World Economic Forum 

Syed Munir Khasru
World Economic Forum
November 20, 2020

https://www.weforum.org/stories/2020/11/global-south-covid19-pandmeic-global-recovery/
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COVID-19 continues to have a devastating impact on public health and to rattle the global economy with structural shocks. The pandemic has now killed more than one million people, while the International Monetary Fund estimates that global GDP will shrink by 4.4% in 2020. But, strange as it may seem, the current crisis could offer developing countries a path toward greater economic self-reliance.

This is partly because developed countries have in general borne the brunt of the pandemic’s health effects so far. Many advanced Western economies have experienced more COVID-19 cases and deaths relative to their populations than have developing countries of the Global South, despite their superior health-care systems and stronger social safety nets. For example, India’s health system ranks 112th globally, while that of the United States ranks 37th. But whereas India has so far reported about 6,400 COVID-19 cases per million population, America’s tally is more than four times higher.

Some developing countries like Vietnam combated the coronavirus effectively by introducing strict testing, tracing, and quarantine measures at a very early stage – something most developed countries failed to do. Even after allowing for possible underreporting and data inaccuracies in poorer countries, the relative performance of developed economies remains a paradox.

Moreover, development financing has already started to plummet as richer countries focus on engineering domestic post-pandemic recoveries. The OECD estimates that external private finance inflows to developing economies could decrease by $700 billion year on year in 2020, exceeding the impact of the 2008 global financial crisis by 60%. Non-resident portfolio outflows from emerging markets totaled $83.3 billion in March 2020 alone, according to the Institute of International Finance. And the OECD thinks global foreign direct investment (FDI) will drop by at least 30% this year, with flows to developing economies likely to fall even more. Such trends imply a grim outlook for Global South countries that historically have largely relied on development aid from the Global North.

But studies have shown that development aid and humanitarian assistance do not necessarily foster economic empowerment. A recent OECD survey found that between 48% and 94% of respondents in developing countries do not believe that humanitarian assistance helps them to become economically self-reliant. People want financial autonomy, not prolonged assistance.

The debate over the effectiveness of development aid is an old one, with critics claiming that rich countries use aid as a tool to exploit developing economies’ resources, and often attach conditions to ensure that donors reap the bulk of the export receipts. But many developed countries have lost much of their soft power because of their shambolic pandemic responses.

Even before COVID-19 struck, many developing economies had been looking for ways to make a sustainable shift from aid dependency to self-reliance. In 2018, Rwanda banned second-hand clothes imports with the aim of encouraging its domestic textile industry to produce higher value-added garments; the US responded by ending the country’s duty-free export privileges. And last year, the United Kingdom’s government allocated part of its £14 billion ($18.5 billion) aid budget to capacity-building projects intended to help developing countries increase their international trade and attract FDI.

Today, developing countries have more opportunities to become self-reliant. For starters, trade in developing East Asia has declined less sharply than in the West during the pandemic, according to the World Trade Organization. A key reason for this is that industries producing high value-added goods usually suffer more during downturns. Developing countries’ greater resilience, stemming from their reliance on low value-added manufacturing, is evident in Vietnam’s textile and garments sector, which has remained operational throughout the pandemic and is expected to have a swifter recovery in 2021 compared to their regional competitors.

Second, digitization will play a crucial role in the post-pandemic recovery by significantly boosting e-commerce, which implies a fairer competitive playing field for producers around the world. Bangladesh’s e-commerce sector grew by 26% year on year by August, and other South Asian countries show a similar trend.

Third, the health-care and pharmaceuticals sectors are expected to thrive in the post-pandemic economy as people become more aware of the importance of health and fitness. Least developed countries can take advantage of World Trade Organization provisions by producing more generic drugs, which face no patent-related obstacles.

Finally, governments in the Global South can mobilize domestic resources to offset the decline in external development finance – in particular by transforming their tax policies to generate revenue from fast-growing digital economic activities. Currently, developing countries’ low levels of tax revenue as a share of GDP – typically between 10-20%, compared to 40% in high-income countries – hinder development by constraining governments’ ability to invest in public goods like health, infrastructure, and education.

Developing countries face several hurdles on the path to self-reliance, not least poor governance, unfavorable business climates, and civil conflicts. But they also must break with the post-1945 paradigm of external development finance, which has been primarily driven by the Global North and shaped by its geopolitical agenda. For far too long, developing countries have had to listen to lectures from those who think they know better. Today, developing-country governments must chart a development agenda that is free from donor conditionality.

Every crisis contains great opportunities, and the COVID-19 pandemic is no different. It offers developing countries nothing less than the chance to reinvent and reboot their economies – and to shake off the disabling legacy of external aid dependency.

World Economic Forum (Global)
Syed Munir Khasru
July 5, 2019

Link: https://www.weforum.org/agenda/2019/07/north-korea-us/
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After a bleak and unfinished ending to the Hanoi summit earlier this year, Donald Trump made a historic walk on June 30 as the first sitting US president to step into North Korea where he shook hands with Kim Jong Un. Subsequently, Trump invited Kim to the White House: this is a substantial diplomatic victory for North Korea. While Trump’s 20 steps in North Korea give a ray of hope to more than 80 million Korean people towards a peaceful and cooperative future, the reality may be less assured. Despite the detente between the two leaders and their respective countries, it remains to be seen if it will last.

