Thursday, June 30, 2016

Tibetans Should Keep Talking About Horror Stories And Future Vision

Tibetans living across the world as expatriates or citizens of other countries cannot but feel sad that world has, by and large, appear to be no more concerned that Tibetans have lost their motherland due to the aggressive onslaught of China. The present generation all over the world appear to be unaware of the horrible conditions that happened in Tibet after occupation by China ,which forced the Dalai Lama and several other freedom fighters to leave Tibet and live in other countries.

Now, China is consolidating it’s hold over the occupied Tibet territory by overwhelming military presence and sustained strategy to keep the younger generation of Tibetans now living in Tibet uninformed about the glorious history of the country by brain washing them. It appears that China is succeeding in it’s efforts,at least for the present, in reducing Tibet to the level of a mere province in China. Using it’s present economic and trade strength, China is also ensuring that several countries in the world would not extend any sort of support to the freedom struggle of Tibetans.

The recent examples are that of Sri Lanka, a country with large Buddhist population which thought it fit to deny visa to the Dalai Lama to enter the country and the US President Obama who bowed to the pressure of China by receiving the Dalai Lama through the back door, as if he was doing a mistake. Even India, which has allowed Dalai Lama and Tibetans to live in the country, has sometimes restricted the Tibetans (may be indirectly), in voicing their protest against Chinese occupation of Tibet and carrying out the campaign for liberation of Tibet.

The “success of China in silencing the world conscience “ until now about the horror that it has caused in Tibet and it’s suppression of freedom in Tibet is a case of triumph of evil over good.

The world history repeatedly highlights the fact that truth has ultimately triumphed, in short period in some cases and in some other cases in longer term. Whether it is short or long period has depended upon the determination and commitment of the campaigners for freedom.

Tibetans are committed to the Buddhist philosophy which essentially centres around non violence, peaceful coexistence and returning good for evil. In a strife torn world. such lofty principles advocated by Buddhism has significantly contributed to protect the humanistic philosophy and values that reflect a belief in human dignity and civilisation. Keeping the Buddhist principles in heart, Tibetans wherever they are , have to continue their struggle and movement to restore Tibet as an independent and free country with the dignity that it highly deserves.

What is important is that Tibetans living all over the world and the friends of Tibetans and those who value and cherish freedom and liberty , should keep talking about the horror stories in Tibet due to Chinese occupation and their future vision for Tibet, at every opportunity and in every forum. They should constantly strive to stir the world conscience which now appears to be largely silent and even the conscience of those presently ruling China, by campaigning that the attack on Tibet by China was an attack on humanity, which is unacceptable.

It is true that Tibetans in their own way have organized themselves to voice their protests but with the governments in many countries not responding to the plea of Tibetans to support their genuine cause, they need to redouble their efforts. While many governments may not openly support the cause of Tibet fearing criticism by China, the ground reality is that people around the world will certainly respond to the campaign to restore freedom of Tibet, which will help in a big way in molding world opinion.

The torch of freedom for Tibet has to be kept alive and this is a challenge for the Tibetans and all freedom loving citizens around the world.

Wherever atrocities have taken place in the world, the forces of just cause have ultimately succeeded by persistent efforts. This logic, that has been proved by world history, should give hope, faith and confidence to the Tibetans and friends of Tibet.

Eurasia View

The increase in China’s presence in Indonesian waters raises question over its political and economic influence and challenges Jakarta’s seeming neutrality on the South China Sea issue

The increase in China’s presence in Indonesian waters raises question over its political and economic influence and challenges Jakarta’s seeming neutrality on the South China Sea issue


In light of the recent increase in Chinese presence in Natuna waters, critics and scholars alike have called on the Indonesian government to break its silence and assert its own legally-backed claims over Indonesia's exclusive economic zone (EEZ).

While China considers the Natuna Islands to be part of its "traditional fishing grounds", Indonesia holds legal sovereignty based on the 1982 UN Convention on the Law of the Sea (UNCLOS). However, neither side has stated specific territorial claims, leading some to wonder what imperatives have kept Indonesia from taking a firmer stance on the issue.

This event marks Indonesia's entry into the South China Sea debate, almost a decade after the territorial fiasco between China, Vietnam, Malaysia and the Philippines began. And just as the country remained silent on the Spratlys Islands dispute, so too has Indonesia taken a "non-claimant" stance on the Natuna issue.

