World bows to Iran's hegemony

The problem with Israeli Prime Minister Benyamin Netanyahu's address to Congress March 3 was not the risk of offending Washington, but rather Washington's receding relevance. President Barack Obama is not the only leader who wants to acknowledge what is already a fact in the ground, namely that "Iran has become the preeminent strategic player in West Asia to the increasing disadvantage of the US and its regional allies," as a former Indian ambassador to Oman wrote this week.

For differing reasons, the powers of the world have elected to legitimize Iran's dominant position, hoping to delay but not deter its eventual acquisition of nuclear weapons. Except for Israel and the Sunni Arab states, the world has no desire to confront Iran. Short of an American military strike, which is unthinkable for this administration, there may be little that Washington can do to influence the course of events. Its influence has fallen catastrophically in consequence of a chain of policy blunders.

The best that Prime Minister Netanyahu can hope for is that the US Congress will in some way disrupt the Administration's efforts to strike a deal with Iran by provoking the Iranians. That is what the White House fears, and that explains its rage over Netanyahu's appearance.

Tehran may overplay its hand, but I do not think it will. The Persians are not the Palestinians, who discovered that they were a people only a generation ago and never miss an opportunity to miss and opportunity; they are ancient and crafty, and know an opportunity when it presents itself.

Most of the world wants a deal, because the alternative would be war. For 10 years I have argued that war is inevitable whatever the diplomats do, and that the question is not if, but how and when. President Obama is not British prime minister Neville Chamberlain selling out to Hitler at Munich in 1938: rather, he is Lord Halifax, that is, Halifax if he had been prime minister in 1938. Unlike the unfortunate Chamberlain, who hoped to buy time for Britain to build warplanes, Halifax liked Hitler, as Obama and his camarilla admire Iran.

China is Chamberlain, hoping to placate Iran in order to buy time. China's dependence on Middle East oil will increase during the next decade no matter what else China might do, and a war in the Persian Gulf would ruin it.

Until early 2014, China believed that the United States would guarantee the security of the Persian Gulf. After the rise of Islamic State (ISIS), it concluded that the United States no longer cared, or perhaps intended to destabilize the region for nefarious reasons. But China does not have means to replace America's presence in the Persian Gulf. Like Chamberlain at Munich, it seeks delay.

Obama, to be sure, portrays his policy in the language of balance of power. He told the New Yorker's David Remnick in 2014, "It would be profoundly in the interest of citizens throughout the region if Sunnis and Shias weren't intent on killing each other. And although it would not solve the entire problem, if we were able to get Iran to operate in a responsible fashion - not funding terrorist organizations, not trying to stir up sectarian discontent in other countries, and not developing a nuclear weapon - you could see an equilibrium developing between Sunni, or predominantly Sunni, Gulf states and Iran in which there's competition, perhaps suspicion, but not an active or proxy warfare."

That, as the old joke goes, is the demo version. On the ground, the US has tacitly accepted the guiding role of Iranian commanders in Iraq's military operations against ISIS. It is courting the Iran-backed Houthi rebels who just overthrow a Saudi-backed regime in Yemen. It looks the other way while its heavy arms shipments to the Lebanese army are diverted to Hezbollah.

At almost every point at which Iran has tried to assert hegemony over its neighbors, Washington has acquiesced. "In the end, peace can be achieved only by hegemony or by balance of power," wrote Henry Kissinger. The major powers hope for peace through Iranian hegemony, although they differ in their estimate of how long this will last.

Apart from its nuclear ambitions, the broader deal envisioned by Washington would leave Iran as a de facto suzerain in Iraq. It would also make Iran the dominant power in Lebanon (via Hezbollah), Syria (via its client regime) and Yemen (through its Houthi proxies). Although Sunni Muslims outnumber Shi'ites by 6:1, Sunni populations are concentrated in North Africa, Turkey and South Asia. Iran hopes to dominate the Levant and Mesopotamia, encircling Saudi Arabia and threatening Azerbaijan.

It is grotesque for America to talk of balance of power in the Persian Gulf, because America destroyed the balance of power that defined the region's politics from the end of the First World War until 2006, when Washington pushed through majority rule in Iraq.

The imperialist powers in their wisdom established a power balance on two levels. First, they created a Sunni-dominated state in Iraq opposite Shi'ite Iran. The two powers fought each other to a standstill during the 1980s with the covert encouragement of the Reagan administration. Nearly a million soldiers died without troubling the world around them.

