Navigating a Plague

Medical Staff at a Hanoi Hospital. Personal photo from H.P., photocredit forthcoming

In the span of weeks, the Corona virus has gone from an isolated problem “over there” to a global pandemic that is generating carnage on an unimaginable scale. Its reach is extending across countries and increasingly into our communities and homes. By 28 March at least 30,000 people had lost their lives to the virus. The worst is still to come.

Viewed on a global scale, from our screens and in our living rooms, we experience the spread of virus and death in an endless parade of charts and video footage, and news articles, clips, and broadcasts of the more or less confused statements and declarations and denials of public authorities whose job, we are now reminded, it is to keep us safe and promote public good.

In this context, one of the most troubling if ever-present aspects of this new plague is its disorienting effects. Simply put, the scale, scope, and complexity are simply too huge to comprehend from any given angle or standpoint. As individuals and as members of communities, countries, and nations, the challenges before us are indeed overwhelming.

And yet our capacity to deal with these depends on our resilience. We are now, all of us, in a life and death struggle in which our survival and that of our families and communities depends on our ability to direct our behaviors in constructive ways … all this while the sky and our sense of normalcy is falling around us.

New York Times photo

Three aspects of crisis

In these times it is essential if difficult for us to be able to stably navigate, to comprehend what is happening in our countries and in our lives in ways that can contribute to effective responses rather than panicked desperation. To do this, it seems, there is a need to attend to three aspects of our lives.

Most immediately there is the individual and family aspect. In the context of a global plague, the urgency of local action takes on a new meaning. Responsible personal behavior is a requirement for our survival and must be promoted and if necessary enforced to the best of our abilities.

A second and perhaps more challenging aspect is that of community, by which is meant our associations with those in and around our places of work and residence. For decades, we have been observing the loss of the sense and reality of community. Today our survival depends on recovering this sense, of nurturing it and putting it to good use, even if its expressions take on new forms and new modes of social coordination. Part of community is empathy and the ability to act in the public interest. In an age of hyper globalization and soulless anonymity, our wellbeing requires we work to recover our humanity as if our lives and those of our family and neighbors depend on it, because they do.

Perhaps the most daunting but nevertheless essential aspect of the pandemic is its political aspect. As a frontline medical worker in Spain has noted, “This is not only an epidemic of illness, it’s an epidemic of really bad government.” That may very well be the understatement of our times. We need to appreciate why China didn’t do it but why bad governance in China did. We need to recognize that the current global health calamity reflects and is exacerbated by a failure of public governance of historical proportions.

To be specific, the current pandemic began with the profound irresponsibility of China’s authoritarian rulers in tolerating conditions conducive to disease, suppressing information, and effectively if passively promoting its spread for two months, as infected travellers crisscrossed the planet. Across Europe, America, and soon the rest of the world, the crisis is being exacerbated by grossly under-equipped (and often profoundly irresponsible governments). It is ironic but not surprising that the leader of world’s wealthiest, most powerful, and most triumphantly capitalist country has been so lethally inept in his response.

Responsibility to self, community, and humanity

As the magnitude of the crisis increases, we are increasingly presented with the harrowing stories of those on the front lines and of those whose with loved ones whose lives are being swiftly cut short, with little in the way of goodbyes. From witness accounts, our hospitals are seeing intensities of death and disease terrifying to even the most seasoned health professionals. As individuals and members of families, we need to devote ourselves to caring for those we love and those who love us by maximizing our preventive measures one day at a time.

We also need to extend our unnaturally atrophied sense of community as best we can, by finding ways of supporting those who live and work around us with an eye to promoting collective wellbeing. Admittedly this is difficult. But we need to find ways recognizing the vulnerabilities of those around us linked to age, socioeconomics status, and other characteristics. Combing social distancing with community requires creativity. Across countries we are seeing experiments in mutual support, from red paper in windows to indicate support is needed to neighborhood chat groups and various forms of social gathering. While we need social distance, we also need to reach out. “Liking” and trolling won’t do.

Finally, responsible cooperation and (where warranted, non-cooperation) with public authorities is essential. We must always insist public controls remain transparent, not be put to abusive ends, and always promote public health inline with the best public health expertise. Yes, in some places life Columbia, death squads are using the current emergency to target political enemies. But clearly, there is no room for patience with libertarian or fascist-populist no-nothings.

Spreading virus is no one’s right. That includes government, however, and chambers of commerce suggesting lives be sacrificed to profits. Where necessary, informed resistance to public authority may be necessary. The basic standard of evaluating when this is warranted is simple enough: our must behavior must never compromise public health.

Who knows what the world will look like after this storm has passed. Who knows what our communities will look like. And even our families and us. Surely we will need to rebuild our economies and put them to the service of humanity.

In the mean time we need to develop new capacities and resiliencies. Part of this, I suspect, is the ability to link together these different aspects of our collective crisis, to take occasional breaks for emotional health and restoration, and to appreciate the finer things in life which, above all else, are our relations with those we love and, somewhat more hopefully, with the communities and collective efforts of humanity on which our lives now depend. Our future is now.

JL, Leiden


Jonathan D. London is Associate Professor of Political Economy at Leiden University’s Institute for Area Studies, in the Netherlands. His most recent books include Welfare and Inequality in Marketizing East Asia, published in 2018 and the Routledge Handbook of Contemporary Vietnam, forthcoming in 2020. London has more than 20 years of experience living and working in Asia. He was born in Boston and raised in Cambridge Massachusetts. He holds a PhD in sociology from the University of Wisconsin-Madison.

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China didn’t do it

It’s imperative to move beyond “China did this” and specify who did what. No country per se ever acts, specific people or groups of people do, e.g. Hitler, the Nazi party, Mao, Deng, Kissinger, Pol Pot etc. Rwanda didn’t commit genocide. Specific groups and people did.

Yes, specific people in China – associated with Xi Jin Ping and he himself – willfully suppressed information and timely responses and to date we lack information to know what’s actually happened – I doubt the “no new cases” claims. Beijing (i.e Xi Jin Ping) also claims that the Tienanmen Square massacre and the confinement of more than 1m Uighurs never happened, that all of maritime Southeast Asia “belongs” to China, and that basic human rights do not exist. Do you believe it?

No matter how widely they are able to broadcast their deadly propaganda – whether via China Daily falsities inserted for dirty money into US newspapers or adds on morally bankrupt Facebook –  it is necessary to hold corrupt power to account.

For the same reasons we need to specify Trump’s (and not America’s) culpability for his deceit and for his corrupt administration’s and ultimately the federal government’s awful and lethally inept response.

And ultimately we need to question why public health systems in the US and even in European counties with otherwise much more effective and equitable health systems have been ineffective in the face of a pandemic. Where was the societal preparedness, where was the public money? Iran and Afghanistan, 2008 bailouts, tax cuts for the super rich, and secret bank accounts come to mind. Where was and is the state capacity? It’s too late. That takes a generation, at least.

It is not too late and it is essential to recognize publicly the culpability of Xin Jin Ping and those a party to his cult of personality for making this global pandemic possible.

Because these are the facts: If public authorities in Wuhan had effectively managed biohazardous wildlife markets allowed to function for 17 … 17 years (!) after SARS 1 … and had responded responsibly to specific threats in November and December of 2019 and all of January of 2020 we would not see thousands dying across the rest of the world and the millions more soon to follow.

It is now likely that millions will die around the world because of Xi Jin Ping’s mismanagement of public markets and suppression of an effective response, including allowing thousands of outward bound flights from a known epidemic hot spot. Never lose sight of that.

We can, correspondingly, reject the Xi regime’s sneaky campaign to dupe the rest of the world, claiming total victory and claiming superior competence, while looking down on the rest of the world for dying and descending into economic and social collapse in a global pandemic that his regime and its systemic corruption effectively permitted and facilitated.

Remember, too, there were more than a few right minded Mainland Chinese people – including even responsible members of his own party and thousands of mainland Chinese citizens – who did try to raise alarm and initiate effective public health responses, who were silenced and even imprisoned.

Nor should we delude ourselves that authoritarian or Confucian values themselves are somehow more effective. Taiwan and South Korea are democratic societies. Confucian culture, as Lu Xiao Bo has pointed out, can be deadly when it facilitates top down and violent suppression, like the Tiananmen Massacre and the suppression of its historical fact since 1989, which most certainly contributed to the culture of docility that allowed the current incompetence, deceit, and carnage.

The ability to cooperate for the purposes of public good in times of crisis or in normal times demands levels of social trust that are sometimes stronger in East Asia and in certain European social democracies than in other places.