Researcher Evan Laksmana described Indonesia's position as akin to a "hollow neutrality" - one that China echoes with great ambiguity, and one that has only recently been questioned.

Indeed, this event comes as a striking change in direction for China-Indonesia relations, largely due to how Indonesia remained (much to China's favour) "neutral" during the South China Sea debacle, in addition to the recent groundbreaking of a China-financed Indonesian high-speed rail project. It thus seems curiously contradictory that China acts as both a benevolent neighbour and a regional superpower - assisting Indonesia's development while simultaneously threatening its territorial sovereignty.

This analysis proposes that China's economic assertiveness and Indonesia's supposed neutrality regarding the South China Sea are somewhat interlinked, and that future Indonesian policy should be viewed under this consideration.

Chinese investment in Indonesia

China's "One Belt One Road" initiative positioned Indonesia as the largest Southeast Asian recipient of China's foreign infrastructure investment, amounting to about $87 billion in repayable loans. Rather controversially beating Japan, China recently won the contract to build Indonesia's first HSR project between Jakarta and Bandung, investing $5.5 billion without requiring a guarantee from the Indonesian government.

According to Xie Feng, the Chinese ambassador to Indonesia, the HSR project represents a "major breakthrough in international capacity and equipment cooperation" between the two nations - a landmark agreement representing the win-win nature of China's ambitious "One Belt One Road" initiative.

But for China, investing in foreign infrastructure projects is not so much a politicised tactic as it is an economic necessity. The nation's railway industry has reached a critical economic juncture: China's own railway networks are already highly developed, and its production surpluses create an imperative to expand its customer base to countries like Indonesia. This perhaps explains the strong economic ties China has built with several Asean nations.

This is not to say that China's economic assistance is entirely apolitical in nature. Critics claim that China's recent investments in infrastructure are mere diplomatic attempts to ease tensions between Asean member states.

Others see it as an attempt to find a line of influence - an opening in the Southeast Asian region. After all, a central hallmark of Chinese foreign policy is reciprocity, and it seems that China will only testify to its "good neighbourhood" approach so long as its territorial claims in the South China Sea remain uncontested.

Diplomatically speaking, China emphasises a "common destiny" approach of coercive connectivity that opposes the Asean norm of mutual non-interference. China capitalises on this non-interference by building bilateral relationships with individual Asean countries - leaving its expansion policies largely uncontested by Asean neighbours.

As a result, the "China Threat" involves the expectation of reciprocation in the political sphere that China demands of its economic recipients. The low level of mutual political trust and fear of Chinese hegemony is in fact secondary to the quiet realisation that the "high speed" diplomacy has unwritten obligations.

The litmus test: So far so good?

Wilmar Salim and Siwage Negara from the Institute of Southeast Asian Studies, posit that China's investment in Indonesian infrastructure can be seen as an economic "litmus test". But the litmus test goes beyond economic viability; the HSR project is also a litmus test for the structural legacy of what Chinese infrastructural investments leave behind.

In particular, the proposition of building a "common destiny" leaves neither intellectual expertise nor local manufacturing facilities, reflecting what Hong Yu of the USC US-China Institute describes as China's competitive, rather than complementary, relationship with its Asean counterparts.

The politicised premise behind China's foreign economic investments is thus not as altruistic as it seems, and the inherent danger is in assessing the "win-win" results of the "One Belt One Road" initiative solely by its economic outcomes.

The fallacy is in using the HSR project itself as a litmus test - and thereby a source of justification - to assess the political soundness of China's influence on Indonesia. After all, wouldn't such a fallacy likewise justify and encourage Indonesia to maintain its indifference toward the South China Sea debate?

The question of Indonesia's silence lies beyond China exerting its political prowess under the guise of economic benevolence. Instead, Indonesia should be more concerned with its supposed neutrality regarding the China-Indonesia HSR project, as well as the illusory perception that the HSR project is mutually exclusive from the South China Sea fiasco.

This is not to say that Indonesia should be wholly condemned for its silence; the debate on territorial sovereignty remains integral, but the anti-thesis to that indifference is far from the solution.

In order for Indonesia to find its compromise, critics must first acknowledge the reasons behind the government's current silence.

Much like how the Jakarta's High Speed Rail project is far from being politically neutral, so too is Indonesia's supposedly "neutral" response tainted with colour.