Second, the Sykes-Picot agreement of 1916 created two states, Syria and Iraq, in which minorities ruled majorities - the Alawite minority in Syria, and the Sunni minority in Iraq. Tyranny of a minority may be brutal, but a minority cannot exterminate a majority.

America's first great blunder was to force majority rule upon Iraq. As Lt General (ret.) Daniel Bolger explained in a 2014 book, "The stark facts on the ground still sat there, oozing pus and bile. With Saddam gone, any voting would install a Shiite majority. The Sunni wouldn't run Iraq again. That, at the bottom, caused the insurgency. Absent the genocide of Sunni Arabs, it would keep it going." 

Under majority Shi'ite rule, Iraq inevitably became Iran's ally. Iranian Revolutionary Guards are now leading its campaign against the Sunni resistance, presently dominated by ISIS, and Iranian officers are leading Iraqi army regulars.

This was the work of the George W Bush administration, not Obama. In its ideological fervor for Arab democracy, the Republicans opened the door for Iran to dominate the region. Condoleezza Rice, then Bush's National Security Advisor, proposed offering an olive branch to Iran as early as 2003. After the Republicans got trounced in the 2006 Congressional elections, defense secretary Donald Rumsfeld got a pink slip, vice president Dick Cheney got benched, and "realist" Robert Gates - the co-chairman of the 2004 Council on Foreign Relations task force  that advocated a deal with Iran - took over at Defense.

In the past, China has sought to strike a balance between Saudi Arabia and Iran with weapons sales, among other means. One Chinese analyst observes that although China's weapons deliveries to Iran are larger in absolute terms than its sales to Saudi Arabia, it has given the Saudis its best medium-range missiles, which constitute a "formidable deterrent" against Iran.

As China sees the matter, its overall dependency on imported oil is rising, and the proportion of that oil coming from Iran and its perceived allies is rising. Saudi Arabia may be China's biggest provider, but Iraq and Oman account for lion's share of the recent increase in oil imports. China doesn't want to rock the boat with either prospective adversary.

Among the world's powers, China is the supreme rationalist: it views the world in terms of cold self-interest and tends to assume that others also view the world this way. One of China's most respected military strategists told me bluntly that the notion of a nuclear exchange between Israel and Iran (and by implication any regional nuclear power and Iran) was absurd: the Iranians, he argued, know that a nuclear-armed Israel could destroy them in retaliation.

Other Chinese analysts are less convinced and view Iran's prospective acquisition of nuclear weapons with trepidation. It is not only war with Israel but with Saudi Arabia that concerns the oil-importing Chinese. For the time being, Beijing has decided to accommodate Iran. In a March 2 commentary, Xinhua explicitly rejected Israeli objections:

The US Congress will soon have a guest, Israeli Prime Minster Benjamin Netanyahu, who is expected to try to convince lawmakers that a deal with Iran on its nuclear program could threaten the very existence of the Jewish state.

Despite the upcoming pressure, policymakers in Washington should have a clear mind of the potential dangers of back-pedaling on the current promising efforts for a comprehensive deal on the Iranian nuclear issue before a March 31 deadline …

With a new round of talks in Switzerland pending, it is widely expected that the P5+1 [the five permanent members of the UN Security Council plus Germany] could succeed in reaching a deal with Iran to prevent the latter from developing a nuclear bomb, in exchange for easing sanctions on Tehran.

The momentum does not come easy and could hardly withstand any disturbances such as a surprise announcement by Washington to slap further sanctions on Tehran.

The Obama administration needs no outside reminder to know that any measures at this stage to "overwhelm" Iran will definitely cause havoc to the positive atmosphere that came after years of frustration over the issue.

While it is impossible for Washington to insulate itself from the powerful pro-Israel lobbyist this time, the US policymakers should heed that by deviating from the ongoing endeavor on Iran they may squander a hard-earned opportunity by the international community to move closer to a solution to the Iran nuclear issue, for several years to come if not forever.

Russia has taken Iran's side explicitly, for several reasons.

First, Russia has stated bluntly that it would help Iran in retaliation for Western policy in Ukraine, as I wrote in this space January 28. Second, Russia's own Muslim problem is Sunni rather than Shi'ite. It has reason to fear the influence of ISIS among its own Muslims. If Iran fights ISIS, it serves Russian interests. Russia, to be sure, does not like the idea of a nuclear power on its southern border, but its priorities place it squarely in Iran's camp.

