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Ms. Halimah Yacob – First female president of Singapore

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Ms. Halimah Yacob, 63, former Speaker of Parliament, became the first woman and first Malay in 47 years to ascend to the Presidency of Singapore- highest office, after successfully filing her nomination papers on Sept 13 as the sole eligible candidate for this year’s reserved Presidential Election.

She will be officially sworn in as Singapore’s eighth President on September 14 at 6pm, at the Istana, the Prime Minister’s Office announced.

Returning Officer Ng Wai Choong declared Ms. Halimah as the President-elect at the People’s Association headquarters along King George’s Avenue to loud cheers by hundreds of Halimah’s supporters. The last Malay to hold the presidency ill he died in 1970 was Yusof Ishak, whose image adorns the country’s banknotes. Yusof Ishak was President between 1965 and 1970, the first years of Singapore’s independence following a short-lived union with neighbouring Malaysia, but executive power rests with Lee Kuan Yew, the country’s Prime Minister.

Aiming to strengthen a sense of inclusivity in the multicultural country, Singapore had decreed the presidency would be reserved for candidates from the Malay community this time. Ms. Yacob’s experience as house speaker automatically qualified her under the nomination rules. Of the four other applicants, two were not Malays and two were not given certificates of eligibility, the elections department said.

 First Malay President

This year’s Presidential Election was reserved for the Malays in a bid to ensure multiracial representation after Parliament passed into law changes to the Elected Presidency scheme last November. Apart from Halimah, two other hopefuls – chief executive of Second Chance Properties Mohamed Salleh Marican, 67, and chairman of marine services provider Bourbon Offshore Asia Pacific Farid Khan, 62 – had also filed application forms to contest as candidates. However, both men were determined ineligible by the Presidential Elections Committee as they did not meet one of the qualifying criteria, which requires that private-sector candidates must have served as the chief executive of a company for at least three years, with the company having at least S$500 million in shareholders’ equity, on average, in the most recent three years.

While some members of the public have expressed happiness at Halimah’s ascension to the Presidency, others expressed disappointment that this was only made possible courtesy of a walkover. They want an election for full legitimacy.  However, others noted that Madam Halimah is fully qualified to become the President and will be able to perform her duties well, citing her track record of over 40 years in public service.

Malays make up about 13 percent of the population, and the government is dominated by ethnic Chinese, who make up about three-quarters. There are no Muslim Malays in the top echelons of Singapore’s army, and few among the senior ranks of its judiciary, but a member of its poorest ethnic minority is set to become the first woman President of the Southeast Asian city state this week.

The government initially narrowed the criteria last year to permit only a Malay to serve as the next president, on the ground that no Malay had held the post in the five preceding terms.

The Presidential Election Committee later tightened the criteria, including a requirement that any candidate from the private sector must have been a senior executive of a company with at least 500 million Singapore dollars in equity, or about $371 million.

Two other Malays were considered by the commission, including Mohamed Salleh Marican, chief executive of Second Chance Properties. He had said that if he was elected, he would begin an investigation into the allegations that Mr. Lee abused his power in his dispute with his siblings. Both potential candidates were rejected on the grounds that the companies they headed were not large enough.

 President Halimah

Ms. Halimah Yacob is Singapore’s eighth president and its first woman head of state, in the country’s first presidential election reserved for candidates from the Malay community.

The 63-year-old former Speaker of Parliament was the only presidential hopeful declared eligible to contest by the Presidential Elections Committee (PEC) “Whether there is an election or not, my passion and commitment to serve the people of Singapore remain the same,” she told reporters.

Halimah Yacob, who was born to an Indian Muslim father and Malay mother, puts minority representation on agenda.

The youngest of five children, Ms. Halimah had described her childhood as a “terrible struggle” following the death of her Indian-Muslim father and family sole breadwinner. Her mother, who died in 2015, had to single-handedly raise the family by selling food on a pushcart. Halimah had studied at the Singapore Chinese Girls’ School and Tanjong Katong Girls’ School, before applying successfully to read law at the then University of Singapore.

Starting out as a lawyer, Halimah, 62, had spent over three decades in the National Trades Union Congress (NTUC). Before she became Speaker of Parliament in 2013, she had served as Minister of State at the then-Ministry of Community Development, Youth and Sports.

She collected her certificate of eligibility at the Elections Department in the afternoon, shortly after witnessing the election of her successor as Speaker in Parliament.