Julius Utama is a student in New York University's Department of Applied Psychology. Michelle Kim is an International Relations and Chinese double major at Emory University. The writers are currently conducting research on China-Indonesia relations in Jakarta.

President Duterte to Filipinos: Trust me and join this rough ride toward change

You mind your work and I will mind mine,” President Rodrigo Duterte said in his “no-fanfare” inauguration on Thursday after he was sworn in as the Philippines’ 16th President.

Duterte has been criticized by various human rights organizations including the Human Rights Watch (HRW) for his unconventional methods of fighting crime.

He was accused of killing over a thousand of suspected criminals in the 20 years he ruled as Mayor of Davao City, a small town in southern Philippines.

While he has committed to waging war against graft and corruption, criminality in the streets and rampant sale of illegal drugs, Duterte said those are mere symptoms “of a virulent social disease that creeps and cuts into the moral fiber of Philippine society.”

“But of course, it is not to say that we will ignore them because they have to be stopped by all means that the law allows.”

Duterte said the biggest problem of the Philippines is the people’s erosion of faith and trust in government.

“Erosion of faith and trust in government – that is the real problem that confronts us. Resulting therefrom, I see the erosion of the people’s trust in our country’s leaders; the erosion of faith in our judicial system; the erosion of confidence in the capacity of our public servants to make people’s lives better, safer and healthier. Indeed, ours is a problem that dampens the human spirit,” Duterte said.

Without consolidating people’s faith and trust, Duterte said, no leader can succeed at anything.

“It is the people from whom democratic governments draw strength and this administration is no exception. That is why we have to listen to the murmurings of the people, feel their pulse, supply their needs and fortify their faith and trust in us whom they elected to public office,” said Duterte assuring that all is not lost.

Unorthodox method of solving problems

Duterte explained that he has seen how corruption creeps in the government and how crime and illegal drugs have destroyed individuals and families.

He said: “I have seen how corruption bled the government of funds which were allocated for uplifting the poor from the mire that they are in. I have seen how illegal drugs destroyed individuals and ruined family relationships.

“I have seen how criminality, by means all foul, snatched from the innocent and the unsuspecting, years and years of accumulated savings. Years of toil and then, suddenly, they are back to where they started. Look at this from that perspective and tell me that I am wrong.”

He told his critics to allow his administration to work on solving the country’s problems in accordance with their mandate under the Constitution. He stressed that the government’s fight will be relentless.

Duterte said that being a lawyer and a former prosecutor, he knows his limits — what is legal and what is not.

“My adherence to due process and the rule of law is uncompromising. You mind your work and I will mind mine. Malasakit, tunay na pagbabago. Tinud-anay nga kausaban (compassion, real change)… These are battle cries articulated by me on behalf of those who are hungry for genuine and meaningful change,” he said.

“Love of country, subordination of personal interests to the common good, concern and care for the helpless and the impoverished – these are among the lost and faded values that we seek to recover and revitalize as we commence our journey toward a better Philippines. The ride will be rough. But come and join me just the same. Together, shoulder to shoulder, let us take the first wobbly steps in this quest,” Duterte said as he started his six-year term as chief executive.

No honeymoon for new leaders

There will be no “honeymoon period” or adjustment period for new leaders.

In his speech, Duterte immediately gave instructions to his department secretaries.

His first order of the day was to cut bureaucracy in the government by reducing requirements and processing time of all applications for government permits and other documents.

“I order all department secretaries and heads of agencies to remove redundant requirements. Compliance with one department or agency shall be accepted as sufficient for all,” he said adding this will make the atmosphere better for investors.

His second order to officials was to refrain from changing or bending rules to accommodate government contracts, projects and transactions.

“Changing the rules when the game is on-going is wrong. I abhor secrecy and instead advocate transparency in all government contracts, projects and business transactions from submission of proposals to negotiation to perfection and finally, to consummation. Do them and we will work together. Do not do them, we will part sooner than later,” Duterte said.

Immediately after the inauguration ceremony, he called his first Cabinet meeting.

Breaking traditions

Duterte and his Vice-President Leni Robredo broke traditions by holding separate inaugurations.

Duterte took his oath of office before his law school fraternity brother, Supreme Court Associate Bienvenido Reyes. He is the second Philippine President who opted not to take oath before the Supreme Court’s Chief Justice.