Before the first Trump-Kim meeting on June 12, 2018, the relationship between the U.S and North Korea was at an all-time low. After the Trump-Kim Summit -- when North Korea pledged to abandon its missile testing and undergo complete denuclearization in return for withdrawal of sanctions -- the reclusive North Korean leader emerged from hibernation and his image started improving on the international stage. Sticking to the non-binding agreement signed during the Singapore Summit, no further missile testing by North Korea was monitored in 2018, and some nuclear testing facilities were destroyed. Kim, buoyed by his new found acceptance, embarked on a charm offensive by improving relations with important allies around the globe.

On September 2018, for the first time, Kim had a meeting with the president of South Korea. The two Koreas have restored their military and radio communications and joint railway projects, and sporting exchanges are underway. Furthermore, the two Koreas are mulling pursuing a joint bid to co-host the 2032 Olympics. Post-2018, Kim’s relationship with China, North Korea's biggest ally and security guarantor, has improved as he has visited the country four times in less than a year. China-North Korea border trade has gained traction as a number of trucks making their way across the Sino-Korean Friendship Bridge have spiked since November 2018. Chinese premier Xi Jinping may finally visit North Korea in 2019.

However, the reality is that while flashy demonstrations of missile launches have been tactically abandoned in 2018, North Korea continues to produce nuclear materials and develop missile bases. Instead of complete denuclearization, Kim has continued with covert nuclear program development. On September 2018, the New York Times reported that Kim has been quietly continuing the development of his nuclear weapons and facilities. Trump is finally realizing the uphill struggle of what denuclearization will entail, and is lowering his expectations, focusing on building an interpersonal rather diplomatic relationship with the North Korean leader.

After the second summit in Hanoi, news of a newly tested North Korean short-range ballistic missile, which appears to be a copy of an advanced Russian design, has surfaced. Missiles that were test-fired earlier this year on May 4 and May 9 from the northwest of the country demonstrate Kim’s ability to start testing missiles again if his demands for total removal of sanctions are not met by the U.S. Looking at how pre-2018 embargoes have been lifted and sanctions relaxed, it is clear who is benefiting more from this newly formed dynamic. Sunday’s meeting reinforces this further: While Trump noted that sanctions will remain in place for now, he indicated that they may be relaxed if talks progress.

Furthermore, the U.S.’s failure to adhere to signed international treaties in the face of political leadership changes in Washington legitimizes North Korea’s trust deficit in the U.S. The country's withdrawal last year from the Joint Comprehensive Plan of Action, informally known as the ‘Iran deal,’ has jeopardized the credibility of the U.S.’s commitment to international agreements.

Looking at events that have unfolded since the first Trump-Kim Summit, Kim has so far enjoyed success projecting a more favorable image of himself to the rest of the world. The U.S., on the other hand, has turned out to be neither a partner that can be trusted in the long run to keep commitments nor an adversary that North Korea cannot co-exist alongside. With Trump realigning his timelines regarding denuclearization and Pyongyang solely focusing on sanctions relief, it seems that there is still a long way to go in this chess game of diplomacy and peace.

World Economic Forum (Global)
Syed Munir Khasru
May 29, 2019

Link: https://www.weforum.org/agenda/2019/05/are-concerns-about-the-new-silk-road-justified
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China has invested billions of dollars in building highways, ports, and railways in more than 60 countries since 2013, as part of its Belt and Road Initiative (BRI). In many countries, however, BRI is facing a backlash. Chinese-financed projects have been trimmed, suspended, or put under increased scrutiny in Sri Lanka, Myanmar, Nepal, Pakistan and Malaysia, over an alleged debt trap and unscrupulous dealings.

In 2017, Hambantota port in Sri Lanka was taken into Chinese hands, along with 69 square kilometres of land, after the government defaulted on debt payments. Pakistan, reeling from a balance of payments crisis, has asked for retrenchment of and easier terms on the China-Pakistan Economic Corridor (CPEC).

BRI has become a cause of concern for its impact on the more vulnerable countries. According to the Centre for Global Development, distress from a highly unsustainable level of debt and interest rates has worsened in countries holding debt from BRI projects.

For instance, a railway project in Laos involves $6 billion of Chinese lending, almost one third of its annual GDP. The unsustainability of these debts has fuelled suspicions about China’s avowed intention of “community and shared destiny” in funding these projects. On top of that, almost 89% of the BRI contractors are Chinese companies.

BRI’s foggy definition and the ambiguity over its long-term objectives have also raised questions. There is no clear map of the scheme, resulting in expansion beyond the initial range of Middle East and Eurasia to the Pacific islands, Latin America, Africa and the Arctic.

The secrecy stokes discomfort and fuels speculation that the initiative’s goals are beyond just economics and connectivity. To many of the ardent critics, BRI is a blueprint by China to turn Eurasian countries into its tributary states under a singular power.

Are concerns overstated?
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Some of the new governments came to power in Sri Lanka, Malaysia, and the Maldives by railing against regimes that were subservient to China. But a focus on BRI solely through geo-strategic lenses falls short of the project’s reality.

For example, it is unclear how China will militarily benefit from the Hambantota port in Sri Lanka since, unsurprisingly, India effectively vetoed any Chinese naval presence in the port.