The Israeli prime minister asserted that the alternative to a bad deal is not war, but a better deal. I do not think he believes that, but Americans cannot wrap their minds around the notion that West Asia will remain at war indefinitely, especially because the war arises from their own stupidity.

Balance of power in the Middle East is inherently impossible today for the same reason it failed in Europe in 1914, namely a grand demographic disequilibrium: Iran is on a course to demographic disaster, and must assert its hegemony while it still has time.

Game theorists might argue that Iran has a rational self-interest to trade its nuclear ambitions for the removal of sanctions. The solution to a multi-period game - one that takes into account Iran's worsening demographic weakness - would have a solution in which Iran takes great risks to acquire nuclear weapons.

Between 30% and 40% of Iranians will be older than 60 by mid-century (using the UN Population Prospect's Constant Fertility and "Low" Variants). Meanwhile, its military-age population will fall by a third to a half.

Belated efforts to promote fertility are unlikely to make a difference. The causes of Iranian infertility are baked into the cake - higher levels of female literacy, an officially-sanctioned culture of sexual license administered by the Shi'ite clergy as "temporary marriage," epidemic levels of sexually-transmitted disease and inbreeding. Iran, in short, has an apocalyptic regime with a lot to be apocalyptic about.

Henry Kissinger is right: peace can be founded on either hegemony or balance of power. Iran cannot be a hegemon for long because it will implode economically and demographically within a generation. In the absence of either, the result is war. For the past 10 years I have argued in this space that when war is inevitable, preemption is the least damaging course of action. I had hoped that George W Bush would have the gumption to de-fang Iran, and was disappointed when he came under the influence of Condoleezza Rice and Robert Gates. Now we are back in 1938, but with Lord Halifax rather than Neville Chamberlain in charge.

Spengler is channeled by David P Goldman. He is Senior Fellow at the London Center for Policy Research and Associate Fellow at the Middle East ForumHis book How Civilizations Die (and why Islam is Dying, Too) was published by Regnery Press in September 2011. A volume of his essays on culture, religion and economics, It's Not the End of the World - It's Just the End of You, also appeared that fall, from Van Praag Press.

ANDREW Chan and Myuran Sukumaran are no saints. The two men now counting down to their execution by firing squad on an island off Java are not guilty of a youthful mistake or a momentary lapse of judgment. They were ringleaders in a failed plan to smuggle more than 8kg of high-grade heroin from Indonesia into Australia.

ANDREW Chan and Myuran Sukumaran are no saints. The two men now counting down to their execution by firing squad on an island off Java are not guilty of a youthful mistake or a momentary lapse of judgment. They were ringleaders in a failed plan to smuggle more than 8kg of high-grade heroin from Indonesia into Australia.

The act was carefully premeditated, the men were aware of the risks and possible consequences if they were caught, and there is no point glossing over the severity of their offences – crimes that would have met with harsh punishment had they been arrested anywhere in the world.

As the debate and lobbying efforts surrounding the looming executions intensify, it should also be remembered that Australia played a significant part in their arrest and subsequent fate. It was, after all, the Australian Federal Police – who have a close working relationship with their Indonesian counterparts when it comes to the narcotics trade – who alerted Indonesian authorities to the planned smuggling operation. In that respect, the legal and policing apparatuses of both nations have had a significant stake in the case since day one.

Amid all the emotion and some of the overblown rhetoric, we should also remember that Indonesia is a sovereign, democratic nation with its own laws, and one that makes no bones about its hard-line policy when it comes to drug trafficking. Indonesia may be a close friend and ally, but that does not mean the line between diplomacy and threat should be crossed.

Yes, Australia has been passionate in its pleas – both public and political – for Indonesian authorities to offer clemency to Sukumaran and Chan. That is only right when it comes to a nation looking out for its own. Indonesia is an equally strong and vocal advocate for its citizens when they face a similar fate in other countries, despite the penalties it applies within its own borders.

We also should not forget that these Australians are just two of the 10 prisoners expected to face the firing squad in the near future. Indonesia is executing two of its own at the same time – along with citizens of Nigeria, Spain, Brazil, France and Ghana.

 

The Boris Nemtsov Assassination and Central Asia-The murder of an opposition figure in Moscow has its parallels in Central Asia

The murder of an opposition figure in Moscow has its parallels in Central Asia.

The brazen killing on February 27 of Boris Nemtsov, the longtime critic of the Putin regime and one of the leading figures in the Russian opposition, has sent shockwaves through the former Soviet republics. Russia’s domestic politics are still closely followed in the CIS states, particularly in those where Russian broadcasting stations and news media are readily available. Nemtsov’s assassination is yet another indication of the political direction the Russian leadership has taken after the Kremlin’s military adventure in Ukraine, which itself has been revealing of the extent of Putin’s ambition.

