Some Malaysian inequality measures more equal than others

 

Is inequality in Malaysia going up or down? Answers differ. Official statistics unambiguously show household income inequality going down in the past decade, but almost everyone seems to think it has gone up. So what’s going on?

The most common measure of income inequality is the Gini coefficient. It suggests falling inequality in Malaysia. The Gini coefficient fell from 0.46 in 2002 to 0.43 in 2012. This Gini coefficient series was calculated using Malaysia’s Household Income Survey — a large sample, consistent and nationally representative dataset. Statistics derived from this source carry substantial weight.

But popular perception and anecdotal accounts view the issue differently. Most people seem to think that inequality has been rising, or at least persisting at high levels. The dissonance between the official figures and public perception warrants further investigation.

Rising inequality also loomed large in Malaysian popular discourse in the 1990s. But across that period, official statistics backed up popular perceptions — Malaysia’s Gini coefficient increased.

Public policy has for decades been preoccupied with targeting and monitoring reductions in inequality between ethnic groups. But the data and the policy direction seem to be at odds. Since 2010, some ethnicity-blind programs have been introduced to target the exclusion and lagging socioeconomic progress of the bottom 40 per cent of households. But this group actually had the highest income growth in the preceding decade. From 2002 to 2012, mean household income for the bottom 40 per cent grew by 6.1 per cent annually, compared to 5.6 per cent for the middle 40 per cent and 4.6 per cent for the top 20 per cent of households.

Why are low income households still considered to be in great need of assistance when their incomes have improved significantly?

Inequality is a zeitgeist issue that has resonance materially, politically and emotionally, regardless of official Gini coefficients. The notion that inequality has risen is believable because of a wider malaise in Malaysia. Malaysians are dissatisfied with rising prices, sluggish wage growth and economic insecurity. Many also resent the concentration of wealth among elites, especially through political-business connections or suspiciously corrupt means. Continual reports of misappropriation of public funds and the lavish livelihoods of corporate, financial and political elites tend to reinforce perceptions of unfairness and unequal opportunity.

Surveys by the Merdeka Center offer some insight into public opinion. In recent years, concerns over economic conditions, especially inflation, employment and wages, have grown. In April 2005, the top concerns were crime and public safety (16 per cent of respondents deemed this the biggest national problem), inflation (10 per cent), business opportunities and economic growth (9 per cent), with unemployment/lack of job opportunities (4 per cent) further down the list. In October–November 2012, the majority considered price hikes/inflation/rising cost of living to be the most pressing issue (23 per cent), followed by crime (7 per cent), unemployment/lack of employment opportunities (6 per cent) and unfavourable economic conditions (6 per cent). It is possible that Malaysians are simply conflating the general economic environment with inequality.

But it is also important to remember that everyone experiences inequality differently. For example, household income inequality need not move in the same direction as personal wage inequality or household wealth inequality. And the Gini coefficient isn’t the only way of measuring income inequality, either.

Malaysia’s official inequality statistics are calculated based on gross household income — that is, adding together all forms of income from multiple sources, including earned income (wages and self-employment earnings) and non-earned income (rent, dividends, transfers, remittances, and so on). It also counts multiple earners in the same household. This highly aggregated calculation can mask the effects of wage growth and asset accumulation, and other factors that affect inequality.

The full Household Income Survey datasets are also not available, meaning research in this field must assemble data from other sources.

One of these sources is data from the Employees’ Provident Fund (EPF), which allows us to calculate wage inequality over time. Formally employed private sector workers maintain accounts with the EPF, which had 6.5 million active members in 2013. Members regularly contribute to their accounts from basic wages and receive dividend payments, at uniform rates regardless of the size of the account. So changes in the distribution of EPF accounts will likely reflect changes in the distribution of wages. And the Gini coefficient of EPF savings accounts has been rising, giving us grounds to believe that wage inequality has increased in the past decade or so.

Other sources concur with a broad picture of steadily rising inequality. In the public sector, the number of managers and professionals at the upper regions of the wage distribution has grown disproportionately faster. Luxury cars constitute an increasing share of passenger vehicle sales, while property sales show rising concentration at the upper end.