Moreover, according to an Asian Development Bank estimate, between 2017 and 2030, Asia needs at least $26 trillion investment in infrastructure development for sustaining its current GDP growth and adapting to climate change. That kind of money is not coming from anywhere and, for many, BRI is a welcome move in bridging the gap.

Given China’s successful experience in building highways, high-speed railways and power grids that have transformed the country into a global economic powerhouse, BRI projects make sense to infrastructure-hungry Asia and Africa.

From the Chinese perspective, its surplus foreign exchange reserves need more lucrative destinations than US government securities. BRI helps address China’s problem of excess capacity in steel, cement, and other materials by using them in infrastructure projects. A focus on developing China’s western hinterlands, by establishing connections with Eurasia and its 14 neighbouring countries is also a reasonable economic proposition from China’s standpoint.

China's response
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As leaders around the world gathered in Beijing in April to attend the second Belt and Road Forum, the mega initiative received a much-needed boost in the face of lingering concerns about the project’s intentions and long-term impact.

Thirty-six heads of state participated in this year’s forum, compared with 28 in 2017. In total, over 6,000 participants from 150 countries and 92 international organizations, including the heads of the IMF and UN, took part.

A total of $64 billion worth of projects were signed, while the BRI parties agreed on 283 projects to deliver in transportation, taxation, trade, auditing, technology, culture, and media.

Chinese President XI Jinping chose to respond to the critics of BRI by vowing to increase imports from developing countries, reducing trade barriers, implementing foreign investment friendly initiatives in China, and shifting focus to a high quality and sustainable framework for BRI projects.

From Europe, state leaders of only seven EU nations took part in this year’s forum, with Italy being the key participant. Countries such as France, Germany, and UK sent higher level representatives than they did during the first forum.

The ASEAN region was well represented with only the Indonesian President, Joko Widodo, absent due to elections. From the Middle East, UAE’s Prime Minister, Sheikh Rashid Al Maktoum, was among the attendees; with Saudi Arabia and Iran represented at ministerial level.

Charting a new way for BRI?
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BRi is yet to reframe its image as a responsible initiative. A good start would be to make it more transparent, inject good governance and best business practices in its implementation.

President Xi’s softening of the rhetoric of ambitious global expansion in the 2nd BRI Forum signals China’s mellowing stance. Involving multiple stakeholders is another necessary step, as China gradually moves towards a more inclusive initiative. Opening doors for local contractors and the workforce of host countries to participate in the implementation of the projects will help remove distrust and allay some of the concerns about China’s geopolitical motives.

BRI needs to demonstrate its commitment to international rules and technical standards to gain legitimacy as an international initiative. The joint statement from this year’s Forum called for "high quality" projects and standards. Even though China earlier disregarded WTO in setting up an independent arbitration court to resolve cross-border BRI disputes, this year’s BRI Forum shows positive developments, as China has signalled intentions to open its borders, allowing foreign investors to operate with full stakes.

This year’s BRI Forum has ended with renewed optimism about BRI and China in general. The Huawei debacle and the consequent geopolitical tussle in recent months have been a great source of distress for China, as international concerns continue to grow about Chinese motives.

A larger international presence at this year’s BRI forum and renewed optimism generated from President Xi addressing concerns over Chinese motives are good starting points for the reforms necessary to turn BRI into a truly global, multilateral development platform. For China, the parting message from its partners would be, “actions speak louder than words”.

World Economic Forum (Global)
Syed Munir Khasru
February 28, 2018

Link: https://www.weforum.org/agenda/2018/02/here-s-how-migration-can-benefit-us-all/
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In the last two years, international media has been full of stories of migrants and their hardships, accompanied by grim photographs splashed across their front pages. The content is almost identical: bleak tales of migrants from war-torn countries entering Europe in search for a better life, and the challenges for both the migrants and the host countries.

The most recent case is that of Myanmar’s Rohingya refugees fleeing murder, rape, arson, and torture unleashed by the military, and taking shelter in neighbouring Bangladesh. In Austria, recent elections continue to reflect the rising influence of anti-immigrant right wing parties in Europe. While Bangladesh, a country of first asylum, is struggling to provide basic lifeline support to people fleeing ethnic cleansing in the Rakhine state of Myanmar.

But things are not always so bleak for migrants fleeing their homes in search of a new life in a mostly unfamiliar land.

Berlin has an inspiring story where refugees are being trained as museum guides, while others are providing tours in their native language. Firstly, these migrants are earning money, and gain a new sense of purpose as they are able to return to a job. Moreover this is their first step towards assimilation.

Many of these refugees are highly educated and were doctors, lawyers, accountants and teachers in their country of origin. The refugees who plan to return home, find inspiration when comparing their country with Germany. Germany’s recent history of rebuilding a country after the Second World War gives them a sense of hopefulness. Their countries’ exhibits of antiques help them reconnect with their culture and heritage despite being a long way from home.

The town called Schwabisch Gmund has a story to share where 800 migrants were assigned by the government to be housed. Instead of accommodating the migrants in one area, they are being spread out in the local area. Many are hosted by the surrounding villages, which help them to know the people and culture better. German language for migrants is also offered by Schwabisch Gmund, which also encourages them to undertake voluntary work. These activities demonstrate the desire of migrants to play their part in the society, helping gain acceptance in the local community.