Ms. Halimah was a Member of Parliament and a leader of the People’s Action Party before giving up her seat last month to run for president. “I can only say that I promise to do the best that I can to serve the people of Singapore, and that doesn’t change whether there is an election or no election,” she told reporters Monday after she was certified as the only eligible candidate. Her campaign slogan — “Do Good, Do Together” — was widely panned as ungrammatical.

World’s attention is focused on Ms. Halimah as she will take her oath of office on Thursday, which will mark the start of her six-year term.

Despite being the establishment candidate, Ms. Yacob wears a hijab, which is banned in state schools and public sector jobs that require uniforms. But she has seldom spoken publicly on the issue and there is little sign of change in official attitudes.

 Mixed reactions

 There were three candidates for the presidency poll and they were issued certificates by the Community Committee confirming that they belong to the Malay community. After scrutiny, the PEC found only Ms. Ms. Halimah was eleigible candidate and  informed the other two – marine services firm chairman Farid Khan, 61, and property company chief executive Salleh Marican, 67 – that they did not qualify to contest. Neither had helmed a company with $500 million in shareholder equity for the most recent three years, a key threshold required for candidates relying on their private-sector experience. In rejecting his application, the six-member panel said it was unable to satisfy itself that he had “the experience and ability” comparable to a chief executive of a company of that size and complexity.

The PEC noted the shareholders’ equity of Salleh’s company, Second Chance, averaged about $258 million, a sum “considerably below the minimum” required under the Constitution.  Farid declined to disclose his company’s financials, but its value is believed to be much lower. He declined to show his letter from the PEC to the media. Both said they were disappointed not to be given the go-ahead – but thanked their families and supporters for their support over the past few months, and said they would continue to serve Singaporeans.

 Under the law, the decision of the PEC – chaired by Public Service Commission chairman Eddie Teo – is final and not subject to appeal or review in any court. The uncontested election drew mixed reactions from observers, who welcomed Madam Halimah making history as the country’s first woman president and the first Malay head of state in 47 years.

Institute of Policy Studies deputy director Gillian Koh said: “Madam Halimah is a double minority – not only is she a Malay-Muslim individual, but a female.” But Dr Koh felt “the statement of our acceptance of diversity would have been all the more powerful if there had been an open contest”.

However, political science professor Bilveer Singh of the National University of Singapore questioned the value of having a contest for a contest’s sake: “Being elected through a walkover does not undermine or delegitimize the winner.”

 For Lee, whose son, Lee Hsien Loong, is now Prime Minister, the answer to social cohesion lay in creating a culture of meritocracy, rather than adopting policies of positive discrimination to boost the chances of advancement for Singapore’s Malay and Indian minorities.

 Singapore

 Singapore officially the Republic of Singapore, is also referred to as the “Lion City”, the “Garden City” or the “Little Red Dot”, is a sovereign city-state in Southeast Asia. Singapore, an island city-state off southern Malaysia, is a global financial center with a tropical climate and multicultural population. Its colonial core centers on the Padang, a cricket field since the 1830s and now flanked by grand buildings such as City Hall, with its 18 Corinthian columns. In Singapore’s circa-1820 Chinatown stands the red-and-gold Buddha Tooth Relic Temple, said to house one of Buddha’s teeth.

 It lies one degree (137 km) north of the equator, just south of the Malay Peninsula across the Straits of Johor, with Indonesia’s Riau Islands to the south. Singapore’s territory consists of one main island along with 62 other islets. Since independence, extensive land reclamation has increased its total size by 23% (130 km2) and its greening policy has covered the densely populated island with tropical flora, parks and gardens.

 Singapore is a global commerce, finance and transport hub. Its standings include: the most “technology-ready” nation (WEF), top International-meetings city (UIA), city with “best investment potential” (BERI), second-most competitive country, third-largest foreign exchange market, third-largest financial centre, third-largest oil refining and trading centre and the second-busiest container port. The country has also been identified as a tax haven.

Singapore ranks 5th on the UN Human Development Index and the 3rd highest GDP per capita. It is ranked highly in education, healthcare, life expectancy, quality of life, personal safety and housing. Although income inequality is high, 90% of homes are owner-occupied. 38% of Singapore’s 5.6 million residents are permanent residents and other foreign nationals. There are four official languages: English (common and first language), Malay, Mandarin and Tamil, though almost all Singaporeans are bilingual.

