US ambassador says "US will fight" if China invades Taiwan

If the People’s Republic of China decides to take Taiwan by force, the US will fight on behalf of Taiwan against the Mainland, said a former US ambassador.

Chase Untermeyer, who just completed his tour as ambassador to Qatar and is on his way back to the US, made these personal comments on 28 Aug at a public lecture on “US policy in the Middle East” at the Lee Kuan Yew School of Public Policy, which was attended by about 80 government officials, foreign diplomats, academics and students.

The ambassador used the Cross Strait example to illustrate the importance the US government — in his opinion — places on the principles of democracy and freedom in making its foreign policy decisions. He pointed out that successive US administrations had made decisions to enter military conflicts not simply out of national interests or detailed calculations of the costs and benefits of entering the wars, but based on deep seated principles that are “as old as the US itself”.

Untermeyer cautioned that many countries would be mistaken if they think the US conducted its foreign affairs solely on hard-nosed pragmatism, like securing oil supplies. In the case of an invasion of Taiwan by China, Untermeyer believed that the US will fight China not because of treaty obligations or even out of national interest, but based on its principles to defend its democratic allies against aggression. (The US’ Taiwan Relations Act obliges the US to supply Taiwan with the military capability to defend itself.) Untermeyer assessed that even if a war with China is detrimental to US economic interests, the US will still aid Taiwan if the Chinese invasion goes against the will of the Taiwanese people.

Attempting to debunk the common perception that the US is interested in the Middle East only for its oil and enriching its own oil companies, Untermeyer argued that if that were so, the US would have never created the State of Israel, knowing the unpopularity of that move in a region dominated by Arab countries. The US depends on the Middle East for a quarter of its oil supplies. He said that the European Union is much more dependent on Arab oil and therefore sees the Middle East through the prism of energy security much more than the US does.

On the powerful Jewish lobby in the US influencing foreign policy in the Middle East, Untermeyer explained that Jews made up only five per cent of the US population, and that Jews alone would not be able to influence US policy that much. In fact, he said, the pro-Israel lobby in the US is powerful not just because of Jewish support, but because it fights for a “broadly popular cause” subscribed to by a wide spectrum of American citizens, including conservative Christians.

On Iraq, Untermeyer predicted a gradual reduction in troop numbers over the next year following a much anticipated report to Congress next month by the US ambassador to Iraq, but that it would not go “down to zero”.

Touching on Iran, he was convinced that Islamic republic is in the process of developing a nuclear bomb and the capability to deliver it on missiles. By removing Saddam Hussein’s regime in Iraq, the US had unfortunately removed the a heavy counterweight to Iran, which is a far more threatening member of the “Axis of Evil” than Iraq was.

Untermeyer was sceptical that a settlement of the Israeli-Palestinian conflict will resolve all the problems the US is having in the region, although he emphasised that the US should help “solve it for its own sake”. Cautioning that since any final settlement will involve large compromises by both sides (the Israelis and the Palestinians), he expected that right wing and jihadist groups would still seize upon any compromises that did not favour the Palestinian side to whip up sentiment against the US.

Voicing his personal disagreement with the policies of the current US administration, Untermeyer said that he did not “see anything wrong with dealing with Syria” rather than isolating them, which is the current Administration’s policy. He pointed out that isolation and sanctions have never been effective ways to change undemocratic regimes — Cuba being the most prominent example.

During the question and answer session, a student from China, referring to Untermeyer’s statement about defending Taiwan, pointed out that the island has been an integral part of China for far longer than the US has been nation. He asked Untermeyer what the US would do if one of its own states broke away. Untermeyer refused to be drawn into the Chinese student’s analogy, instead repeating that the US will fight based on its own principles of defending democracy, rather than historic precedent or economic interest.

An Indian student then queried how the US could spring to democratic Taiwan’s defence, yet cosy up with Pakistani President Pervez Musharraf, who overthrew a democratically elected government. Untermeyer acknowledged that Pakistan presented a whole slew of policy difficulties for the US, but that the US saw Musharraf as “our man” for now in no small part because of the threat of Al Qaeda.

Untermeyer admitted that there were many examples of US actions that contradicted this assessment. However, he pointed out that even pragmatists like former secretary of state Henry Kissinger conceded that the principled, values-based approach to foreign policy will in the long run prevail over an approach based purely on hard nosed pragmatism and selfish national interests.

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This article first appeared in theonlinecitizen.com.

Indonesia playing punk with us again

MFA Spokesman’s Comments on remarks by Indonesian Minister of Defence Prof Juwono Sudarsono

In response to media queries on remarks by Indonesian Minister of Defence Prof Juwono Sudarsono, who was quoted as saying that Indonesia’s ratification of the Defence Cooperation Agreement was held up because Singapore had rejected Indonesia’s proposal for training arrangements to be determined jointly by the two sides, the MFA Spokesman said:

“We are puzzled by Prof Juwono’s statement that Singapore wants to decide by itself the military training arrangements in Indonesia.

