad Ali Baryalei, the most senior Australian with Islamic State, the terrorist group also known as IS or ISIL, on Tuesday.

He told his devotee in Sydney, Omarjan Azari, that it was time "show we can kill a kafir [non-believer]", according to a counter-terrorism source.

Arguably the most important directive was to come later during several phone calls that stretched into the evening on Tuesday. Police will allege he ordered that Azari film the terrorist act and send it to Al Hayat Media for distribution around the world via social and mainstream media.

The highly sophisticated media outlet of IS, Al Hayat is infamous for its never-ending stream of propaganda videos, filmed in high definition and expertly edited with music, action scenes from the battlefield and even scenes from video games like Call of Duty.

Al Hayat produced the videos of three American and British men who have all died at the hand of a fanatic's knife in the past month, appalling and transfixing the world and going a long way to spurring western military intervention.

Deeply disturbing for Australians is that it appears beheadings, reserved until now for the benighted battlefields of Syria and Iraq, were to be unleashed on the streets of its major cities.  

With the terrorist threat level lifted to high, Australian pilots and soldiers en route to the Middle East to await the final go-ahead to "degrade and destroy" Islamic State, how severe is the threat of terrorist attacks in Australia? What can be done to defeat it?

Bonded by their fanatical support for holy war and Islamic State's self-proclaimed caliphate, the group of more than a dozen men that police alleged formed a terrorist cell first came together last year year to funnel fighters and funds to jihadist groups in Syria.

Mohammad Ali Baryalei was the contact in the Middle East, shuttling between Turkey and Syria and rising through the ranks of Islamic State.

A 33-year-old  from a privileged Afghan family who came to Australia as a refugee, Baryalei worked as a Kings Cross bouncer and bit-part actor before being swayed to fundamentalist Islam and becoming a minor celebrity in radical circles for his "Street Dawah", videotaped kerbside conversions of Australians to Islam.

In Australia, police allege that Hamdi al-Qudsi was the main operator, recruiting young men, some of them teenagers, to travel to Syria.

The network supplied some 30 Australians  to Syria and Iraq, around half the number of Australians who are believed to have travelled to fight in the region.

As far back as May, the intent of a group of men in Sydney and Brisbane to commit some kind of terrorist act became an active concern.

Under close surveillance, counter-terrorism authorities heard of discussions about packing a car with explosives, plans that never seriously developed and were quickly abandoned in favour of  something much easier to organise.

As Azari - an apprentice motor mechanic from Guildford - faced court, charged with planning a terrorist attack, he was described Crown prosecutor Michael Allnut as possessing  an "unusual level of fanaticism".

The plot was hatched with rapid speed and done in the "full knowledge of police surveillance", Allnut said.

"There was almost an irrational determination to commit that plan ... to randomly select a person to rather gruesomely execute."

An attack, police judged, was "very imminent". More than 800 police were scrambled to launch pre-dawn raids across Sydney and Brisbane, searching 25 homes in two states, detaining and questioning 15 men and charging two, including Azari, for terrorism offences.

A sword was seized in Marsfield in Sydney's north-west; machetes, balaclavas, a gun and ammunition in Brisbane. .

What exactly motivated the quick-fire call for terror remains unclear, although the conversation came just days after Australia announced its commitment to send 600 military personnel and military aircraft to the Middle East to prepare to wage war on Islamic State.

Asked whether there was a connection, NSW Police commissioner Andrew Scipione said: "Let me answer your question by saying this - in our risk assessments, in putting together our response plan, we have certainly factored that in."  

Certainly, the alleged plot in Australia is only the second in a western country known to have links to Islamic State. A former IS fighter and jailer murdered four people at a Jewish Museum in Brussels in May after opening fire with an automatic weapon.

The killing of off-duty British soldier Lee Rigby in a Woolwich street by two knife-wielding Al Qaeda sympathisers approximates.

But that was a brutal knife attack, rather than a beheading. What was allegedly planned for Sydney and Brisbane was far more sinister.

Terrorism analysts say a beheading, especially when coupled with the drama of hostage taking, can be more powerful in terms of its psychological impacts than a mass casualty attack.