We need to ask why. Why are Taiwanese and Koreans living in democratic societies and mainland Chinese and Singaporeans and Hong Kongers living under more or less authoritarian circumstances able to coordinate when necessary in the public interest but unevenly effective in managing risks to public health (like, in the case of China, allowing deadly pollution, the consumption of melamine, the production and export of toxic foods and drugs, or conditions conducive to allowing bat to pangolin to human transmission to occur etc).

These are all important questions that need to be addressed if we are to have a safer world. We also need to ask why whistle blowers continue to be silenced at the expense of overwhelming risk. If the Chinese doctor Li Wen Liang and the American doctor Helen Chu who each detected early disease spread in their countries were not suppressed we would be in a better position than we are today. Both were victims of chauvinist suppression, along with all of us.

Racism, in other words, will not help us and nor will blaming entire countries. Similarly, praising authoritarians or ‘Confucian culture’ as inherently good is unhelpful at best. So stop with that.

Hold specific public officials to account instead. And speak up for, vote for, and insist on effective, responsible, and transparent government. Remember the anonymous gentleman who stood in front of the tank in Tienanmen square. Remember Rosa Parks. Don’t ever lose your voice.

 


Jonathan D. London is Associate Professor of Political Economy at Leiden University’s Institute for Area Studies, in the Netherlands. His most recent books include Welfare and Inequality in Marketizing East Asia, published in 2018 and the Routledge Handbook of Contemporary Vietnam, forthcoming in 2020. London has more than 20 years of experience living and working in Asia. He was born in Boston and raised in Cambridge Massachusetts. He holds a PhD in sociology from the University of Wisconsin-Madison.

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Sources and consequences of systemic health systems failure

However rich, that none of the “advanced capitalist countries” of the West have the capacity to test and have therefore failed in responding to the pandemic has largely to do with the fact that none of them passed through the SARS or MERS epidemics and therefore failed to develop and adequately arresting vision of future possibilities. In the many years since SARS and MERS, the governments of these countries continuously failed to prioritize the development of an effective testing or emergency preparedness regime.

Unluckily for these countries and for those of us who live in them (and soon, especially, for those in poor countries and those in poor households and vulnerable groups in rich countries), it is not possible to have effective testing and emergency pandemic response regimes in short order or to have treatment materials, medicines, and equipment on a sufficiently large scale.

That health systems in the world have become so thoroughly commercialized and profit-driven has reduced their effectiveness with respect to public health, leading to the current situation that is aptly summarized in conversations long overheard in hospitals in the so-called Third World: “There are not tests we can do because we don’t have them for you. I am sorry but there is no treatment, so I suggest you just go home and wait.”

And one more note…

I just learned this morning that the lovely family directly across our very small street has the virus. We see them every morning and every day of the year through the windows of our houses, which are only meters away from each other. Every so often we wave to each other through our windows. Our small whatsapp group of immediate neighbors is supporting them. My wife just brought them groceries.

Will not be surprised if I/we get it soon. Wait at home, perhaps? Let’s see.

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Notes on the Plague – By Mike Davis

Notes on the Plague (Original Post Here)

COVID -19 is finally the monster at the door. Researchers are working night and day to characterize the outbreak but they are faced with three huge challenges. First the continuing shortage or unavailability of test kits has vanquished all hope of containment. Moreover it

is preventing accurate estimates of key parameters such as reproduction rate, size of infected population and number of benign infections. The result is a chaos of numbers.

There is, however, more reliable data on the virus’s impact on certain groups in a few countries. It is very scary. Italy, for example, reports a staggering 23 per cent death rate among those over 65; in Britain the figure is now 18 per cent. The ‘corona flu’ that Trump waves off is an unprecedented danger to geriatric populations, with a potential death toll in the millions.

Second, like annual influenzas, this virus is mutating as it courses through populations with different age compositions and acquired immunities. The variety that Americans are most likely to get is already slightly different from that of the original outbreak in Wuhan. Further mutation could be trivial or could alter the current distribution of virulence which ascends with age, with babies and small children showing scant risk of serious infection while octogenarians face mortal danger from viral pneumonia.

Third, even if the virus remains stable and little mutated, its impact on under-65 age cohorts can differ radically in poor countries and amongst high poverty groups. Consider the global experience of the Spanish flu in 1918-19 which is estimated to have killed 1 to 2 per cent of humanity. In contrast to the corona virus, it was most deadly to young adults and this has often been explained as a result of their relatively stronger immune systems which overreacted to infection by unleashing deadly ‘cytokine storms’ against lung cells.

The original H1N1 notoriously found a favored niche in army camps and battlefield trenches where it scythed down young soldiers down by the tens of thousands. The collapse of the great German spring offensive of 1918, and thus the outcome of the war, has been attributed to the fact that the Allies, in contrast to their enemy, could replenish their sick armies with newly arrived American troops.

It is rarely appreciated, however, that fully 60 per cent of global mortality occurred in western India where grain exports to Britain and brutal requisitioning practices coincided with a major drought. Resultant food shortages drove millions of poor people to the edge of starvation. They became victims of a sinister synergy between malnutrition, which suppressed their immune response to infection, and rampant bacterial and viral pneumonia. In another case, British-occupied Iran, several years of drought, cholera, and food shortages, followed by a widespread malaria outbreak, preconditioned the death of an estimated fifth of the population.

This history – especially the unknown consequences of interactions with malnutrition and existing infections – should warn us that COVID-19 might take a different and more deadly path in the slums of Africa and South Asia. The danger to the global poor has been almost totally ignored by journalists and Western governments. The only published piece that I’ve seen claims that because the urban population of West Africa is the world’s youngest, the pandemic should have only a mild impact. In light of the 1918 experience, this is a foolish extrapolation. No one knows what will happen over the coming weeks in Lagos, Nairobi, Karachi, or Kolkata. The only certainty is that rich countries and rich classes will focus on saving themselves to the exclusion of international solidarity and medical aid. Walls not vaccines: could there be a more evil template for the future?

*

A year from now we may look back in admiration at China’s success in containing the pandemic but in horror at the USA’s failure. (I’m making the heroic assumption that China’s declaration of rapidly declining transmission is more or less accurate.) The inability of our institutions to keep Pandora’s Box closed, of course, is hardly a surprise. Since 2000 we’ve repeatedly seen breakdowns in frontline healthcare.

The 2018 flu season, for instance, overwhelmed hospitals across the country, exposing the shocking shortage of hospital beds after twenty years of profit-driven cutbacks of in-patient capacity (the industry’s version of just-in-time inventory management). Private and charity hospital closures and nursing shortages, likewise enforced by market logic, have devastated health services in poorer communities and rural areas, transferring the burden to underfunded public hospitals and VA facilities. ER conditions in such institutions are already unable to cope with seasonal infections, so how will they cope with an imminent overload of critical cases?

We are in the early stages of a medical Katrina. Despite years of warnings about avian flu and other pandemics, inventories of basic emergency equipment such as respirators aren’t sufficient to deal with the expected flood of critical cases. Militant nurses unions in California and other states are making sure that we all understand the grave dangers created by inadequate stockpiles of essential protective supplies like N95 face masks. Even more vulnerable because invisible are the hundreds of thousands of low-wage and overworked homecare workers and nursing home staff.

The nursing home and assisted care industry which warehouses 2.5 million elderly Americans – most of them on Medicare – has long been a national scandal. According to the New York Times, an incredible 380,000 nursing home patients die every year from facilities’ neglect of basic infection control procedures.

Many homes – particularly in Southern states – find it cheaper to pay fines for sanitary violations than to hire additional staff and provide them with proper training. Now, as the Seattle example warns, dozens, perhaps hundreds more nursing homes will become coronavirus hotspots and their minimum-wage employees will rationally choose to protect their own families by staying home. In such a case the system could collapse and we shouldn’t expect the National Guard to empty bedpans.

The outbreak has instantly exposed the stark class divide in healthcare: those with good health plans who can also work or teach from home are comfortably isolated provided they follow prudent safeguards. Public employees and other groups of unionized workers with decent coverage will have to make difficult choices between income and protection. Meanwhile millions of low wage service workers, farm employees, uncovered contingent workers, the unemployed and the homeless will be thrown to the wolves. Even if Washington ultimately resolves the testing fiasco and provides adequate numbers of kits, the uninsured will still have to pay doctors or hospitals for administrating the tests. Overall family medical bills will soar at the same time that millions of workers are losing their jobs and their employer-provided insurance. Could there possibly be a stronger, more urgent case in favor of Medicare for All?

But universal coverage is only a first step. It’s disappointing, to say the least, that in the primary debates neither Sanders or Warren has highlighted Big Pharma’s abdication of the research and development of new antibiotics and antivirals. Of the 18 largest pharmaceutical companies, 15 have totally abandoned the field. Heart medicines, addictive tranquilizers and treatments for male impotence are profit leaders, not the defenses against hospital infections, emergent diseases and traditional tropical killers. A universal vaccine for influenza – that is to say, a vaccine that targets the immutable parts of the virus’s surface proteins – has been a possibility for decades but never a profitable priority.