Indonesia and Singapore had negotiated the Extradition Treaty (ET), and the Defence Cooperation Agreement (DCA) and four associated Implementing Arrangements (IAs) as one package. This package of agreements was agreed to and completed at a meeting of their Ministers of Foreign Affairs and Defence, and their armed forces chiefs on 23 April 2007. It was on this basis that the ET, DCA and Military Training Area IA were signed on 27 April 2007 in Bali in the presence of President Susilo Bambang Yudhoyono and Prime Minister Lee Hsien Loong. At Indonesia’s request, however, the date for the signing of the three remaining IAs was deferred to 7 May 2007, purely for administrative and logistical reasons. The TNI explained that it could not get all three Indonesian Service Chiefs to be present on 27 April. Unfortunately, the signing on 7 May 2007 did not materialise, because just before it was due to take place Indonesia requested changes to the IAs which Singapore could not agree to.

The package of agreements was settled after comprehensive negotiations between the relevant agencies on both sides, including the defence ministries and armed forces of Indonesia and Singapore. Since the time negotiations commenced in October 2005, both sides had ample opportunity to raise any matter of concern for discussion, prior to the conclusion of the carefully balanced set of agreements on 23 April 2007. Indonesia did not raise these issues then. But after the conclusion of the package, Indonesia asked for substantive changes and new conditions to what had already been agreed upon in the DCA and IAs, as reflected in Prof Juwono’s remarks.

Singapore’s position is that the agreements are already settled, and the terms cannot be changed casually or piecemeal, without risking the whole package of ET and DCA unravelling. Nevertheless, in the interests of good relations between the two countries, Singapore had earlier conveyed to Indonesia our proposal on how we can move forward on this issue, and we are waiting for Indonesia’s response to our proposal.”

MINISTRY OF FOREIGN AFFAIRS
SINGAPORE
13 JUNE 2007

This is a worrying escalation of “megaphone diplomacy”, whereby Singapore and Indonesia are now negotiating through the mass media, instead of through more discreet diplomatic channels.

Let me hazard a guess as to what’s going on behind the scenes (the following may or may not be true, but it’s my assessment of what I think is most likely):

1. Singapore made an earlier than expected announcement that it was ready to sign the ET and DCA, and Indonesia got rushed into signing even though they didn’t want to sign the DCA, because there is much domestic expectation that the ET should be signed asap.

2. Now we learn that the Indons tried to play punk by claiming their military chiefs couldn’t make it to the 27 April signing. That is absolute rubbish! You mean the president, defence minister and foreign minister can make it, but the generals can’t? I mean, how big shot can a general possibly be? So why can’t the defence minister sign on their behalf. They must think the Singapore officials were stupid not to call their bluff in the first place. Singapore probably knew it, but just swallowed it.

3. Juwono alleged that Indonesia “proposed that training arrangements be determined jointly by the TNI (Indonesian military) and Singapore. Singapore rejected it, saying they should decide for themselves, despite the fact that the exercises will be conducted on our territory” — that is ludicrous! I know Singapore officials are often pushy and arrogant, but they would never insist on something outrageous like conducting military training in another country without the host country’s 100% concurrence.

4. After 27 April, Indonesia probably proposed some vague clause that could effectively invalidate the whole DCA because they can just use it to delay the DCA’s execution indefinitely. Naturally Singapore rejected the change. Also there’s a principle to stick to. If they agreed to it before, why should we allow them to suka suka make a change like that?

5. “Puzzled” in Singapore diplomatic speak means more like “the fella is trying to shift goal posts and go back on what we previously agreed on”.

Myanmar regime belongs in the dog house

The extension of the imprisonment of Myanmar’s pro-democracy leader, Daw Aung San Suu Kyi, on 27 May 2007 was a widely expected move by the country’s military government, which has already kept her under detention for most of the 17 years since her party won the national elections by a landslide in 1990.

While Indonesia, Philippines and Malaysia (and occasionally Singapore) have voiced their dissatisfaction with the lack of democratic progress in Myanmar, there is still a lot more that the countries of the Association of Southeast Asian Nations (ASEAN) can and should do to push the regime towards the path of democracy. ASEAN’s continued reluctance to take concrete action against Myanmar has only served to embolden the Myanmar generals’ sense of invincibility and reinforce the commonly held view that ASEAN is a “toothless tiger”.

Background

Myanmar (also known as Burma) was admitted as a member of ASEAN in 1997 with the support of the grouping’s most influential members — Indonesia, Malaysia and Singapore. This was despite protests from Western governments and Aung San Suu Kyi herself that admitting Myanmar was tantamount to endorsing the junta’s despotic ways. However, ASEAN had its reasons for admitting Myanmar, despite the latter’s dismal human rights record.

Firstly, ASEAN governments saw the expansion of the grouping from six original members (Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand) to 10 members (with the addition of Cambodia, Laos, Myanmar and Vietnam) as a way to increase its attractiveness as an investment destination. With over 567 million people and a combined gross domestic product of over US$1 trillion, “ASEAN-10” is trying to make itself an attractive alternative to China and India.

Secondly, ASEAN felt it was imperative to engage Myanmar to prevent it from drawing too close to China, which ASEAN countries have always been wary of. China views Myanmar as a country of strategic significance, providing it with much needed access to the Indian Ocean.

For Singapore, which pooh-poohs abstract notions of human rights and democracy in favour of hard-nosed economic pragmatism, Myanmar provides a sizeable export market, particularly for its military equipment and ordnance. (Singapore has long been a major supplier of arms to Myanmar.)