"Terrorism is a form of propaganda by the deed. And the more chilling the deed, the more impactful the propaganda," Shashank Joshi, a senior research fellow of the Royal United Services Institute, wrote this week.

"The graphic nature of beheading, the focus on the individual and the act of bodily desecration involved all render this far more chilling than the explosion of a bomb, even where the latter's death toll is greater."

If, as Brian Jenkins, a doyen of counter terrorism studies observed, terrorists want a lot of people watching, not necessarily a lot of people dead,  a beheading is perhaps the ultimate form of sowing maximum fear with minimal resources.

Jessica Stern, a veteran terrorist analyst who lectures at Harvard University, told Fairfax Media that, while relatively few are directly affected by a beheading, the psychological impact is huge.

It serves multiple purposes - to instill fear, make a political point, attract recruits and provoke an over-reaction from an adversary.

"They are really trying to get us to over-react. It really does seem that they are trying to get us to invade [Iraq and Syria]."

On that front, Islamic State would appear to be succeeding and there are concerns that the West's armed intervention will see the terrorist group switch focus from its preoccupation with the "near enemy" to the one further afield.

The near enemy is  the "apostate" Shia Muslims and other religious minorities IS has sought to purge as it advances across Iraq. The far enemy is the West.

Counterterrorism  authorities are worried this week's plot is not the only terrorist act being conceived by Islamic State supporters in Australia. "Chatter" picked up by intelligence agencies has prompted heightened security around parliament house and other government installations.

Stern says any rise in the terrorist threat here, perhaps inevitable due military campaign against IS, should not necessarily preclude an armed response.

IS has grown at an astonishing rate, and is different from other terrorist groups in that it controls large swathes of land and two large cities - Mosul in Iraq and Raqaa in Syria, she notes.

Without taking action that involved deadly force, it would likely become more potent anyway.

"They have been more successful than al Qaeda," says Stern.

John Horgan, a psychologist from the University of Massachusetts who has studied terrorism for 20 years says IS "truly is something different". Its gains in Iraq and Syria are demonstrable signs of its success to Islamists.

"It holds very, very broad appeal," he told New York Magazine this week.

"In the eyes of potential recruits, this is fantasy made reality. It's everything a would-be jihadist could have hoped for."

Australia's counter-terrorism agencies are claiming a major success, as is the government. Court proceedings will determine the strength of their intelligence.

The number of police deployed on Thursday was the biggest on record, although the plot was hardly the most serious encountered in Australia over the past decade, which included more advanced plots to set off bombs at public events and launch a massacre at Holsworthy Army barracks.

Nonetheless, the allegation of a discarded plan to set off a car bomb highlights the difficulties obtaining raw materials after more than a decade of strong anti-terrorism measures, including closer regulation of fertilisers and other bomb making materials and improved on-the-ground intelligence.

Disrupting terrorist cells, surveillance and other intelligence gathering intelligence, as well as shutting down sources of finance, will remain integral parts of the effort to defeat IS.

Military action, too, can be effective in routing IS from its safe haven, although only if it is undertaken with a broad  and deep coalition that includes Muslim countries. Allied to that coalition has to be a political solution to the long-standing disputes and religious hostility in the region that feeds Islamic State.

To slow the flow of recruits to IS from the West, Dr Horgan suggests a narrative needs to be articulated based on disaffected former members of IS.

"People become disillusioned if they feel that the [terrorist] group has gone too far, if they don't seem to have a strategy beyond indiscriminate killing," he says.

"It's only a matter of time  before those accounts leak out [of Islamic State]… We would do very well to be on the lookout."

The prime minister on Friday was urging Australians to press on with their lives.

"The best response to all of this is to go about one's business normally, because terrorism is about scaring people out of their ordinary daily way of life.

"Second point I make is that the Government will do whatever we humanly can to keep our community safe.

"[The] third point – very important point – is that the actions yesterday were not about any particular religious group or any particular community. They were about crime, they were about potential terrorism, and they're about keeping our whole community safe."

The Qur'an, like the Bible, depicts beheadings from Biblical times. Members of Islamic State undoubtedly play on the references as they adopt the practice as a terrorist tactic and recruitment tool.