Popular perceptions of rising inequality, it turns out, are supported by empirical evidence. Household inequality may be falling, as the data suggests, but other forms of inequality are rising.

Malaysia needs to pay more attention to wage distribution and labour market dynamics as well as wealth inequality. There are indications that wage inequality is rising, as well as widespread concerns over wage growth, household livelihood and housing affordability.

And the rich Household Income Survey datasets need to be made available for exploration — again, to investigate earnings and wealth, and to disaggregate personal and household dimensions. Only then can we really begin to untangle the complexities of inequality in Malaysia.

Hwok Aun Lee is Senior Lecturer in the Department of Development Studies at the University of Malaya. This article draws on a working paper co-written with Muhammed Abdul Khalid.

 

China’s nine-dash line still infringes international law

Suggestions that China could claim historic fishing rights within the nine-dash line misinterpret international law. While Sourabh Gupta’s arguments, outlined in a recent Forum article, relating to the UN Convention on the Law of the Sea (UNCLOS) Articles 62 and 123 have been disputed elsewhere, we argue that his argument regarding Article 56 is also incorrect.

The exclusive economic zone (EEZ) regime is outlined in UNCLOS Article 56, which states that a country has within its EEZ ‘sovereign rights for the purpose of exploring and exploiting, conserving and managing […] natural resources’. UNCLOS and its subsequent interpretations imply that the right of exploitation is exclusive, as the name implies: other countries can participate in the exploitation of this country’s EEZ only with its agreement. When a country becomes an UNCLOS signatory it gives up any claims to any rights to fish within other countries’ EEZs, regardless of historical fishing activities. In return the country gains the exclusive right to fish in its own EEZ.

Gupta misinterprets the Permanent Court of Arbitration’s (PCA) ruling in the Eritrea–Yemen maritime territorial dispute as support for the view that an UNCLOS signatory has the right to continue its traditional fishing activities in other countries’ EEZs. When the PCA awarded sovereignty over some islands to Yemen but also let the fishermen of Eritrea continue the traditional fishing regime in the vicinity, the ruling was in regard to sovereignty over the islands not the EEZ. In international law, the acquisition of sovereignty and the rights over resources within a country’s EEZ are governed by two different legal regimes.

The PCA took into account ‘Islamic tradition’, ‘regional legal traditions’, ‘the Islamic system of international law’, the fact the islands had had characteristics of res communis — a common area not subject to the legal title of any state — for centuries, and Yemen not acquiring sovereignty over them until towards the end of the 20th century. When it awarded sovereignty of the islands to Yemen but also gave free access of the surrounding waters to Eritrea’s artisanal fishermen, that was a ruling tailored to the particular history of sovereignty over those territories. It was not a general rule of international law. The PCA was not required to strictly apply the concept of sovereignty, primarily a creation of the West.

The creation of the EEZ regime bears no resemblance to Yemen’s acquisition of sovereignty over the islands. This regime was not a creation of the West but negotiated by the international community. China voluntarily subscribed to it when ratifying UNCLOS. Therefore, the international courts are unlikely to uphold the view that China has the unilateral right to fish in other countries’ EEZs. Overwhelmingly, they do not give any country the right to fish in another’s EEZ unless there is an agreement between them to that effect.

Drawing lessons for the South China Sea, if an international court was called on to resolve the disputes, it might award sovereignty over the different islands to different countries together with clauses to award access to these islands and their 12-nautical-mile territorial seas to artisanal fishermen from other countries. But it is extremely unlikely to give China the right to fish in the entire nine-dash-line area, and it is very difficult to characterise modern fishing in the South China Sea as artisanal fishing.

It is doubtful if China itself shares Gupta’s view. While China claims to have a historically-established right to unilaterally fish within approximately 50 nautical miles of the uncontested coasts of other countries, does it accept that they have the same right within 50 nautical miles of its uncontested coast? It is worth mentioning that since 2009 China has been using force to drive Vietnamese fishermen out of their traditional fishing grounds around the still-contested Paracel Islands.