Some analysts have speculated that the admission of Myanmar was the ASEAN leaders’ way of asserting the supposed superiority of “Asian values” and a rejection of Western governments’ attempts to impose “alien” values of liberal democracy on the region. At that time, Southeast Asian economies were brimming with confidence and optimism on the wings of phenomenal growth rates over the previous decade. In an almost Titanic-like turn of events, however, all this came crumbling down just a few weeks after Myanmar was admitted to ASEAN. The sudden devaluation of the Thai baht led to a regional economic meltdown known as the Asian Financial Crisis.

To garner support Myanmar’s admission, ASEAN governments promoted the idea that so-called “constructive engagement” of the regime rather than isolation and sanctions would be a more effective way of prodding the generals to behave according to internationally-accepted norms. Ten years on, constructive engagement of Myanmar has proven to be an abject failure. The level of oppression of the opposition and people in Myanmar has increased, rather than abated, since its admission into ASEAN.

The Myanmar thorn

Since coming into the ASEAN fold, Myanmar has been a thorn in ASEAN’s relations with its major trading partners, the European Union (EU) and the US. Because of Myanmar’s membership in ASEAN, a number of ASEAN-EU Ministerial Meetings have been cancelled or downgraded. These were lost opportunities for ASEAN as the meetings could have further enhanced ASEAN’s political and economic relations with the world’s most important trading block.

Myanmar has also proven to be a impediment to talks on an ASEAN-EU Free Trade Agreement (FTA). It is virtually impossible for the EU to consider an FTA with ASEAN while maintaining trade sanctions against Myanmar for human rights abuses.

Meanwhile, a trade and investment pact with US was postponed several times because of Washington’s reluctance to have anything to do with Myanmar’s generals. Eventually, the US did sign a watered-down Trade and Investment Framework Arrangement (TIFA) with ASEAN.

In 2005, US Secretary of State Condoleezza Rice broke with tradition and skipped the annual ASEAN-led security meeting known as the ASEAN Regional Forum (ARF), signalling Washington’s displeasure over the lack of democratic progress in Myanmar.

Perhaps the biggest threat that Myanmar poses to ASEAN is its potential to derail the grouping’s bold plans to achieve regional economic integration
by 2015. With its moribund economy and lack of progress on almost all aspects of development, Myanmar is likely to be a huge stumbling block to economic integration, which requires a minimum degree of parity in economic development between member states in order to be successful.

Wake up call for ASEAN

Condoleezza Rice’s snub of the 2005 ARF was a wake up call for ASEAN governments, as it dawned on them how much of a liability Myanmar was turning out to be. The leadership of ASEAN is rotated annually among its 10 members. The most important responsibility of the ASEAN chair is to host all the major ASEAN meetings, including the ASEAN Ministerial Meeting, the ASEAN Summit, the ARF and the East Asian Summit (which involves Australia, New Zealand and India).

Of these meetings, the ARF is probably the most significant as it involves ASEAN’s “Dialogue Partners”, including the US, the EU, China and Russia. It was a no brainer that any meetings held in Yangon (Myanmar’s capital) would be skipped by the US, the EU and probably Australia and New Zealand.

To stave off this looming crisis, ASEAN foreign ministers in 2005 took an unprecedented move to strongly hint to Myanmar that it voluntarily forego its turn as ASEAN chairman. This was probably the furthest ASEAN has got to breaking its tradition of “non-interference” in the domestic affairs of member states. Fortunately, Myanmar got the hint and did give up its chairmanship, although the option still remains open for it to reclaim its turn at a future rotation.

Put them “in the dog house”

By this time, ASEAN leaders were starting to openly voice their frustration at the continued recalcitrance of the Myanmar junta, and their unpredictable behaviour. On 1 June, during the Shangri La Dialogue (an annual security forum in held in Singapore), Prime Minister Lee Hsien Loong told the audience, “We (ASEAN) have exercised our influence, persuaded, encouraged, cajoled the authorities in Myanmar to move and adapt to the world which is leaving them behind. The impact has been limited.”

He admitted that “Myanmar is a problem. It’s a problem for ASEAN, it’s a problem for Myanmar itself”. He continued, “We can take a strident position and say well, we will condemn you, we will shut you off, we will embargo you, we will put you in a dog house. Will we make things better? Will we cause things to change? I don’t believe so.”

These unusually bitter words coming from a Singapore leader were carried by Reuters and Associated Press, but were conspicuously absent from Singapore’s newspapers, including The Straits Times.

It is true that ASEAN’s influence over Myanmar is limited. Even without ASEAN’s support, Myanmar can still count on the support of its two giant neighbours, China and India, who are competing with each other to give more money, aid and weapons to the regime in order to exercise more influence over that strategically located nation.

It was a colossal mistake for ASEAN to have admitted Myanmar into the fold in the first place. Although that is now water under the bridge, ASEAN’s continued reluctance to take concrete action against Myanmar has only served to embolden the Myanmar generals’ sense of invincibility and reinforce the commonly held view that ASEAN is a “toothless tiger”.

Myanmar rightly belongs in the dog house. Some parliamentarians from ASEAN countries have called on ASEAN to suspend their membership. However, none of the ASEAN countries appear ready to support this very harsh measure. They would reason that if Myanmar can be suspended because of foreign pressure, then the same might happen to their own countries in the future.