As the antibiotic revolution is rolled back, old diseases will reappear alongside novel infections and hospitals will become charnel houses. Even Trump can opportunistically rail against absurd prescription costs, but we need a bolder vision that looks to break up the drug monopolies and provide for the public production of lifeline medicines. (This used to be the case: during World War Two, the Army enlisted Jonas Salk and other researchers to develop the first flu vaccine.) As I wrote fifteen years ago in my book The Monster at Our Door – The Global Threat of Avian Flu:

Access to lifeline medicines, including vaccines, antibiotics, and antivirals, should be a human right, universally available at no cost. If markets can’t provide incentives to cheaply produce such drugs, then governments and non-profits should take responsibility for their manufacture and distribution. The survival of the poor must at all times be accounted a higher priority than the profits of Big Pharma.

The current pandemic expands the argument: capitalist globalization now appears to biologically unsustainable in the absence of a truly international public health infrastructure. But such an infrastructure will never exist until peoples’ movements break the power of Big Pharma and for-profit healthcare.

 

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Nguyễn Quang Dy: How John McCain is remembered  

John McCain (like John Kerry) was a congressional leader (and “a titan in the Senate”). Both have been successful politicians who have run unsuccessfully for president. Both men are Vietnam War veterans who (as a Republican and a Democrat) have done so much to support the painful process of normalization of relations between the two bitter enemies.

John McCain (as a naval pilot) was shot down over a Hanoi lake during an air strike and jailed for over five years in the “Hanoi Hilton”, while John Kerry (as a gunboat officer) was wounded during battles in the Mekong delta during the Vietnam War. Both Johns are known much more for their peace- making efforts with Vietnam than for their war records.

John McCain (unlike John Kerry) suffered so much in captivity, yet he worked so hard over the years (like John Kerry) to assist Vietnam’s post-war reconstruction and reconciliation. The last major action John McCain and John Kerry did for Vietnam was to lobby and support President Obama’s timely decision to lift the arms ban on Vietnam (May 23, 2016).

John McCain fought for what he believed was right until the very end. In one of his last public acts, McCain blasted Trump’s summit with Putin (July 16, 2018) as “one of the most disgraceful performances by an American president in memory”. Then he went on “The damage inflicted by Trump’s naiveté, egotism, false equivalence, and sympathy for autocrats is difficult to calculate. But it is clear that the summit in Helsinki was a tragic mistake”.

As John McCain died on August 25, 2018 (the full-moon thanksgiving day in Vietnam), he has left not only deep sorrow in the heart of his family and friends, but also a huge gap in the dynamics of US-Vietnam Relationship, at this critical juncture of history.

There are few men who could really come to terms with their former enemy. And much fewer men are missed and loved by both friends and foes alike when they die. John McCain is such a man, as he stands larger than size with his uncommon values and valor.

When John McCain was diagnosed with brain cancer (glioblastoma) a year ago, he told CNN “every life has to end one way or another”. He said: “I’ve lived very well and I’ve been deprived of all comforts. I’ve been as lonely as a person can be and I’ve enjoyed the company of heroes. I’ve suffered the deepest despair and experienced the highest exultation”.

As John McCain died (at 81), Vice President Joe Biden said: “John McCain will cast a long shadow. His impact on America hasn’t ended. Not even close. It will go on for many years to come… America will miss John McCain. The world will miss John McCain. And I will miss him dearly”.  John McCain died from glioblastoma on August 25, 2018, while Senator Edward Kennedy (his good friend and foe) also died from the same form of brain cancer on August 25 2009, exactly nine years earlier to the day (as a strange coincidence).

If “statesmen are judged not for what they did but for the consequences of their actions” (as people say), John McCain is such a statesman. He would live much longer than life in the heart and mind of people he cares for. His family and friends should be proud of this uncommon man who will be missed and remembered as a decent man, and a good guy.

There are no better words for this man than the speech that Ambassador Pete Peterson delivered in Boston (September 10, 2001) during an Award Dinner Honoring Senator John McCain and Senator John Kerry. Let me quote (in part) to make the points:

Tonight, we gather to honor two more brave men – the architects of American’s reconciliation with Vietnam: Senators John McCain and John Kerry. Through the administrations of four American presidents (Reagan, Bush, Clinton, and, now, another Bush), I have seen how these two colleagues of mine in Congress –  and fellow veterans of Vietnam – first planned, designed, and then patiently guided this reconciliation to completion…

Having seen first-hand the recent evolution of Vietnam, I can tell you that with the aid of John McCain and John Kerry, the people of Vietnam now have a chance at a better future…like what our country eventually enjoyed after the reconciliation of our own civil war…They are just as heroic in waging peace…as they are in waging war…

It took 50 years after the last shot was fired in the American civil war for the survivors reconcile their differences on the field at Gettysburg…Without John McCain and John Kerry, it would have taken far longer. Maybe 50 years…when those of us who went to Vietnam the first time would be in the 8th and 9th decades of our lives. May be even longer…

But because of these two visionaries, these two leaders, it happened sooner in our lifetimes…

The American people and the people of Vietnam are forever in your debt.

The future relations of these countries is in your debt…

Now that John McCain is gone, John Kerry seems even lonelier

May John McCain’s soul live in peace without ordeal

Amen!

NQD, August 28, 2018.

 

 

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Nguyen Quang Dy: The Paradoxes of Special Economic Zones

Hanoi — Recently, there has been intense interest and discussion concerning a new Bill on “Special Administrative and Economic Units” (referred to as “special economic zones”) expected to be passed by the National Assembly soon. The first three special economic zones (SEZ) of Vân Đồn (Quảng Ninh), North Vân Phong (Khánh Hòa), and Phú Quốc (Kiên Giang) would be invested (until 2030) VNĐ 1,570,000 billion (nearly $70 billion). While I’m not against the SEZ concept per se, and not sure how they have come up with this huge figure, I do not support these three special economic zones for the following reasons.

Background

For transitional economies (like Vietnam), the SEZ concept remains attractive, though a bit outdated with more lessons of failures. This concept requires certain conditions as it is not really about what to do but how to do it. While everything is possible, “a miss is as good as a mile”.

Given the right conditions for the project to move on track at the right time, it could become an economic leverage and growth engine (like Shenzhen). Du Bai was a success story that many countries wanted to repeat. Some Vietnamese have dreamt of turning Chu Lai into Vietnam’s Du Bai, or turning Phú Quốc into its Singapore. But Singapore’s success was due to “the Lee Kuan Yew factor” (which Vietnam does not have), and Du Bai’s success was due to the absence of “the China factor” (which Vietnam has too much).

Though the SEZ idea is nothing new, some people might have forgotten the bad lessons of “Vũng Áng Special Economic Zone & Formosa Steel Complex” (in Ha Tinh) and Tân Rai & Nhân Cơ bauxite mining projects (in Central Highland), as well as bad experiences of Chu Lai (Quảng Nam, 2003), Dung Quất (Quảng Ngãi, 2005), Nhơn Hội (Bình Định, 2005), Chân Mây (Thừa Thiên,  2006), Vân Phong (Khánh Hòa, 2006), Phú Yên (Phú Yên, 2008).

Why failures? What would make the new projects successful? Without institutional change to curb power and corruption, similar development models would repeat the failures.

Once natural resources are drained and the land scarce, interest groups would naturally   scramble to seek rents by levying higher taxes (for VAT, income and property), increasing utility prices (for gas, power, water) and toll fees. SEZ becomes a new piece of cake that they would lobby for parts of the game.

While Beijing is militarizing and controlling the South China Sea (as its own lake) banning Vietnamese from fishing and developing oil resources in their own waters, it would try to control critical positions on land. SEZ becomes an attractive piece of cake for them to take. Vietnamese interest groups may collaborate with Chinese firms (for shared interests) to manipulate policy and projects.

While government officials’ management capacity is limited (especially at local level), their greed is unlimited, and thus they are likely to be manipulated by interest groups. While the painful lessons of Formosa and bauxite mining projects are not forgotten, the new scandals of public investment projects in Ninh Bình are shocking.

Though Ninh Bình is not a special economic zone, it is a “kingdom” by itself. Those local interest groups are not only “grabbing everything” but also “ruining everything” by greed, leaving serious consequences, not only in an economic and social sense, but also in terms of national security.

Economic picture   

According to Vũ Quang Việt (an UN statistics expert), the SEZs of Vân Đồn, North Vân Phong, and Phú Quốc have put “group interests first”. The new Bill has focused on property and casino market, without attracting high-tech investment.