However, Islam's holy book also forbids the mistreatment of prisoners, orders followers of Allah not to initiate hostilities and always be inclined towards peace.

Islamic State perverts and traduces the faith, and there was no better illustration than the men alleged to have planned the execution of innocents in Sydney and Brisbane.

According to the police, El Baryalei spoke to Azari about wrapping the bloodied body of their victims in Islam's flag.

The shedding of any blood on the ancient black banner proclaiming the pre-eminence of Allah and the Prophet Muhammed -  co-opted by IS and other jihadists groups - is strictly forbidden and widely considered a desecration by Muslims.
So, too, is murdering civilians.

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It's the sheer randomness of it that makes it so terrifying. The idea that the victim would be utterly generic: not a politician or a soldier, but a random person.

It's the sheer randomness of it that makes it so terrifying. The idea that the victim would be utterly generic: not a politician or a soldier, but a random person. This person would be an abstraction, really. They are everyone precisely because they are no one in particular. What would matter is the image. The video had to be made, the event had to be broadcast. This matters more than the killing itself.

Now will come the courtroom arguments about whether this is a serious plot or empty, youthful bravado, but they will have no public purchase. Terrorism is all about the fear, the anxiety, the outrage. It's nothing without it. And what can scare or outrage us more than the thought of ISIL within?

And it's that thought that perhaps has the most to teach us in Australia. ISIL is not simply a group to be vanquished. It is not a fixed, finite, collection of people we can somehow control or eradicate. For us in Australia, it's most dangerously a symbol: a brand a young man from Sydney can claim for himself; a flag in which he can wrap himself, and his proposed victim. For all its pretensions to statehood, the key thing is that it's anything but. It exists in the mind as much as on land.


So it's not the kind of thing we can simply destroy with military force. Modern terrorism doesn't work that way. We keep killing "senior figures" in terrorist groups – indeed, it's more than three years since we killed the most senior of them all – and nothing substantive changes. We tried to smash al-Qaeda. It fragmented, then morphed into a mass movement not truly under anyone's direct control, with Osama bin Laden mostly a symbolic figurehead. Then it begat ISIL.

This yields a devilish problem: namely, that we are trying to confront a threat that exists nowhere in particular, and anywhere in theory. We can't destroy that. Not in the short term and not with the kind of conventional force the state has at its disposal. What we can do is manage it. Arrest, prosecute, convict. The good news is, we're good at that. The bad news is that this isn't a cure. It's the (certainly necessary) treatment of symptoms.

Long-term, it's about us. It's about how resilient we are as a society, and how focused we are in our response. There is one very clear way in which this alleged plot can succeed, even if it is never carried out: that we become so emotionally manipulated, so provoked, that we end up helplessly polarised. That becomes a problem because a symbol as ghastly as ISIL can only prosper in a febrile atmosphere.

"Right now is a time for calm," urged NSW police commissioner Andrew Scipione. "We don't need to whip this up."

He's entirely right, but even as he says this he must be asking himself a very scary question: is that going to be possible?

Waleed Aly is a Fairfax columnist and a lecturer in politics at Monash University.

The US, Vietnam and Shifting Alliances in Asia

It’s not only the US that should be worried about a Russia-China axis, but also Vietnam

The budding alliance between Russia and China may be redrawing old battles. The Soviet Union has long since collapsed, China has jettisoned much of its communist ideology, and the Soviet–Sino split has been relegated to another chapter of the Cold War. Certainly the frequency of Russia–China summit meetings suggests that these two countries have grown to become more than cordial neighbors.

In this second decade of the 21st century, Moscow and Beijing may, once more, have bonded over their opposition to a Western-led (specifically, US-dominated) world order. With the US especially vocal and active in imposing sanctions against Russia over the Ukrainian conflict, and the US’ strategic rebalance to Asia-Pacific seen as an attempt to contain China, it is no wonder that Presidents Vladimir Putin and Xi Jinping have sought out one another.