If ASEAN stops defending Myanmar (for example when the EU refuses to give the Myanmar representative a seat at ASEAN-EU conferences), the generals may realise that they cannot gain anything more from remaining in ASEAN, and might decide to voluntarily withdraw Myanmar from the grouping. This would save ASEAN the dilemma of deciding whether or not to suspend Myanmar.

Should Myanmar remain obstinate, and move even further away from its “roadmap to democracy”, ASEAN should take a bold step to bite the bullet and suspend them, lest Myanmar becomes a millstone around ASEAN’s neck which eventually drags down the grouping. At a minimum, ASEAN governments should break their traditional silence and speak more strongly against the behaviour of the Myanmar regime.

The ASEAN Inter-Parliamentary Myanmar Caucus (AIPMC) has repeatedly called for the release of Daw Suu Kyi and for ASEAN’s ties with Myanmar to be suspended should they fail to do so. (The AIPMC includes of lawmakers from Cambodia, Malaysia, Indonesia, Philippines, Singapore, Thailand and an MP-elect from Myanmar.) Since ASEAN governments find it difficult to take a more strident tone on Myanmar, the AIPMC provides a good alternative voice of ASEAN, especially since it consists of elected MPs from member states. Therefore, the profile of the AIPMC should be enhanced and their statements given more coverage by the media.

However, at the end of the day, ASEAN governments will see no compelling reason to act against M
yanmar unless their electorates take a keener interest in the issue and call on their governments to stop turning a blind eye to the plight of Myanmar’s suffering people. Malaysian opposition leader Lim Kit Siang probably expressed it best, when he once remarked that “ASEAN cannot be expected to be forced to promote democratization in Burma until democratization itself has taken deep and firm root in the majority of ASEAN nations[1].”

This article first appeared in The Online Citizen. It was also published by Malaysiakini on June 19 and OhMyNews International on June 22.

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[1] Lim KS, “Drugs and the battle for democratization”, in From Consensus to Controversy: ASEAN’s relationship with Burma’s Slorc, Bangkok: Alternative ASEAN Network on Burma, 1997.

Some further reading:

S’pore-Indon treaties: Is the light at the end of the tunnel a train?

I’m back after a one-and-a-half month absence. This is an article which I wrote for The Online Citizen.

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Indonesia has been seeking an Extradition Treaty (ET) with Singapore for the past 34 years.

However, since the 1997-98 Asian Financial Crisis this issue has risen to the top of Indonesia’s foreign policy agenda with Singapore. During the crisis, it is believed that many corrupt Indonesian businessmen absconded to Singapore with millions of dollars stolen from banks. has asked for “variations” to the agreement.

During Indonesian President Susilo Bambang Yudhoyono’s state visit to Singapore in February 2005, Prime Minister Lee Hsien Loong made a surprise announcement that Singapore was “committed to having an extradition treaty with Indonesia“. The negotiations on the ET kicked off in March 2005.

Background

Eight months later, in October 2005, PM Lee got President Yudhoyono to agree to a quid pro quo: a new Defence Cooperation Agreement (DCA) would be negotiated and signed in tandem with the ET. This DCA would, inter alia, provide the SAF with much needed training areas in Indonesia and provide for more joint military exercises between the SAF and the Indonesian Armed Forces (TNI).

In January this year, unhappy with what they perceived to be foot-dragging on the ET by Singapore, Indonesia slapped a ban on all sand (and apparently some granite) exports to Singapore, a move which threatened to cripple Singapore’s struggling construction industry.

Indonesia’s official reason for the ban was that of “resource conservation”, but an Indonesian foreign ministry official let the cat out of the bag when he said publicly that the move was aimed at pressuring Singapore to sign the ET. By then most of the details of the ET had already been settled. What remained was to negotiate the details of the DCA, which is the package that Singapore wants in exchange for the ET.

Eventually, on 27 April, the two treaties were signed by the respective foreign and defence ministers in Bali, amidst much fanfare and optimism that a bone of contention in our relations was finally removed — or so we thought. However, there are still several hurdles that need to be crossed before this issue can be considered settled.

Hurdles still yet to be crossed

Firstly, there are still some supplementary agreements which are part of the DCA which have not been signed. The original deadline in early May for signing these additional documents has lapsed. Singapore’s Ministry of Defence (MINDEF) reported that there were some “unexpected difficulties” because Indonesia has asked for “variations” to the agreement.

According to Indonesia’s Antara News Agency, the legalisation of the implementation arrangements of the DCA has been “postponed indefinitely”.

Secondly, the two agreements need to be ratified by the Indonesian House of Representatives (the DPR) before they can be implemented. While lawmakers there have indicated they are ready to sign the ET, senior MPs from many of the major parties have strongly asserted that they will not ratify the DCA, as they claim it would “undermine Indonesia’s sovereignty”. This display of nationalistic fervour is to be expected from MPs who feel a need to pander to their constituents. Indonesian Defence Minister Juwono Sudarsono already told his Golkar Party members on 21 May, “Do not worry. Trust me as the commander of the TNI with regard to…the protection of national interests and our sovereignty.” He will have to repeat this several times more when he defends his government’s decision in front of the DPR on 28 May.

