Like A Thief in the Night
By Erick San Juan
When China parked a giant oil rig in disputed waters off Vietnam, it confirmed what Washington and regional governments have long feared: Beijing is taking a major leap in the defense of its territorial claims, testing the resolve of rattled neighbors—as well as the U.S. (Asia News online 5/8/14)
‘Like a thief in the night’, such major leap will not sit well with the rest of the neighborhood especially claimants in the disputed areas in the South and East China Sea. As an observer of events and geopolitics, I have been saying through my radio program and my blog that given the premise (as most writers say) that war is inevitable, the epicenter is here, either with Vietnam or the Philippines (or both). For the nth time since I wrote this possibility of war between Vietnam and China way back in the 90’s, that crisis like this was designed to happen and as always – it could be delayed but sadly it will happen whether we like it or not.
When Vietnam’s Prime Minister Nguyen Tan Dung visited the Philippines during the World Economic Forum on East Asia, economic and security issues were discussed and focused on the disputes with China over contested areas.
Reports from the WEF-EA: While stressing that Vietnam “strives for peace and stability in Asia Pacific,” Dung slammed China for violating international law and failing to adhere to his country’s demands to “immediately withdraw” a drilling rig it deployed near the disputed Paracel Islands in the South China Sea.
Speaking before the WEF at the Makati Shangri-la on Thursday, May 22, Dung said China’s actions “threaten peace, stability, and security and freedom of navigation and aviation” in the East Sea (South China Sea) and violate the United Nations Convention on the Law of the Sea (UNCLOS).
“Vietnam always wants peace and friendship,” Dung said in Vietnamese. “We have exercised utmost restraint and showed every… good goal and exhausted all dialogue channels to communicate with Chinese authorities of different levels by expressing protest and demanding China to immediately withdraw its drilling rig and its escorting vessels from the Vietnamese waters.”
He added: “We ask China to observe the 1982 UNCLOS. However, China (has failed) to respond to Vietnam’s legitimate demand. On the contrary, it has been slandering and blaming Vietnam while continuing to use force and escalating its increasingly adventurous and serious act of intimidation and violation.”
“The entire Vietnamese nation has been protesting against China,” Dung said. He added that his government has had to manage unrest over the dispute and punish law violators.
It was reported that more than 3,000 Chinese have already returned home from Vietnam following riots by Viet citizens protesting China’s deployment of an oil rig to the Paracels.
In an earlier e-mail sent exclusively to Reuters, Dung said, “Vietnam is considering various defense options, including legal actions in accordance with international law.”
The Philippines has said it wants Vietnam, along with Malaysia, to join its historic case against China over the disputed waters, parts of which it calls the West Philippine Sea. But Malaysia immediately countered that it won’t get involved.
Of course, peaceful resolutions to such crisis had to be done first but as I have warned before – confrontations like this will take place in a regular basis in the contested areas in the SCS among the claimants and China if there will be no clear discussions on the matter, and a possible regional conflict is in the offing.
The fact that China deployed the rig shortly after US Pres. Barack Obama’s Asia tour “underlines Beijing’s commitment to test the resolve of Vietnam, its Asean [Association of Southeast Asian Nations] neighbors and Washington,” wrote security scholars Ernest Bower and Gregory Poling, of the Center for Strategic and International Studies.
China has laid claim to much of the South China Sea for years. Its intent to establish control hasn’t changed, security analysts say. But under President Xi Jinping, China’s government has begun to more aggressively demonstrate its capabilities, courting more direct conflict with neighbors—trends that have prompted deep worry in Washington. A senior State Department official on a visit to Hanoi on Thursday said the U.S. is “very concerned about any dangers.” (Vietnam Spat Represents a Chinese Leap by Brian Spegele and Vu Trong Khanh, 5/8/14)
Given the escalated tensions in the South China Sea through provocations, only a miscalculation could bring the response that has been predicted long time that will spark the conflict.
After a century since the Great War (First World War), is the world ripe for another global war?
Here we go again!!!