From an economic perspective, the influx of migrants into Europe provides an opportunity, as the region faces the major demographic challenge of an ageing population. The EU’s fertility rate is 1.5 children per woman and working age population would be shrinking if it were not for migration.

The German economy is a good example, as it is creating jobs faster than natives can fill them. In the UK, the period of high immigration, which started in 1997 and peaked in 2004, had a positive impact on GDP and employment. Immigrants bring various skills and aptitudes, catalysing the locals to improve their own. While the difference in performance in the UK between immigrants and the natives is marginal, it is significantly higher in Spain, Greece, Belgium and Sweden.

Meanwhile, Charles Agyemang from Ghana has an interesting story to share. He worked in the field of public health for over 10 years and migrated from Ghana to Western Europe. He visits Ghana every year with the help of the International Organization for Migration. As part of its MIDA (Migration for Development in Africa) Ghana health project, Agyemang teaches and collaborates with other health workers and experts.

As a continent in transition, Africa’s eating pattern is changing. Africans also suffer from hypertension, diabetes and cardiovascular diseases. Charles, along with his colleagues, goes into the community and educates people about their rights and health. The migrant Charles is making a positive difference in his native country and is appreciated for what he does to improve people’s lives.

The ghost town of Riace in Italy is being revived by migrants. The past 18 years has witnessed the influx of more than 6,000 migrants and the Mayor of Lucano offers refugees uninhabited apartments and job training. Zara Husseini, 34, for example weaves fabric on a loom and embroiders it with needlework. She and her daughter fled from the clutches of the Taliban in Afghanistan to find a new life in Europe.

Selma Giana is a young Somali woman who works in a shop in Riace, where she has been living for two months. When asked about her past, she recounts the horrors she encountered as smugglers kept her captive during her horrific journey through Ethiopia, Sudan and Libya. They refused to give her any food, sexually assaulted her, and tortured her for months.

Riace’s natives believe that the migrant experience has been good for their town and Mayor Lucano has a message for the European politicians who keep migrants out. “To those Europeans who fear migrants bring disease, take away their jobs and sense of security; they bring us their culture, their world, their colours and their knowledge."

In the world of sports, many players have migrated from Africa to France, or different parts of Europe, and are represented on an international level. Zlatan Ibrahimovic has an interesting background. His father was a Bosnian Muslim and his mother a Croatian Catholic. Both his parents migrated to Sweden. At the age of 2, his parents divorced and he became an infamous bicycle thief. Eventually, he polished his football skills and surprisingly when he was 15, wanted to quit. However his coach at Malmo FF football club convinced him to stay, and he is now known as one of Sweden’s greatest football players.

Historically, stories abound about refugees who made the world a better place to live in. Einstein migrated to the US after leaving Nazi Germany, for fear of his family being sent to a concentration camp. After working for the Institute for Advanced Study, he applied for American citizenship. The actor Mila Kunis left the Soviet Union at the age of seven, in fear of religious oppression by the anti-Semitic government. Steve Jobs has a gripping family history, as his father was a Syrian immigrant though they never formally met.

All these stories call attention to the positive impacts of migration. In the host countries, job vacancies and the skills gap can be filled, and economic growth can be sustained. The Temporary Return of Qualified Nationals (TRQN) has resulted in the home countries reaping the benefits of migration, as returning migrants bring savings, skills and international contacts with them.

The challenge set forth by the refugee crisis may seem insuperable, but some stories show that there is a beacon of hope. These spirited individuals are showing Europeans and the rest of the world the positive energy and optimism that they bring and, in many instances, filling the gaps that would otherwise remain empty.

World Economic Forum (Global)
Syed Munir Khasru
November 14, 2017

https://www.weforum.org/agenda/2017/11/whats-weve-achieved-and-the-challenges-ahead-50-years-of-asean/
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As ASEAN marks its 50th Anniversary, the bloc’s economic achievements with regards to intra-regional trade and connectivity have been remarkable.

Today Southeast Asia has a combined GDP of about $2.4 trillion. Overall trade has grown from $10 billion in 1967 to $2.3 trillion in 2015. The GDP per capita has increased by 63.2%, from 2007 to 2015.

Movement of people within ASEAN has significantly increased since its inception. This year Thailand has had an influx of around two million people from Myanmar, Cambodia and Vietnam. Malaysia had three million estimated migrant workers from Indonesia, Philippines and Myanmar. Singapore frequently relies on professionals from Malaysia and Indonesia. Such movements have brought about closer cooperation and people-to-people connectivity among ASEAN countries, although issues with regards to legalizing migrant workers remain a challenge.

A plan of action in transport and communications has also been implemented to further multi-modal transport, facilitate trade, achieve inter-connectivity in telecommunications, and streamline road transport laws and regulations among the member nations. A feasibility study has been conducted on the development of a rail link from Singapore to Kunming in Southern China, passing through Malaysia, Thailand, Cambodia, Laos, Myanmar and Vietnam, to enhance seamless connectivity among the nations to boost intra-regional trade and connectivity. Initiatives have been undertaken to promote ASEAN as a tourist destination, conserve cultural and environmental heritage, endorse intra-ASEAN travel and encourage better services in the sector.