Thirdly, even if the ET comes into effect and the Indonesian attorney-general hands over his list of suspects for extradition, Singapore is not going to be able to simply arrest them and hand them over to the Indonesians. There are caveats in the ET that allow Singapore to refuse extradition if it suspects that the charges are politically or racially motivated. Stringent legal procedures and judicial processes will have to be followed when an extradition request is made, and Indonesia’s police and judicial processes will be subject to review by Singaporean judges and vice versa.

Furthermore, it has been 10 years since the 1997 Asian Financial Crisis, and it is likely that any stolen money brought into Singapore has already been laundered, making it very difficult to pinpoint its origin. In other cases, the suspect might have changed nationalities or left Singapore years ago. Thus, it could well turn out that none of the people on Indonesia’s wanted list will ever get extradited.

Senior Minister of State for Foreign Affairs Zainul Abidin Rasheed told Parliament on 21 May that both agreements will have to come into force together, as he tried to allay MPs’ concerns that the Government was rushed into signing the ET before the DCA was finalised.

In Singapore, the Cabinet (not Parliament) has the authority to ratify treaties. An option open for Singapore now would be for the Cabinet to refuse to ratify the ET until the Indonesian DPR ratifies the DCA.

Although the signing of the ET appears on the surface to have paved the way for warmer bilateral relations between Singapore and Indonesia, we are no where near the end of the tunnel.

In fact, it is entirely possible that even more problems will surface once the ET comes into force, leading to more frustration among Indonesians who think the ET is the magical elixir that will solve their endemic corruption problems.

You sell us sand, we’ll help you…

The Myanmar junta has offered to be a “long-term supplier of sand, cement and granite to Singapore”. Since this offer has been announced so loudly by the Ministry of Foreign Affairs, we can safely assume that the offer will be accepted.

I noticed that the caption under the picture in TODAY reads “Lending each other a hand”. Well, Myanmar is lending us a hand by selling us sand. I wonder what quid pro quo arrangement they could be expecting in return?

Perhaps a toned down rhetoric on their lack of progress on their Roadmap to Democracy? (Singapore’s pressure played no small part in getting Myanmar to pass on its ASEAN chairmanship in 2005.)

That we do not push for an ASEAN Human Rights Commission which would likely impact Myanmar the most? (So far only Indonesia, Philippines and Thailand have been pushing for that as part of the upcoming ASEAN Charter. Singapore has been very silent on it.)

That we do not ask them to free Aung San Suu Kyii and do not make statements criticising them (the same way as we criticise North Korea and Iran)?

That we jam all attempts by the US and European countries to take Myanmar to the UN Security Council? (Don’t underestimate the ability of our diplomats in New York. They’ve performed such feats before.)

In all likelihood, the proceeds from the sale of sand, granite and concrete will go almost directly into the pockets of the generals, via the companies that they own, and in the process prop up the regime the same way that the drug trade does. Sadly, because this will benefit Singapore’s economy, we can expect that moral considerations can take a backburner. Nevermind that this might be the same sand that has soaked up the blood of the thousands of civilians and monks that the military gunned down during the 8 August 1988 (8888) Uprising. (I have an ex-colleague who was a diplomat in Rangoon then who actually witnessed the students being fired upon.)

Recent Political and economic developments in Malaysia

I attended a talk by Dato’ Dr Michael Yeoh this afternoon at Raffles Hotel on the topic, “Recent political and economic developments in Malaysia”. The event was organised by the Institute of Southeast Asian Studies (ISEAS).

Dato’ Yeoh is the co-founder and CEO of the Asian Strategy and Leadership Institute (ASLI), a prominent Malaysian think-tank, which captured headlines a few months ago when it released a report about the Malay equity stake in the economy.

He began by summarizing the key events that shaped the Malaysian political scene in 2006, then provided a assessment of what lies ahead in 2007.


Key events in 2006

2006 started well for Prime Minister Abdullah Badawi, as his Ninth Malaysia Plan was initially well received. However, several events led to a sharp rise in political tensions in the nation, including:

1. Former Prime Minister Mahathir Mohamed’s personal attacks on PM Abdullah’s policies.

2. Reductions in oil subsidies which led to a sharp rise in fuel prices.

3. Increased road toll prices.

4. Numerous anti-government public demonstrations, most of which which were “blacked out” by the mainstream media but carried freely on the Internet.

5. The “Bloody Sunday” incident. On 28 June 2006, a protest in frot of Kuala Lumpur City Centre (KLCC) descended into chaos and many protestors were beaten by riot police. The Malaysian human rights commission (SUHAKAM), on which Dato’ Yeoh sits as a board member, later found that there was a “disproportionate use of force” by the police on the protestors.

6. The Article 11 Coalition of several ethnic minority and liberal Muslim groups raised the very sensitive issue of religious freedom (or lack thereof) in Malaysia, arousing tensions among conservative Malay groups. One of their public meetings was forcibly shut down by the government.

7. There was a general perception that the Malaysian economy was not doing well, probably due to the shift in the “components of growth” to industries with “less multiplier effect”.

8. ASLI’s corporate equity distribution study, which came under attack by Malay groups. Using alternative methodologies, the study estimated that the bumiputera (ethnic Malay) corporate share in the country may be as high as 45 per cent — considerably higher than the official figure of 19 per cent and higher than the targeted 30 per cent share that was meant to be achieved under the New Economic Policy (NEP).