The ‘historic fishing rights’ argument is in fact a late tack-on and has nothing to do with the original purpose of the nine-dash line. According to Taiwanese President Ma Ying-jeou, when China’s Kuomintang Government published the eleven-dash line map, which later became the nine-dash line, it was only a claim to the enclosed islands, not to rights over maritime space.

But as China’s power grew after Deng Xiaoping’s reforms, its ambitions in the South China Sea also grew. This gave rise to the view that this line was not just a claim to the islands but also a claim to rights over the maritime space enclosed by it. The problem is that, according to international law regarding maritime delimitation, this line cannot possibly be a valid claim to an EEZ.

Faced with this, Chinese scholars have argued that ‘historic rights’ are the basis for China to make maritime claims well beyond what would be consistent with jurisprudence on EEZ delimitation. However, leading international scholars have convincingly shown that that argument is flawed. The view of the US Department of State on this question remains far more convincing. Historic fishing activities by the peoples around the South China Sea in what was at that time international waters cannot give China the right to fish in other countries’ EEZs today.

One of the best possible avenues for fairness and stability in the South China Sea is for China to recognise the meaning of the nine-dash line map as clarified by Taiwan’s President Ma. It should recognise that of the islands enclosed are the subjects of territorial disputes and negotiate with the relevant countries the EEZ belonging to these islands on the basis of international law.

Huy Duong is a UK-based IT consultant.

Tuan Pham is Associate Professor at the University of New South Wales.

 

India–US relations face hurdles

 

Economic relations between India and the United States seem to be going well. This was recently reinforced in New Delhi with Prime Minister Modi and President Obama endorsing the India–US Delhi Declaration of Friendship. But beneath the friendly joint statement of a new economic partnership lie considerable differences on critical issues of economic significance. These hurdles need to be overcome in order to strengthen bilateral relations.

India has repeatedly voiced concerns that its IT-driven services sector faces several barriers to entry into the US market. And recently proposed policy changes are threatening to exacerbate the problem. India has consistently raised these issues with the World Trade Organization (WTO), but its demand for a less restrictive regime for service providers has failed to cut any ice with countries like the US.

US domestic policies have become significantly more unfavourable since the economic downturn in 2008. Now, the US Congress is debating immigration reform, which could have far reaching implications for Indian IT firms. The 2013 Border Security Economic Opportunity and Immigration Modernization Act proposes to cap the share of employees holding H1B visas in any firm at 15 per cent. While the bill has passed the Senate, it has yet to be cleared by the House of Representatives.

From India’s point of view, President Obama’s offer to support India’s transition into a low carbon economy is an important step. India has previously considered adopting green technologies, especially in the energy sector. In 2010, the Singh government introduced the ambitious National Solar Mission, which aimed to provide 20,000 MW of grid-connected solar power by 2022. In its attempt to reduce the cost of power generation, the government promoted the use of domestically produced solar panels.

But these plans are now in serious jeopardy. The US has objected to the use of ‘Made in India’ solar panels, labelling it as a violation of India’s national treatment commitment to the WTO. India is now busy defending itself against the complaint made to the WTO’s Dispute Settlement Body. Now that the leaders of the two countries have agreed to work in a spirit of cooperation, India should expect the US to support the plans it had enacted to generate affordable solar power in the country.

But this is not the only area in which India’s economic policies have met with serious challenge from the US administration. In December 2014, the US International Trade Commission (USITC) unveiled the findings of a yearlong survey of the effects of India’s trade, investment and industrial policies on the US economy.

The report concluded that that a wide range of restrictive Indian policies have adversely affected US companies doing business in India. The USITC reports that its investigations (covering a large number of US business lobbies) showed that tariffs, as well as taxes and financial regulations, have had the heaviest effects on US companies. Foreign direct investment and intellectual property policies have also negatively affected specific industries in the agricultural, service and manufacturing sectors.

