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About the project

The East Asia Program conducts research on the politics and foreign policies of the countries of East Asia, with a focus on how domestic politics in these countries shape external behaviour. Researchers focus on China, Indonesia, and Myanmar, and commission work by other scholars on the broader region. The program also holds a robust series of dialogues and events on the politics of the region, independently and in partnership with other organisations.

Photo: Jung Yeon-Je-Pool/Getty Images

Experts

Richard McGregor
Senior Fellow
Ben Bland
Director, Southeast Asia Project
Bobo Lo
Nonresident Fellow
Malcolm Cook
Nonresident Fellow
Merriden Varrall
Nonresident Fellow
Peter Cai
Nonresident Fellow
Matthew Busch
Nonresident Fellow
Bonnie S Glaser
Nonresident Fellow

Latest publications

Understanding China’s approach to aid

International Development Minister Concetta Fierravanti-Wells' remarks about China's aid to the Pacific are part of a long tradition of concern in Australia. Yet while some Chinese aid projects are less than perfect, as my colleague Jonathan Pryke notes, Fierravanti-Wells' sweeping comments reflect a lack of understanding about China's foreign aid.

The first point to recognise is that Chinese aid is not a coherent and strategic tool of the Chinese state. In fact, while an inter-agency aid coordination mechanism exists, it largely has a symbolic role.

Chinese aid policy is drafted by the agency responsible for its management, and many agencies are involved – for example, the Ministry of Commerce, the Ministry of Health, the Ministry of Education, and provincial-level governments, among others. The State Council approves policies, but this process is not coordinated. In aid partner countries, there is usually only one or two government staff to oversee the aid program. Different agencies often have competing agendas.

Many Chinese government officials working in foreign aid are genuinely committed to improving well-being. In recent years, China has adopted some elements of the Development Assistance Committee for the Organisation for Economic Cooperation and Development (OECD), such as creating five-year country development plans in close consultation with partner countries. Officials are proud of China's commitment to 'demand-driven aid', where the proposals for development projects must come from the partner country.

Many of the aid implementing agencies, including large state-owned enterprises, have established project experience in China. They have often transferred this same modus operandi to the aid partner country, with very mixed success.

One example is the Ramu Nickel Mine in Papua New Guinea (considered an investment with development benefits, with an aid component). This mine has a long history of disruptions because of community dissatisfaction. During fieldwork research at the mine site, I spent time talking to a young Chinese woman appointed by the mining company as the community liaison officer. She had no previous experience in the Pacific, and although her English wasn't bad, she couldn't speak any local languages. She was genuine in her efforts to get to know and understand the different landowner groups and their concerns, but she recognised she was in for a tough time.

The mining company's Chinese management found it hard to understand how the approaches used so successfully in China – in particular, agreeing terms with the government with the assumption that the arrangement would be largely respected by the local people – didn't work in PNG. The company management acknowledged they were on a steep learning curve and were keen to improve, with their business success at stake, too.

A second point is differences in the way that development is understood by its practitioners in mainland China. Amartya Sen's notion of 'development as freedom' directly or indirectly underpins traditional OECD donor views of reducing poverty. China's approach has nothing in common with Sen's idea that 'removal of unfreedoms' is both the means and the end of development. According to traditional donors' development approaches, transparent institutions and 'good' governance are critical to sustainable development.

The Chinese view, however, sees development as a triangular hierarchy of needs, in which the broad base of fundamental physical and material needs has to be met before anything else can be considered. In this vision, economic growth and investment in infrastructure are seen as the key factors for achieving developed status.

According to this Chinese approach, a key aspect of development is not looking like a poor, underdeveloped, backwards country, either to the people themselves or to outsiders. For many Chinese, the Birds Nest Stadium, the Water Cube, and other hyper-modern buildings constructed for the 2008 Beijing Olympics were symbolic of how China had progressed to become a developed and modern country. Skyscrapers and wide roads are seen as a source of national pride. According to this approach, projects that to Western eyes look like 'white elephants', such as sports stadiums, are very much in line with what being developed entails.

China's development record in the Pacific is mixed. But this should not be confused with China being nefarious.

Brexit Britain won’t be able to uphold Asia’s liberal order

This article is part of a series for the Australia-UK Asia Dialogue, co-hosted by the Lowy Institute and Ditchley Foundation, and supported by the Department of Foreign Affairs and Trade and the Foreign and Commonwealth Office.

If you work on or in Southeast Asian politics, it is impossible not to be impressed by the quality of your British colleagues. British diplomats are quietly effective operators, and among the most well briefed in the region. Outside of government, British experts and journalists play major roles in debates about the future of Southeast Asia as members of think tanks, activists or foreign correspondents. For a relatively small country so far away, British nationals play an outsized role in Southeast Asia.

So one of the many minor tragedies of Britain's diminished role on the world stage following Brexit is that the British people and their government will have far less use for their skill and expertise in the years to come.