What Vietnam really needs is high-tech and educational investment to increase productivity, industrial development and knowledge-based economy, not property and casino projects. Viet said in 2011-2016 period, the productivity in Vietnam’s industrial sector registered a very low average growth of only 2.9% annually, while the average GDP growth rate would not go beyond 5.0% annually if the productivity could not grow beyond 4.0% annually. That is a strange economic phenomenon, and a paradox of economic development in a country where the productivity ranks among the lowest in the world (15 times lower than that of Singapore).

Without a national debate to assess and quantify the pros and cons of the SEZ projects in terms of economic, social, and geo-political consideration, there may be misconceptions (from wishful thinking) or risky decisions (by interest groups’ manipulation) leading to mistakes (like before).

These are likely scenarios:

  1. First, there may be a new “land rush” in a property market already too hot with price hikes driven by brokers (even when the SEZ idea was speculated).
  2. Second, there may be “a property bubble” leading to a crisis of over supply, making the economic picture twisted and chaotic.
  3. Third, as a result of such developments,  these SEZs are no longer attractive for high-tech investors who would need a cleaner business environment and a decent eco-system for business operation.

While the government keeps talking about “technological revolution 4.0”, what is going on at these SEZs is really “economic mindset 1.0”. But, it is a big mistake to use a policy of land-lease (for 99 years) to attract high-tech investors who do not really need long-term land-lease.

Business investors focusing on supply chains and global value chains would need linkages with infrastructural and business eco-systems, partnership networks and financial institutions, professional service providers and skilled human resource, all of which are not offered by these SEZs.

The only thing they offer is free space in an un-free environment. In this sense, special privileges offered are not really special at all. What are the real reasons for the SEZs then (except for property development)? The obvious answer is “casino and red-light district”, as these SEZs are the only places in Vietnam where these people can do business freely. But, another reason that many people are aware of but still reluctant to spell out (for “sensitivity”) is “the China factor”. Otherwise, there is nothing else there.

Social-political picture  

While the Party and Government have a headache trying to figure out how to control power and corruption, the legal system for the SEZs gives too much power to the “SEZ chairman” as a lord (or a prince) having the rights to grant foreign investors land-lease up to 70 years or even 99 years (if approved by the Prime Minister), to appoint contractors, sign labor contracts and employ public servants…Investors are also allowed to enjoy a tax break for 30 years, to transfer property rights by sales or inheritance.

Some experts said a policy of land-lease for 99 years would only serve big property developers (and China), while 85% investors confirm a tax break is unnecessary (according to World Bank). Foreign nationals are allowed to work up to 180 days per years (without work permits), and they can get residence permits for 5 years if they invest VNĐ 110 tỷ ($5 million). Vietnamese are allowed to gamble at the casino, and enjoy a personal income tax break for 5 years (and 50% in the following years).

These special favors would lead to a new wave of migration from China and other neighboring countries, especially the unskilled labor market, upsetting the demographic structure of these zones, thus increasing social problems and crime rates (like the “Wild West” time). The SEZs are also “special incubators” for crony capitalism (or “red capitalists”).

According to Minxin Pei, the entrenchment of crony capitalism (in China) would make the transition to democracy more difficult and disorderly. It is difficult for the democratization process (led by the middle class) to happen under crony capitalism. It would be a mistake to assume that private entrepreneurs, once they have gained economic wealth and political power, would prefer liberal capitalism to crony capitalism.

The legacy of crony capitalism (greater inequality of wealth, local mafia states, and the collusion of privileged tycoons) would enable those who have acquired enormous wealth to wield political influence to crack down on new elements of democracy.

The dynamics of regime decay would destroy the institutional integrity of the party-state through three possible mechanisms.

First, these collusive networks would colonize all corners of the party-state, trying to subvert its political authority, transforming it into their private instruments of power. Instead of advancing the regime’s interests, they would primarily seek private benefits.

Second, corruption networks would compete with each other for power and rents, thus weakening the party’s internal unity and increasing the risk of purges that endanger the personal security of its top elites.

Third, when collusive corruption pervades the security apparatus of the party-state, it is almost certain to undermine the effectiveness and loyalty of the pillar institutions upon which the party-state’s survival rests. (China’s Crony Capitalism, Minxin Pei, Harvard University Press, 2016).

While some people thought Phu Quoc should be developed as Singapore (talk about positive thinking!), others would fear Vân Đồn might become something like Cremea (a negative thought). But the “Singapore Story” has been based on completely different premises.

Lee Kuan Yew once said, “The number one position in Asia should have been for Vietnam”.  According to him, the geo-political position and abundant natural resources should be the top factors which could have turned Vietnam into “the Big One of Asia”. Whereas today Vietnam’s economic output is only 1/15 of Singapore (or 1/5 of Malaysia, and 2/5 of Thailand).

Lee confirmed that the success of a nation would depend on three key factors. First, natural conditions (as strategic location and natural resources); Second, the people; Third, the opportunity.

But the human factor is always the most critical one. That is why Lee Kuan Yew was so regrettable that Vietnam has failed to appreciate talents, as he believed most Vietnamese talents have migrated overseas. (Việt Nam in Lee Kuan Yew’s eyes, Cao Huy Huân, VOA, September 14, 2014).

National security picture    

Even if these SEZs would become (short-term) successes in tourism, property or casino, Vietnam stands to pay huge prices for geo-political and national security follies (as “more harmful than good”) Article 62 of the Land Law is a policy loophole to be manipulated by interest groups, while Article 69 opens the door for China to infiltrate Vietnam.

At the Formosa steel complex (Hà Tĩnh) and Lee & Man pulp mill (Hậu Giang) thousands of Chinese work there. Recently, there have been public protests in Quảng Ngãi province for removing the Bình Hải border station to clear the land for FLC’s “Resort & Tourism Complex” at Bình Châu-Lý Sơn newtown.

Not only Quảng Ngãi but also Đà Nẵng has moved a border station to clear the land for a private property project. Gen Võ Tiến Trung (former Director of the Defense Academy) confirmed “The positioning of border stations had been considered carefully in the perspectives of local defense planning” (Zing, April 22).

Article 62 is also good news for interest groups as it allows local governments to take the land away from farmers and give them to companies for project development, and Vietnamese companies can transfer the land to foreign companies (like Chinese ones). In a seminar in Japan (September 7, 2017), Trịnh Văn Quyết (FLC president) said that apart from selling shares, “FLC can transfer projects to foreign investors”.

According to news reports, Quảng Trị province is prepared to allocate 1000 ha along Cửa Việt seaboard to FLC for resort, golf course and an airfield development. Now that Vũng Áng is in Chinese hands, Vân Phong and Cửa Việt may be the next ones in line that China is really interested. Along the Northern to Southern seaboards of Central Vietnam, many strategic positions have been granted to Chinese companies for resort projects without taking national security into consideration. In Da Nang and Nha Trang, many strategic defense positions along the coastline have been taken over by Chinese companies (sometimes through local proxy).

While Vietnam’s economic interests and sovereignty in the South China Sea are seriously threatened by China, the decision to set up new SEZs at these critical positions would be inexcusable for either economic or national security reasons.

Given poor management yet  exceptional corruption skills, these SEZs may become “special corruption zones” by interest groups (or “red capitalists”), and “special incubators” for “crony capitalism”. If most of big projects in Vietnam have fallen into the hands of Chinese firms, there is no reason why they would not take over these new SEZs as “special concessions”.

Chinese crony firms supported by their government with powerful motivations and financial resources would take over the SEZs as a “soft invasion”, to “win without fighting” (as Sun Tzu’s art of war or Weiqi board game). For those critical positions on land that China could not take by force (as they had taken Paracel and Spratly islands) they would try to take over by investment and “sharp power”. Therefore, the “great policy” for the new SEZs with special favors (for 99 year lease) looks like “sending the fox to mind the geese” or “giving a hand to the enemy”.

Geo-strategic picture

In history, Vân Đồn was a frontline outpost having a strategic position guarding the North-Eastern gateway to the sea, from where Chinese naval forces would invade. Ngô Quyền had fought the Southern Han Dynasty’s army, and defeated it at Bạch Đằng naval battle (in 938), Lý Thương Kiệt had fought the Song Dynasty’s army (1075-1077), and Trần Hưng Đạo had fought the Mongol armies (1257-1288).