Singapore is a unitary multiparty parliamentary republic, with a Westminster system of unicameral parliamentary government. The People’s Action Party has won every election since self-government in 1959. The dominance of the PAP, coupled with a low level of press freedom and restrictions on civil liberties and political rights, has led to Singapore being classified by some as a semi-authoritarian regime. One of the five founding members of ASEAN, Singapore is also the host of the Asia-Pacific Economic Cooperation (APEC) Secretariat and a member of the East Asia Summit, Non-Aligned Movement and the Commonwealth of Nations.

Singapore is a parliamentary republic with a Westminster system of unicameral parliamentary government representing constituencies. The country’s constitution establishes a representative democracy as the political system Executive power rests with the Cabinet of Singapore, led by the Prime Minister and, to a much lesser extent, the President.[54]The President is elected through a popular vote, and has veto powers over a specific set of executive decisions, such as the use of the national reserves and the appointment of judges, but otherwise occupies a largely ceremonial post

The Parliament serves as the legislative branch of the government

Singapore’s foreign policy is aimed at maintaining security in Southeast Asia and surrounding territories. An underlying principle is political and economic stability in the region.[97] It has diplomatic relations with more than 180 sovereign states. As one of the five founding members of ASEAN,[99] it is a strong supporter of the ASEAN Free Trade Area (AFTA) and the ASEAN Investment Area, because Singapore’s economy is closely linked to that of the region as a whole.

 The separation of Singapore from Malaysia gave ethnic Malays a clear majority in Malaysia, while ethnic Chinese formed the majority in independent Singapore. Leaders of both countries, however, recognised that peace and prosperity depended on preserving harmony between the two groups. But living in a Muslim-dominated neighborhood, with Malaysia and Indonesia next door, Singapore’s leaders have long worried about the risk of conflicted loyalties among Malays.

President

The President of the Republic of Singapore is Singapore’s head of state. In a Westminster parliamentary system, as which Singapore governs itself, the prime minister is the head of the government while the president is largely ceremonial, broadly analogous to the Sovereign of the United Kingdom. A Constitutional Commission recommended changes to guarantee minority representation in the highest office in the land as well as to tighten eligibility criteria in keeping with the economy’s growth.

The President is the head of state of Singapore. The executive authority of the nation is vested in the President and exercisable by him or her or by the Cabinet or any minister authorised by the Cabinet. However, it is the Cabinet that has the general direction and control of the Government, and in most cases the President exercises powers in accordance with the advice of the Cabinet or a minister acting under the Cabinet’s general authority. The President only exercises limited powers in his or her personal discretion to block attempts by the government of the day to draw down past reserves it did not accumulate, to approve changes to key appointments, and to exercise oversight over the Corrupt Practices Investigation Bureau and decisions of the Executive under the Internal Security Act and the Maintenance of Religious Harmony Act.. As a component of the legislature together with Parliament, the President is also jointly vested with the legislative power of Singapore.  The President usually opens each Parliamentary session with an address drafted by the Cabinet setting out the Government’s agenda for the session, and may address Parliament and send messages to it

The Constitution confers on the President certain executive functions to block attempts by the government of the day to draw down past reserves that it did not accumulate. Thus, a guarantee may only be given or a loan raised by the Government if the President concurs, and his or her approval is also needed for budgets of specified statutory boards and Government companies that draw on their past reserves.

 Before 1993, the President of Singapore was chosen by Parliament. Following constitutional amendments in 1991, the Presidency became a popularly elected office with certain custodial powers, particularly over government expenditure of the nation’s past financial reserves and key appointments to public offices. In November 2016, further amendments provide for “reserved elections” for a particular racial group (Chinese, Malay and Indian/other minority) – if that community has not been represented for five presidential terms.

 The President has been called “Singapore’s No. 1 diplomat” Ambassadors and high commissioners accredited to Singapore present their credentials to him, and he is called upon by visiting foreign leaders. In addition, he or she contributes to the nation’s external relations by undertaking overseas trips on Cabinet’s advice. Presidents have also used the office to champion charitable causes.