9. During the televised UMNO Youth general assembly, the UMNO Youth president Hishamuddin Hussein unsheathed a kris (a Malay warrior’s dagger), which is a symbol of Malay pride. He came under fire from Chinese groups for his provocative actions.

10. The Sarawak state elections saw many urban Chinese voters ditching the Barisan Nasional (BN) for the Opposition, causing no small concern among the BN’s Chinese parties, the Malaysian Chinese Association (MCA) and Gerakan.


Looking ahead in 2007

2007 brought a “fresh spring” for PM Abdullah, as Tun Dr Mahathir toned down his criticism of his successor. PM Abdullah’s deputy prime minister, Najib Tun Razak, continued to demonstrate his steadfast loyalty to and support for the prime minister.

The unveiling of the Iskandar Development Region (IDR) in Johor generated much excitement and a “feel good factor” for the country. Many Malaysians are hopeful that the relaxing of the bumiputera policy in the IDR could herald more good news in the near future. It is significant this move is being done in Johor, which is the power base of UMNO.

In addition, Malaysia’s foreign reserves have increased significantly under PM Abdullah, many times more than the kitty during Dr Mahathir’s reign as PM.


Timing of next GE?

There is speculation that the next General Elections could take place sometime in the later part of this year, in order to capitalize on the “feel good factor” and before former finance minister Anwar Ibrahim can legally contest elections. Dato’ Yeoh felt that there was “no reason” for Pak Lah (as PM Abdullah is affectionately known) to call for early elections. If elections are delayed until next year, it would give the PM more time to roll out another “feel good” budget, which could see the lowering of personal income tax. Also, the next few months will witness several more Ninth Malaysia Plan programmes being rolled out.

Dato’ Yeoh did an assessment of how he thought the BN will fare during the next elections. He was of the view that it would be impossible for the BN to repeat the sterling results of the March 2004 elections, but it will easily maintain its two-thirds majority in Parliament. He pointed out that support for UMNO is still very strong in the rural heartlands.

The key electoral challenge facing the BN would be retaining urban support. A recent survey revealed that 65 per cent of urban voters want a change and will vote for the Opposition. This will pose a tremendous challenge to the MCA, the Malaysian Indian Congress (MIC) and Gerakan, whose seats are mainly in the cities.

The fight for the state of Penang will be the most important contest during the elect
ions. The opposition Democratic Action Party (DAP) and Parti Keadilan are expected to pick up many more seats in the coming election. Dato’ Yeoh assessed that they could more than double their number of seats in Parliament up to 30 — mostly at the expense of MCA, Gerakan and MIC.

However, Dato’ Yeoh was confident that UMNO’s position is still stable, as most rural voters still support the party. Parti Islam (PAS) can be expected to pick up 14 – 15 seats at best, compared to more than 80 for UMNO. Although the PAS stronghold is in the northern states, these states have only a few seats. In fact, Dato’ Yeoh pointed out, if UMNO could retain all their Johor seats, it would make no difference to their position even if they lost Kelantan and Trengganu.

With these high expectations of a BN victory, the result would therefore be considered a “poor performance” if BN lost its two-thirds majority in Parliament and they lost the states of Penang and Kedah — all unlikely scenarios.

Concluding, Dato’ Yeoh said that the key challenges facing Malaysia are the vital need to bridge the racial divide; maintaining political stability by the BN retaining its two-thirds majority; reducing or eliminating corruption; redressing inequalities; and making the economy more open and competitive.


Q & A discussion

During the Q & A discussion, some interesting insights were raised. Unfortunately due to the imposition of the Chatham House Rule by the chairman, Ambassador K. Kesavapany, the discussion cannot be freely reported. But here are some of the notable remarks made from the floor and the speakers:

It was pointed out that some of the most capable Malays in the country are in Johor. They are therefore poised to compete with the best that will come in to invest in the IDR. Therefore it is unlikely that there will be a repeat of the racial tensions of 1960s even if affirmative action policies in IDR were relaxed, simply because the vast inequalities have been largely levelled out. There is also now a new group of Malay business leaders with a modern outlook and no longer depend on patronage to succeed.

There appeared to be much optimism about what the Abdullah government would be achieving in the coming months. It was pointed out that PM Abdullah’s style is much more deliberate, bottom up, institutional-based (instead of personality-based) and consultative than his predecessor’s. Important issues now get debated over several Cabinet meetings, unlike in the past when few ministers spoke and most issues were basically fait accompli by the time they reached the Cabinet.

Vessel detentions show Jakarta’s disconnect with its people

It is shocking to learn from the MFA spokesman yesterday that Indonesia has yet to release the vessels carrying granite from the Riau Islands to Singapore. The press release did not indicate how many vessels were still being detained, but based on remarks in Parliament on 5 March by Foreign Minister George Yeo, some 12 tugboats and 12 barges — most of which fly the Singapore flag — have been detained. On Friday 23 March, The Jakarta Post reported that at least 20 barges have been detained by the Indonesian Navy since early February — that’s almost two full months!