Wide-ranging diversity
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Given all its accomplishments in trade and connectivity, it still remains for ASEAN to be as closely integrated socio-politically as the European Union (EU). Diversity in institutions, markets and economies and the different pace of development among members in many instances have acted as a hindrance. While Singapore and Brunei have high GDP per capita, Laos, Cambodia and Myanmar lag far behind in terms of economic growth and modernization. The region needs to have an authentic discourse on inequality amongst itself. There exist stark political, ethnic, cultural, religious, and linguistic diversities among ASEAN states. In the EU, new member states must have stable institutions guaranteeing democracies with market economies, but ASEAN member states range from authoritarian, to socialist, to fully democratic.

ASEAN has yet to achieve milestones in terms of forming a unified body to address issues of security, human rights and good governance. A central mechanism has not yet been formulated to enforce compliance among member states if they falter to meet agreed-upon regulations and standards. No legally binding dispute-settlement mechanism is present either in the economic or political sphere. There is no mechanism to penalize states if they fail to follow through on agreements, declarations or deals, and this is one issue ASEAN leaders will have to grapple in the next 50 years.

Rohingya crisis
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ASEAN as a bloc has remained complacent and ineffective in handling regional human rights issues. The Rohingya crisis in Myanmar has demonstrated the failure of ASEAN to unify against a regional humanitarian crisis committed by one of its members. Despite reports of human rights abuse, ethnic cleansing and mass killing and arson, other than the Muslim majority Indonesia and Malaysia, ASEAN has mostly maintained its stance of non-interference and failed to adequately address the issue.

Although ASEAN had attempted to address the human rights issue by forming an ASEAN Intergovernmental Commission on Human Rights in 2009, and, by 2012, had drafted the ASEAN Human Rights Declaration, the declaration was strongly criticized by international observers and ASEAN civil society. It was described by the Human Rights Watch as a "declaration of government powers disguised as a declaration of human rights.” ASEAN civil society was not consulted during the drafting process. One of the concerns about the declaration was that it had used ‘weasel’ words, which have actually allowed governments to violate their human rights commitments. Unlike the EU, there is a lack of a sense of ownership among ASEAN citizens.

The people of the ASEAN countries still do not participate in the decision-making process of the forum and it is mostly a forum for policy-makers and bureaucrats only.

World Economic Forum (Global)
Syed Munir Khasru
July 28, 2017

Link: https://www.weforum.org/agenda/2017/07/the-geopolitical-landscape-of-asia-pacific-is-changing-dramatically-here-s-how/
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Two important events are having a significant influence on existing security arrangements in Asia Pacific.

The result of China’s Belt and Road Initiative (BRI), led by President Xi Jinping, and US President Trump’s abandonment of the Trans-Pacific Partnership (TPP), is that many Asian states are re-orientating their long-held policy towards the two giants.

Vague commitments by the US towards its traditional Asian allies, coupled with offers of billions of dollars in infrastructural investments by cash-rich China, have the potential to disrupt the usual order of things in Asia.

Trump’s ‘America First’ policy, and Xi’s policy of ‘deep pockets’ for China’s neighbours have already made several US loyalists recalibrate their alliances.

The starkest shift has come from Philippines President Rodrigo Duterte. Despite having long-standing issues with China after a standoff over Scarborough Shoals in the South China Sea, and the Philippines being one of the US’s trusted allies in Asia, Duterte has publicly shunned the US and signed multiple bilateral treaties with China.

Chinese support
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China has donated a $7.35 million shipment of more than 3,000 assault and sniper rifles along with ammunition to the Philippines, weapons that are likely to be used in Mindanao against radical militants. Even five years ago, the world would have expected the US and the West, not China, to have supported the Philippines’ fight against radical militants.

Duterte’s fallout with the US can be attributed to the US being critical of his hardline policies against drug dealers. Duterte has said on several occasions he does not like the US military presence in his country. By contrast, China is unlikely to infringe upon Duterte’s strong leadership, nor will it be critical of him over human rights.

Thailand and Malaysia, too, have been pulled closer towards China’s orbit of influence.

Thailand’s military government did not have especially comfortable relations with the Obama administration anyway; and now China and Thailand are pursuing a planned high-speed railway project worth $5.15 billion. Thailand's junta has targeted infrastructure spending as a long-term means of boosting the economy, with China offering billions through BRI.

If the Philippines, Malaysia, Thailand, Laos and Cambodia also move closer to China, this all has the potential to shake the fundamentals of the geopolitical orientation of ASEAN nations.

ASEAN driving forces
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When ASEAN was formed 50 years ago, there were two driving forces. One was to make economic gains through better trade among member states, and the second was to form an alliance against the spread of communism in the region, led by the then Soviet Union and Mao’s China. Today the Soviet Union has ceased to exist, and communism is dead. China is not interested in exporting ideology, but in expanding trade in the region. The inevitable question is, “Will economic gains create sticky-enough glue to hold countries in the bloc together as they tread unchartered territories, and respond to a surging China and a waning and unsure US?”

One probability is that ASEAN will form its own defence pact to avoid being caught in the China-US regional power play, and to retain regional peace and stability.

Contention in the South China Sea has exposed potential rifts, with countries like Cambodia reluctant to upset China, while others express support for the ruling of the International Arbitration Court in the Hague.

In spite of lingering doubts about continued US engagement in the region, a US Navy destroyer early this month sailed close to the disputed island in the South China Sea; and the US has proposed increasing its naval presence from 272 vessels to 350.