The first President elected by the majority of the people was Ong Teng Cheong, who served from 1 September 1993 to 31 August 1999. The office of President was created in 1965 after Singapore became a republic upon its secession from the Federation of Malaysia that year. It replaced the office of Yang di-Pertuan Negara, which had been created when Singapore attained self-government in 1959. The last Yang di-Pertuan Negara, Yusof Ishak, became the first President. After his death he was replaced by Benjamin Sheares, who served until his death in 1981, when he was succeeded by Chengara Veetil Devan Nair. Owing to personal problems, Nair stepped down in 1985 and was replaced by Wee Kim Wee, who served as President until 1993.

In January 1991, the Constitution   was amended to provide for the popular election of the President, a major constitutional and political change in Singapore’s history. Under the revision, the President is empowered to veto the use of the country’s past reserves and key civil service appointments. He or she can also examine the administration’s enforcement of the Internal Security Act and Maintenance of Religious Harmony Act, and authorize corruption investigations The first popularly elected President was Ong Teng Cheong, a former cabinet minister. He served as President from 1 September 1993 to 31 August 1999.

Discrimination

There are serious elements of discrimination in Singapore against minorities in all walks of life. A government report published in 2013 found Malays felt they were sometimes discriminated against and had limited prospects in some institutions, such as the armed forces.

Malays, who form just over 13 per cent of Singapore’s 3.9 million citizens and permanent residents, also underperform on measures such as university and secondary school education.

The election of a Malay President is by itself unlikely to resolve concerns over under-representation, but analysts and advocates say it could help foster trust among communities.

Singapore’s economic success and education policies have helped swell the ranks of middle-class Malays, but the last census in 2010 showed they lagged other ethnic groups on socio-economic measures such as household incomes and home ownership.

Farid Khan, one of the unsuccessful candidates and the chairman of marine services firm Bourbon Offshore Asia, told Reuters more Malays now hold political office, and some are making their way in the corporate world, but “there is still room for improvement.”

Yet the reserved election has also injured some pride. “It cheapens the credibility of a Malay person that it requires a token election for us to be President,” said Malay comedian and television personality Hirzi Zulkiflie. “Some people intending to run are very capable.” 

Observation

A popular public figure, Ms. Halimah was widely expected to win the presidential election but rejection of other two candidates made the poll fairly easier. West like many anti-Islamic insiders might not like the Muslim woman is elected to presidency in Asia.

Singaporeans are used to predictable elections, with the same party winning every parliamentary poll in the carefully managed country’s 52-year history, last time with a landslide. It’s partly due to loyalty to the ruling People’s Action Party (PAP), but also because the government tightly controls the media and political freedoms. As the head of state, the president plays a largely ceremonial role and doesn’t hold much power, apart from having say in the use of Singapore’s hefty financial reserves.

Ms Halimah, who is Muslim, is only the second president to come from the Malay ethnic minority. It’s a move that should be celebrated by Singapore, which prides itself on its multiculturalism and diversity. That’s because this election was only open to Malay candidates – the first time the government has reserved an election for a particular race. Otherwise a Muslim cannot t hope to be the elected president, especially in the present era of Islamophobia.

The government, which lauds its careful maintenance of national racial harmony, argued it was necessary to ensure minorities could have a chance at becoming president in Chinese-majority Singapore, which has always had an ethnically Chinese prime minister. But some Malays saw the move as positive discrimination that went against Singapore’s golden rule of meritocracy, which is that the best person gets the job, regardless of background. It also stirred up questions about Malay racial purity, after people realized Ms Halimah was half-Indian, and many have mocked her ethnicity. Singapore’s government has often clamped down on such unhealthy discussions, fearing it would hurt racial harmony.

After getting elected as the first ever female President Ms. Halimah said she is the president of entire Singapore as she is committed to Singapore and Singaporeans. She asked people to forget the differences and instead work on the similarities among them to make the nation achieve greater goals.

Ms. Halimah with a genuinely positive mindset has a long way to go forward to strengthen secular democracy, Singapore too!

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Southeast Asia

Will Mahathir Reset China-Malaysia Trade Relations?

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A shock electoral upset has just returned 92-year-old Dr Mahathir Mohamad to the prime ministerial chair in Malaysia. The run-up to this climax was muddled by a miasma of fake news, lurid allegations and outright conspiracy theories from eitherside of the political divide. China-baiting was inevitably drawn into this tawdry mix despite mainland investments being a stabilizing main stay of the local economy.