(Photo: WN)

Aside for the obvious implications on the construction industry in Singapore, which relies heavily on sand and granite imports from Indonesia, the financial impact on Indonesian companies in the business of sand and granite exports has been tremendous. Riau Granite Members Association (APGR) member Muchamad Syafei told The Jakarta Post that business has been “badly affected”, as each vessel can carry between 2,000 and 3,000 tons of granite, with up to 3 round trips to Singapore per day. At US$21 per ton (which was the price of granite before the detentions began), that works out to over US$1 million in losses per week for the Indonesian companies.

And we haven’t even factored in the losses from the ban on sand exports. Based on a 11 March report in Indonesian daily Kompas, Indonesia used to sell sand to Singapore at US$7 per ton. Each day, more than 16,000 tons of sand were being exported from Indonesia to Singapore. The losses in sand revenue for Indonesian companies: US$672,000 per week.


The 17-member APGR has made a complaint to the Trade Ministry, and some companies are even considering suing the Navy for its massive losses. All this while, the Trade Ministry, including its minister and director general, has been denying that there is any ban on granite exports. Indonesian Foreign Minister Hassan Wirajuda also assured George Yeo on 15 March that the Indonesian Cabinet was not considering a ban on granite exports. However, he said that some of the detained barges were “in breach of regulations”. (The Navy alleges that the exporters are smuggling sand concealed under the granite, but the Indonesian exporters have insisted that these were just dust from the crushed granite.)


Jakarta has already let the cat out of the bag that all these bans and detentions are nothing to do with environmental damage, but are instead intended to pressure Singapore to sign an extradition treaty so they can hunt down corrupt businessmen and officials seeking refuge in the city state. Given the conflicting statements and actions of the Indonesian Trade Ministry, Foreign Ministry and the Navy, it is possible that each of these power centres in Indonesia are playing one-upmanship games in order to claim credit for what is eventually going to be a signed extradition treaty. (Singapore has already said that it will sign the Treaty once the details of the parallel Defence Cooperation Agreement are worked out.)


All this points to a serious disconnect between the government in Jakarta and commercial interests in their own Riau Province. While Jakarta officials continue to play games to demonstrate their nationalist credentials, their own people and businesses suffer. Singapore can always find alternative sources of sand and granite. But do the Indonesian companies and their workers have alternative sources of revenue and employment?


Projecting "soft power" but not going soft

In his speech in Parliament yesterday, Foreign Minister George Yeo said that “from time to time, we must expect countries to pressure us in the hope that we will then give way to their demands. Singaporeans know that if we give in to such pressures, we would only invite more such pressures. However, we are always prepared to build good relations with them on the basis of mutual respect and mutual benefit. We should still help them when they are in difficulty not because we expect gratitude or reward, but because that is the right thing to do.” (emphasis mine).

Defence Minister Teo Chee Hean echoed similar sentiments when he stressed that the SAF would continue rendering humanitarian aid and disaster relief to our neighbours, even though this help appeared to be taken for granted by some quarters. He said, “I still believe it’s the right thing to do. I suppose in some quarters, memories can be short. But heaven forbid, if we were to be called upon again…we will respond. We are all brothers in Asean.” (emphasis mine)

It is certainly heartening to note that the two ministers at the forefront of our foreign policy have emphasised the intrinsic value in rendering assistance to our neighbours, rather than solely focusing on a “balance of benefits” or quid pro quo. Although this by no means indicates that our leaders are becoming less “hard nosed” about foreign policy, I sense that there is a slight shift in the direction of using “soft power” to project our national interests. This will be a subject of a future post on this blog. Stay tuned!

Extradition Treaty with Indon will benefit S’pore too

Singapore and Indonesia have been conducting “megaphone diplomacy” with each other in the past few weeks. Officials and parliamentarians on both sides have been trading barbs over Indonesia’s sudden ban on the export of sand to Singapore and the bilateral Extradition Treaty that Indonesia so desperately seeks.

Indonesia has been wanting to sign the Extradition Treaty with Singapore for over 30 years. However, it is only in the past decade since the 1997-98 financial and political crisis in Indonesia that nationalistic drumbeats have forced this to the top of its foreign policy agenda with Singapore. In 1999, then-President B. J. Habibie accused Singapore of being racist and harbouring “economic criminals” as he tried to pressure Singapore to sign the Extradition Treaty. It was in this context that Habibie uttered his now infamous remark that Singapore is nothing but a “little red dot in a sea of green”, an analogy that the Singapore Government has used ever since to explain its dispassionate and clinical approach to foreign policy.

After Singapore’s and Indonesia’s new leaders — Lee Hsien Loong and Susilo Bambang Yudhoyono — took power in 2004, the two countries finally agreed to move forward on talks on the Treaty. In early 2005, during President Yudhoyono’s first state visit to Singapore, PM Lee assured him that Singapore would work towards concluding the Treaty. But since then, Singapore officials have been uncharacteristically slow in working out the details of the Treaty to bring it to a conclusion.

The Indonesians have not bothered to hide their impatience with Singapore’s apparent delay tactics. In February this year, Jakarta suddenly announced a complete ban on sand exports to Singapore. Singapore was the biggest importer of Indonesian sand, which is needed for its construction industry. The Indonesians first cited environmental and border encroachment concerns. But then the Director-General for Asia in DEPLU (Indonesia’s foreign ministry) revealed to the Jakarta Post on 26 February what both parties knew all along: the sand ban had nothing to do with the environment, and everything to do with applying pressure on Singapore to conclude the Treaty expeditiously.