As it celebrates 50 years, ASEAN leaders can’t deny or defer forever the inevitable geopolitical realities and the implications for the bloc’s ability to remain united over the next 50 years in the fast-changing security dynamics of the region.

An increasingly aggressive North Korea led by Kim Jong Un has tested more missiles than his father and grandfather combined. Already, 16 missiles have been fired during10 tests in 2017, and the country’s ultimate goal is to produce a missile capable of reaching the US, topped with a nuclear warhead.

An end to patience
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North Korea’s sabre rattling makes Japan and South Korea uneasy. The Trump administration has announced an end to the “era of strategic patience” and declared that “all options are on the table”.

The US military build-up on its Asian bases, the deployment of its Terminal High Altitude Area Defense (THAAD) system across the Korean border, and China’s anxiety because of this deployment, along with US frustration with China’s inability to contain the erratic North Korean leader – all these factors are leading to a number of possible eventualities.

The likelihood of a US attack, with the resulting impact on the region, is no longer improbable. No matter how unlikely it may have sounded even a year ago, the emergence of “One Korea” in the aftermath of the chain of events that may happen if the North Korean missile tests continue, is no longer an impossibility. That is, of course, a debate requiring separate analysis and argument.

An increasingly powerful China is showing signs of assertiveness in the neighbourhood, including the South China Sea. While joining celebrations on the 20th anniversary of the return of Hong Kong to China, President Xi Jinping had strong words of caution: “The central government will unswervingly implement the policy of “one country, two systems and make sure that it is fully applied in Hong Kong without being bent or distorted”.

The general mood of resignation is echoed in the words of Carrie Lam, the newly appointed Chief Executive of Hong Kong, who told the BBC that she cannot guarantee that freedom of speech will protect those who call for independence. These developments will certainly not offer any reassurance to Taiwan, considered by China as a “breakaway province” to be united with the mainland in the future.

Old rivalries persist
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In South Asia, there is little hope for any amity between India and Pakistan, or of them reaching a solution to longstanding issues such as Kashmir and border disputes. Indeed, matters have taken a turn for the worse following the attack last year on Indian border guards in Pathankot, and subsequently Uri, by alleged Pakistani militants.

Rivalry between the two largest countries in South Asia has undermined regional cooperation, and South Asia continues to be one of the least integrated regions of the world, with trade between its countries not even amounting to 5% of the total trade that countries of the region conduct with the rest of the world.

With a population of about 1.7 billion, South Asia houses two nuclear-armed, mutually hostile neighbours; any misjudgement or miscalculation by either side could have catastrophic consequences, not only for the two countries, but the region as a whole.

While the South Asian Association for Regional Cooperation (SAARC) is virtually a dysfunctional body – particularly when compared to ASEAN – the Indo-Pak rivalry is also impeding other regional and sub-regional initiatives, like the BRI and The Bangladesh–China–India–Myanmar Forum for Regional Cooperation (BCIM). The China-Pakistan-Economic-Corridor runs through the contentious Kashmir region, making India a non-participant in the BRI and sceptical of BCIM.

In June, Chinese troops started building a road towards India's border, onto Bhutan’s Doklam plateau, which is claimed by the Chinese as its own enclave. Bhutan, in turn, has sought help from neighbouring India, which sent troops across the border from the northeastern state of Sikkim.

India’s chicken's neck
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The standoff between China, India, and Bhutan began because of India’s sensitivity to Chinese building activity in the region. While the Doklam plateau is not Indian territory, activity in the region gives the Chinese access to the “chicken’s neck” corridor that connects India to its remote northeastern states. It is suspected by China, and many in Bhutan, that Bhutan’s assertion of its claims may be prompted by New Delhi because of the corridor’s strategic importance to India.

The inability of these two Asian giants to have some form of minimal strategic relationship for mutual economic, trade, and connectivity advantages, not only continues to deprive them, but other countries in the region as well.

A reorientation by India is seeing Prime Minister Modi moving closer to the US and Japan, as a US-India-Japan-Vietnam regional alliance is in the offing.

The visit to Israel by PM Modi – the first by an Indian prime minister – and the signing of a defence deal worth billions of dollars between the two countries, reflects a shift from India’s traditional dependence on Russia as its major supplier of military hardware.

The joint military exercise last year between Russia and Pakistan, and Russia’s flirting with the Taliban, as insurgents in Afghanistan launch increasingly bold attacks, and a new branch of Afghanistan-ISIS is taking control of Afghanistan’s fortified territory, previously considered to be a Taliban stronghold, are all changing the dynamics of regional power play.

US troop withdrawal, Pakistan’s uncertain commitment to eradicating the Taliban, and now Russia getting involved, does not bode well for the region.

Even Australia had a fallout with the US after the botched phone call between Trump and Prime Minister Malcolm Turnbull over questions of refugee asylum. And Turnbull publicly said he was open to the idea of China taking the place of the US in leading Trans-Pacific Partnership (TPP) negotiations, following Trump’s withdrawal.

Today, China is Australia’s largest market for merchandise exports. Turnbull is also in consultation with other nations to forge ahead with TPP minus the US, and he is in talks with Japan’s Prime Minister Shinzo Abe.