Foreign Secretary Boris Johnson boasts that Brexit will free up the Britain to play more of a global role, untethered from the constraints of commitments in Europe. These pledges have become absolutely central to the post-Brexit British narrative around the world. But even under the best case scenarios, Brexit will continue to be an enormous distraction, demanding the full attention of ministers and much of the civil service. At the other end, Britain will likely emerge a smaller economy relative to what it could have been had it remained in the EU, desperate for trade deals that offset its reduced access to the common market and with a smaller budget and a smaller military.

Supporters of Brexit dismiss these dire predictions, pointing to the current equities bubble and the way that the fall in the pound sterling has cushioned the blow. But the latest indicators are not good. The cost of living is up, wage growth is down. Business activity has slumped, and London is haemorrhaging finance jobs. Brexit is still yet to take place, and as the economist Rudiger Dornbusch wrote, a 'crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought'.

This crippled Britain is promising to do more in East Asia. It is an offer that Australians must regard with considerable scepticism. As James Goldrick points out, the Royal Navy has very little capacity for the type of token presence operations pledged by Johnson in his Lowy Lecture in Sydney this year, and with Brexit squeezing the defence budget it will have even less in the future. The ongoing Strategic Defence and Security Review is likely to result in the early retirement of Britain's amphibious capability. After that, there will be little hope of substantial British military assistance in humanitarian relief or stability operations in Southeast Asia.

Nor is Australia likely to be able to rely on British diplomacy to support the rules-based order in the region as much as it once did (and which in recent years has not been very much). Britain's more abstract interests in the integrity of the liberal international system will, in all probability, take a back seat to the mad dash to strike trade agreements with China and other illiberal economies. With little leverage, Whitehall will be a price-taker in these talks. Relief in Canberra and around the region last year at the dismissal of former chancellor George Osborne, who pursued a more transactional relationship between the UK and China even before Brexit, has given way to recognition that circumstances will force much more of this behaviour in the future.

It is true that a diminished Britain will be at the mercy of global institutions more than it is at present. As a result, Britain will have an even stronger interest in protecting the integrity of those institutions that are truly global in scope yet vulnerable to localised challenges, such as the World Trade Organisation. This will be helpful amid ongoing Chinese protectionism, and at a time when US President Donald Trump is threatening to sabotage the WTO dispute settlement mechanism. Moreover, the UK will remain a permanent member of the UN Security Council and a nuclear power, unless a future prime minister Jeremy Corbyn has his way.

But Britain is unlikely to have the budget, ships, negotiating leverage or diplomatic capital to stand up to challenges to the liberal international order where the practical effect of those challenges are limited to this region, such as China’s coercion of its neighbours. Australia also has little need to avail itself of Britain's veto at the UN Security Council, and already enjoys extended deterrence through its alliance with Washington.

One might argue that renewing old ties with London makes sense at a time when US commitment to the region remains unclear, as a hedge against US abandonment under Trump. But while the US election in 2016 brought about a change of government, it has not brought about a fundamental change in policy. By contrast, Brexit brought about a fundamental change in policy without a change in government. As damaging as Trump's election has been to US prestige and credibility, the damage can be partly reversed in three years' time. Brexit is forever.

Some of British colleagues might think this a bloody-minded response to an offer of cooperation. But Australia is a middle power that must invest its diplomatic and resources carefully, and remain circumspect about exerting its own resources in pursuit of partnerships that may not fulfil their promise. Unless a second referendum reverses Brexit, there is little reason other than costly nostalgia for Australia to put a great deal of energy into developing a new relationship with Brexit Britain. We owe our old friends an honest reply.

What, then, of Britain's extraordinary human resources, particularly in Southeast Asia? They may be the silver lining of Brexit for Australia and the region. I work with three outstanding colleagues of British origin at the Lowy Institute, and have benefited greatly from my interactions with Britons throughout Southeast Asia. I expect we'll see many more in these parts in the years to come; working as experts, journalists, or activists to uphold liberal values in the region, even if their government can no longer afford to.

Australia wants to reform Hun Sen – ‘It’s not going to work,’ says opposition leader

This morning I spoke with Mu Sochua, the deputy leader of the opposition Cambodia National Rescue Party (CNRP). On 2 September, the leader of her party Kem Sokha was arrested at his home in the middle of the night and later charged with treason. Mu Sochua fled Cambodia in early October after learning she would be next.

After a contrived and deeply flawed process, the country's supreme court dissolved the CNRP as a political party on 16 November, and awarded its seats in parliament other parties nominally in opposition but allied, in practice, with the government.

The crackdown on the CNRP has run alongside a crackdown on independent media in the country, with the government shutting down the Cambodia Daily and arresting Cambodian journalists who had worked for Radio Free Asia.

I asked Mu Sochua, in our interview below, why she believes the crackdown is taking place now, what drives Hun Sen to want to remain in power, and about China's role in keeping him there. Asked what governments such as Australia can do to encourage Cambodia to return to democracy, she urged Australia to stop engaging Cambodia's repressive security services:

Australia has been on the side of the democratic forces in Cambodia, for example investing in the local organisations, investing in the reform of the police, and so on. However, there are certain institutions, like the military, like the police, the ministry of interior – those institutions remain in the hands, in the control of Mr Hun Sen directly. And Australia has been trying to reform those institutions, reform Hun Sen. It's not going to work. It's been 25 years – and more money into these institutions means full support for Mr Hun Sen to stay in power. That is not acceptable.