The next day, Indonesian Vice President Jusuf Kalla lashed out at Singapore in an interview with the Financial Times for “refusing to sign” the Extradition Treaty. He accused Singapore of trying to keep “billions of dollars” in corrupt money siphoned out of Indonesia by fleeing tycoons during the 1997-98 financial crisis. He added that “Singapore often says there’s so much corruption in Indonesia. But when we want to work together on combating corruption, they don’t want to.”

A report in Australian daily The Age (“Singapore none too fussy about the source of wealth in its financial sector”, 26 July 2006) pointed out that among those believed to be hiding out in Singapore are convicted crooks who had embezzled hundreds of millions of dollars from Indonesian banks and state investment agencies. Many of these white collar criminals had bribed state bank officials to give them huge unsecured loans, and then fled to Singapore.

Singapore: Indonesian corruption is not our problem

The Singapore Government has countered Indonesia’s claims by pointing out that an Extradition Treaty is not going to solve its corruption problems, and that the main culprit is poor law enforcement within its own borders. It has also argued that the Treaty is a complex document that is complicated even further by the different legal systems in each country.

It is clear that the Singapore Government does not see any economic benefit in concluding the Extradition Treaty with Indonesia. A Merrill Lynch report in October 2006 found that one-third — or 18,000 — of Singapore’s high net worth individuals (those with over $1 million in assets) are Indonesians holding Singapore Permanent Residency. Their combined assets are worth a whopping $87 billion — prized foreign talent indeed! No doubt these Indonesian tycoons have contributed tremendously to the strong growth of Singapore’s wealth management industry in recent years.

Of course, not all rich Indonesians living in Singapore are corrupt. But the fear in the financial services industry is that once the Treaty is signed, many corrupt Indonesians will simply pull out their money and move to another safe haven to avoid extradition, and in the process hollow out Singapore’s private banking industry. So while Indonesia’s loss has been Singapore’s gain, Singapore’s loss (when the rich crooks pack up and leave for third countries) will not necessarily be Indonesia’s gain.

So what’s in it for Singapore?

So, from a Singaporean perspective, are there any compelling reasons for concluding the Extradition Treaty with Indonesia? In my humble opinion, there are many.

Firstly, it is the morally right thing to do. “Always do what is right, because it is right“, is what an American soldier’s mother advised him when he went out to war in Clint Eastwood’s movie, Letters From Iwo Jima. Just because Indonesia wrongly thinks that the Extradition Treaty is a panacea for its corruption problems, doesn’t mean that Singapore should continue to provide refuge for economic fugitives and profit from their dirty money. As a Christian, I am convinced that “righteousness exalts a nation, but sin is a disgrace to any people” (Proverbs 14:34, NIV). We will reap in future what we sow now. Obviously this cuts little ice with our self-proclaimed rational and amoral government, but that doesn’t make it any less important.

Secondly, taking a firm stand on money laundering will raise our profile as Asia’s premier fin
ancial services hub. This issue has been reported in the leading newspapers in Australia, the UK and goodness knows where else, causing much damage to Singapore’s squeaky clean reputation. The Government previously claimed that there is no need for an extradition treaty, because Singapore banks already have stringent checks in place to ensure that the Republic is not used as a money laundering centre. If this is the case, then the Government should have no worries that the Extradition Treaty will impact the money parked in local banks. If it turns out not to be the case, then it’s high time our banks put their house in order.

Thirdly, the conclusion of the Extradition Treaty will extinguish Indonesia’s main bargaining chip in its negotiations with Singapore. They have already agreed to renew the bilateral Defence Cooperation Agreement in exchange for the Extradition Treaty. In addition to continued access to training areas for the SAF, improved defence diplomacy with Indonesia will in no small way contribute to Singapore’s security. The Treaty will also remove the main bugbear in bilateral relations with our largest and most important neighbour, and open doors for further cooperation in a myriad of areas.

Finally, if Indonesia makes inroads into combating corruption, Singapore will be one of the main countries to benefit. This is the basis of ASEAN’s “Prosper Thy Neighbour” policy. Corruption is a scourge that is preventing the Indonesian economy from achieving its full potential. Although an extradition treaty is not going to fix Indonesia’s endemic corruption, it is part of the effort and would force corrupt businessmen to think twice before committing fraud and escaping to Singapore.

Indonesia is Singapore’s second-largest trading partner and Singapore is one of Indonesia’s biggest foreign investors. A growing Indonesian economy would be a boom for not only our exporters and investors, but our services industry as well. It is certainly not a “zero sum game”, as many in our government often see it. A Business Times report (“Betting on IT in Indonesia”, 1 March 2006) indicated that there is strong interest among Singapore’s companies in the Indonesian ICT market, which is set to grow from US$1.9 billion in 2005 to US$3.7 billion in 2010. Lower corruption means more efficient running of business and less “overheads” that need to be paid out to get things done.

Concluding the Treaty “early”

It is heartening to note that the Ministry of Foreign Affairs indicated yesterday that Singapore “would like both Agreements (the Extradition Treaty and the Defence Cooperation Agreement) to be concluded early”.

Hopefully this is the honest truth, and not just more diplomatic lingo.