Last week, the two presidents met in Dushanbe, Tajikistan for the Shanghai Cooperation Organization (SCO) regional summit, which also included leaders from Tajikistan, Kyrgyzstan and Uzbekistan. The meeting between the two leaders at the summit follows after bilateral talks held earlier.

At the SCO, Russia and China affirmed ongoing cooperation in important fields such as oil and gas, with the China–Russia East Route used as an example of such cooperation. Construction on the joint-venture pipeline began on September 1 after the $400 billion agreement was signed in May, and is expected to pump 38 billion cubic meters of gas every year starting in 2018.

Despite sanctions, Europe continues to consume and rely on Russian energy; however, deteriorating relations between Russia and Europe has forced Moscow to look elsewhere. China, with its growing energy demands, was ready and waiting.

There is little the US can do to deter or impede Russian–Chinese relations. There is no Soviet–Sino split to exploit. Circumstances have since changed since President Nixon’s visit to China in 1972.

With the Islamic State of Iraq and the Levant (ISIL) terrorizing Iraq and the Iraqi people, and President Obama’s recent address to “degrade and ultimately destroy” ISIL, to say nothing of the ongoing and bloody civil strife in Syria, America’s attention will remain in the Middle East for the foreseeable future.

US–Vietnam Partnership

However, Moscow and Beijing’s warming relationship is not merely a concern for the US but also regional countries, particularly Vietnam. For Hanoi, which has historically viewed China as a threat and Russia (then-Soviet Union during the Cold War) as a counterweight, any outcome where Russia and China are allies is undesirable.

A potential alliance between Russia and China is a concern for Vietnam, which has relied on the former for armaments. Through Russia, Vietnam has acquired six Kilo-class submarines and six light frigates, as well as a shipment of modern SU-30 fighter jets to bolster Vietnam’s aging air force. Suffice it to say, without Russian technology, Vietnam’s military would have long since fallen into obsolescence.

While Moscow and Beijing have in the past butted heads over Russia’s interests in the South China Sea, it is not inconceivable that the two governments will find some way to resolve their differences given their shared interests in opposing US advances in their respective backyards.

Consequently, ties between Russia and Vietnam, at least with respect to the sale of weapons technologies, may cool at the behest of China. Russia, of course, must walk a fine line between respecting China’s concerns while advancing Russian interests, for Moscow maintains positive relations with many countries in Southeast Asia, some of whom who do not feel the same with China. Russia may not, if ever, abandon Vietnam, but there can be no doubt that any potential future conflict between Vietnam and China will force Moscow to react accordingly.

In an effort to diversify, Hanoi has looked to the US to balance against China and may ultimately encourage an American presence in the region to counter its northern neighbor. Although the US maintains an embargo on the sale of lethal weapons to Vietnam, recent comments by Senator John McCain and the US nominee for ambassador to Vietnam, Ted Osius, suggest that an easing of restrictions may be on the horizon.

The foundations for a US–Vietnam strategic partnership are certainly in place. Already the two countries have inked a comprehensive partnership, detailing areas in which the US and Vietnam will cooperate, including such fields as maritime capacity building, strengthening economic and commercial ties, and tackling climate change and environmental challenges, as well as education and promoting human rights. Some effort has been made by the US to guide Vietnam out from beneath China’s shadow.

There are, of course, far too many differences between the US and Vietnam for these two countries to become allies in the truest sense. The arms embargo on Vietnam remains in place due in part to Hanoi’s poor human rights record. Ever the advocate for democracy and human rights in Vietnam, Senator McCain made clear that any complete lifting of the arms embargo will depend on much needed human rights reform from Hanoi.

Nevertheless, political realities may dictate otherwise if the US finds itself out of options in Asia-Pacific. A need to develop Vietnam as a strategic partner to advance US interests in the region may outweigh human rights reform if Washington deems such a compromise necessary. As a matter of principle, however, one can only hope that a compromise will not be required.

Khanh Vu Duc is a lawyer and part-time law professor at the University of Ottawa. His research covers Vietnamese politics, international relations and international law. Duvien Tran is a special research associate at VDK Law Office in Ottawa, focusing on foreign policy and South China Sea security issues.