According to an Economic Intelligence Unit report last year, Malaysia was the fourth-largest recipient of mainland Chinese direct investments – right behind Singapore, United States and the autonomous Chinese province of Hong Kong. Although the sum total of Chinese investments in Malaysia has not been adequately tallied,the US$100 billion Forest City project provides a snapshot of the staggering amounts being invested into the local economy.

While former Prime Minister Najib Razak hailed these investments as an imprimatur ofhis government’s investor-friendly policies, the opposition camp (and new government) accused him of “selling out to China”. In reality, one doubts whether foreign consortiums canmatch the scale, cost-effectiveness and speed of execution of many Chinese-led projects in Malaysia.

Business Compradors

Dr Mahathir has particularly taken issue with the inadequate number of local jobs created by Chinese investments in Malaysia. It is an argument not without merit.Overseas Chinese infrastructure projects are known for their heavy reliance on mainland labour, machines and supplies – of the lock, stock and barrel variety – tokeep costs, graft and middlemen interference to the lowest possible scale.

Curiously, the backbone of Dr Mahathir’s electoral tsunami came from the ethnic Malaysian Chinese community who openly hailedthe global ascent of China. That was until theydiscovered thatmainland business models accommodated as few middlemen as possible.It was Alibaba on a massive scale, missing 40 thieves and in perennial need of 40innovators.

Many Malaysian consumerssave thousands of ringgit each year by purchasing a variety of consumer products directly from China instead of forking out a hefty mark-upat local stores.Unsurprisingly, there are now growing calls to tax online purchases from China. This is not going to help budget-strapped Malaysians who voted in the new administration on the back of complaints over rising living costs. Malaysia’s shadow economy has been estimated by various studies to range between 30 percent and 47 percent of its GDPup till 2010.

The anti-China narrative therefore may be couched in terms of multifaceted grievances like jobs and the South China Sea but it primarily boils downtoincentives for middlemen who contribute little or nothing in terms of value-additions to projects, productsor services offered by mainland companies. These modern-day compradors have an ally in another area bereft of value – added or otherwise.

Media Compradors

The biggest impediment to the Malaysian economy is not China, its business modus operandi or the lack of local talent. It is the Malaysian media which has abjectly failed to relay grassroots ideas and innovations to national policy-makers for decades.

The author himself vividly remembers the lament of Dr Mahathir’s former national science advisor on the dearth of science journalists in Malaysia. This translates to recurring losses in taxpayer money.There is an oft-told account of how a fact-findingdelegation to the United States, seeking particular expertise in renewable energy technology,were told that the expert they were looking for was a Malaysian academic back in Kuala Lumpur!

Researchers needing critical economic or scientific data on Malaysia are likely to get them from foreign sources as even google cannot cope with the bottomless insipidity and juvenile meanderingsof the local media. Publicity-seeking experts with dodgy backgrounds are routinely sought for their banal insights and quotes in return for guaranteed filler spaces in a lack lustre media.Malaysia is gradually losing its economic and intellectual competitiveness due to the entrenched practise of mediocrity promoting mediocrity – egged on by Western interests.This forms the main backdrop to the current anti-China narrative.

Local media stalwarts privately blame politicians, in particular Dr Mahathir himself (during his previous 22-year reign) for the lack of media vigour and freedom in Malaysia. While media restrictions undeniably exist, one wonders how proposed articles on topics such as Open Governance could be seen assubversive.

It is high time to drain the swamp in Malaysia. Dr Mahathir has already indicated that the bloated 1.6 million-strong civil service in Malaysia would be pruned to promote economic and government transparency. For decades, successive governments had rewarded personal loyalty with plush posts and contracts. Malaysians now have another chance to demand efficient, meritocratic and transparent governance. Not mass-mediated bogeymen, viral passions and pies-in-the-skies.

The billion-dollar question now is whether the new administration will be able tousher in a transparent and vibrant media – one that can explore greater synergies within and abroad.Otherwise, Malaysia’s relations with its neighbours and trading partners are bound to deteriorate, along with its economy.

An abridged version of this article was published by CCTV’s Panview on May 14, 2018

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Changing dynamics of China-India and China-Japan ties

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Over the past year, there has been a growing interest with regard to the vision of a Free and Fair ‘Indo-Pacific’. While this term has been used in recent years by policy makers from the US and Australia and has been pushed forward by a number of strategic analysts, a number of developments since last year have resulted in this narrative gaining some sort of traction.