The Vietnam Violence
By Ramon Orosa
The Vietnam violence does not come as a surprise. While seemingly symbiotic, having worked together for many years in Vietnam’s fight for independence and being somewhat conjoined by having similar ideologies, and finally adopting their ideology to allow greater economic freedoms, I think there is some tendency to under estimate the fierce independence of the Vietnamese and their determination to protect their national interests from China’s escalating attempt at robbery, no matter how China might defensively view it’s actions.
They have not abandoned a centralized autocratic form of governance and when it is not damaging to her interests, Vietnam is likely to be accommodative of China’s “requests” but there is a clear point when Vietnam will no longer accommodate China. The sea grab of China is one of them. The violence is meant to send a loud and clear message to China that her Middle Ages world view needs to be seriously updated and revised. The world is no longer the same and while China has prospered greatly in the last 50 years, it is not sufficient reason to look at the other countries that are her neighbors as vassals that need to pay tribute to China as an overlord.
In modern times, China has decided to restore that tribute paying practice by the attempt to extend her sovereignty over the seas and extend, because she thinks no one can challenge her, to the virtual shores of the neighboring countries. She looks with so much condescension on her neighbors, viewing herself as a superior race to which all others must bow and acquiesce. Witness her response to statements from the US essentially telling the US to keep out- this is our turf and we are free to do whatsoever we wish including rewriting all the boundaries of neighboring nations. First the seas, and then virtual takeovers of the involved nations.
This is why she insists that bilateral discussions are the only way to resolve this whole issue. First, bilateral discussions will weaken any resistance, because China’s economic size and military might are unmatchable by any of the neighboring countries and so the negotiations would be truly one sided. Second, China’s twin objectives are simply to have everyone accept what is in the seas are theirs and if you accept that, you may do whatever you wish there provided we get the lion’s share of the riches in the water and the sea beds at the bottom. That is your tribute to your overlord and you still get some of the riches but you grow at our discretion.
I suppose some of the thinking in terms of timing was based on their assessment that the US is a spent force that would be unwilling to take on China in a confrontation in the area and that the American public, devastated by the economic problems of the last 5 years and the accumulated debts of their Middle Eastern adventures since 9/11, would not be supportive.
But, at best, the world view of China is barbaric and has absolutely no place in the modern world. In some way, some might even be able to say that because it is race discriminative, China is today’s resurrection of nazi, gestapo type national policy. The problem is that China essentially plans long term and in this case, hopes to wear out all of the other affected nations, including the US. It is what I interpret as China’s beginning war versus the world. All of her alliances are strategic, serving her political, commercial and military interests. She has no real allies, just nations under her dominance. And when, in her estimation, the payoff is inestimable, just as the potential riches of the South Seas are, she will attempt to grab whatever can be grabbed.
This sea grab of China is truly unconscionable and in a way, I suggest that cowardice is behind the statements of the US that they are neutral in terms of the disputatious grab being done by China. What could be more unlawful, unreasonable if not unconscionable than what China is doing? This is what China is relying on. That is why she continues to expand her South Seas presence while America does nothing but talk.
Even if US stations forces in Palawan, it will take several years before any decent facility can be constructed. In those years of construction, China will be expanding her presence so that by the time the US is able to establish herself, China would already have built a mighty presence in the area she is grabbing. The problem then is how to get her out without a major confrontation. It seems to me it would probably be too late. I would think it is time not just for port visits by American naval forces, but a temporary placement in the disputed areas of some of those vessels and aircraft that constantly move and shadow the Chinese vessels.
Some might ask, why China is reclaiming land and building an airfield? Because of the distance from China’s coastline to the disputed area so she can station both naval and air forces and not run out of fuel or supplies should there be combat.
What China may not have anticipated was the protest reactions and attacks on Chinese interests in Vietnam. She also did not expect our forces to arrest the fishermen who were clearly trespassing and poaching endangered species of sea life in the area. So the response has been somewhat muted. What China fails to understand is that times have changed, the world has changed and while she has much military might, she will have to do a whole lot of killing to subdue the neighboring nations and make a pariah of herself in the world. Does she mind? I doubt it and that is what is truly unfortunate about this situation.