Editing Out Thailand's Past

Borrowing a page from the propagandists in George Orwell’s “1984,” Thailand’s military government has removed Thaksin Shinawatra, the country’s former prime minister, from new editions of high school history textbooks. Not content with ousting a democratically elected government in May, the generals running the country now want to whitewash the past in what appears to be a broader campaign to get people to support military rule.

The government has not explained why Mr. Thaksin’s name has vanished; the books do say that the government that existed at the time — the very government presided over by the scrubbed-out Mr. Thaksin — became popular through public spending.
The chairman of an official committee on the teaching of history and civic duty says the omission was an aberration he cannot explain. This sounds highly suspicious coming from a military government that has been aggressively trying to mold public perceptions and behavior, especially among young Thais, and whose Education Ministry has been telling students to write down their daily behavior and attitudes in a “merit passport.”

The Thai military has a history of overthrowing democratic governments and cracking down on dissent. It ousted Mr. Thaksin from office in 2006, and earlier this year removed a government led by his sister, Yingluck Shinawatra. Her name has also disappeared from the new textbooks. The military, along with much of the country’s economic and cultural elite based in Bangkok, has long despised the Shinawatras. They say the family is corrupt and has misled the majority of Thais into voting for its political parties through unsustainable populist policies.

The government’s latest propaganda tactics are ominous, suggesting at the very least that Gen. Prayuth Chan-ocha, who was named prime minister in August, is in no hurry to return the country to democratic rule. The New York Times


The ‘Indo-Pacific’: Absent Policy Behind Meaningless Words

Some may not have noticed when it happened but Julie Bishop, after becoming Australian Foreign Minister in September 2013, directed the Department of Foreign Affairs and Trade (DFAT) to use the term ‘Indo-Pacific’ instead of the traditional ‘Asia Pacific’ which has now been in use throughout the world for more than forty years. According to some, Bishop was not initially wedded to ‘Indo-Pacific’ but she seems to have become a convert, although she still occasionally uses ‘Indo-Pacific/Asia Pacific’. However, the term ‘Indo-Pacific’ is now spread across the DFAT website, in place of, and occasionally as well as, ‘Asia Pacific’.

But is ‘Indo-Pacific’ really meaningful as the new strategic term of choice for the region? To what extent, if any, is the term accepted elsewhere? What are the precise reasons for and against using ‘Indo-Pacific’? Partly, the reason seems to be the present Australian government’s aversion to the concept of the ‘Asian Century’ espoused by the previous government — but there is also hostility towards ‘Asia-Pacific’.

The term ‘Indo-Pacific’ was first widely used in the 2013 Australian Defence White Paper, presumably at the direction of then Defence Minister Stephen Smith. But the usage in the White Paper was neither casual nor indiscriminate: it was used either as an anticipatory strategic concept, acknowledging that ‘as a region’, the Indo-Pacific was still evolving; it was also used in the White Paper as a simple geographic term. Using ‘Indo-Pacific’ in defence strategy might help, retrospectively, give strategic justification for Australia’s Persian Gulf naval deployments.

‘Indo-Pacific’ seems to be a term that also carries some ideological baggage, however, in the sense that those using are often trying to prove a political point. Indeed, one particular problem of the ‘Indo-Pacific’ terminology is the different purposes that would-be protagonists see in having an ‘Indo-Pacific’ strategy. For India, and for Indians, ‘Indo-Pacific’ might provide comfort and a (perhaps false?) sense of greater relevance for them in a wider world, namely the Asia/Pacific. In India it also sometimes serves as a parochial elaboration of India’s own — at best — partially successful ‘Look East’ policies. However, it is not apparent on the basis of national interests why India would want to adopt such an overtly anti-China and anti-Japan posture. India is not excluded from any ‘Asia-Pacific’ grouping: indeed, it is included in all such groupings.

‘Indo-Pacific’ has not yet been widely embraced as a useful term, either internationally, or by the wider Australian community — despite the best efforts of a few Western Australia-based politicians (including Smith, Bishop, and more recently the current Defence Minister, Senator David Johnston). The term has become popular with some Australian commentators who have substantial exposure to Indian thinking on security issues. But it is hard to find wider support for the term outside these groups.