Robredo took her oath of office before a barangay chairman (town hall officer).

While Duterte’s predecessors had the inauguration ceremony at bigger venues like Quirino Grandstand, Barasoain Church and Cebu City that accommodated thousands of people, the 71-year President opted to have his inauguration inside MalacaƱang Palace with less than 500 guests.

As for food, instead of popping champagne bottles and cheese were Duterte’s favorites including coconut pith spring rolls, banana fritters, white cheese made from unskimmed carabao’s milk and durian tartlets. For drinks, it was a choice between pine-mango cooler and the local orange called dalandan.

For Robredo’s inauguration, which was attended by around 300 guests, buchi (rice balls), sotanghon (Chinese vermicelli or cellophane noodles), pandesal, maja blanca, pichi-pichi, and Choc Nut were served.

Command conference

On Friday, Duterte will hold a command conference in Camp Crame, the headquarters of the Philippine National Police.

He is expected to give his marching orders and other specifics to start his war against criminality.

“I was not elected to serve the interests of any one person or any group or any one class. I serve every one and not only one. That is why I have adapted as an article of faith the following lines written by someone whose name I could no longer recall. ”

He quoted him: “I have no friends to serve, I have no enemies to harm … I am here because I love my country and I love the people of the Philippines. I am here, why? Because I am ready to start my work for the nation.” By Lorenz Niel Santos

Asia Times


Wednesday, June 29, 2016

Former residents of the Chagos Islands who were forcibly removed from their homeland more than 40 years ago have lost their legal challenge to return. (The World needs to know why this small island nation is relevant to Western Security)

Former residents of the Chagos Islands who were forcibly removed from their homeland more than 40 years ago have lost their legal challenge to return.  (The World needs to know why this small island nation is relevant to Western Security)

Families left the Indian Ocean islands in the 1960s and 70s to make way for a US Air Force base on Diego Garcia, the largest of the group of islands.

An Immigration Order preventing anyone from going back was issued in 1971.

The Supreme Court - UK's highest court - upheld a 2008 House of Lords ruling that the exiles could not return.

On 31 August 1903 the Chagos Archipelago was administratively separated from the Seychelles and attached to Mauritius.

In November 1965, the UK purchased the entire Chagos Archipelago from the then self-governing colony of Mauritius for £3 million to create the British Indian Ocean Territory (BIOT), with the intent of ultimately closing the plantations to provide the British territory from which the US would conduct its military activities in the region. On 30 December 1966, the US and the UK executed an Agreement through an Exchange of Notes which permit the United States Armed Forces to use any island of the BIOT for defence purposes for 50 years (until December 2016), followed by a 20-year optional extension (to 2036) to which both parties must agree by December 2014. As of 2010[update], only the atoll of Diego Garcia has been transformed into a military facility.

Olivier Bancoult, the Chagossian leader who has been fighting in the courts on behalf of the islanders, had argued that decision should be set aside.

In the latest challenge, justices were told it relied heavily on a 2002 feasibility study into resettlement, which concluded that the costs of long-term inhabitation of the outer islands would be prohibitive and life there precarious.

Information about the feasibility study was not disclosed before the decision was made, the islanders said.

But the five justices dismissed the islanders' appeal by a majority of three to two - the same numerical split as the Law Lords in 2008.

Sabrina Jean from Crawley, West Sussex, chairs the Chagos Refugees UK group. Her father was originally from Chagos Island and is one of the 3,000-strong Chagossian community who live in the town, which is near Gatwick Airport.

She told BBC Sussex: "We are disappointed about the result but we will never give up. We will continue our fight to find justice for the Chagossian community. All the people have the right to live on the islands."

The Supreme Court case was the latest in a long legal battle over the right of the islanders to return.

In 2000, High Court judges ruled that Chagossians could return to 65 of the islands, but not to Diego Garcia.

In 2004, the government used the royal prerogative - exercised by ministers in the Queen's name - to effectively nullify the decision.

Then in 2007, the court overturned that order and rejected the government's argument that the royal prerogative was immune from scrutiny.

However, the following year the government won an appeal, with the House of Lords ruling the exiles could not return.


