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Managing the South China Sea: Where Policy Meets Science

James Borton

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The South China Sea is in a crisis. The problems facing the sea are as vast, deep and seemingly intractable as the oceans themselves.

Rival countries have wrangled over a string of atolls, coral reefs, and islets in this contested region for centuries but now these competing claims are viewed as a serious challenge to peace and prosperity in the region. These disputes, which are associated with continuous coastal development, escalating reclamation, and increased maritime traffic, also draw attention to the destruction of coral reefs and the overall environmental degradation in the troubled waters.

Furthermore, they reveal how claimant nations—the People’s Republic of China (PRC), Vietnam, the Philippines, Malaysia, Brunei, and the Republic of China (ROC) on Taiwan—have a legal and ethical responsibility to ensure that none of their activities harm or create long-term damage to the fragile marine ecosystems.

In this sea of opportunities, uncertainties and threats, environmental degradation remains at the center of scientific conversation as an increasing number of marine scientists sound the alarm about how to address issues of acidification, biodiversity loss, climate change, destruction of coral reefs, and fishery collapses.

With environmental security shaping a new South China Sea narrative about the ecological challenges, this concept represents a crucial effort to link the impact of environmental change to both national and international security.

Paul Berkman, oceanographer and former head of the Arctic Ocean Geopolitics Program at the Scott Polar Research Institute, provided his own definition of environmental security. “It’s an integrated approach for assessing and responding to the risks as well as the opportunities generated by an environmental state-change.” 1

Through studying the sustainability of the biological seascape and navigating the development of science diplomacy to prevent geopolitical battles over the management of marine resources, marine biologists’ efforts to respond to the damage done to the “Global Commons” will require scientific forums and collaborative problem solving among all neighbors.

Last year, the unanimousdecision reached by The Hague’s five-judge tribunal,found that China’s large-scale reclamation and construction of artificial islands has caused severe harm to coral and violated the country’s obligation to preserve fragile marine environments. Furthermore, it denied them any legal basis to claim historic rights over a vast majority of the South China Sea. It was a striking victory for the Philippines, which filed the case. Among many dramatic findings, the tribunal declared China’s so-called “nine-dash line” invalid.

“The Tribunal has no doubt that China’s artificial island-building activities on the seven reefs in the Spratly Islands caused devastating and long-lasting damage to the marine environment,” stated the judgment. 2

In addition, the United Nations Convention on the Law of the Sea (UNCLOS) stipulates in two of the 17 Parts of UNCLOS a direct application to the merits of marine science research with an emphasis on encouraging bilateral and multilateral agreements to create favorable conditions for marine science study. 3

Professor John McManus, a marine biologist at the University of Miami and a notable coral reef specialist, who has regularly visited the region and provided analysis to the tribunal, has stated that based on satellite imagery the environmental damage done by the Chinese’s dredgers and clam poaching is most severe.

McManus has researched this region for over a quarter of a century. He knows that the most important resource in these heavily fished waters is the larvae of fish and invertebrates. As a result, he has called repeatedly for the development of an international peace park in this contested region.

“Territorial disputes have led to the establishment of environmentally destructive, socially and economically costly military outposts on many of the islands. Given the rapid proliferation of international peace parks around the world, it is time to take positive steps toward the establishment of a Spratly Islands Marine Peace Park,” claims McManus. 4

His peace park proposal includes management of the area’s natural resources and alleviation of regional tensions via a freeze on claims.

As early as 1992, McManus was one of several marine scientists who completed scientific articles advocating for an international peace park or marine protected area. Despite the geopolitical SCS intractability, the Spratly Islands appear to him as a “resource savings bank,” where fish, as trans-boundary residents, spawn in the coral reefs and encircle all of the South China Sea waters, before returning home.

Policy makers may do well to take a lesson or two from nature as they examine how best to address the complex and myriad of sovereignty claims.

Even the Association of Southeast Asian Nations (ASEAN) Working Group on Coastal and Marine Environment recognizes that the region faces enormous challenges to sustainability in coastal and shared ocean regions. Unless a scientific ecosystem approach is adopted, trans-boundary marine areas conflicts can and are getting worse.

Since ASEAN’s inception, it has been occupied with the task of identifying shared solutions to common security problems. To a large degree, one may say that security questions have been the driving force for continued regional integration in Southeast Asia. In the future questions of environmental security may play the same role.