The USITC announced that ‘if tariff and investment restrictions were fully eliminated and standards of [intellectual property] protection were made comparable to US and Western European levels, US exports to India would rise by two-thirds, and US investment in India would roughly double’.

The message is unambiguous: India must undertake a significant change in its policy orientation so that it meets the expectations of the business interests in US and Western European countries.

This broad affront on India’s economic policies by the USITC, which closely followed the investigation of India’s intellectual property laws by the US Trade Representative, seem to undermine the new found warmth in the relations between the two countries. It is clear that the various wings of the US administration need to understand the spirit of the New Delhi dialogue on economic issues, else the economic partnership will be all for nothing.

Dr Biswajit Dhar is Professor at the Centre for Economic Studies and Planning School of Social Sciences, Jawaharlal Nehru University, New Delhi.

 

Japan-Korea Spat Complicates US Task in Asia

The Dodkos. Or the Takeshimas. Take your pick

Tensions between the two north Asia nations have been building slowly but surely

Tensions between Japan and Korea have been incrementally building, reaching their height over the past couple years under the watch of Japanese Prime Minister Shinzo Abe and Korean President Park Geun-hye.

Tokyo and Seoul’s deep-rooted historical problems have thus far prevented any chance a comprehensive bilateral partnership between Washington’s two key allies in East Asia. This presents a significant obstacle for the US which is looking to coordinate between its allies in the Asia-Pacific in order to add heft to the Obama administration rebalancing strategy.

Historical Grievances

The one inescapable image coming from the 2013 Asia-Pacific Economic Cooperation [APEC] leaders’ summit in Bali was that of a daydreaming Japanese Prime Minister hunched over in his chair next to a visibly indignant President of South Korea. The frigid personal relationship between Abe and Park however is merely symbolic of the fractured bilateral relationship between Japan and South Korea.

Indeed, ties have become so strained over the past year that Park even indicated that a summit with Abe would be “pointless.” Meanwhile, Park’s refusal to entertain a summit with Abe over the past year appears to be somewhat vindicated after Abe’s controversial – and provocative – decision to visit the Yasukuni Shrine, burial place of World War II war criminals – in late 2013.

The stumbling blocks to a Japan-Korea rapprochement are not new to most in Washington. The most important of these issues are an acceptable resolution of the “comfort women” saga, including a strong reaffirmation by Japan of its historical statements on the pain it caused Korea before and during World War II; Japan’s whitewashing of its unsavory war history through its text books; and finally managing tensions surrounding the sovereignty of the Dokdo/Takeshima islands.

In late December 2013, Abe made the controversial pilgrimage to Yasukuni shrine. Abe reportedly made his decision to visit mainly due to his personal convictions. If that wasn’t enough, Abe obstinately refused to listen to pleas from his advisors and allies to avoid the controversial visit claiming that ties with South Korea and China were already at an all-time low.

According to Yomiuri Shimbun, Abe dismissed such warnings, telling aides that “even if I pay a visit to Yasukuni, [ties with South Korea and China] won’t deteriorate further. Japan has established a good relationship with Russia and other countries aside from those two countries.”

The Yasukuni visit resulted in significant blowback. China and South Korea pointed to the trip as more ammunition for their arguments that Tokyo remains recalcitrant on coming to terms with Japan’s role in World War II. The Chinese foreign ministry even went as far as decrying Abe as “celebrating the Nazis of Asia” through his visit. Seoul used less bombast in its condemnation but still levied a thinly veiled accusation at Abe for “digging up wounds of the past.”

The move may also derail recent efforts to progress on trilateral free trade talks between the three countries. North Korea’s state news agency meanwhile, in its predictably over-the-top manner, labeled the decision as an “act of war on Asia.” But worst of all, Abe’s decision has bailed out both China and South Korea, which were receiving flak from Washington for their recent policies of aggression and isolation, respectively, towards Tokyo.

To make matter worse for Japan, the visit resulted in an unusually stern rebuke from the US which denounced the decision as “disappointing” and one that could “heighten regional tensions.”