Of course, Russian meddling in the internal affairs of post-Soviet states is hardly a novelty. The Kremlin’s strategy in its “sphere of influence” only adds to the current regional divides in Central Asia. Take the Kyrgyz Republic, where Russian intelligence has been visibly active. Kyrgyzstan had a turbulent decade, during which it also hosted a U.S.-NATO airbase on the outskirts of Bishkek. During its years of domestic instability, a series of high profile killings of journalists and political figures occurred. The most appalling assassinations took place during the rule of the runaway President Kurmanbek Bakiyev, who these days resides in the city of Minsk under the protection of Belarus strongman Alexander Lukashenko. Immediately after the Kyrgyz coup, Vladimir Putin denied any involvement in the ousting of the regime. Nonetheless, Moscow’s “Kyrgyz project” was in motion during the Bakiyev presidency and after his overthrow in 2010 under new governments.

In a striking resemblance to Ukraine, the Russian leadership is wary of political developments in Kyrgyzstan because of the Kremlin’s fading influence in the region. Uzbekistan and Turkmenistan tend to be the most distrustful of Russia’s regional initiatives. Meanwhile, Kazakhstan’s unorthodox approach to its northern neighbor is understandable: Russia’s invasion of Ukraine has raised concerns in Kazakhstan about the prospects of a “Russian spring” in its border territories.

That leaves the two weakest Central Asian states, Kyrgyzstan and Tajikistan, which rely on Russia for political and economic support. From time to time the Tajik regime does remind the Kremlin of its duty to ”respect” its friendly ally. In contrast, under the leadership of the current ruler Almazbek Atambayev, Kyrgyzstan is the one regional state that has declared its loyalty to Moscow. Once dubbed an “island of democracy,” Kyrgyzstan is now rolling back its human rights record. Similarly, in the last three years the Kyrgyz state has been following in Russia’s legislative footsteps when it comes to basic rights. Meanwhile, domestic tension in Kyrgyzstan is mounting over Atambayev’s policies, which last year took the country’s corruption index to Russian levels.

Political assassinations in Kyrgyzstan have rocked the Central Asian nation in the past and cannot be ruled out in the future. Just weeks ago, a Kyrgyz mob boss was found dead with a fake Russian passport in the trunk of a car in Minsk. He was also on the designated list of the U.S. Treasury Department. It is unclear whether this death is related to broader political developments in Kyrgyzstan. But in an unusual statement, the Kyrgyz President blamed the Bakiyev family for the mobster’s death and demanded that Lukashenko extradite Bakiyev and his family back to Kyrgyzstan. Apart from the high-level exchange between Belarus and Kyrgyzstan over this episode, it should be noted that for a small state like the Kyrgyz Republic, the killing of a widely known gangster will have an impact on the country’s clan based politics. But that shouldn’t come as a surprise given the strong links between state institutions and organized crime in the country’s modern history.

Consequently, Ukraine’s experience is an extension of the Kremlin’s heavy-handed policies in its near abroad. The murder of a Russian politician in Moscow – and more broadly, the Kremlin’s policy towards opposition figures – has parallels in the former Soviet states as well. Certainly, it does in Kyrgyzstan.

Ryskeldi Satke is a contributing writer-analyst with research institutions and news organizations in Central Asia, Turkey and the U.S. Contact e-mail: rsatke at gmail.com 

 

The Explosive Politics of Voting Rights in Myanmar

The prospects for the country’s beleaguered Rohingya appear bleak.

When Myanmar’s Parliament voted on February 2 to approve a bill governing regulations for a planned referendum on constitutional amendments, it unleashed a firestorm. Included in the bill was a provision explicitly allowing holders of temporary ID cards – also known as “white cards” – to vote in the referendum.

White cards are primarily held by Rohingya, a Muslim minority group in western Myanmar’s Rakhine State. Despite Rohingya’s decades-old presence in the area, many in Myanmar, particularly Rakhine Buddhists, consider them to be illegal immigrants. The military regime provided white cards in the 1990s as temporary documentation pending a citizenship verification process that never materialized. This left Rohingya and other minorities that hold the cards in a precarious legal limbo.

White card holders were allowed to vote in past elections, including the 2008 constitutional referendum and the 2010 parliamentary elections – both widely seen as fraudulent. But following inter-communal violence that rocked Rakhine State in 2012 and continues to simmer, the question of white card holder suffrage has emerged as a hot-button political issue.