According to Karin Dokken, a political scientist at the University of Oslo, “The states around the South China Sea are to a large degree interdependent when it comes to questions of the human environment. They are interdependent to the degree that if they fail to find common solutions to environmental problems they may end up in violent conflict against each other. In general, environmental interdependence is both a source of conflict and a potential for international integration.” 5

Without agreement on these environmental problems there’s a bleak future for the sea. Nearly 80 percent of the SCS’s coral reefs have been degraded and are under serious threat in places from sediment, overfishing, destructive fishing practices, pollution, and climate change.

Challenges around food security and renewable fish resources are fast becoming a hardscrabble reality for more than just fishermen. With dwindling fisheries in the region’s coastal areas, fishing state subsidies, overlapping EEZ claims, and mega-commercial fishing trawlers competing in a multi-billion-dollar industry, fish are now the backbone in this sea of troubles.

An ecological catastrophe is unfolding in the SCS’sonce fertile fishing grounds, as repeated reclamations destroy reefs, agricultural and industrial run-off poison coastal waters, and overfishing depletes fish stocks.

And in 2014, the Center for Biological Diversity warned that it could be a scary future indeed, with as many as 30 to 50 percent of all species possibly headed towards extinction by mid-century.” Fish catches have remained at an unsustainable 10-12 million tons per year for decades—a number that could double when Illegal, Unreported, and Unregulated (IUU) fishing practices is included.

A recent issue of The Economist underscores the importance for science diplomacy: “The littoral states ought to be working together to manage the sea, but the dispute over sovereignty fosters the fear that any collaboration will be taken as a concession.” 6

The lack of any effective international governanceremains at the epicenter of the SCS sustainability problems.As a result, the marriage of policy and science is essential to navigating these perilous geopolitical passages and to provide some science based solutions. Although not a new paradigm, more policy planners and marine scientists appear to be devoting their studies to establish the linkage that places the environment squarelyat center of national security.

After all, the United Nations Environmental Program (UNEP) confirms that the South China Sea accounts for as much as one tenth of global fish catches and by 2030, China will account for 38 percent of global fish consumption. Overfishing and widespread destruction of coral reefs now necessitates the intervention of science policy to safeguard stewardship of this vital area.

While other regions stabilized the size of their fishing fleets, Asia’s has doubled in size and makes up three quarters of the world’s powered fishing fleets.

Sent by their governments to find food for their people, fishers find themselves on the front lines of this new ecological battle. These fishing sentinels and their trawlers are fighting the maritime disputes between China and its neighbors.

This fishing competition for available fish has resulted in increased number of fishing vessel conflicts. These hostile sea encounters have been witnessed in Indonesia waters where 23 fishing boast from Vietnam and Malaysia were accused of poaching in that nation’s waters.As a result, Indonesia’s fisheries minister, Susi Pudijastuti, ordered the dynamiting of these boats and over 170 fishing vessels have been sunk in their waters over the past two years. The increasing number of fishing incidents reflects not only deeply different interpretations and application of the law of the sea, but a fundamental conflict of interest between coastal states and maritime powers.

Foreign Policy magazine asserts that these fishing incidents and direct acts of violence is significant “because it underscores how central fishing is to the simmering territorial disputes that are turning the South China Sea into a potential global flash point — and how far countries are willing to go to defend their turf, or at least what they claim is theirs.” 7

Within the disputed territory, there are over 1.9 billion people, seventy-five percent of them living within one hundred kilometers of the coast. Nearly eighty-five percent of the world’s fishers are concentrated in Asia, particularly in the South China Sea, according to the Food and Agriculture Organization of the United Nations.

Subsequently, fishing remains a politically sensitive and emotionally charged national security issue for all claimant nations. This ocean plundering presents the region witha looming food crisis. Any effort to balance the economic benefits with the security context within the South China Sea will require a coordinated, multi-level response from scientists, historically engaged in collaborative research and already addressing issues of sustained productivity and environmental security in the region.

The immense biodiversity that exists in the South China Sea cannot be ignored. The impact of continuous coastal development, escalating reclamation and increased maritime traffic is now regularly placed in front of an increasing number of marine scientists and policy strategists.

Marine biologists, who share a common language that cuts across political, economic and social differences, recognize that the structure of a coral reef is strewn with the detritus of perpetual conflict and represents one of nature’s cruelest battlefields, pitting species against species.

While traditional diplomatic and military tactics are not completely exhaustedin the latest round of diplomatic salvos between China and the U.S., perhaps the timing is excellent for the emergence of science as an optimal tool to bring together various claimants, including Brunei, China, Malaysia, the Philippines, Vietnam, and Taiwan in the highly nationalistic contested sea disputes.