But the visit to Yasukuni was not the only blow to diplomatic ties with Korea. Despite its consistent approach to Seoul for a bilateral summit, the Abe government made a number of gaffes and clumsy remarks that further discolored the diplomatic skies. The most harmful were those addressing historical issues. By J Berkshire Miller

 

For example, Abe helped contribute to a rocky start with Park when he heralded the relationship between his beloved grandfather – former Japanese Prime Minister Nobusuke Kishi – and Park’s father, former South Korean President Park Chung-hee. The seemingly innocent sentiment betrayed the political realities and pressures that Park faces as the daughter of the former dictator – who also served in the Japanese Imperial Army. Further inflaming this comparison is the role of Kishi during World War II [accused, but acquitted, of class-A war crimes during the Tokyo Tribunal].

Abe similarly angered Seoul when he questioned the use of the term “war of aggression” to describe Japan’s role during the war. And then there was the case of Taro Aso, Abe’s deputy, who further riled Seoul when he suggested that, in looking to revise Japan’s post-war constitution, the Abe government should replicate the Nazi approach in changing the Weimar Republic’s constitution in the 1930s. Abe also had to deal with blowback from South Korea after a Japanese politician outside of his party seemingly noted approval of Japan’s military using “comfort women” during the war.

 

Thai Military Tribunals Lock Down a Country

Groucho was right

Junta’s lapdog legislature appears certain to make military courts permanent

The late American comic Groucho Marx once famously said that military justice is to justice what military music is to music. That is being proven out with a vengeance in Thailand.

Almost immediately after ousting the elected Pheu Thai government of former Prime Minister Yingluck Shinawatra, The National Council for Peace and Order, the pseudonym for the junta, extended the jurisdiction of the military courts to try civilians for breaching junta regulations in the name of preserving “national security.” 

So far, since the May 22 military coup that brought Prayuth Chan-ocha and the junta to power, according to Thai Lawyers for Human Rights, at least 666 individuals have been told to report to the authorities. At least 134 of those were ordered to military courts for prosecution.

By the end of this month, the National Legislative Assembly, made up predominantly of military officials or their supporters, is expected to codify military law into the military courts statute, allowing local commanders to detain civilians up to 84 days without charge or judicial oversight, basically handing the military unchecked authority to detain civilians.

There are growing concerns that the military is going too far. After nine months of relative calm after the coup, the 19th in the country’s history – 13 of them successful – Thailand is basically under lockdown, according to Thitinan Pongsudhirak, a Chulalongkorn University professor of political science who is one of the country’s most astute observers, writing in the Straits Times of Singapore on Feb. 19.

Thailand has had plenty of occasions to get used to the tanks in the streets.  But the degree of control being exercised by Prayuth’s government is unprecedented, sources in Bangkok say. And while the streets are relatively calm, with few protests, there is growing concern, as reported in Asia Sentinel on Feb. 13, that it may have been screwed down too tight, setting the stage for more political turbulence that the military can’t control.

Outraged citizens have taken to the streets in the past to drive the military back to the barracks. In 1992, Gen. Suchinda Kraprayoon made the mistake of thinking he could make a coup permanent. That one was named the National Peacekeeping Council. Eventually, 200,000 people came to the streets in what was called Black May. At least 52 people died, hundreds disappeared and 3,500 were arrested before Suchinda and his troops retreated and gave the government back to the civilians,

A big part of the growing tension is the military courts. As Thitinan pointed out, fallout over charges brought against former Prime Minister Yingluck Shinaatra have been limited because the junta is so clearly in charge and with martial law as a coercive instrument to quell street protest.

The military courts have been criticized by Human Rights Watch, Amnesty International and other human rights NGOs, with no discernible effect on the military leaders who have taken over Thailand.  At least 25 military courts are operating across the country.  Besides the 366 people that Thai Lawyers for Human Rights have tracked, the total number being processed in those courts s unknown.  The National Council has refused to make that information public.