When Lý Thường Kiệt launched preemptive attacks on Khâm Châu, Liêm Châu, and Ung Châu (Chinese citadels across the border), his army had used Vân Đồn and Móng Cái as staging bases before the attacks. And later, when Lý Thường Kiệt fought against the Song army along Sông Cầu river defense line, Vân Đồn was used as a naval base to prevent the Song naval force from moving up the river to regroup with the Song army at Sông Cầu. That is why the Song army was defeated …

If Vân Đồn enjoys a strategic position guarding the North-Eastern gateway, looking over the Tonkin Gulf, Phú  Quốc enjoys an equally strategic position guarding the South-Western gateway looking over the Indian Ocean, while Vân Phong (near Cam Ranh) enjoys a strategic position guarding the gateway of Central Vietnam looking over the South China Sea. In Central Vietnam, while Sơn Dương (in Vũng Áng) is a deep-water port now controlled by the Taiwanese and Chinese, Vân Phong and Cửa Việt are the only major deep-water entrepots having strategic values that China has not been able to control.

Phú Quốc commands a special strategic position in the new Indo-Pacific vision. It is so close to Sihanoukville and Bokor (in Poipet, Cambodia), as two strategic positions which China has leased for 50 years. Now, China is very interested in Phú Quốc as the next target to form a strategic triangle in this area. Once China could strike a deal with Thailand to develop the Kra canal, Phu Quoc might be even more important than Singapore in geo-strategic terms.

According to James Holmes (a leading American expert in naval strategy) “a clash of arms (in the South China Sea) is possible”, and “China could win even if it remains weaker than America in the aggregate”. In the words of gen Chang Wanquan (Chinese defense minister) China can win a war in the South China Sea by “people’s war at sea”. Holmes commented: “statesmen and commanders in places like Manila, Hanoi and Washington must not discount Chang’s words as mere bluster”. The Chinese can win by “over-empowering the US in a war by contingent at the place and time that truly matters…”.

In this sense, “active defense is all about harnessing tactical offense for strategic defensive campaigns”. Now that PLA commanders could pursue a mix of small and big unit engagements against the US-led coalition, Holmes advised “US and allied commanders to study China’s art of war to gain insight into how PLA’s offshore active defense might unfold in the South China Sea”. (China Could Win a War Against America in the South China Sea, James Holmes, National Interest, May 30, 2018).

In an armed conflict in the south China Sea, the SEZs of Vân Đồn, Vân Phong, and Phú Quốc would play a critical role in the strategic game of “anti-access/area denial” (A2/AD). If these strategic positions are in China’s hands, Vietnam would be checked mate (and the game is over). That is a real danger in any war scenario, not only for Vietnam but also for ASEAN and other powers having vested interests in the South China Sea (such as the US, Japan, India, Australia, and the EU or Russia). As the South China Sea is vital not only for Vietnam but also for these powers, the story of Vân Đồn, Vân Phong, Phú Quốc SEZs should be put in  larger geo-political perspectives of the South China seas and the Indo-Pacific vision.

Let’s bear in mind the geo-strategic implications of the SEZs (like the TPP saga) are greater than (short-term) economic interests. It would be unfortunate if law makers and decision makers have no strategic thinking, or strategic think tanks are muted.

NQD

EndNotes

The new SEZs of Vân Đồn, North Vân Phong, and Phú Quốc would be invested 1.570.000 billion VNĐ (with 270.000 billion for Vân Đồn, 400.000 billion for North Vân Phong, and 900.000 billion for Phú Quốc). Even if the initial investment figure would not be inflated (like  the “Ninh Bình syndrome”), how can the state or the business community raise so much money (if not from the “northern neighbor”). This implies potential national security risks and long-term geo-political dangers. If the story of the SEZs is put in perspectives of conflict of strategic interests and the new Indo-Pacific vision, “the China factor” would loom large and clear in the broader geo-political picture. It is really a paradox when Vietnamese leaders keep lobbying hard for the US, Japan, India, and Australia to increase their military presence in the South China Sea to counter China while the National Assembly is prepared to pass this new Bill to allow potential investors (mostly the Chinese) to lease the land (for 99 years) at the most critical positions having strategic values in the country.

The nature of Vân Đồn, North Van Phong, and Phú Quốc SEZs is mostly about property market and casino operations. As soon as the news about the SEZs was speculated, investors started to rush in to buy land for hoarding, driving the prices up. So why do they need to set up the SEZs when the market is already moving? For Vân Phong to become an entrepot, it is not necessary either to set up a SEZ. In fact, property development is simply land hoarding for “quick bucks”. They have mistakenly assumed that the key factor to attract investments is a series of favors leading to legal manipulation, tax avoidance and money laundering. But attracting investment at all costs would entail big prices to pay later. For long-term sustainable growth, there must be institutional change to facilitate international integration along the line of the common standards already agreed upon in the WTO, BTA, FTA (and CPTPP).

While the Party would “lead everything”, the National Assembly should share responsibility for this “historical decision” which would define patriotism. This is when law makers and decision makers should think over and decide what to choose (like “choosing fish or steel”). If they make the right decision, later generations would be indebted. But if they make the wrong decision, they would be cursed by later generations (even if they run away). Many experts have advised that for the Bill to be passed it requires extensive inputs and revisions to ensure national interests over group interests, to void unfortunate mistakes. Negative consequences in social-economic, institutional, environmental and national security terms as a result of the SEZs (as “special concessions”) would be enormous and unpredictable. Once money is lost, it is difficult to recover. But once territory and sovereignty are lost, it is impossible to recover. When can Vietnam get back the Spratly and Paracel islands?  (and the next might be Vân Đồn, Vân Phong, and Phú Quốc). Now, it is time for the National Assembly to prove they would vote for national interests, not group interests (or foreign ones).

References 

  1. Việt Nam in Lee Kuan Yew’s Eyes, Cao Huy Huân, VOA, September 14, 2014
  2. China’s Crony Capitalism, Minxin Pei, Harvard University Press, 2016
  3. Dự án luật về ba đặc khu Vân Đồn, Văn Phong và Phú Quốc (Legal Bill on Van Don, Van Phong, Phu Quoc SEZs), Vũ Quang Việt, Viet-studies, May 30, 2018
  4. Mô hình đặc khu đã lỗi thời (Outdated SEZ Model), Nguyễn Tiến Lập, MTG, May 31, 2018
  5. China Could Win a War Against America in the South China Sea, James Holmes, National Interest, May 30, 2018

NQD. June 3, 2018

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Nguyen Quang Dy: The paradox of Malaysian politics

If what has been going on in the Korean peninsula recently has attracted the attention of the world, what has just taken place in Malaysian politics is equally unexpected. Though the two events are different, they both reflect the indeterminacy of the new world order in which no country is an exception (including, even, Vietnam).

Many well informed about Malaysia may be shocked, but nor are they surprised by the defeat and disgrace of Prime Minister Najib Razak, for his corruption scandals have truly angered Malaysians and have reminded Malaysians and the region of such notorious kleptocrats as Marcos and Suharto. On one level it seems history keeps repeating itself. Malaysian people power has arrived.

But the success of the (unlikely) coalition between Dr Mahathir Mohamad and Anwar Ibrahim – who was notoriously sacked and imprisoned, both by his present partner Dr Mahathir (in 1998) and (later, in 2015) by Najib is no less dramatic. Reality is indeed often stranger than fiction.

Taking a step back, there must be compelling reasons for Malaysian voters to vote a 92 year old former autocrat and (his former) prisoner (jailed twice) into power. And yet somehow the feel is different than the elections of Mr Donald Trump or Rodrigo Duterte.  Not all populisms are based on fear and paranoia. Some rise with demands for accountability and political accountability.

Mahathir Mohamad (at 92) promises to change the system he had set up.    

Political earthquake in Kuala Lumpur

According to The New York Times, the political change in Kuala Lumpur following the historic election of May 9, 2018 is a “political earthquake”. As recently as a few months ago, few people would predict Prime Minister Najib Razak and the ruling Barisan Nasional coalition would lose, even when Najib Razak has been accused of big corruption. But this unexpectedly outcome has indeed unfolded, and in dramatic fashion. Even the victorious opposition party was shocked. Nor was this earthquake limited to KL.

What happened? Most basically, given an historic opportunity, Malaysia voters turned out in record numbers (14.5 million voters), delivering the opposition coalition (Pakatan Harapan) led by Dr Mahathir a majority of 113 of 222 seats in parliament, and leaving the ruling coalition (Barisan Nasional) led by Najib Razak a humiliating 79 seats). Now, Dr Mahathir has returned to power at the age of 92, as “the world’s oldest elected head of government”. (Malaysia Elections Everything You Need to Know About a Political Earthquake, Angie Chan, New York Times, May 17, 2018).

The story is a strange one, if not downright weird. Dr Mahathir Mohamad was UMNO leader and Malaysian Prime Minister from 1981 to 2003 (for 22 years), had formerly sponsored Najib as the next prime minister, and before that had sponsored Anwar as his deputy prime minister, before sacking and jailing Anwar on made-up charges. In a news conference, following the election Dr Mahathir offered a half-apology:

“The biggest mistake that I have made in my life was choosing Najib… You know the mess the country is in, and we need to attend to this mess as soon as possible… The rule of law will be fully implemented”.