For several decades, science has been adopted as a diplomatic tool for peace building by many countries, including the United States, and there are many organizations that strengthen global scientific relationships. Formed in1848, the American Association for the Advancement of Science is the largest scientific organization in the world and houses a Center for Science Diplomacy that effectively builds cooperation and collaboration. The Center’s journal, Science and Diplomacy, provides a forum for open policy discussion.

Also, representatives from the Soviet Union, the United States, and 10 other Eastern and Western bloc countries to use “scientific cooperation to build bridges across the Cold War divide, and to confront growing global problems on an international scale” established the International Institute for Applied Analysis (IIASA) in 1972. Since then, the institute has developed a mission with the help of 24 national member organizations to bring together a wide range of scientific skills to provide science-based insights into critical policy issues in international and national debates on global change.

Although nation states have different approaches toward science diplomacy, in general this type of diplomacy is defined by the American Association for the Advancement of Science (AAAS) as (i) science in diplomacy (science to inform foreign policy decisions); (ii) diplomacy for science (promotion of international scientific collaborations); and (iii) science for diplomacy (establishment of scientific cooperation to ease tensions between nations) (The Royal Society 2010). In that sense, it is widely accepted among environmental policy planners that science diplomacy positively contributes to the terms of conflict resolution.

As such, science diplomacy is not a completely new approach to international relations in general, and to South China Sea dispute management in particular. However, at this moment it seems that this type of diplomacy has raised two important questions in efforts to successfully settle the South China Sea dispute, namely: should we do it? And can it be successful?

What’s clear is that an insightful understanding of historical and scientific perspectives in the context of both Arctic and Antarctic environmental policies offers valuable lessons for possible adoption in the South China Sea. The Antarctic Treaty system involved seven claimant nations by 1943. Others signed a treaty in 1959 by 12 countries, including the seven claimants, and later to a total of 53 nations. Because of the leadership of scientists, they set Antarctica aside as a scientific preserve and recognized it as a multilateral, trans-boundary peace park in 1998.

The success of the treaty was predicated on three key elements: 1) a freeze on claims (no modifications or additions to existing claims are allowed. 2) a freeze on claim-supportive activities (nothing a claimant does during the time of the treaty can be later used in support of a claim), and 3) joint resource management.

To be clear, science diplomacy does help by directly and indirectly promoting confidence building among the parties involved in the South China Sea dispute. Science diplomacy, characterized by scientific cooperation activities, has contributed to solving many trans-boundary issues among nations sharing the same marine waters and in marine areas beyond national jurisdiction. Also, environmental monitoring successfully offers a context for countries to express their true perception of the region without being affected by other nationalistic, political, or economic factors like sovereignty or foreign policy direction.

As a result, it provides claimants and other parties involved in the South China Sea with an effective way to evaluate the political willingness of other partners and policy makers among the claimants, as well as a better understanding of the overall picture of what is happening in the South China Sea.

Consequently, claimants can be more confident in future cooperation on other issues. In other words, science diplomacy can establish a useful and convenient starting point for regional cooperation to deal with not only international environmental problems but also the achievement of a South China Sea settlement in particular and the region’s prosperity and peace in general. 7

The role of science diplomacy in solving illegal fishing in the South China Sea can be seen as an example. Fishermen act as sentinels in maritime territorial disputes where nations already employ naval forces to bolster sovereignty claims. In the contested waters, clashes between the claimant governments and foreign illegal fishermen continue. In that regard, the prospect of South China Sea claimants going to war over access to fishing waters is a real and immediate threat. 8

However, compared to other issues like the claims over sovereignty, science diplomacy’s approach to fishery collapse may be one of the most urgent but least sensitive problems, as it can be solved without provoking nationalism and other traditional concerns which are currently much higher than they need be in the region. Simply put, science diplomacy provides the parties involved in the South China Sea disputes with a rational and transparent way to avoid the worst while looking for the best.

The timing for a joint scientific declaration for urgent action on an environmental moratorium on dredging is much needed. Recent biological surveys in the region and even off Mainland China reveal that the losses of living coral reefs present a grim picture of decline, degradation, and destruction. More specifically, reef fish species in the contested region have declined precipitously to around 261 from 460 species.

After all, this environmental change is a global issue that holds no regard to sovereignty. The destruction and depletion of marine resources in the Spratly Islands harms all claimant nations. Perhaps, citizens from the region, who are directly impacted by the environmental attack on their sea and their fragile coral formations, can create something like a Coral Reef Action Network, similar to the Rainforest Action Network.