”All of these people have experienced the violation of their rights in different ways,” according to Thai Lawyers. “Many have been held in custody for at least seven days without an arrest warrant being produced, charges being pressed, or the locations of their detention facilities being disclosed. Many have been denied the right to speak with a lawyer or receive visits from their relatives.”

There have been allegations that military officials have tortured detainees in order to coerce them into confessing while they are in custody. The information obtained has then been used to go after others named under torture.

Amnesty International accused the Thai authorities of “using the courts to silence dissent and make an example of those who voice opposition against military rule.” Civilians convicted in Thai military courts have no right of appeal to higher courts, which is contrary to international law.

“No civilian should be tried in a military court in any circumstance – authorities should move all such cases to civilian courts and stop prosecuting people for acts which are not internationally recognized as offenses,” according to Rupert Abbott, Amnesty International’s Asia-Pacific Deputy Director, in a statement issued last September.

“Trying civilians in military courts with no right to appeal violates Thailand’s commitments to protect the right to a fair trial. The Thai authorities should also immediately reinstate the rights to freedom of expression and peaceful assembly – the current sweeping restrictions on these rights are creating a climate of fear.”

Martial law is present from the start of the process, with the military arresting civilians and then relying on evidence obtained from them in custody, often by torture, as the human rights organizations charge. There is no right to habeas corpus. The military can use the pretrial period to obtain evidence before the suspect has even appeared before a tribunal.

The defendants have no right to counsel. Note-taking is banned in the courtroom. Often cases are prosecuted in secret.  The courts are not accessible to relatives or rights activists.  Requests for temporary release are almost never granted, with the authorities citing the political nature of the cases as the reason for the denial.

The military court is a single-tiered system. “Based on cases which have already been adjudicated, Thai Lawyers for Human Rights observes that the military courts tend to impose much harsher sanctions than civilian courts,: the NGO said. “This forces civilian defendants to choose to plead guilty to the charges rather than to fight them. In addition, no effort is made to explore the background of the accused persons, which should be examined for the possible reduction of sentences. Concern about the harsh and unjust practices of the military courts has pressured people to flee and live in exile.”

The organization called for ceasing the apprehension, arrest and detention of individuals under martial law, saying it “creates a benefit for officials engaged in the criminal prosecution of civilians, but also creates opportunities for the violation of the right to life and security of civilians and makes them unable to access a fair and just judicial process.”

That patently is not going to happen unless protest drives the military out of power again. Although Thitinan and others are growing concerned, it doesn’t appear yet that there is enough momentum to do that. Asia Sentinel

 

As they say there is always another side of the story to be told

Bali Nine drug kingpin Andrew Chan, who is facing death by firing squad in Indonesia, masterminded another international heroin smuggling attempt out of Hong Kong - but the operation failed, resulting in three young Australians being jailed.

Daily Mail Australia can reveal for the first time that Chan enlisted Sydney teenager Rachel Diaz, 17, and Chris Vo, 15, both from western Sydney, as drug couriers to smuggle $1 million worth of heroin in condoms, which they were to swallow in Hong Kong and bring back to Australia.

The Hong Kong deal was to run at the same time as the Bali Nine operation - when Chan, Myuran Sumurakan and seven Australian mules were arrested, some with the drugs strapped to their bodies.

It can also be revealed that after his own arrest, Chan wrote a letter to Diaz in Hong Kong, ordering her to keep her mouth shut.

Chan and syndicate partner Sumurakan are on death row and were told this week by new Indonesian President Joko Widodo that he would not grant them pardons, despite their attempts to rehabilitate themselves behind bars. They could face death by firing squad in coming months.

Chan, who Indonesian police called 'The Godfather' when they arrested him, was a key organiser of the Australian end of the smuggling and distribution network, which was detailed in the Hong Kong court during Diaz's trial and described as a 'predatory crime syndicate'.

In just two weeks in April 2005, the syndicate was responsible for the arrest, and later the incarceration, of 17 young Australians for heroin trafficking in three countries.

Diaz, Vo and their minder Hutchinson Tran, 22, were arrested in a low budget Hong Kong hotel room on April 12, 2005.