Remembering History: Connecting the Dots
By Erick San Juan
Recalling the words of the late Senator Claro M.Recto that “in the future, Philippines could be a province of China.” In the ’90′s, We were told by an American lecturer at the Heritage Foundation in Washington DC that the future war in South China Sea could spark between China and Vietnam and the Philippine involvement is inevitable. When my father was still alive, he told me the time will come that possibly the Philippines and many Asian countries will be ruled by China. Thus dividing the world into regions namely: Asia is for China, US controlling north, central and south America, USSR (now Russia) dominating Eastern Europe, Germany managing western Europe and Israel conquering Africa and the Middle East to create a Greater Israel in the process.
This flashback of events is now getting into a reality. In the Asian setting, it started with sweet talks from China’s leaders diplomatic steps in 2013 to reportedly improve Asean-China relations and bring back confidence in the region, charming it’s neighbors with promises of restraint and win-win cooperation. Foreign minister Wang Yi in May 2013, had raised hope in Asean that China was giving first priority to regional diplomacy and China viewed Asean as a valuable strategic partner.
Asean welcomed the visits of China’s President Xi Jinping and Premier Li Keqiang to South East Asia in October 2013. Pres. Xi’s historic remarks to the Indonesian parliament that Asean and China should build “trust and develop good neighborliness” and “stick through thick and thin”.
China also indicated that it’s ‘Maritime Silk Road for the 21st Century Initiative’ was inspired by Admiral Zheng He’s peaceful voyages to South East Asia in the 15th century, which was not about gaining new territories but about commerce and extending Chinese civilization. As a result of these diplomatic statements by Chinese leaders, Asean was hopeful that China was changing it’s approach to it’s maritime disputes with its neighbors. Asean leaders were closer to becoming convinced that the ‘China Dream’ could also be made ‘South East Asia’s Dream’.
Asean agreed to fully and effectively implement the Asean-China Declaration on the Conduct of Parties in the SCS-DOC and actively proposed confidence building measures.
The overall situation in the South China Sea went calmer with both sides exercising restraint.
(Casting Doubt on Neighborliness by Nguyen Hung Son of RSIS-Singapore 5/14/14)
What went wrong? Action speaks more than words.
China issued the 9 Dash line, the new Hainan fishing regulations and introduced an ADIZ(Air Defense Identification Zone) in the SCS.
It was a complete shock to the Asean and the international community when China sent it’s biggest oil rig near Vietnam, claiming the maritime area as it’s own. China even grabbed few reefs and shoals also claimed by the Philippines and installed military barracks. Nguyen concluded that China’s action was deliberate, well-planned and coordinated.
The worst, China even dismissed calls to resolve the dispute through dialogue and other peaceful means. Is this the current version of Sun Tzu’s Art of War?
The real agenda was exposed by Andrew Browne of the Wall Street Journal (5/21/14) citing CNOOC (China National Offshore Oil Corp.) launching it’s first deep water drilling rig in 2012. It’s chairman, Wang Yilin called it “our mobile national territory and a strategic weapon”. He claimed that an oil platform enjoyed sovereign rights wherever it floated, like an offshore island. The gigantic $1 billion rig was designed to roam across the SCS, which China claims almost in its entirety.
It got the ire of the Vietnamese people, who resisted and rammed the Chinese ships. The fury of the Vietnamese continued and attacked the Chinese owned factories on shore. China evacuated thousands of its nationals, many injured and several died.
According to Jane Perlez and Keith Bradsher of Intl. New York Times (5/19/14), ” The deployment of the oil rig is a possible game changer. Its China’s determination to dominate the South China Sea. While Holly Morrow, a fellow in the geopolitics of energy program at Harvard University who served during the George W. Bush administrations National Security Council said, “China has been taking incremental steps, escalating and increasing its presence in SCS. CNOOC is a business but the program is not only about energy, its about sovereignty.”