The only other country where the term Indo-Pacific has been used regularly is Indonesia, where Foreign Minister Natalegawa used it during 2013. He argued for a region-wide treaty mechanism to overcome the ‘trust deficit’; manage unresolved territorial claims; and manage change, including reforms, economic transformation, and above all promoting a ‘dynamic equilibrium’, through an Indo-Pacific treaty of friendship and cooperation.

In other countries in the region, no such debate or reservations about terminology are to be found, apart from in Japan. That the term ‘Indo-Pacific’ should have been used in India in 2007 by Japanese prime minister Abe during his first (failed) prime ministership is not surprising. Ever the opportunist, Abe likes to play with ideas without necessarily injecting much substance. It is noticeable that other Japanese commentators, other Japanese ministers or the Japanese Foreign Ministry have not been using the term ‘Indo-Pacific’: it is only used by officials working directly for Abe. In reality, Abe and his Japanese cohorts have been talking about expanding Japan’s long-neglected links with India, not necessarily developing new institutional arrangements or strategic thinking as such.

‘Indo-Pacific’ is most unlikely to be endorsed with any sincerity by China or Japan, the key countries in Asia. They are hardly likely to accord this term ‘equivalence’ with Asia-Pacific, with which they and others have long become comfortable. Indeed, the main problem with the phrase ‘Indo-Pacific’ is that it deliberately seeks to downplay, and to reduce, the ongoing role and importance of China and Japan.

What value ‘Indo-Pacific’ might serve the United States is also not clear. Former US Secretary of State Hillary Clinton used the term but this does not necessarily signify wider acceptance by normally geographically-challenged Washington DC policymakers (who still see Australia as part of ‘Asia’). The term ‘Indo-Pacific’ certainly gained some traction in US State Department parlance earlier this year — ahead of and after the May 2014 Indian elections — but it remains to be seen whether this will really take hold. For example, will Clinton still use the term if she becomes President? (John Kerry’s more recent use of ‘Indo-Pacific’ as a means of including Myanmar rhetorically in a regional framework for the US pivot to Asia might have left Myanmar wondering!)

For Australia, ‘Indo-Pacific’ might hypothetically be a way to improve its engagement with India. Earlier attempts by Australia to strengthen relations with India were not too successful, largely because of the difficulty of getting India to reciprocate Australia’s keenness; simply using this term can hardly be a better approach than previous substantive policies.

But the absence of substantial strategic, economic or other interests along the western rim of the Indian Ocean means that ‘Indo-Pacific’ cannot serve as a more logical or plausible term. Adding genuine ballast to ‘Indo-Pacific’ relationships also remains as challenging as ever.

Trevor Wilson is Visiting Fellow at the Department of Political & Social Change, The Australian National University.







Thursday, September 18, 2014

Indonesia-Australia: The lame-duck gambit

Taking the one-page code of conduct between Jakarta and Canberra at face value as a signal of restored ties poses a real danger to the future of bilateral relations between the two neighbors. In practice, the document conceals the extent of bilateral damage and might be preventing it from receiving much-needed proper treatment.

Instead of “applying pressure” to the wound, President Susilo Bambang Yudhoyono apparently opted to cover it with a piece of paper instead.

First, the outgoing president seemingly pushed the diplomatic process in an unnatural, hurried and somewhat suspect manner that left the public guessing. A “six-step” gradual process of rapprochement, like many aspects of Yudhoyono’s foreign policy, hardly reflects the diplomatic reality on the ground. It is doubtful that anyone other than Yudhoyono himself can feel, let alone claim, any ownership of the diplomatic process and the final signed document.

Despite the rhetoric of increasing people-to-people (P2P) relations, the code of conduct indicates that relations have taken a much more elitist turn. Understandably, this introduces a certain degree of volatility in bilateral relations should the next row erupt under president-elect Joko “Jokowi” Widodo’s watch. The Indonesian public is also left without proper closure since Yudhoyono could not even manage to extract a simple apology from Canberra. Claims that Australia “won the spy war” and “did not budge an inch” are correct. However, it leaves out the ironic fact that Australia did not win the spy war “against Yudhoyono”, but won it “with Yudhoyono” instead.