Opponents contend that it amounts to granting the vote to foreigners. As a result, the Rakhine National Party (RNP) vowed to fight the decision and challenged the constitutionality of the law in court – a challenge that was endorsed by Myanmar’s Constitutional Tribunal on February 16. Angry Rakhine Buddhists, led by nationalist monks, protested in Yangon and townships across Rakhine State.

President Thein Sein ultimately caved to the pressure. Only a day after signing the controversial bill into law, on February 11 he issued an executive order that all white cards will expire on March 31, effectively overriding the granting of suffrage to their holders.

The episode highlights the explosive politics surrounding Rohingya in 2015 and the confusing arrangement of political forces aligned on either side.

While many human rights advocates have accused President Thein Sein and his government of stoking anti-Rohingya sentiment, his moves seem increasingly confused and easily influenced by populist public pressure. His flip-flopping on the suffrage question demonstrates his inability to navigate competing demands from domestic voices vilifying all Rohingya and international actors calling on the government crack down on hate speech and respect Rohingya rights.

Meanwhile, veteran democracy campaigners are split. Some have stood up for Rohingya rights. But several lawmakers from Aung San Suu Kyi’s National League for Democracy (NLD) signed on to the RNP’s legal challenge against the bill, and an NLD MP initially proposed removing the clause granting suffrage to white card holders back in November.

Suu Kyi herself has been reluctant to speak out forcefully in support of Rohingya rights. Appearing to support Rohingya citizenship could be political suicide in a country where anti-Muslim sentiment is rising rapidly, and some of her closest advisers, who wield substantial influence over her decision-making, are Rakhine Buddhists.

Then there are the electoral implications. Many see the referendum rules as a preview of regulations for the general election planned for late 2015. Several Myanmar politicians voiced concern that the granting of suffrage to white card holders represents a vote-buying scheme by the ruling Union Solidarity and Development Party (USDP). Majority-Rohingya townships in Rakhine State voted strongly for the party in 2010. If Rohingya are not allowed to vote in future elections, it could undermine the USDP’s prospects in Rakhine State and benefit the otherwise-dominant RNP (hence that party’s particularly strong stance on the issue).

The debate distracts, however, from a far more pressing concern at stake: the need to amend the deeply antidemocratic 2008 constitution. With heavy media focus on white card suffrage, critical questions about other parts of the recently passed referendum bill have been overlooked.

Few – even among veteran politicians – seem to know the referendum’s precise intended outcome. Parliament Speaker Shwe Mann has insisted that no amendments will be fully approved prior to the 2015 general election. But if the referendum, which is tentatively scheduled for May, is intended as an official up-or-down vote on specific constitutional changes passed by Parliament, that assertion seems misguided, since the vote would constitute the final stage of the amendment process. Alternatively, the referendum could simply be a general gauge of popular opinion on constitutional change. In that case, it would be essentially meaningless – just another stalling tactic of the military and political establishment.

Moreover, the military remains vehemently opposed to changing key articles that would loosen its control over Myanmar’s political system. Regardless of any public referendum, without some movement on that front, real constitutional reform will not be possible.

In the end, all that the referendum bill and the associated frantic politicking achieved was to strip Rohingya and other vulnerable minorities of the only documents they had. As conditions in Rakhine State worsen and anti-Muslim sentiment grows nationwide, prospects for resolving the Rohingya question look bleak. A durable solution to the problem likely must involve citizenship for Rohingya. But that will be an even more difficult task to accomplish – one that the current government (and likely future governments as well) will be loath to attempt.

Oren Samet is an independent journalist and researcher based in Bangkok, Thailand.

 

The One Moment in Singapore’s History You Should Know About

As the nation marks its 50th anniversary, here’s one moment we should all reflect on.

As Singapore celebrates the 50th anniversary of the country’s independence this year, there has been a lot of emphasis on reflecting on the past. For instance, the Institute of Policy Studies conducted a survey which revealed some interesting things about which domestic events Singaporeans remember (and, more interestingly, don’t remember) in their history.

But there is one important global moment that Singaporeans – and the international community more generally – should remember this year. On February 25, 1603, in the midst of the Eighty Years’ War, ships commanded by Jacob van Heemskerk of the Dutch East India Company seized the Santa Catarina, a Portugese merchant ship, without explicit authorization to do so. To defend the seizure, the Dutch hired a 26-year old lawyer named Hugo Grotius (yes, that Hugo Grotius), who astutely claimed that it was a legitimate challenge to Portugal’s monopoly on commerce with Asia.