Since two years ago, China was reportedly able to nudge aside the helpless Philippines from the disputed reefs without a fight. While many nations admired the Vietnamese standing up against perceived Chinese invasion. The world has not forgotten that the Vietnamese fought the Americans in the past and won.
Ken Fuller of the Daily Tribune asked a very timely question–”Will Washington Defend the Philippines? (5/20/14) He said that the US government clarified almost 40 years ago that it was under NO OBLIGATION that the US will honor the provisions of the Mutual Defense Treaty of 1951, nor will spring to the Philippines defense in the event of a Chinese incursion into areas of SCS claimed by this country.
On June 9,1975, US Secretary of State Henry Kissinger even sent a lengthy telegram to the Commander in Chief, Pacific Fleet, with a copy to the US Embassy-Manila stating Washington’s legal interpretation that MDT commitments do not apply in the event of an attack on Spratlys or on GOP(Government of the Philippines) forces stationed there.
The Spratlys were not included in the territory ceded by Spain to the USA in 1898 and excluded from the maps accompanying the presentation of MDT.( You have to read Fuller’s article in full and you will surely get ‘goose pimples’.
The worst revelation came from John Mangun, an American based in the Philippines and columnist at the Businessmirror(5/22/14). He believed that Beijing’s diabolical plan is not only to take over the Philippines power grid but….. It’s a fact: China is not going away and relations and actions must be based on REALITY, NOT FANTASY.
He said that the US government is so out of touch with what’s happening on the ground that US Sec. of State John F.Kerry might go to Beijing to offer to sell the Philippines to China using the same 1898 Treaty of Paris as the legal basis.
“Ano tayo, pambayad utang?” God forbid!
The Travails of MSMEs (part 2)
by Miriam Tan-Fabian
LET us continue where we left off on the challenges, issues, and obstacles that MSMEs need to hurdle just to start, maintain, and sustain micro, small, and medium businesses.
Market transaction costs
Aside from financial support, MSMEs also need to contend with transaction costs. The Philippines is again mentioned as one of the countries with the most expensive power rates in the ASEAN. In fact, if you look at your electric bill, one of the items you are paying for are costs of transmission loss. Instead of customers shouldering this cost, should not Meralco shoulder such inefficiencies which the company should deal with and not customers? While this is already one concern for ordinary citizens like us, it is even a bigger headache for business owners whose power needs are several times more than individuals or even whole families.
In the electronics sector, currently one of the fastest growing industries, electricity is a major manufacturing cost. In the case of Myanmar which has an unreliable power and seasonal black outs, the cost of power is a real limitation even in the agro-processing industry, specifically, the edible nut industry which requires milling machines to process. More importantly, to ameliorate the inadequate power provided by the government, businessmen who own factories, mills, or some kind of machinery have to purchase diesel-powered generators, where the resulting costs of running them are four times the cost of government-produced electricity, just to maintain operations. Another country, Cambodia, also cited high energy cost as a barrier to business.
Another transaction cost is labor costs where the relatively high labor cost in the Philippines could well be losing us investments when compared to the lower labor costs for Vietnam and China. Thailand too, recently approved a minimum wage increase, prompting complaints from the private sector and the closing of several MSMEs.
What are ASEAN governments doing about it?
While it is true that MSMEs have many challenges to surmount, it would be unfair to assert the ASEAN governments are not doing anything about MSMEs. In fact, many of them have put up two to three, or even more government agencies, departments, or other instrumentalities to assist MSMEs. One of these would definitely have something to do with trade and or industry, investment, and what not. In the Philippines, we have the Department of Trade and Industry (DTI), which has a section totally devoted to MSMEs, while Vietnam has the Ministry of Industry and Trade (MOIT), and Indonesia has a Ministry of Industry.
Most governments to have a medium or long-term Development Plan for MSMEs or SMEs. Vietnam has the SME Development Plan of 2011-2015; Indonesia has a Strategic Plan for SMEs, and the Philippines has a Philippine Development Plan for SMEs for 2005-2009. While most strategic planners enjoin top public officials to plan long-term, meaning 10 or more years, the electoral reality is that top government officials, unless they are re-elected, will stay in power for only less than 10 years.