Tuesday, June 28, 2016

Ready for Brexit contagion? HK likely to enter recession, China’s yuan to soften, and Singapore’s growth to cool

Asian economies may slow down sharply and currencies may be pushed broadly lower as the Brexit contagion hits Asia, with Hong Kong likely to fall into a recession and the Chinese yuan to decline further, according to analysts.

Britain’s dramatic decision to break from the European Union has roiled financial markets and sent shockwaves across the globe. Asian economies could soon feel deeper pains through several channels, including the financial sector, trade, investor confidence, and investor psychology, according to analysts from Nomura on Tuesday.

“It’s not a temporary contagion. There are going to be several waves [on Asia],” said Rob Subbaraman, chief economist for Asia ex-Japan for Nomura, in a conference call.

Subbaraman said his team had slashed GDP growth forecasts for all major economies in the region and put Asia’s aggregate growth at 5.6 per cent in 2016, down from a previous projection of 5.9 per cent.

In the region, Hong Kong may be hit the most, with its 2016 GDP likely to shrink by 0.2 per cent, compared with a previous estimate of 0.8 per cent growth. In 2015, Hong Kong’s economy grew by 2.4 per cent. Singapore’s projected growth rate for 2016 was also cut sharply to 1.1 per cent, versus an estimate of 1.8 per cent previously.

“Hong Kong and Singapore are both financial hubs and very exposed to UK banks,” said Subbaraman. “They also have managed exchange rates, which give central banks less leeway in rate policy. There is also a risk that the HIBOR (Hong Kong Interbank Offered Rate) rates could start rising.”

In particular, the reasons that they forecast an “outright recession” for the Hong Kong economy are mainly related to a stronger Hong Kong dollar, which is rising with the US dollar amid global risk aversion.

Hong Kong’s reliance on exports also leaves it exposed to Brexit risks, as the city’s merchant exports to the UK and the rest of the EU accounted for 14 per cent of GDP in 2015, the highest in Asia, Nomura analysts said.

Their opinions were shared by analysts from Credit Suisse, although the latter’s predictions for Hong Kong’s economic growth were more conservative.

Santitarn Sathirathai, who leads a group of analysts at Credit Suisse, said in a research note that many Asian economies may take a hit from Brexit, resulting from the potential slowdown in the UK and euro area. Hong Kong, Singapore, and Vietnam look most vulnerable, as they are “the most export-oriented ones with limited policy space to respond to shocks”.

However, Credit Suisse analysts didn’t call a recession case in Hong Kong. Instead, they expected Hong Kong’s economy to slow modestly to 2 per cent in 2016 from 2.4 per cent in 2015. That is slightly higher than a consensus 1.7 per cent growth forecast for Hong Kong.

Meantime, Singapore’s economic growth may slow significantly in 2016 to 1.4 per cent, versus 2 per cent in 2015, possibly due to a high weighting of value-added exports in its GDP, which is around 58 per cent, according to estimates by Credit Suisse.

In addition, Asian currencies may be pushed broadly lower against the greenback in the near term, with the Chinese yuan under pressure of further depreciation, said Craig Chan, head of FX strategy for Asia ex-Japan from Nomura.

Chan said his strategy is to long the US dollar against offshore Chinese yuan (CNH), as China’s economy is losing momentum after a short-lived, debt-fuelled rebound in investment growth, which may exacerbate net capital outflows and heighten credit concerns. However, he believed it unlikely that Chinese policymakers will devalue the yuan “aggressively”.

Chan expects the yuan to weaken to 6.95 per US dollar by year-end from a previously-predicted 6.8 per US dollar. According to Nomura’s estimates, the Chinese economy may only grow 6 per cent in 2016, versus its original forecast of 6.2 per cent.

Credit Suisse analysts also predicted a rally in the US dollar against the Chinese yuan over the next several months, with knock-on effects on other Asian exchange rates. They estimated the CNH to weaken to 6.67 against the US dollar over three months, and fall further to 6.88 per US dollar in the next 12 months.

Both Nomura and Credit Suisse expect significantly more monetary easing from Asian central banks, with Nomura analysts projecting three quarter-point reserve requirement ratio cuts from the People’s Bank of China by year-end.


Indonesians' assets in tax havens abroad are estimated at $850 Billion

Indonesians' assets in tax havens abroad are estimated at $850 Billion 

Much-anticipated tax amnesty legislation passed Tuesday paves the way for the government to finance its infrastructure push by taxing funds stashed overseas by affluent Indonesians. The law frees tax evaders from past tax debts, as well as related fines and sanctions, as long as they voluntarily report or repatriate undeclared assets abroad by the deadline of March 31, 2017.