The rest, as they say, is history. His idea of the freedom of the seas, which he elucidated in Mare Liberum (Free Sea) was subsequently enshrined in the United Nations Convention of the Law of the Sea (UNCLOS). And while it is difficult to summarize his overall influence on the direction of international law (and other fields as well, including international relations, political theory and philosophy), the fact that the term “Grotian Moment” is used by some today to describe “a paradigm-shifting development in which new rules and doctrines of customary international law emerge with unusual rapidity and acceptance,” should give you an idea.

Today, many people have at least encountered Grotius in passing, and some may know the background to his emergence. But as Navin Rajagobal wrote in an opinion piece for The Straits Times last week commemorating the 412th anniversary of the sinking, few – including many Singaporeans – are aware of Singapore’s role in this major event. As Rajagobal notes, the incident happened off Singapore’s upper east coast, near Changi, where the Santa Catarina was anchored after sailing from Macau to Malacca. Furthermore, Johor-Riau, the local authority at the time, played an important role in helping van Heemskerk seize the Santa Catarina as many of them had fled the Portugese conquest of Malacca in 1511. This is not just a historical footnote: the Dutch alliance with the local authority was a major part of Grotius’ legal justification because he claimed that van Heemskerk was not a pirate but an agent of Johor-Riau.

The Grotian moment also has broader significance for Singapore and the international community as well. Today, his Mare Liberum (Free Sea), along with the counterarguments it inspired (most pointedly Mare Clausum (Enclosed Sea) by John Selden in 1635) inform the current discussions we have on territorial and maritime disputes in the South China Sea. As Rajagobal notes, China’s ‘nine-dashed lines’ map might be construed by some as more in line with the mare clausum principles that the Portugese favored in the 1600s rather than the mare liberum principles championed by Grotius. History may not repeat itself, Mark Twain is said to have once noted, but it sure does rhyme.

 

Indonesia’s Death Penalty Hypocrisy

Jokowi’s hardline policy on executions may be imperiling the fight to save hundreds of Indonesian migrants on death row.

What a difference a few months make. Last year, thousands of Indonesians collected coins in a last-minute attempt to save a migrant worker, Satinah, from imminent execution while on death row in Saudi Arabia. The campaign galvanized the country, led to a trending hashtag #savesatinah, and forced then-President Susilo Bambang Yudhoyono to intervene and pay the remainder of the blood money to get Satinah taken off death row.

Today, it is the world that is campaigning against Indonesia’s new administration, led by President Joko Widodo, popularly known as Jokowi, and its use of the death penalty against foreign citizens in its fight against drug trafficking. Even more worrisome, the government’s insistence on using the death penalty may be imperiling the ongoing fight to save the lives of hundreds of other Indonesians like Satinah, still on death row all around the world.

A Vulnerable Population

Satinah was one of what Migrant Care, an Indonesian NGO that raised awareness of her case and fights for the rights of Indonesian migrant workers around the world, estimates are an astounding 360 Indonesian citizens facing the death penalty in countries around the world right now.

“In Saudi Arabia there are 48 [on death row], in Qatar one, in China 22 and in Malaysia 288,” said Anis Hidayah, executive director of Migrant Care. “Right now, eighteen of them are awaiting execution. Four in Malaysia, five in Saudi Arabia and nine in China.”

Indonesia’s migrant workers form one of the world’s largest foreign worker populations, numbering, according to Migrant Care, 6.5 million, and find themselves primarily in countries like Saudi Arabia, Malaysia, and Qatar, that have terrible human rights records and justice systems that do not provide fair trials to migrants. Reports by international NGOs including Amnesty International and HRW in the past years demonstrate the peril that many Indonesian migrant workers face. Sexual exploitation, torture, and even modern slavery are not uncommon.

Just last year, the country was galvanized by the story of Erwiana Sulistyaningsih, a domestic worker from Central Java who was tortured for eight months in Hong Kong, considered a “safe” country, and then sent home without receiving any pay.

The reasons that the workers are on death row abroad are varied – and rarely, if ever, proven in a fair court. Some workers who face abuse end up killing their employers. Satinah’s supporters claim that this is what happened in her case, in 2011. Because she did not have access to a fair trial, there was no way of ascertaining the true reason for her actions, and she was sentenced to death without access to impartial legal assistance.