US President Donald Trump during his visit to South East Asia and East Asia in November 2017, used this term on more than one occasion, much to the discomfort of China (which prefers ‘Asia-Pacific). On the eve of his visit to India last year, Former Secretary of State, Richard Tillerson while speaking at the Centre for Strategic and International Studies (CSIS, Washington DC) spoke about a larger role for India in the Indo-Pacific, and the need for India and US to work jointly. Said Tillerson:

     ‘The world’s center of gravity is shifting to the heart of the Indo-Pacific. The U.S. and India, with our shared goals of peace, security, freedom of navigation, and a free and open architecture, must serve as the Eastern and Western beacons of the Indo-Pacific, as the port and starboard lights between which the region can reach its greatest and best potential’.

In November 2017, the Quad grouping (Australia, US, India and Japan) met on the sidelines of the ASEAN Summit pitching not just for a rules based order, but also in favour of enhancing connectivity. Commenting on the meeting, US Department of State had said that the discussions were important and members of the Quad were:

‘committed to deepening cooperation, which rests on a foundation of shared democratic values and principles.”

Earlier too the four countries had coalesced together, but as a consequence of Chinese pressure, the grouping could not last.

There have also been discussions of coming up with connectivity projects. While this was discussed during Australian PM, Malcolm Turnbull’s meeting with Donald Trump in February 2018. In April 2018, representatives of Japan, US and India met in New Delhi and committed themselves

Indo-Pacific and China factor 

While members of the Quad continuously denied, that the Indo-pacific was specifically targeted at China, it would be naïve to believe, that this assertion. In fact, during a visit to Australia, French President Macron who is trying to position himself as one of the frontline protagonists of liberalism in the Western world, spoke about the need for India,  Australia and France to work together in order to ensure a rules based order.  Commenting on the need for India, France and Australia to jointly work for a rules based order, and checking hegemony (alluding to China), the French President, Emmanuel Macron, stated:

   ‘What’s important is to preserve rules-based development in the region… and to preserve necessary balances in the region….It’s important with this new context not to have any hegemony,”

Changing dynamics of China-India and China-Japan ties

While it is good to talk about a rules based order, and Free-Fair Indo-Pacific, it is important for members to do a rational appraisal, of ensuring that the Indo-Pacific narrative remains relevant . especially in the context of two important events. First, the reset taking place between India-China, and second the thaw between Japan-China.

This has already resulted in some very interesting developments.

First, Australia was kept out of Malabar exercises in June (Japan, US and India will be participating).  Australia is a member of the Quad alliance, and has been one of the vocal protagonists of a Free and Fair Indo Pacific Narrative, and a greater role for India in the Indo-Pacific.  Australia has on more than one occasion, expressed its desire to participate in the Malabar Exercises.

Many argue, that the decision to exclude Australia from the exercises, is a consequence of the significant shift taking place in India-China relations. Though India has been dismissive of this argument,

Second, Japan has expressed its openness to participate in the (Belt and Road Initiative) BRI,  as long as international norms are met. During meetings between the Chinese and Japanese Foreign Ministers (Wang Yi, in April 2018, such a possibility was discussed. During Wang Yi’s meeting with Japanese PM, Shinzo Abe too this possibility was discussed. The Japanese PM who is seeking to improve ties with China, reiterated the potential of the Belt and Road Initiative in giving a boost to the regional economy.

It would be pertinent to point out, that a number of Japanese companies are already participating in countries which are part of the Belt and Road Initiative.

Interestingly,  Japanese led Asian Development Bank ADB which has been funding many projects (spearheaded by Japan) which have been projected as a component of the Indo-Pacific strategy has even gone to the extent of stating, that it does not perceive AIIB as a threat. Commenting on the possibility of cooperation between ADB and AIIB, President of ADB, Takehiko Nakao  stated:

“AIIB, it’s not the kind of threat to us. We can cooperate with AIIB because we need larger investment in Asia and we can collaborate.”

Where does Indo-Pacific go from here?