Protected marine reserves are an emerging tool for marine conservation and management. Sometimes called “ecological reserves” or “no take areas,” these marine protected areas are designated to enhance conservation of marine resources. 9

Vietnam, another claimant nation is wasting little time responding to the region’s environmental challenges and is fast-tracking its own model marine protected area program.

Cu Lao Cham is located about 20 kilometers off Vietnam’s central coast. The Cham Islands is a marine protected area (MPA) that was established by the Provincial People’s Committee of Quang Nam Province in December 2005. Professor Chu Manh Trinh, a 53-year-old Da Nang University biology professor, is largely responsible for mapping out the agreed upon objectives of protecting natural resources, and cultural and historical values of the Cham archipelago. In 2009, the area was designated a World Biosphere Reserve by UNESCO.10

“Yes, it took a sustained educational campaign to convince the population that conservation would provide long-term benefits to their way of life,” claims Trinh. 11

The senior marine science expert goes even further in reinforcing that the coral reefs in the Paracels and Spratlys need to be carefully protected for the whole East Sea region, that is not only for the life of fish but the life of people in the region and the world.

Vietnam has adopted marine protected areas to address present and future food security issues. These MPAs play an important role in the development of the marine economy; improve livelihoods of coastal fishing communities, and also serves to protect national sovereignty claims.

Scientific and policy cooperation required

This paper’s position is that it’s time to bring together the most qualified scientists who have experience studying the marine biodiversity and environmental sustainability in the troubled SCS waters to participate in a science policy forum.

While other types of diplomacy tend only to solve issues at the state level, like sovereignty or territorial integrity, science research cooperation in the South China Sea is aimed at a more “down-to-earth” approach, namely ensuring that fishermen can fish safely, marine products are unpolluted, and marine resources are protected correctly.

Their collaborative work may lead to the successful development of a South China Sea International Science Commission. As a result, their scientific efforts may then inspire the Association of Southeast Asian Nations (ASEAN) to cooperate in responding to regional resource management by issuing a call for a moratorium on any further damaging reclamation work.

Of course, China has many excellent coral reef scientists of its own, who recognize it is in the best interests of Beijing to protect coral reefs, maintain sustainable fisheries, and to eventually avail themselves of ecofriendly tourism once tensions decline.

Thus, it came as a surprise and somewhat of a mystery to scientists last year why China insisted that the portions of the coral reefs on which they have built consisted of dead corals.

Dr. Wu Shicun, president and senior research fellow of the National Institute for South China Sea Studies, claims that the Spratly Islands are territory of China, and that his country has adopted “green engineering” measures before, during, and after the completion of its entire reclamation in the South China Sea in order to protect the region’s ecology.

In an email, Wu claims that, “China carries out its construction projects on the inner reef flat where corals have basically died. China gathers loose soil for its land reclamation on the flat lagoon basin, which is not fit for coral growth. China has adopted “natural simulation,” applied a new type of “cutter-suction dredging and land reclamation method,” and has paid attention to the spread of sediment floating in its construction.”

There are many inconsistencies associated with China’s assertions about conservation.  The most revealing includes Google satellite images that identified hundreds of these clam “cutter boats” operating on an unidentifiable reef located between Thitu Island and Tieshi Jiao referred to now as “Checkmark Reef”,where large areas of sand and dead coral were piled into arc-like ridges. In most of the area, there was not a single living organism—no visible sea urchins, sea cucumbers, worms, corals or other organisms present.

Revisited satellite imagery of the Spratly Islands, which is freely available on Google Earth, confirms that for each of China’s newly constructed islands, the cutter boats had been operating on the reef prior to construction. Thus, it seems likely that when the coral reef scientists had been asked to assess each potential site, they truthfully reported that the coral was dead.

Professor McManus claims that “these areas of living coral reef would have been killed as the sand and silt from dredging and island construction leaked out to envelop them, just as is happening around the cutter boats. It can take a reef in these areas a thousand years to create a meter or so of gravel, sand, and silt, and so places from which they have been removed are essentially permanently altered.” 12

The common ground shared by all claimants is that an increasing number of South China Sea fisheries are hurtling towards collapse and this translates into a looming environmental security issue, and the outcome is all too likely to be conflict. The global scientific, conservation and legal communities must unite to halt the coral reef destruction, biodiversity loss, and fisheries depletion.