You can listen to the full interview below:

The ill-advised rush for Australia to strike a trade deal with Indonesia

Negotiations for the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) entered extra time this week, as negotiators agreed to add an 11th round (the 7th since leaders reactivated the initiative in March 2016) after negotiations in November failed to produce a final deal.

There are reportedly still differences on goods, services, and investment. Presumably, agreement has been reached on so-called 'economic cooperation', touted as new frameworks for cooperative implementation, technical assistance and future dialogue on bilateral economic relations.

Indonesian Investment Coordinating Board Chairman Tom Lembong, the cabinet member responsible for the bilateral relationship, told a Melbourne audience last weekend that Australia should prioritise a quick deal. As The Weekend Australian reported, Lembong said:

When we sign the trade agreement with Australia, it will be the first trade agreement Indonesia has signed with anybody in almost one decade. We're a bit rusty, we're a bit out of practice in negotiating such agreements so I think that's one limiting factor…I would say it's better to get it done now, get it done quickly, and leave room for us to upgrade it in three to five years.

These comments echo those of Indonesian lead negotiator Deddy Saleh, who urged Australia to lower its sights from a 'high quality' agreement to one that was 'good quality'. As reported by Fairfax Media, Saleh sought to downplay expectations about the agreement's reach and seemingly expressed scepticism about how a 'high quality' agreement would benefit Indonesia:

A 'high quality' agreement suggests opening the markets fully … I'm saying the agreement must be mutually beneficial. So that is where the negotiation lies right now. We are negotiating the 'good' (versus) the 'high' quality agreement.

Such comments should prompt a pause, especially as Australian leaders have insisted throughout 2017 that the deal would be completed this year.

Free trade agreements (FTAs) frequently consume years of negotiation, especially when they don't build off existing frameworks. The Australia-Peru FTA, for example, was in part concluded so rapidly because it extended the existing negotiations through the Trans-Pacific Partnership (TPP) as a basis for further bilateral liberalisation. IA-CEPA, in contrast, envisions a slate of novel elements; it is therefore reasonable that more time would be required.

Another factor – witness Chairman Lembong's observation about 'rustiness' – is Indonesia's lack of FTA negotiations over the past decade. But beyond rustiness, the reality is that free trade does not yet have a strong domestic constituency in Indonesia. Exports are dominated by crude palm oil, coal, liquified natural gas, mineral ores, and rubber; commodities that are freely traded the world over. Indonesia strenuously protects its domestic market, and there are regular World Trade Organisation (WTO) dispute settlement filings against these efforts. Indonesia gives as good as it gets, proving increasingly officious in its filing of WTO complaints against what it perceives as other countries' unfair trading practices. Even during IA-CEPA negotiations, the parties concurrently filed WTO complaints against each other. 

Recent events are also not the first indications that progress might be proving difficult. In February this year, Prime Minister Malcolm Turnbull and President Joko Widodo stood together in Sydney and announced some relatively anodyne concessions: reduced tariffs on Australian raw sugar; administrative changes to the live export trade; and the removal of barrier to Australian imports of Indonesian pesticides. At the time, I wrote the practical importance of the deals hardly matched the fanfare of the leaders' announcement.

In September, trade ministers Steven Ciobo and Enggartiasto Lukita called a press conference in Jakarta to buoyantly inform journalists of new trade deals on sugar, cattle, and pesticides. Somewhat incredibly, these were essentially the same items the leaders announced in February. That it took seven months to draw up the rules makes one wonder if they were hastily thrown together at the end of a visit otherwise devoid of concrete economic progress.

This prompts a last point, which is the ill-advised nature of the government's commitment to deliver a deal by the end of 2017. The leaders and trade ministers have repeatedly affirmed commitment to what is an otherwise arbitrary deadline (including in a joint statement after the February leaders' meeting). Turnbull has framed IA-CEPA as a testament to a relationship that is now (unlike with previous occupants of the office, wink, wink) getting better and better. As he said in February:

But we have got such a strong relationship. It's a very strong friendship and it gets stronger all the time. We're working towards the Comprehensive Economic Partnership and great progress there. We're increasing our trading links and investment, so there's a lot to discuss. At every level the Australia-Indonesian relationship gets stronger and stronger.

Widodo never speaks in such a fashion. Unfortunately, the government has painted itself into a corner here; it will be undeniably awkward if IA-CEPA is too hard and must be rolled into next year.

The comments from Lembong and Saleh must not be separated from this issue; Australia must regard them squarely in the context of what is an ongoing negotiation. In fact, the comments might well be calibrated to exert further pressure on the Australian position.

It is impossible, of course, to evaluate the terms currently on offer. Similarly, we do not know how close (or far) negotiators are from an acceptable deal. Considering reports following the 10th round, there appear to be many items still to be worked out. If so, it would be foolhardy for the government to wager on the vague promise of a future 'upgrade' just to meet what is an essentially political deadline.

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