They were found with 114 condoms filled with up to 1kg of heroin - but Diaz had had second thoughts about taking part in the operation, for which they were to be paid $200 for each 5cm-long condom they ingested.

Diaz's father Ferdinand failed to get his daughter released on bail and 12 months after her arrest, she was sentenced to 10 years and eight months. Vo, by then 16, received nine years, and Tran got 13 years and four months.

All have since been released, with Diaz serving out the majority of her sentence in a NSW women's prison after being transferred in February 2009 under the International Transfer of Prisoners' Act.

Five days after her arrest, Bali police arrested Chan, Sukumaran and their mules Renae Lawrence, Martin Stephens, Scott Rush, Si Yi Chen, Matthew Norman, Michael Czugaj and Tan Duc Thanh Nguyen. The seven couriers recruited by Chan and Sukumaran have all received sentences ranging from 18 years to life.

Both the Bali Nine and the Hong Kong drug smuggling deals were connected with a third, lesser-known attempted heroin importation in which Chan and Sukumaran conspired with four young Brisbane people.

Daily Mail Australia can also reveal that in the lead up to the Bali Nine and the Hong Kong operations Chan and Sukumaran visited a young Korean-Australian who was later arrested and charged over the Hong Kong conspiracy following the arrest of Diaz, Vo and Tran.

A Korean-Australian and a co-conspirator were charged with plotting to import the packages of heroin that Diaz and 15-year-old Vo were meant to swallow.

Chan visited the Korean-Australian at least three times in different NSW prisons and once with Sukumaran in late 2004, just before the two made two 'practice' runs to Indonesia with several of the future Bali Nine couriers, including Renae Lawrence, and successfully returned to Australia with heroin strapped to their bodies.

Chan, who was a manager at a Sydney catering company, duped three of his staff - Lawrence, Norman and Stephens - into becoming mules, promising them thousands of dollars in return.

Following the arrests in Hong Kong and Bali within days of each other - and a series of other arrests in Sydney and Brisbane just days later - police said the Bali Nine had no connection with the Diaz case.

However, detectives have exclusively revealed that Chan was in contact with Diaz for months and all three trafficking deals were connected to a Sydney-based Chinese drug smuggling syndicate which had links to Myanmar.

Chan, who has found God in prison, was regularly visiting another convicted drug dealer in prison as he was conspiring to commit the Bali Nine deal.

Diaz and Vo were recruited to go to Hong Kong as drug mules, police say, on the promise of $6000 or $7000 for a single trip.

Diaz, a trainee hairdresser with churchgoing Filipino migrant parents, and Vo, a McDonald's worker and son of a single mother of Vietnamese origin, came from modest income families in western Sydney.

Neither had previously known connections with drug syndicates, nor had they met before they flew out from Sydney to Hong Kong in April 2005.

Diaz's parents, Ferdinand and Maria, believed she was having a sleep-over at a friend's house and then reported her missing when she failed to return.

On the day she and Vo were due home, April 13, police believe the Korean-Australian went to Sydney Airport to collect them, armed with three packets of laxatives.

Diaz and Vo were in a room at the Imperial Hotel, in Hong Kong's Tsim Sha Tsui backpacker district, with the 114 heroin-filled condoms, supplied by Hutchinson Tran, when police burst in.

Vo was prepared to swallow 30 packages but Diaz had apparently reconsidered, realising they could burst inside her stomach during the eight-hour flight back to Sydney.

Meanwhile, four Australians from Brisbane - aged 24, 22, 18, and 19, had been arrested in Brisbane and charged with conspiring with Chan and Sukumaran of conspiring to import heroin to Australia.

A fifth, Khanh Thanh Ly, 24, was arrested in Sydney. Ly subsequently pleaded guilty, but said he was only a 'run around' in the gang whose members included Sukumaran, and was never paid but did it for the 'glamour' and entries to parties and clubs.

The Bali Nine incident was linked to one of the world's biggest drug syndicates, Crescent Moon, which has smuggled large quantities of heroin from Myanmar (Burma) to Western countries.