 

It is a half apology because it was Mahathir’s imprisonment of Anwar that presaged Najib’s rise to power. Nonetheless, now in disgrace, Najib Razak, his wife, and other senior officials of the outgoing government have been banned from leaving the country. Najib’s home has already searched by the police.

To beat Najib Razak and restore “a new new order”, Dr Mahathir has cooperated with the opposition party he had once suppressed. On May 9, 2018 when he was pardoned by the King (at Mahathir’s request). Today Anwar’s wife, Wan Azizah Wan Ismail, has taken her place in the new government as a deputy prime minister, while waiting for Anwar to return to politics. According to Wan Azizah, Mahathir has agreed to stand aside midway through his five-year term for Anwar to succeed him as the next prime minister.

Anwar Ibrahim is waiting to be the next prime minister

Power and corruption

Anwar Ibrahim claims he was put in jail by Dr Mahathir for political motivations. But now, he is willing to forgive Mahathir and is ready to work with him to bring “a new dawn” to Malaysia, a country where genuine political rights has been assiduously suppressed.

While Pakatan Harapan is an unlikely and uneasy coalition, it is a remarkable and uncommonly brave one. For only through Dr Mahathir’s cooperation with Anwar’s People’s Justice Party (as the largest party in the coalition) was it possible to create a force strong enough to beat Najib Razak and an entrenched system that has benefited under his corrupt administration. Now that power has been wrenched from Najib, Malaysia finds itself with a genuine multi-party political system. But whether Mahathir is (this time around) a reformer is less certain.

Nor should this possibility be ruled out. Malaysian voters have voted for Dr Mahathir, at 92, precisely because there has been an understanding that Mahathir would serve as a “transitional” prime minister for two years to rebuild the government and pave the way for Anwar to succeed him. And Anwar, it would seem is a popular and genuine reformer. Still, the plan for “mid-term” power transfer remains an x-factor, and may ultimately depend on Dr Mahathir’s himself. (Malaysia election: Anwar Ibrahim’s future still in Mahathir Mohamad’s hands, Adam Harvey, China Morning Post, May 16, 2018).

Power and democracy

It has been widely observed that democracy and human rights have not fared well in Southeast Asia, particularly in countries widely regarded as ripe for transitions to democracy. From the Philippines where journalists have been assassinated and drug users exterminated extra-judicially (by President Rodrigo Duterte) to Cambodia where the opposition and the news media have been suppressed (by Prime Minister Hunsen) to Myanmar where Rohingya muslims have been the subject of genocide, forever damaging the reputation of Aung San Suu Kyi. What, then, does Malaysia’s turn mean?

In domestic politics, how Dr Mahathir’s new government behaves remains an open question. It is difficult for members of Mahathir’s multi-party coalition government to share with him a common vision on different issues, except their common interest in deposing Najib Razak’s corrupt government and Barisan Nasional’s grip on power. Now that Mahathir (at 92) is again prime minister, he has the rare opportunity of correcting mistakes of his earlier tenure as prime minister and autocrat.

For his part, Anwar Ibrahim has declared his full support to Mahathir and (of course) his wife, Mahathir’s deputy prime minister. This is a new alliance of two (or perhaps three) veteran politicians, including the odd couple of Mahathir and Anwar: mentor and protégé turned rivals and now allies. In the meantime, Anwar plans to go on the lecture circuit to leading universities around the world to spread the message of “moderate Islam” and, one would expect, the merits of more democratic and transparent politics.

Nor does the significance of recent developments stop in Malaysia. For international politics, Mahathir has addressed China’s extensive influence and investment in Malaysia, saying that his government would need to study the agreements made by Najib and that he was concerned about the size of Malaysia’s debt to China. As for the Belt and Road program, Mahathir said the new government would have no problem, but he would not like to see too many warships in the area, as “warships attract other warships”. Anwar’s view on China is similar to that of Mahathir, as he is not against Chinese investment, but he is also concerned about the manner some of the deals were made. (In Malaysia, the Old Prime Minister Promises a New Order, Richard Paddock, New York Times, May 10, 2018).

More broadly, the developments in Malaysia remind us of the indeterminacy and possibility of politics. Suddenly, Malaysia is a country of possibility. That’s good news for Malaysians and interesting news for us all.

End notes

  • Former Prime Minister Najib Razak is known for big corruption with his nick name “Man of Steal”. He has been accused of stealing at least $3,5 billion from a government investment fund he once headed (the “1MDB scandal”) and spending on expensive real estate in the US, a luxury yacht, jewelry and art, with $731 million ending up in his personal accounts. He is reported to have owned a penthouse (worth $30.6 million) at the Time Warner Center in Manhattan (New York) overlooking Central Park, a mansion (worth $39 million) in Los Angeles, another house (worth $17.5 million) in Beverly Hills, a diamond necklace (worth $27.3 million) for his wife. The US Department of Justice charged that these lavish properties were bought by people close to Najib Razak with money stolen from Malaysia’s public fund.
  • If Dr Mahathir transfers power to Anwar “midway through his five-year term” (as pledged) to support institutional reform and turn Malaysia into a democratic and modern country, he would go down in history for leading Malaysia in critical reform drives (twice as “round one” and “round two”). And yet, he would be able to change his poor image as an autocrat (in his earlier tenure). But if he fails to do so, Anwar and his followers are not expected to except and this multi-racial country may be polarized and fall prey to Islamism or China’s manipulation. While Anwar is poised to lead democratization and modernization, Mahathir is likely to return to a “Look East” approach, now in line with the new Indo-Pacific vision and Japan’s role in the “Quad” alignment (of America, Japan, India, Australia). In this perspective, the relationship between Vietnam and Malaysia is expected to improve, making a positive contribution to peace and stability in the South China Sea as well as ASEAN’s regional role.

NQD. May 22, 2018

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Nguyen Quang Dy: Unexpected game changers overturning Korean chessboard

“Politics is the art of making the impossible possible”

In 2017 North Korea’s missile and nuclear tests and the inflamatory words of president Donald Trump and chairman Kim Jong-un put the word on edge. After a flury of diplomacy in 2018, prospects for peace and reconciliation have rarely seemed higher. What seemed to be well-founded pessimism amid “war brinkmanship” has suddenly turned into optimism – giddy in some quarters – that peace on the Korean peninusla may finally be at hand.

Seemingly well-deserved bad publicity for both Trump and Kim has swiftly turned into a wave of praise. Yesterday’s “despot Kim” is today “Kim the young talent. Whether playing to Trump’s incessant need for praise or not, South Korean president Moon Jae-in’s quip that Trump is “deserving of a Nobel peace prize” has generated waves on its own. There is a certain surreal quality to what is occurring, and the intrigue continues.

Historic changes

April 27, 2018 was an historic day in Korean history as the two Korean leaders met and signed a joint statement in Panmunjom, confirming that a complete denuclearization of the Korean peninsula is the common goal (or at least common stated goal) of the both Korean states.

Chairman Kim Jong-un told president Moon Jae-in “if we meet so often and build confidence with America, if we end the war and commit not to invade each other, why should we live in fear of nuclear weapons? Kim Jong-un pledged “I’m determined not to repeat the painful history of the Korean war, and I promise that we would never use force again…Living together on the same homeland, we should never spill blood again”. Kim Jong-un then decided to change the time zone of Pyongyang to that of Seoul.

Witnessing the historical moment when the two Korean leaders sign the joint statement in Panmunjom, KIA director Suh-hoon could not hold his tears.

KIA director Suh-hoon was moved to tears (April 27, 2018)

According to the New York Times (April 29, 2018), the next day (April 28) president Moon Jae-in phoned president Donald Trump to brief him on the result of the inter-Korean summit. Moon Jae-in quoted Kim Jong-un as saying “The PRK would give up nuclear weapons if the U.S. agrees to end the Korean war and pledges not to invade Korea”.

Kim Jong-un also said he would invite experts and journalists from South Korea and the U.S. to North Korea next month to monitor the suspension of nuclear tests there. Moon Jae-in also told Trump that Kim Jong-un understood him and the two countries could live in peace and happiness together. Moon Jae-in advised Trump to meet Kim Jong-un the sooner the better, to follow up on the momentum of a successful inter-Korean summit. Moon Jae-in also phoned Japanese Prime Minister Shinzo Abe (April 29) to advise him that Kim Jong-un is willing to talk to Tokyo.