China with the world’s largest fleet of deep-sea fishing vessels is plundering the ocean to feed their enormous population. China’s distant-water fishing fleet has grown to nearly 2,600 vessels (the United States has fewer than one-tenth as many), with 400 boats coming into service between 2014 and 2016. The data is clear: these unsustainable fishing practices threaten food security for the region and the world. 13

Since there remain serious concerns about what will happen next to address further ecological damage, it may be thatscientific interest and environmental objectives in the region could strengthen diplomacy within both legal and scientific frameworks and lead to cooperation and to insuring environmental security for all in the region.

For ASEAN, the South China Sea links their global economies, remains an energy-shipping route and provides the essential sea lanes between Southeast Asian islands. With an escalation of fishing boat clashes, ASEAN leaders may be taking notes on how to reduce fishing incidents rather than to resorting to sending more fleets into the commons.

For many policy observers, it’s odd that while ASEAN countries quickly reached a consensus to issue statements to address the terror attacks in Istanbul;they failed to be united on the international tribunal’s ruling.

Since last year’s tribunal decision was the first international rulingon the South China Sea, it offered an opportunity for measured steps towards peace and security. Of course, ASEAN has demonstrated a weak institutional capacity to address complex political and environmental issues simultaneously, but the world, including the United Nations and Washington are watching carefully how international law and its application on various claims can lead to a peaceful and lawful path forward.

Lawrence E. Susskind, a Ford Professor of Urban and Environmental Planning at Massachusetts Institute of Technology (MIT), also raises the issue of China’s support for science diplomacy. He asserts that although China did not join a few of the science diplomacy initiatives in the past, Beijing has its own agencies to deal with environmental issues. 14

However, it’s telling that China is not among the states that share data with the Pacific Tsunami Warning Center in Hawaii (PTWC), which collaborates with countries all over the globe to warn at-risk populations of impending tsunami. Conversely, China established its own tsunami-warning center in the South China Sea, which it counts among its diplomatic rationales for its South China Sea activities. So China may already have its own science policy in the South China Sea, which could simultaneously prove both diplomatic and controlling. Consequently, Beijing may tend not to protest other, similar initiatives.

The Philippines and Vietnam have time and again chosen to look at the South China Sea as a sea that binds rather than divides claimant nations by trying to promote cooperation on common interests.

The Joint Oceanographic Marine Scientific Research Expedition organized between the Philippine Maritime and Ocean Affairs and the Vietnamese Institute of Oceanography provides evidence that science offers confidence-building opportunities through diffusion and exchange of information on marine resources. There have been three joint science operations conducted between 1996-2007 covering the southern part of the South China Sea. 15

Informal conversations are now taking place between the Philippines and Vietnam about reviving joint maritime research activities in 2018.

But the crucial point here is that the assemblage of the South China Sea is increasingly shaped in scientific terms. Nevertheless, it’s painfully clear that today’s ecological policy issues face formidable challenges to inform policy deliberations. As the disposition of regional maritime space becomes greater, adding seabed research, geology and mapping, deep-sea biology, underwater archaeology, cultural registers, environmental symposia, and marine protected areas, it revealsmore avenues for thecreation of common ground for all claimants. In this unfolding maritime drama, science offers all claimants the ability to monitor and to intervene.

Although science diplomacy is not a completely new approach to solving conflicts in general and in South China dispute management in particular, the urgent adoption of such a peace-building mechanism by all claimants is desperately needed.

Perhaps a few of these suggested actions directed to all claimant nations marine scientists and policy shapers may bolster peace building in the region:

  • Create regional Marine Science Council to address environmental degradation issues;
  • Expand science cooperation among ASEAN marine scientists through more informal workshops;
  • Provide an ASEAN regional cooperation science framework that mobilizes countries to address trans-boundary issues;
  • Place aside all territorial claims;
  • Establish complete freedom of scientific investigation in the contested atolls and reclaimed islands;
  • Foster dialogue for a proposed marine peace park;
  • Propose a science-led ASEAN committee to study the Antarctica Treaty and the United Nations Environmental Program initiative under the East Asian Seas Action Plan;

ASEAN does recognize the importance of fisheries to food security and to the economy. Because China has become the world’s top producer and exporter of fishery products, there’s more responsibility for them to operate in alignment with shared sustainable practices among their neighbors.

If there are to be any fish left in the contested sea, an ASEAN ecological agreement––led by Brunei, Malaysia, the Philippines, and Vietnam––can steer others to unite around a proposed international peace park or at the very least, a cooperative marine protected area situated prominently in the Spratlys.