For example, in Vietnam, there is a Vietnam General Office of Statistics which monitors MSMEs.
Several ASEAN countries also have specific laws specifically designed to benefit MSMEs. The Philippines for example has the Magna Carta for SMEs. Indonesia has a Presidential Decree No. 7 of 2005 which includes items on SMEs, and Thailand has Small and Medium Enterprises Promotion Act, and the Tax code of Thailand. This Thai tax code was expanded by several royal decrees to promote SMEs. Although there are some countries though like Myanmar and Vietnam who have yet to craft specific SME laws, policies, and regulations, their governments are aware of this problem and are already in the process of drafting such laws.
Many countries also provide trainings for MSMEs. In the Philippines for example, the DTI’s training arm is the Philippine Trade and Training Center (PTTC) which offers training programs through three modes: 1) onsite or face-to-face, 2) customized in-company courses, and 3) through online training videos. Thus, as long as you have reliable internet access, you can even learn from your house.
On the other hand, if you tend to learn better with a group, you could take up the face to face trainings programs instead. PTTC’s onsite programs include such interesting and relevant topics like: Accounting for Non-Accountants, Analyzing Business Target and Business Buying Behavior (Dealing with Competition), and Basic Business Recording, topics which would be useful for most entrepreneurs. Further, these courses are affordable and competitive when compared to their private sector counterparts, costing anywhere from Php 250 to 500 for half-day affairs and Php 1,750 to Php 3,000 for trainings of 1 to 3 days.
It is unfortunate then that many MSMEs do not know of these programs. Thus, there is a need for the government to actively reach out to these businesses, through a stronger marketing campaign, the effective and active use of social media, and even through the LGUs which hold annual business registration activities for MSMEs and businesses in their jurisdictions. What better way for LGUs to ensure more taxes being paid by these businesses than by helping to improve their capabilities and capacities?
Moreover, since China and India’s economic influence and dominance are felt strongly by neighboring Asian countries, there is a need to seriously work towards the goal of ASEAN economic integration by 2015. We cannot expect to be more competitive if we remain insular, especially since many of the MSMEs in the ASEAN region suffer from the same challenges and obstacles. Hopefully, such a situation will enable some proposed common solutions to be effective in addressing these similar MSME issues and concerns across the region.
Two ways by which we can do this is first through actively enhancing and supporting the implementation of ASEAN Free trade agreements (FTAs) which should enable a regionally mobile workforce, open up foreign markets even to MSMEs, and promote technology transfer. This labor force too can be trained with the required minimum standards through a common labor certification program.
Such an initial step though presumes of course that the state will mainstream these FTAs into national development strategies.
A second way is through the creation of a regional MSME business registration system to facilitate enterprise identification for financing and/or credit guarantee programs and domestic and export market access. This tactic will also aid international organizations like the ADB design a more responsive credit risk profiling of MSMEs in the region.
- The Travails of MSMEs (part 1) (opinyon2010.wordpress.com)
- MSME dept to develop websites of MSEs (industrialloops.wordpress.com)
- Youths benefit from job creation programme (times.co.zm)
- $2Tr Financing Pap Faces SMEs In Developing Economies. (spyghana.com)
- MSME gets major policy benefits extended for 3 years even if they graduate to new category (industrialloops.wordpress.com)
- Syndicate Bank unveils 5 products for MSMEs (vancouverdesi.com)
- CII-IMRB Paper on ‘Adoption of Cloud Among MSMEs’ at CII Cloud Summit 2013 ‘Developing Cloud Strategy’ (hispanicbusiness.com)
- Syndicate Bank unveils 5 products for MSMEs (news.in.msn.com)
- SMEs in developing economies face $2 trillion financing gap – IFC (ghanabusinessnews.com)
- India, Mauritius ink MoU to develop policy framework for MSME (industrialloops.wordpress.com)