Earlier, Mike Pompeo (as CIA directory and now newly confirmed US State secretary) visited Pyongyang to meet Kim Jong-un (April 1, 2018). Pompeo told ABC (April 29, 2018) that his meeting with Kim Jong-un went very well, that Kim is seriously prepared for denuclearization of the Korean peninsula, and has a specific roadmap for this. Pompeo confirmed “When I left, he understood exactly the work as I describe it today. The U.S.’s objective is a complete denuclearization of the Korean peninsula, verifiable and irreversible”.

In fact, the door to peace and reconciliation was opened up during the XXIII Olympic Winter Games (Pyeongchang, February 9 to 25, 2018). On this occasion, Kim Jong-un’s sister Kim Yo-jong delivered to Moon Jae-in a personal letter from Kim Jong-un. The Pompeo-Kim meeting was in preparation for the coming Trump-Kim summit (in late May), to follow up on the successful Moon-Kim summit in April 27, which has laid the foundation for a peace process.

Kim Yo-jong and Moon Jae-in (Pyeongchang, February 2018)

President Donald Trump told Bloomberg (April 29, 2018) that Kim Jong-un “was not kidding”, and he would meet Kim “in 3 or 4 weeks” (likely in Panmunjom). Kim Jong-un and Donald Trump have exchanged nice words and mutual respect (totally different from last year). They have shown mutual understanding of their wishes, and confidence in the success of the coming meeting. However, public skepticism often dies hard, until written commitments are signed or even until specific actions are taken to follow up. That is why both sides need time to build mutual confidence and goodwill for peace and reconciliation.

It seems Kim Jong-un has been able to take this hard fact of life with pleasure as if he has proactively prepared for it in advance. Indeed, he appears to have has unexpectedly embraced the process, exhibiting a deftness that has surprised some and intrigued virtually everyone.

While outcomes of the flurry of diplomacy remain uncertain, it seems clear that direct negotiation between the U.S. and North Korea was and remains an inevitable step in the process to of resolving the crisis. Be that as it may, the tensions that led to the current diplomacy are in part an outcome of the nuclear threat from North Korea’s use of nuclear blackmail and brinkmanship. This was and remains a dangerous if calculated gambit.

A new game of thrones

While it remains unclear whether and to what extent Donald Trump and Kim Jong-un are sane or mentally unfit as reported they appear, for the moment, unwilling to die. For a negotiated solution to occur, Washington and Pyongyang will have to talk directly and that is now occurring.

Significantly, it has been Seoul that has played the intermediary (instead of Beijing). Perhaps, that is why Xi Jinping and Kim Jong-un rushed to meet in Beijing (March 25-28, 2018) before the inter-Korean summit and the US-Korean summit talks. There are reasons for both Trump and Kim to meet to “dilute” Chinese influence over Korea. From this perspective, it is possible and even likely that Kim went to Beijing not for reassurance or rapprochement, but to appease Beijing and to play the China card as a counterbalance before Kim would meet Trump. When North Korea tested nuclear bombs, the Chinese were anxious. Now that Trump is going to meet Kim (without being arranged by Beijing) Xi Jinping may be feeling anxieties of a different sort.

Now, Kim Jong- un is himself playing with world powers, using Xi (the “Red Emperor”) into a trump card with Trump. According to David Shambaugh (a top China watcher), Xi Jinping and Kim Jong-un are “not a happy couple”. New York Times also reported (April 22, 2018) that Kim Jong-un wanted to reduce Chinese influence on Korea, while Beijing is concerned that China has been sidelined from the power game during recent Inter-Korean summit and the coming US-Korean summit talks (in late May 2018). If the US-Korean summit is successful, Pyongyang may escape being dependent on and controlled by Beijing. Conversely, if the talks fail, Pyongyang risks being punished by both China and the U.S.

In such a context, Kim needs to ensure Trump understands exactly his position and intention, while somehow managing to avoid alienating  Xi. This, it would seem, is mission improbable; success would seem not only on the whims of Trump and Kim but on the talents, limitations, and decisions of advisors on both sides.

Events on the Korean pinnisula are moving fast. In a flash, Kim Jong-un has appeared on the world stage for the first time and has in many respects had a successful debut with credit, too, to telegenic sister and brain Kim Yo-jong by his side as his right-hand advisor.

Now, summit watchers might worry more about Trump than Kim, as Trump is known to be unpredictable and undisciplined as a true loose cannon. Worse, Trump is understaffed with less experienced aides (particularly from the State Department) and John Bolton in the mix, too.

According to Moon Jae-in, “Seoul is trying to create a line of communication between the U.S. and North Korea” and he is playing a key role to make sure Pyongyang and Washington are getting even closer.

Korea watchers would agree both Pyongyang and Seoul want to reduce Chinese influence on the Korean peninsula. By arranging for Kim Jong-un to meet Donald Trump, Moon Jae-in is helping Pyongyang move away from Beijing and achieve degrees of freedom from its influence. If Kim Jong-un and Moon Jae-in can do this, not only Korea’s destiny but also Northeast Asia’s (and Southeast Asia’s) geo-political picture would be changed.

According to the New York Times (April 22, 2018), as China is sidelined from the coming US-Korean summit talks, there is a growing fear in Beijing that the outcome may be either North Korea or (someday) a reunified Korea leaning toward the U.S, reducing China’s influence in the region. While Kim Jong-un has decided to suspend nuclear and missile tests, Moon Jae-in is working hard for gradual reunification. If he succeeds in facilitating a deal between Kim Jong-un and Donald Trump, in the form of “normalization of bilateral relations” in exchange for “denuclearization of Korean peninsula”, for example, the geo-political landscape of East Asia and its balance will indeed have changed. Stay tuned!

NQD, Hanoi

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New Book: Welfare and Inequality in Marketizing East Asia (1)

Welfare and Inequality in Marketizing East Asia.
London. Palgrave Macillan.  466 pages.

From the preface:

While there has been great interest in East Asia’s economic performance and its implications for comparative political economy, attention to patterns of welfare and inequality in the region’s political economies has been largely confined to specialist academic and policy literatures. While these literatures have vastly improved our understanding of patterns of welfare and inequality in East Asia, rarely have they done so in ways that inform comparative understandings of the region’s political economies or contribute to the theoretical development of comparative political economy more broadly.

This book is premised on the assumption that welfare and inequality—and, more precisely, the mechanisms that generate them—are central to the analysis of comparative political economy and that an analysis of the recent history of welfare and inequality in East Asia can both enhance our understanding of the region’s political economies and contribute to a more adequate theorization of welfare, inequality, and comparative political economy in a variety of world historical settings.

Welfare and Inequality in Marketizing East Asia addresses the comparative political economy of East Asia in the context of late 20th and early 21st century marketization—understood as an historic and dramatic acceleration in the world-scale expansion of markets and market relations that has gained force since the early to middle 1980s and which has transformed social life everywhere. East Asia has figured centrally in this contemporary instance of marketization.

This book

This study traces the manner in which marketization has registered across the region’s diverse social landscape and explores how it has shaped welfare and inequality across the region. It does so through an approach that views contemporary East Asia’s political economies as dynamic, globally-embeded social orders and embraces the spirit of Charles Tilly’s (1984) meta-theoretical explorations of “big structures, large processes, and huge comparisons.” Situated in the world-historical context of late 20th and early 21st century marketization, the book employs individualizing, universalizing, and variation-finding modes of comparison to probe the dynamic properties of the region’s political economies as social orders in order to better understand how marketization— in combination with other factors—has shaped welfare and inequality outcomes within them.

It contends that a more adequate theorization of welfare and inequality in marketizing East Asia requires an encompassing approach trained on continuity and change in the social constitution of political economies.

Rather than replacing narrow analyses of the political economy of growth with similarly narrowly-focused studies of welfare or inequality, we can explore the manner in which the broad array of social relations and processes associated with marketization bear mechanisms underpinning growth, welfare, and inequality across time and place. The typological search for ideal-typical “worlds of welfare” that has been at the center of the literature on comparative welfare regimes is jettisoned in favor of an inductive approach focused on the dynamic attributes and development of social relations within countries, understood as nationally-scaled social orders.

Coming next: The value and limits of welfare regimes analysis

Jonathan London, 17 April 2018
The Hague

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Watching the Dragon Rise │ Nguyen Quang Dy

Watching the Dragon Rise

Nguyen Quang Dy

Hanoi – What does China really want in the immediate future? At strategic level, it is so obvious in terms of Sino-US rivalry in the South China Sea (SCS). At economic and political level, however, it is less obvious as geo-political interests might be confused or compromised by economic interests and ideological orientations. For clarity, this question should be viewed in perspectives to make sense. The following are some humble comments as food for thoughts.