They need only pay so-called declaration or repatriation tariffs -- and the sooner they do, the less they fork over.

A person who repatriates assets between July and September will pay a rate of just 2%. This rises to 3% for repatriation carried out between October and December and 5% if it is done between January and March of 2017.

If assets are declared without being repatriated, then rates of 4%, 6% and 10% will apply for the same periods.

Repatriated assets will have to stay in-country for at least three years, with the law offering options for investing the funds in government bonds, bonds of state-owned enterprises, banks to be appointed later and infrastructure projects, among other things.

Indonesians' assets in tax havens abroad are estimated at 11,500 trillion rupiah ($850 billion) -- 30% of which is potential revenue for the state.

From the tax amnesty program running through March 2017, however, the government aims to pocket 165 trillion rupiah ($12.5 billion) in additional tax revenue.

This is expected to help the government meet its tax revenue target of more than 1,300 trillion rupiah this year, up 30% from last year, to finance President Joko Widodo's ambitious infrastructure development programs.

The government is optimistic that wealthy Indonesians will come forward, with the Automatic Exchange of Information regime slated to be fully up and running in 2018.

Developed by the Organization for Economic Cooperation and Development and the Group of 20, the new global standard of the AEOI will help fight tax evasion by allowing participating countries to access financial data on their citizens in other jurisdictions, including some well-known tax havens.

At least 1,000 people will declare or repatriate overseas assets once the law takes effect in July.

ERWIDA MAULIA, Nikkei staff writer


Monday, June 27, 2016

BREXIT and impact on Asian Nations

Within ASEAN there is not the widespread opposition to Jakarta as there now is to Brussels.  The ongoing tensions over ASEAN unity when addressing the South China Sea issue may be intellectually and politically interesting, but they are not the source of widespread public criticism.

It would be a mistake, however, to say that Brexit does not serve as a warning to ASEAN.

The current situation in the UK reminds me of the social emergencies that surrounded the 1997 Asian Financial Crisis and the widespread rejection from the people of ASEAN of the regional project to that moment, the belief that the regional organisation had lost touch with the needs of the people and was actually, through its practices, hurting them further.

From this perspective the parallels between 1997 and Brexit are clear – domestic political constituencies that formerly were happy to permit the ongoing development of regional affairs suddenly withdrew their support for that project and demanded radical change; resulting in Brexit in the EU case and the ultimately quite radical reorganisation of ASEAN in the Southeast Asian case.

ASEAN and the EU are very different beasts (as former ASEAN Secretary General Surin Pitsuwan notes, the EU is ASEAN’s inspiration but certainly not its model), but both ignore at their peril the need to constantly demonstrate their real world and practical benefit to the poorest and most marginalised who live within them.

The lesson ASEAN should draw from ‘Brexit’ is not then a smug ‘well that will never happen here’ – instead it has to be a realisation that regional cooperation is predicated on domestic permission for those activities to take place. That permission is not generated by abstract arguments about integration, but by the immediate lived experiences, livelihoods and yes emotions of citizens. Without this demonstration, any regional project has dangerously weak foundations.

Here I think ASEAN is very exposed, a product of its particular approach to regional affairs. ASEAN has recently been increasing its commitments to the improvement of ‘people-centric’ activities (including but not limited to human rights promotion, environmental protection, climate change and disaster management), in the belief that ASEAN must be seen to be doing something.

All very good, until you remember that ASEAN is still woefully weak when it comes to living up to those commitments – there is a huge gap between what ASEAN says it is doing and what it is actually doing or perceived to be doing. Making commitments and failing to achieve them and ignoring that failure may be the ASEAN way, but it is a dangerous path to protecting your broader legitimacy in societies where there are so many in need of assistance.

Brexit then is a warning against complacency – against the belief that just because elites feel things are going well that there are no problems. Yes ASEAN and the EU are different, in form, in function, in intention and even in the challenges they face. Both, however, are predicated on the ongoing legitimacy of their activities in the eyes of the people themselves.

In the UK this legitimacy has been overturned and resulted in an unprecedented crisis for both London and Brussels. ASEAN leaders must be mindful to not make the same mistakes.