The latest leaked documents on a graft scandal surrounding the printing of Indonesian banknotes in Australia in 1999 (The Jakarta Post, Aug. 1, 2014) indicates that any future leaks might be — properly or wrongfully — associated with individuals working and events happening under Yudhoyono’s presidency. Understandably, it would be in Yudhoyono’s interests to quickly mend ties and keep himself on Australia’s good side. In contrast, there is very little interest for Jokowi to hand out “get out of jail free” cards to Australia.

Unfortunately, ever since the bilateral row took place, it has also become the Australian media’s favorite pastime to “intentionally misread” Yudhoyono’s actions and perceptions as representing the whole of Indonesia. However, such media biases are entirely understandable since the Indonesian public itself is having difficulty figuring out whether policy options concerning Australia are motivated by Yudhoyono’s own political interest or Indonesia’s larger national interest.

Second, the signing of the code of conduct should be seen as a note of caution about a larger political maneuvering in the last moments of Yudhoyono’s presidency. A lame-duck president might be tempted to hand out a number of strategic national leverages to secure last-minute praise from the West or simply to politically capitalize on the seemingly chaotic transition period.

Jokowi’s transition team has received a bad rap recently due to allegedly being unruly, bypassing procedures and “unnecessarily meddling” in the affairs of certain ministries. Despite being technically sound, these criticisms are substantively irrelevant. President Yudhoyono is currently handing over his “presidential briefcase” to Jokowi. Therefore, it is important for the latter’s team to thoroughly check the briefcase for ticking time bombs before it is passed on. To be fair, though, it is also natural for Yudhoyono to feel untrusted, offended and violated upon being frisked, but this might have more to do with his own insecurities.

Amid all the smoke and mirrors, the transition team should be guarding PT Freeport Indonesia renegotiations closely since Jokowi will be at the receiving end of all political externalities, economic consequences and diplomatic difficulties produced by the gold-mining operator. Despite clarifications, the current government is continuously sending mixed and unclear signals, ranging from postponing renegotiations for future leadership to drafting a legally binding memorandum of understanding (MoU) to seal negotiations early on. This is where the message should be made clear — no more last-minute deals behind closed doors.

The transition team needs to search thoroughly in anticipation of further “buck-passing” of the more difficult policy decisions to incoming president Jokowi. The postponing of the evaluation of special autonomy in Papua, the drafting of the special autonomy “plus” package for Papua and Yudhoyono’s rejection of requests to perform the long-overdue cutting of fuel subsidies are just a few examples of such buck-passing tendencies.

Third, wishful thinking that bilateral relations are fully restored by Yudhoyono’s one-page document is both naive and dangerous. The premature code of conduct swept the trust deficit under the rug and stole away the chance for both countries to learn and appreciate each other’s sensitivities, sensibilities and subtleties. It is the equivalent of breaking off a fight without resolving the underlying problem that initially triggered it.

The document unnecessarily placed Indonesia in a vulnerable position and might be incentivizing further breaches in the future. It conveys the wrong message that openly conducting large-scale intelligence operations from a Jakarta embassy and repeatedly breaching Indonesian sovereign waters will only cost a signature on a piece of paper.

Let’s not forget that Beijing is also keeping a very close eye on Southeast Asia’s largest country. Just to refresh memories, Chinese destroyers Wuhan and Haikou and the country’s largest amphibious landing craft Changbaishan were deployed for simulation drills through the Lombok Strait soon after the Royal Australian Navy repeatedly breached Indonesian waters six times in early 2014.

In Yudhoyono’s dealings with Australia, Indonesia looked entirely like a nation of coolies and a coolie among nations. Despite its growing international stature and being a larger economy than Australia, Indonesia under Yudhoyono has had to receive the coolie treatment from Australia. Jokowi will be walking into the G-20 meeting in Brisbane, Australia, with the difficult challenge of dispelling the image of Indonesia as “the pushover nation, a nation of coolies and a coolie among nations”, thanks to Yudhoyono.


Pierre Marthinus, director of the Marthinus Academy in Jakarta.