New ways
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As traditional US allies find ways to come together without the US, and China continues its drive with trade regimes, like the Regional Comprehensive Economic Partnership (RCEP), as well as mega infrastructure projects like BRI, the geopolitics of Asia Pacific are going through realignments and changes not seen since the end of the World War II.

As the Asia-Pacific region navigates through unchartered waters, it will test the strength of old economic alliances like ASEAN, as well as challenge the conventional wisdom that used to see countries with democratic credentials and free markets politically and militarily aligned to the leader of the free world, the US.

Economics, politics, and military alliances may no longer follow the same trajectory as before. The future of the region is fraught with challenges and uncertainty that require a much better understanding of both the strategic issues and economic interests, along with the forces that are either uniting or driving a wedge between countries.

Complex issues need mature understanding, which at this moment seems to offer the Chinese an edge over the Americans, as anxious Asians wait and watch events unfold. One thing is for sure, things will never be the same.

World Economic Fourm (Global)
Syed Munir Khasru
June 1, 2017

Link: https://www.weforum.org/agenda/2017/06/wannacry-exposes-need-for-better-public-private-cooperation-in-the-cyber-space
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On May 12, the world suffered one of the worst cyber-attacks in history as the ransomware “WannaCry” held data from 230,000 computers hostage in at least 150 countries, earning over $80,000.

A ransomware, once activated, encrypts access to the data of a computer or a network until a sum is paid. Infected organizations during the attack included both public and private entities across the globe, from the UK's National Health Service (NHS) to FedEx, Chinese universities and even the interior ministry of Russia.

Cybercrime has globally evolved into a growth industry where risks are low and returns are high. McAfee, one of the leading computer security companies, estimates that cybercrimes annually cost the global economy more than $400 billion. The figure is expected to increase manifold as projections lead to a staggering sum of $2.1 trillion by 2019. On the other hand, the importance of internet connectivity cannot be understated in terms of global economic and social development. Connectivity is changing the way we work, socialize, create and share information, and organize the flow of people, ideas and things around the world.

According to UNCTAD, $22 trillion exchanged hands in 2016 through e-commerce, which accounts for 3.1 percent of global GDP. The global communications network connects people and supply chains almost anywhere in the world. However, criminals can access these company systems from nearly any jurisdiction, resulting in the widespread exploitation of networks in an organized manner. Computer systems today are extremely complex, with millions of lines of code. It is natural for even the best organizations to have loopholes. This is why developers rigorously monitor and frequently update their software.

The WannaCry breach was facilitated by leaks from NSA documents which outlined flaws in outdated versions of Microsoft Windows, that were subsequently exploited by the hackers to spread the virus. The National Security Agency (NSA) has long been following such a strategy of finding loopholes in key software systems and hoarding information to utilize the flaws in times of need for political and military gains.

The strategy has indeed been successful in some cases in the past; when the US used the Stuxnet virus to slow down Iran’s proliferation of nuclear technology or brought down North Korean missiles through the “left-of-launch” strategies. However, the recent attack has exposed a glaring flaw in this strategy, as a deliberate lack of coordination from the government’s part with the private sector (Microsoft) resulted in major financial loss; but more importantly a loss of access to crucial data that could mean life or death for some, as in the case of the NHS.

As hospitals diverted ambulance services and switched off non-emergency services, it was striking that any individual with a laptop and access to the internet was capable of affecting so many lives worldwide. The anonymity and maneuverability of the internet provides cybercriminals access to remote resources at lower costs and lesser risks, making committing cybercrimes a lucrative prospect. Recovering stolen data or money can become impossible, even when the perpetrators are apprehended. Such was the case during the Bangladesh central bank heist in 2016, when hackers siphoned off $81 million from Bangladesh central bank's Federal Reserve account in New York, which were immediately laundered through multiple casinos in Philippines. So far, only $15 million have been recovered while getting the rest back seems increasingly unlikely.

In the age of connectivity, cyber weapons have grown to be the most threatening means to wage attacks, as their span broadly ranges from political targets to financial embezzlement.

However, the greatest threat from cyber weapons is their potential to take control of military equipment, as the usage of smart weapons continues to grow. While no significant attacks have taken place in this arena, the signs are growing that this is a real risk. In 2015, the German Patriot air and missile defense systems, stationed at the Turkish border with Syria, was compromised as the system carried out “unexplained” commands for a short period of time. Although the breach was identified and neutralized swiftly, one can easily imagine the catastrophic leverage that the hackers could have gained if they had full access to a system that included six launchers and two radars.

In light of such massive breaches, the world’s preparedness in tackling these risks is now under serious scrutiny.

There is an urgent need to develop an international platform for strengthening online infrastructure and protecting information assets. The Wannacry attack has reinforced the importance of keeping computer systems critical for operations separate from internet access. While that might not be possible for many systems since leveraging connectivity provides organizations with competitive advantage, addressing complacency of users can limit the progression of a virus to a large extent. In most cases viruses are spread when someone clicks a rogue email link or uses outdated systems, as was the case during the Wannacry attack. Strict monitoring and awareness measures, supported by appropriate legal systems can help address this issue. However, when it comes to monitoring and privacy, careful trade-offs need to be weighed in between the values inherent in an increasingly connected world and the risk of operational disruption, intellectual property loss, public embarrassment, and fraud.