The actions of the Indonesian government in the past – calls for leniency, willingness to pay blood money, politicians making personal interventions to foreign governments, and even threats of diplomatic revenge, are not too dissimilar to the actions taken in recent weeks by Australia, Brazil, and the Netherlands on behalf of their citizens who are facing the firing squad in Indonesia.

“Indonesia usually spends a lot of energy, money and effort to save any Indonesian citizens on death row abroad,” said Andreas Harsono, Indonesia researcher with Human Rights Watch (HRW), adding that he was shocked no one told Jokowi about the potential consequences of using the death penalty before December’s executions.

Losing Credibility 

During last year’s election, Jokowi performed well among Indonesia’s migrant workers, winning more than 53 percent of the overseas vote. His strong migrant worker policy was the main reason for this, as he pledged to review licenses for trafficking agencies, increase access to legal aid for migrant workers, and reform bilateral agreements to provide for better worker protections. During his campaign, he even joined in calling for Satinah’s release.

In fact, organizations like Migrant Care had been fighting to improve the positions of migrant workers for years and were optimistic that a Jokowi administration would prioritize migrant issues.

“After the beheading of Ruyati [in Saudi Arabia] in June of 2011, the Indonesian government formed task forces on the protection of Indonesian migrant workers facing death penalty. Before 2011, Indonesian government did not provide comprehensive legal aid,” said Hidayah.

All that hard work may not be undone by an administration that seems to be unaware of the implications of using the death penalty now. Hidayah is already seeing challenges.

“After the executions in Indonesia, there is now a diplomacy barrier for the Indonesian government to work to release Indonesian migrant workers on death row abroad,” said Hidayah. “And for us, now it is much more difficult to pressure the Indonesian government, and other countries.”

Hypocrisy

It is likely, with hundreds of citizens on death row abroad, that in 2015, there will be another situation like Satinah’s where the country will try to apply international pressure to save an Indonesian from execution. This time, however, Indonesia may find that it has fewer friends prepared to stand with it. Already, the use of the death penalty last month has hurt its relations with Brazil, the Netherlands, Nigeria, Malawi, and Vietnam. If plans move forward with the next round of executions, which includes citizens from France and Australia, despite pleas from clemency from civil society groups, foreign leaders, and human rights activists, it is almost certain cries of hypocrisy will be loud in the future.

Jokowi was elected to bring change to Indonesia, and enjoyed the support of many groups, including Migrant Care, who are opposed to his use of the death penalty. For them, the relationship is clear. If more foreign citizens are executed for drug-related crimes, then it will become even more difficult for them to take action to protect Indonesian workers abroad.

However, both Migrant Care and Human Rights Watch believe that it is not too late for the president to change. In doing so, he can perhaps recapture some of the optimism and idealism that was behind his rapid rise to power.

“President Widodo has an opportunity to demonstrate wise leadership by recognizing the well-documented failure of the death penalty as a crime deterrent and joining the growing number of countries that have abolished capital punishment,” said Phelim Kine, Asia Deputy Director for HRW. Otherwise, it will not just be the Bali Nine who will suffer, but many Indonesians as well.

Nithin Coca is a freelance writer and journalist who focuses on cultural, economic, and environmental issues in developing countries.

 

Hedge Funds Cry Foul Over Indonesia’s Bakrie Telecom’s Runaround in Debt Workout

Five hedge funds are testing Indonesia’s legal protections for foreign investors after a local court barred them from Bakrie Telecom’s debt restructuring talks.

The funds and one other bondholder are asking a New York court to quash a ruling by a Jakarta district judge that they cannot vote on the workout arrangements because their defaulted notes were issued by an offshore special-purpose vehicle.

The investors, who own 28 percent of the $380 million May 2015 dollar-denominated securities, said in the suit they would recover less than 20 cents on the dollar under the plan.

Leading global asset managers are watching the dispute with interest because almost 90 percent of all Indonesian non-state corporate dollar notes have been issued via offshore entities similar to that used by the telephone company, which is part of the Bakrie conglomerate, a group with two other entities in restructuring.

President Joko Widodo can ill afford to irk foreign investors after outlining plans to build 25 dams in five years, 24 ports and six mass transport systems to spur an economy that grew at the slowest pace since 2009 last year.

“We want to know how bondholders are treated everywhere we invest so we watch closely key bankruptcy rulings,” said Benjamin Cryer, a Singapore-based portfolio manager for the Franklin Asia Credit Fund of Franklin Templeton Investments, a unit of Franklin Resources.