Dr Mathew Davies is head of the Department of International Relations in the ANU Coral Bell School of Asia Pacific Affairs.

This article is a collaboration between New Mandala and Policy Forum – Asia and the Pacific’s leading platform for policy analysis and debate.

Illustration: John Shakespeare

Sunday, June 26, 2016

Brexit impact to be felt for years to come

Views split on impact of Brexit on China, while concerns mount in London over future of its role as a global finance hub and gateway to Europe. Finance Minister Lou Jiwei sees Britain’s vote to leave the European Union as heightening uncertainty and impacting markets and the global economy for years to come.

The comments yesterday came as ­London began to weigh the implications for its reputation as the gateway for US and Asian businesses into Europe’s vast ­single market.

“[The result] will cast a shadow over the global economy ... The ­repercussions and fallout will emerge in the next five to 10 years,” Lou said at the first annual meeting of the Asian Infrastructure Investment Bank in ­Beijing.

“It’s difficult to predict now. The knee-jerk reaction from the market is probably a bit excessive, it needs to calm down and take an objective view.”

Lou’s views were echoed by other economists at the World Economic Forum (WEF) in the northern city of Tianjin.

“It’s hard to talk about and judge the direct impact on China’s economy,” said Huang Yiping, a professor at Peking University and a member of the central bank’s monetary policy committee. “If [Brexit] is an important landmark in terms of a reversal of globalisation, I think that’s very bad for the world, it’s very bad for China.”

But Li Daokui, a professor at Tsinghua University and a former adviser to China’s central bank, was more optimistic.

“China is perhaps one of the least impacted economies in the world by Brexit,” he told an audience at the WEF. “The only short-term impact I can think of is on the exchange rate of the renminbi.”

Meanwhile, in London, there are growing fears that investors and bankers could flee the city after the shock vote, threatening its coveted reputation as a global financial hub.

Some 60 per cent of Londoners voted to stay in the EU in Thursday’s historic referendum, but most of the rest of England cast their ballots overwhelmingly to leave. The capital’s 8.6 million residents, whose GDP is about the same as that of oil-rich Norway, are anxious about the impact on the city’s economy.

According to ratings agency Standard and Poor’s, a fifth of all global banking activity takes place in London.

A haemorrhaging of bankers could hit the city, where the financial sector provides one in three jobs – or about 1.25 million.

British business minister Sajid Javid yesterday urged companies not to panic.

“Our economic fundamentals remain strong. They’re strong enough to weather any short-term market volatility,” he said in an interview with the BBC.

The minister plans to hold a roundtable meeting with business associations this week, with British media reporting that it could be as early as tomorrow.

Javid campaigned for Britain to remain in the EU and warned during the campaign that a vote to leave could trigger a recession and 500,000 job cuts.

On Sunday, he refused to confirm the dire forecasts, saying it was time for “reassurance for businesses”.

“If we all work together we can avoid many of the things we have forecast,” he said. “Let’s look at what opportunities this throws up.”

Scotland’s First Minister Nicola Sturgeon also added to the woes of the Brexit leaders by suggesting the Scottish Parliament could keep Britain from leaving the European Union. She told the BBC yesterday she believed the consent of the Scottish Parliament would be needed for Britain to leave but conceded that the British government would probably take a “very different view”.

European lawmakers have urged Britain to begin EU exit proceedings at a European Council meeting starting tomorrow.

Martin Schulz told German newspaper Bild am Sonntag that a period of limbo would “lead to even more insecurity and thus ­endanger jobs”.

However, German Chancellor Angela Merkel’s chief of staff insisted there was no rush to show Britain the door.

“The political leadership in London should have the chance to reconsider once again the consequences of a withdrawal,” Peter Altmaier told RND media group.

Altmaier later clarified that he was “explicitly” not suggesting another referendum.

British Foreign Minister Philip Hammond, who had campaigned for Britain to stay, said there would have to be a trade-off with the EU on the free movement of people if Britain wanted to remain in the single market.

Meanwhile, a petition on Parliament’s website for London to be independent from Britain and apply to join the EU – dubbed “Lexit” – has been gaining popularity since it started as a joke on Saturday.

Another petition on the website calling for a second EU referendum has rapidly gathered more than three million signatures.

Ironically, the petition was started in May by a “Leave” campaign supporter as a back-up plan in case the “Remain” camp won.