What is more important is the need for transparency when it comes to forging partnerships between the government and private sector. The WannaCry attack could have been avoided, or at least mitigated to a large extent, had NSA alerted Microsoft about the security loophole before it was too late for affected computers to update the software.

Security needs to be integrated into the technology environment, helping individuals understand the risks of the public and private information they deal with every day. Training, raising awareness, and working with stakeholders are the way forward as lines are getting blurred between individuals and institutions, nations and borders, connectivity and casualty.

World Economic Forum (Global)
Syed Munir Khasru
May 20, 2017

Link: https://www.weforum.org/agenda/2017/05/asean-50-human-rights-syed-munir-khasru/
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ASEAN, poised to celebrate its 50th anniversary coming August, has come a long way since its inception through the Bangkok Declaration. While promoting free trade and economic cooperation remains its core focus, the organization was founded in 1967 by five of its current members to maintain regional stability and safeguard against the influence of communism in the region. Along with trade and economic growth, political stability, good governance and civil liberties were the founding principles on which the organization was built upon.

In terms of trade and economic prosperity, ASEAN states separately and as a bloc have been stellar performers. Home to more than 622 million people, today if counted as a country, it is the seventh largest economy in the world with a GDP of $2.6 trillion. More than a quarter of the population belong to the 15- 29-year age bracket.

However, civil liberty and human rights issues have not progressed in tandem with the region’s economic prosperity. Most ASEAN nations, notably Cambodia, Laos, and Vietnam put heavy restrictions on media, civil society, and freedom of speech. Even progressive and matured nations like Malaysia and Singapore restrict free speech and have not yet developed the culture of political pluralism as reflected by the fact that since their independence, they both have been governed by the same political party. Thailand too, in spite of its economic success and one of the most popular global tourist destinations, remains under the clutches of military dictatorship. Myanmar, having achieved some traction towards democracy after years of military dictatorship is also mired in allegations of ethnic cleansing and abuse of its marginalized Rohingya population.

Initially ASEAN as a bloc was hesitant in confronting human rights issues owing to their ‘no interference policy’ in each other’s internal affairs, which changed after the adoption of a charter in 2007, in which for the first time ‘human rights’ principles were mentioned. The culture of non-interference, however, still prevails and the bloc is always slow to respond to rising human rights issues in the region in fear of appearing to be interventionist. Indonesia, the world’s fourth most populous country and seventh largest economy by GDP, has witnessed recent escalation in human rights abuse. Ahok, the popular Chinese-Christian former governor of Jakarta, has been sentenced to two years in prison under the blasphemy law. A doctored video of him criticizing a Koranic verse went viral and the double-minority Ahok was immediately sentenced.

New channels for public discourse
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The civic space to voice opinions has been alarmingly shrinking in South-East Asia. Bloggers and social media activists are arrested for writing commentaries that do not adhere to ruling party’s narration of events. Initially social media remained an open space when state agencies were still grappling with the new technological disruption. With time, law enforcers have become adept at arresting people, sensing dissent in social media. However, the space of social media is also expanding with newer outlets being invented every other day for people to communicate online and share opinions. Hence, it will be tough for central bodies to continually monitor every emerging social media platform. Enhanced communication via internet will continue to challenge governments’ capacity to dominate the public discourse.

ASEAN regimes are becoming stricter and introducing draconian laws to shrink the social media space. With more than320 million internet users in January 2017, the region will have increasingly higher internet penetration with rising income. More people will have smartphones in their hand with access to Viber, Whatsapp, Snapchat and Facebook to communicate, acquire independent information, collaborate and voice opinion. The speed of technological innovation is likely to outsmart the capability of centralized surveillance authorities. The pragmatic approach for ASEAN leadership would be to start reforming the socio-political culture by giving its citizens more freedom and space, enhancing civil liberties and improving human rights conditions. Only developing economies through trade will not be sustainable if basic freedom indicators are not improved upon. According to the human rights watchdog organization, Freedom House, most ASEAN nations are either ‘not free’ or ‘partly free’ as result of heavy state repression. Thailand for its lèse-majesté laws and Cambodia due to beating and sentencing of almost as many as 40 bloggers, as well as heavy media and internet censorship, were ranked as completely ‘not free’ among ASEAN countries.

With greater digitization, bulging youth population and rising income, South-East Asians will continue to find newer and cheaper digital platforms to speak their minds. ASEAN, if unable to adapt to international standards of governance, runs the risk of brewing an ‘ASEAN Spring’ protest and causing political disruption. That is unlikely to occur since per capita incomes in ASEAN economies are far higher than in states like Tunisia, Egypt, Morocco and Algeria, where growing unemployment and falling income generating opportunities were some of the prime reasons for eruption of protests. Protests in ASEAN will most likely erupt from frustrations of a tech savvy generation accustomed to voicing opinions in digital platforms. With countries like Philippines topping the ranking for the most number of hours spent on Facebook, the region will quickly require to change its narrative on free speech.

The longer ASEAN waits in reforming its governance and human rights condition, the riskier the political environment of the region would become. ASEAN has every reason to celebrate the economic prosperity it has brought to the region and its people through greater trade and closer economic integration. However, moving ahead the key challenges in the coming decades would be to equally effectively address non-economic issues like greater political accountability, improved human rights, greater civil liberties and freedom of speech. Aspiration for greater freedom and liberty are the inevitable outcome of rising economic prosperity and part of the evolutionary process.