In terms of strategic issues, especially ensuring that China is not unfettered influence in the region, the narrative is relevant. The Chinese approach towards Indo-Pacific and Quad as being mere froth is an exaggeration. Addressing a press conference on the sidelines of the National People’s Congress, Chinese Foreign Minister, Wang Yi had stated, that there was:

‘no shortage of headline grabbing ideas” but they were “like the foam on the sea” that “gets attention but will soon dissipate”,

Similarly, in terms of promoting Democratic values it certainly makes sense. The real problem is in terms of connectivity projects (beyond India-Japan, none of the members of the Quad have elaborated a coherent vision for connectivity). The US has spoken about an Indo-Pacific Economic Corridor, but given the Trump Administration’s approach, it remains to be seen to what extent this can be taken further. While Australia has been steadfast in its opposition to China’s growing economic clout, it has its limitations, in terms of funding any concrete connectivity projects. Possible regions where Australia could play a key role should be identified. It has been argued, that Australia could play a key role in important infrastructural projects in the South Pacific.

Conclusion

It is fine to speak in terms of certain common values, but to assume that China can be the only glue, is a bit of a stretch, especially given the fact that it has strong economic ties with key countries pushing ahead the Indo-Pacific vision. It is also important, for the Indo-pacific to come up with a cohesive connectivity plan. Currently, the narrative seems to be driven excessively by strong bilateral relationships, and the individual vision of leaders. In the ever evolving geo-political and economic dynamics in Asia, with China re-examining its relations with both Japan and China, the key stakeholders in the Indo-Pacific region need to do some serious thinking.

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Infrastructure Drive, Strong Domestic Demand to Sustain Philippine Growth

MD Staff

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The Philippines’ economic growth is expected to sustain its quick pace in 2018 and 2019 as the government’s infrastructure program is rolled out, says a new Asian Development Bank (ADB) report.

In its new Asian Development Outlook (ADO) 2018, ADB projects Philippine gross domestic product (GDP) growth at 6.8% this year and 6.9% in 2019, up from 6.7% in 2017. Rising domestic demand, remittances, and employment, in addition to infrastructure spending, will drive growth. ADO is ADB’s flagship annual economic publication.

“Along with domestic demand, the government’s infrastructure investments will fuel the country’s growth in the next few years, supported by a sound economic policy setting,” said Kelly Bird, ADB Country Director for the Philippines. “We expect this growth to further lift wage employment numbers, add to household incomes, and benefit more poor families across the archipelago.”

The Philippines remained one of the strongest growing economies in Southeast Asia in 2017. Domestic investment recorded 9% growth last year, moderating from a brisk 23.7% in 2016, although growth in fixed investment in industrial machinery, transport equipment, and public construction remained robust. Household consumption grew by 5.8% in 2017, from 7% in 2016, on the back of higher remittances and employment, with the unemployment rate falling by 1.3 percentage points to 5.3% in January 2018 as 2.4 million jobs were added. Public spending rose by 7.3% last year from 8.4% in 2016.

Consumer price inflation reached 3.2% last year from 1.8% in 2016 due to strong economic growth, higher international fuel prices, and Philippine peso depreciation, but well within the 2% to 4% target by the Bangko Sentral ng Pilipinas—the country’s central bank. The country’s external debt further declined to 23.3% of GDP in 2017, from 24.5% of GDP in 2016.

Moving forward, ADB projects services will continue to drive GDP growth, along with manufacturing and construction industries. The approval of the Tax Reform for Acceleration and Inclusion law in December 2017 will augment tax revenues and provide additional fiscal space for more progressive public spending. The policy reforms are expected to yield additional 90 billion to 144 billion Philippine pesos ($1.73 billion to $2.76 billion) in tax revenue collection in 2018 and 2019, respectively.

With economic growth gaining momentum, inflation is projected to reach 4% in 2018 as global oil and food prices rise, and higher excise taxes on some commodities take effect. In 2019, meanwhile, inflation is expected to marginally decline to 3.9%.

The report notes there are external risks to the Philippines’ growth outlook from heightened volatility in international financial markets and uncertainty about global trade openness, although the country’s strong external payments position would cushion these effects.

A major policy challenge to the country’s growth outlook, according to the report, is managing the rollout of the government’s “Build, Build, Build” infrastructure program, which is expected to raise public infrastructure spending to 7.3% of GDP by 2022 from 4.5% in 2016. The report provides suggestions on ways to enhance government capacity, including strengthening coordination between government agencies and improving technical capacity of staff within these agencies, and fostering stronger partnerships between government agencies, the private sector, and development partners.

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An economic space from the Atlantic to the Pacific

On the 23 May, in the run-up to SPIEF, a roundtable held jointly between the Roscongress Foundation and St. Petersburg...

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