“Bondholders expect to be treated fairly in a restructuring and if they can just be excluded from the process, investors will at the very least require some additional safety in future issues.”

Less credit

Doubts over the ability to enforce the rights of foreign investors could reduce the availability of credit to smaller companies from Indonesia, Cryer said.

Bond issuers may have to start offering additional assurance in writing that foreign creditor rights will be respected, he said.

The dispute threatens to overshadow Indonesia’s position as the best performing country this year in JPMorgan Chase & Co.’s Asia Credit Index series. Returns total 5 percent.

“Indonesian bonds and mainly Indonesian high-yield bonds should trade wider than other similar rated emerging market bonds,” as a result of the recent ruling, Brigitte Posch, the London-based head of emerging market corporate debt at Babson Capital Management, which controls some $212 billion, said.

Bakrie Telecom hasn’t reported an annual profit since 2010, according to Bloomberg data, after focusing on a mobile phone technology that’s lost popularity.

“We are still reading the situation so we can’t give any official comment on this matter just yet,” Niko Margaronis, Bakrie Telecom’s head of investor relations, said.

Coffee, steel

Achmad Bakrie started what would become the Bakrie group in 1942, trading rubber and coffee, before expanding to steel, energy and property.

His son, Aburizal, struggled to repay $1.1 billion of debt when currencies plunged in the 1997 Asian financial crisis, and was forced to give away most of the family empire to creditors.

The group rebounded along with Indonesia’s economy until the companies accounted for 15 percent of the Jakarta stock exchange’s market value in June 2008.

The eight companies’ combined weighting has since shrunk to less than 1 percent.

Coal and palm oil have slid 48 percent and 38 percent respectively since the end of 2010, weighing on sales for miner Bumi Resources and Bakrie Sumatera Plantations.

Property sales for Bakrieland Development were hampered by 1.75 percentage points of increases in Indonesia’s benchmark interest rate in 2013.

All three companies are restructuring their debt, or have done in the past two years.

Bondholders sue

Bank of New York Mellon, the defaulted notes’ trustee, is representing bondholders in the restructuring, according to the notes’ contract.

Bank of New York Mellon as trustee was excluded from the process, and executives of a company subsidiary named Bakrie Telecom voted on the plan in its place, according to the Feb. 18 court document.

The five hedge funds are Universal Investment Advisory, Universal Absolute Return, Vaquero Master EM Credit Fund, Footbridge Capital and Growth Credit Fund, the document shows.

The bondholders suing in New York didn’t participate in the vote, according to Joel Hogarth, a partner at Ashurst, which represents Bakrie Telecom.

Even if they had, the dissenting votes amounted to about 18 percent of the company’s total debt, he said in an e-mail, suggesting they wouldn’t have had enough power to change the outcome of the workout anyway.

Mexican glassmaker

In 2012, Vitro, Mexico’s biggest glassmaker, explored a loophole in the local law to allow executives from its subsidiaries to steer its debt workout in a similar manner to Bakrie Telecom, leaving holders of $1.2 billion of bonds with losses of more than 40 percent.

The local ruling was challenged in the US by hedge funds including Paul Singer’s Elliot Management and a court decided the Mexican plan wasn’t worthy of enforcement.

While bondholders owned less of Vitro’s debt than its subsidiaries, and hence had less power in the restructuring, they were still allowed to vote in the process.

“I can’t think of any other case in which the special purpose vehicle investors were not allowed to vote in a restructuring,” as happened with Bakrie Telecom, James Harper, the head of research at BCP Securities in Connecticut, said.

“That puts Indonesia in a bad light.”

The government expects total investment in projects this year to reach 516.5 trillion rupiah ($40 billion), up 11.5 percent from 2014, with two thirds of that money coming from abroad.

Offshore cash

“It’s clear that the new government in Indonesia is trying to attract more offshore capital into the country and it will be very sensitive to perceptions of discriminatory treatment,” said Jim Jagger, a senior vice president and portfolio manager at Aviva Investors Global Services.

The Indonesian bankruptcy law was amended in 1998 to allow companies to remain operational while restructuring their debt, as part of an agreement with the International Monetary Fund, Gary Bell, an associate professor of law at the National University of Singapore said.

“While the law follows the framework of Chapter 11 in the US, local judges often have very different interpretations of it from what would be seen elsewhere in the world,” Bell said.

“When an Indonesian company goes into bankruptcy, the proceeding will happen in a local court, and there is nothing global investors can do about that.”

Bloomberg