Keeping the US out of the SCS

In terms of strategic competition and rivalry between China and the US, the Chinese really want to keep the US out of the South China Sea, now considered their “sphere of influence” (similar to the Monroe Doctrine). Alternatively, the Chinese want to make a deal with the US to share power and interests along the line of “great power diplomacy” (G-2). But this option now seems unrealistic even when they play the North Korea card. Now that the Trump administration has adopted the new National Defense Strategy (NDS 2018) and relied on the Four-Power Pact (or “Squad”) of America-Japan-India-Australia partnership as collective counterweight, China is expected to get more serious in dealing with this new development.

Now, any US military presence and activity in the South China Sea, such as FONOP patrols near the small islands occupied by China in the U-shaped zone, would be considered violation of China’s rights and “core interests” and even acts of aggression. China may declare an ADIZ in parts of the zone (as it did in the East China Sea). As a question of principle, China neither recognizes the UN Convention on the Law of the Sea (UNCLOS) and the PCA’s rulings over disputes in the South China Sea, nor accepts multilateral negotiations with ASEAN as a bloc over regional disputes or a Code of Conduct. In fact, China keeps polarizing ASEAN (as its “divide and rule” policy) to weaken its unity as a regional bloc.

Changing Facts in the SCS

To turn the South China Sea into its own lake is China’s long-term objective. To this end, China keeps “changing facts on the ground” (with “salami-slicing” tactics) and then making it a “fait accompli” after militarizing these artificial islands as new military bases. Apart from the Paracel islands that they have occupied (since 1974), they have over the past few years intensified their efforts to militarize those islands in the Spratlys that they have occupied (since 1988), turning them into military bases with modern airfields, radar & missile installations, and naval facilities. New aerial pictures show they are near completion for actions.

Scarborough Shoal (claimed by the Philippines) is the only feature in the Spratlys that the Chinese have occupied (since 1912) and yet to be militarized. The Chinese seized this shoal after a long standoff when the US failed to challenge them. Now, this is the US’s “last red line” that the Chinese have not decided to cross, though President Duterte has decided to lean on China (instead of the US). Once China could turn Scarborough Shoal into another military base to threaten US bases in the Philippines, it would be the “tipping point”. This is an indication that the Chinese consistently follow the “salami-slicing” tactics.

Bullying & Polarizing Neighbors   

Like it or not, Vietnam is the toughest neighbor standing in the way of China’s ambition in the South China Sea as a crucial step to expedite the grand strategy of the “Maritime Silk Road” and “One belt, One road” as part of the “China dream”. As China’s next door neighbor and a fellow socialist state, Vietnam shares China’s ideological model as well as historical enmity. But China keeps bullying Vietnam, thus pushing it closer to the US. This is an unintended consequence that neither China nor Vietnam had planned in the first place.

The HD 981 standoff (May 2014) was the first major turning point, pushing Vietnam closer to the US for strategic hedging in a delicate balancing game with the two competing superpowers. The Repsol drilling crisis (July 2017) was another critical turning point, pushing Vietnam even closer to the US, culminating in the coming visit of the USS Carl Vinson and the Strike Group to Da Nang (March 5-9, 2018). China keeps polarizing not only ASEAN but also Indochina, bullying Vietnam while courting its next door neighbors Cambodia and Laos. As ASEAN is polarized, Indochina is divided by China’s “game of thrones”.

Economic & Trading Perspectives

Vietnam has come under China’s growing pressure and influence economically and politically, to give China most-favored nation deals in major projects, including the controversial Formosa Steel plant and bauxite mining concessions. These projects have become timed bombs as they are potential environmental disasters.

Many China-invested projects have been positioned in strategic locations around the country. Now, the cross-border economic cooperation model of “two states, one zone” is raising new fear of China’s “soft border” designs to change facts on the ground. Financially, Jack Ma’s Alibaba is expected to make a business invasion soon to capture the potential online payment market, while the cross-border illegal trading is still running wild, making up nearly $20 billion in trade deficit every year. These are economic realities that China may use as strangleholds to choke or checkmate Vietnam.

The Chinese government is also exploring how artificial intelligence (AI) and big data can be used to monitor social media and citizens for “social-reliability rating”. Chinese strategic thinking about “political warfare” believes an enemy’s political, social, economic institutions and the media should be targeted even before war starts.

China has been developing not only cyber capabilities but also using “soft power” for economic, social, cultural, media initiatives. Every year, the Chinese government spends some $7 billion on news media and broadcast outlets overseas. In 2017, Chinese box-office receipts registered $8.6 billion. The giant firm Dalien Wanda has invested some $10 billion in entertainment assets in the US, Europe, and Australia… Kong: Skull Island (directed by Jordan Vogt-Roberts) is an American production invested by Wanda. Other Internet and financial giants (such as Alibaba, Tencent, and China Film Group) have invested billions of dollars in US film ventures.

Chances of a Trade War

Peter Navarro is perhaps the most vocal trade hawk in the Trump administration. As a fierce critic of China, he has encouraged the president to carry out his campaign promises and take aggressive actions on trade. But administration officials remain deeply divided over exactly what Trump should decide on the aluminum and steel tariffs. Gary Cohn, H.R. McMaster and Rex Tillerson have all expressed concerns about steep tariffs. James Mattis has also raised concern about some of the Commerce Department’s recommendations, and the negative impact of such a move on key allies regarding the recommended options.

In September 2017, White House chief of staff John Kelly merged Navarro’s Office of Trade and Manufacturing Policy with the National Economic Council, requiring Navarro to report to NEC Director Gary Cohn. The move kept Navarro out of some high-level meetings on trade, and forced him to work under Gary Cohn (with whom he has disagreed). But now, the White House wants to promote Navarro as “assistant to the president for trade policy”.

The new title would ensure that he has a seat at the table for pivotal meetings on trade, and access to the daily senior staff briefings. One administration official said Trump, who likes Navarro, ordered the change, while another said John Kelly has agreed to implement it. If this is true, the Chinese may have reasons to be concerned about a possible trade war.

Cultural & Ethnic Sinicization

China has stepped up efforts to influence the political systems of other countries. New reports and investigations have raised growing concern in Australia, New Zealand, and the United States, amid signs that these Chinese efforts (or “Charm Offensive”) might lead to new debates and backlashes. In Australia, China has conducted wide-ranging influence operations, using campus organizations to monitor Chinese college students, business associations, and diplomats to supervise Chinese-language media. In the US, more than 100 universities are in partnership with the Chinese government through Confucius Institutes.

Recently, US officials, lawmakers, and academics have focused their attention on resisting these Chinese influence on campuses. As FBI has been watching and investigating some Confucius Institutes, the US intelligence community has warned about their potential spying activities. In Vietnam, apart from Confucius Institutes, thousands of Chinese nationals including workers, traders, and others, have migrated to Vietnam every year for business or settlement. As most of them are there to stay, they may eventually change the demographic nature of local community and in the process become a long-term security risk and danger.

NQD. March 01, 2018    

Recommended readings:

  1. China Doesn’t Want Confrontation in the South China Sea, James Holmes (professor at Naval War College), National interest, January 29, 2018.
  2. Can Vietnam’s Military Stand Up to China in the South China Sea? Derek Grossman (RAND Senior Defense Analyst), Asia Policy vol. 13, no. 1, January 2018.
  3. Why a South China Sea Diplomatic Breakthrough Is Unlikely: How to Respond to Beijing’s Continued Military Buildup, Gregory Poling, Foreign Affairs, January 25, 2018.
  4. Promotion would give Navarro deeper influence over trade policy, Andrew Restuccia, Politico, February 25, 2018.
  5. Waking up to China’s infiltration of American colleges, Josh Rogin, Washington Post Opinions, February 18, 2018
  6. Will China Weaponize Social Media? Kent Harrington, Project syndicate, February 5, 2018
  7. Trump’s coming hard line on China, Ely Ratner (CFR Senior Fellow, former deputy national security advisor to Vice President Joe Biden), Lowy, November 21, 2017.
  8. The Paradox of Xi’s Power, Minxin Pei (Director of the Keck Center for International and Strategic Studies at Claremont McKenna College), Project Syndicate, October 27, 2017.
  9. China vs America: Managing the Next Clash of Civilizations, Graham Allison (former director of Belfer Center, Harvard), Foreign Affairs, September-October 2017.
  10. China’s Crown Theorist:The Rise of Wang Huning, Ryan Mitchell, Foreign Affairs, December 4, 2017.
  11. China’s Influence Game Down Under, Charles Edel (Senior Fellow at the United States Studies Centre, Sydney University), American Interest, November 13, 2017.
  12. Australia and New Zealand Face China’s Influence, Joshua Kurlantzick (CFR Senior Fellow for Southeast Asia), Council on Foreign Relations, December 13, 2017.

 

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