Chan has admitted he saw the Bali Nine deal as a 'quick pay day'. He has never spoken about his involvement in the Hong Kong deal.

In an interview with ABC TV he pleaded for clemency, saying if his death sentence was commuted and he was released from prison, he wanted to help the community and become a minister of religion.

 

By Candace Sutton for Daily Mail Australia

Published: 09:43 EST, 12 December 2014 | Updated: 11:41 EST, 12 December 2014

 

Is a China-India-Russia Coalition Inevitable?

 

Although unlikely in the near future, the three powers share interests that bind them and pose a challenge to the U.S.

A new global order is emerging, though much of its shape is still uncertain. At the very least, many would agree that while the U.S. will remain a great power for many decades to come, its share of global power will decline relative to other rising powers. These other powers, such as China and India, will catch up and play a more active and important role in global affairs. While many analysts have focused their attention on a possible rivalry between China and the U.S., few have paid adequate attention to the dynamic emerging between China, India, and Russia and the possibility of a coalition among them born from their desire to alter the status quo.

On the surface it seems that China, India, and Russia are ill-suited to a partnership. Despite being members of the “BRICS” club, there are many substantive differences between the three countries, particularly between China and India, that will impact how they relate in the decades to come.

Tensions between China and India are obvious. While India is a democracy, China remains an authoritarian regime. Of course, the importance of regime type in interstate relations is debatable. States with different regime types are not necessarily doomed to troubled relations; there is nothing inherent in regime type that inhibits cooperation. Still, many would agree that India, to some degree, sees non-democratic China as a threat; whether or not such a threat perception is grounded in reality is a different issue. The perception alone impacts their relations.

The biggest problem in China-India relations is still the territorial dispute between them. As serious as this problem is, however, the likelihood that this dispute will be resolved is actually higher than many people might think. It has been confirmed that Indian Prime Minister Narendra Modi will visit China in May and there is talk that both China and India would like to make a breakthrough on the issue. China also supports greater Indian involvement at international institutions, including the United Nations. These positive signs mean that there is considerable potential for a closer China-India partnership, despite recent hype about India siding with the U.S. to contain China. Most importantly, what will bring China and India together is their shared dream of becoming first-tier developed countries. In this sense, India can benefit from China’s exports and capital, whereas China can benefit from India’s market and technology potential. It would be a serious mistake for both countries to dismiss their shared long-term interests in favor of present disputes.

The China-Russia relationship is more interesting these days as the Ukraine crisis continues to drive Russia and the West apart. The fundamental distrust between the West and Russia helps drive the ongoing Ukraine crisis. Few are optimistic about the potential of the recent ceasefire deal to settle the conflict and relations between the West and Russia are likely to stagnate for some time. Meanwhile, the China-Russia relationship will get stronger. China can provide economic and strategic stability to Russia, and Russia can stand with China in its ongoing disputes with other Asian countries. At the very least each can be supportive to the other.

From a fundamental perspective, the core reason for a possible China-India-Russia coalition is their common desire to build a multipolar or multiplex global system within which emerging powers like China and India can play a larger role. None of the three countries are content to live under the shadow of U.S. hegemony, though they may not want to directly challenge the U.S. at the moment. As China’s Foreign Minister Wang Yi said in 2013, all three countries should work together to promote the democratization of international relations. If this is true for all three countries, then there is a good reason to consider the possibility of a China-India-Russia coalition in some form in the future. That is not good news for the U.S., which would prefer to maintain its dominant position for as long as possible. The U.S. may seek to counter the coalition with one of its own, with Japan and the E.U. as formal partners.

We are unlikely to see a formal coalition composed of China, India and Russia anytime soon, but we should not rule out the possibility over the long term. All three powers are dissatisfied with the current global order to varying degrees. If the U.S. wishes to avoid such a coalition it should think carefully about how to encourage the redistribution of power at the global level. Beginning the process of sharing power with China and India might be a good start.

By Dingding Chen