It’s the first step in supporting trust and confidence among neighbors and in implementing a common conservation policy.

After all, coral reefs are the cathedrals of the South China Sea. It’s time for more citizens and policy shapers to join the chorus and rally around marine scientists so that they can “net” regional cooperation and ocean stewardship to benefit all before it’s too late.

Endnotes

1.Berkman, Paul, Power point presentation. http://www.envirosecurity.org/arctic/Presentations/EAC_Berkman. 
pdf

2.https://pca-cpa.org/wp-content/uploads/sites/175/2016/07/PH-CN- 20160712-Press-Release-No-11-English.pdf

3.Nordquist, Myron H., Ronan Long, Tomas H. Heidar, and John Norton Moore, Ed.

                2007    Law, Science & Ocean Management, Leiden/Boston: Martinus Nijhoff Publishers. Pp 271-293.

4.http://www.csmonitor.com/World/Asia-Pacific/2016/0720/In-South-China-Sea-case-ruling-on-environment-hailed-as-precedent

5.http://www.tandfonline.com/doi/abs/10.1080/09512740110087311

http://www.economist.com/news/leaders/21650122-disputed-sea- growing-security-nightmareand-increasingly-ecological-one-sea- 
troubles

Hong, Nong. “Marine Environmental Security as a Driving Force of Cooperation in the South China Sea.” Paper presented at Taiwan and the 2016 Elections: The Road Ahead- The Twenty-Fourth Annual Conference on Taiwan Affairs, Walker Institute of International and Area Studies University of South Carolina, September 24, 2016.

Bergenas, Johan, and Ariella Knight. Secure Oceans: Collaborative Policy and Technology Recommendations for the World’s Largest Crime Scene. Washington, DC: The Stimson Center, 2016 https://www.stimson.org/sites/default/files/file-attachments/Secure-Oceans.pdf.

http://foreignpolicy.com/2016/04/07/fishing-disputes-could-spark-a-south-china-sea-crisis/

http://marineprotectedareas.noaa.gov/pdf/helpful-resources/factsheets/reserves-factsheet2014.pdf

Interview conducted with Professor Chu Manh Trinh in Cu Lao Cham June 2, 2016.

Panelist Dr. John McManus at the East West Center in Washington DC on May 3, 2016.

https://www.nytimes.com/2017/04/30/world/asia/chinas-appetite-pushes-fisheries-to-the-brink.html

https://lawrencesusskind.mit.edu/blog/we-need-science-diplomacy

http://www.international-relations.com/CM7-1WB/SouthChinaSea.htm

James Borton is an independent journalist, a former non-resident fellow at the Stimson Center, and founding member of the Environmental Peacebuilding Association based in Washington D.C. He is the editor of “Islands and Rocks in the South China Sea: Post Hague Ruling” and “The South China Sea: Challenges and Promises.”

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Southeast Asia

Reducing gender gaps in Asia and Pacific essential to realizing region’s potential

Ingrid van Wees

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Over the past two decades, the Asia and Pacific region has made progress in reducing gender gaps in certain areas, most notably education. According to the World Economic Forum’s 2018 Global Gender Gap Report, 6 out of 25 developing Asian countries had attained gender parity in education. In 12 out of 18 Asia Pacific countries analysed in the Report, women outnumber men in tertiary education enrolment rates. 

However, these improvements in skills and professional training for women have not translated yet into progress towards equal economic and professional clout. 

Gender gaps persist in labour force participation, gendered-segregation of the labour market, financial inclusion, and representation in senior managerial positions across the corporate world. This is the only region in the world where the labour force participation rate of women is declining. Meanwhile, a growing body of research on the future of work in the region has highlighted the high concentration of women in informal and vulnerable work, and that the bulk of unpaid care work is disproportionally being carried out by women.  

Female participation in the labour force in 2018 ranged from 60.1% in East Asia at the top end of the spectrum to only 25.9% at the bottom end in South Asia, according to the International Labour Organization (ILO). When women do work, they are often segregated into “feminized” sectors, where wages are typically lower. Wages are not yet equal. In developing Asia, the gender wage gap (75%) is lower than the global average of 79%
    
Women’s share in managerial positions across Asia varies significantly. In the corporate sphere, three countries in this region are among the top 10 economies worldwide with women in senior management positions, higher than the global average of 25%. They are the Philippines at 39%, Thailand at 37%, and Indonesia at 36%. On the other hand, there are countries in the region at the lower end, for example Japan with only 7%.  

Women’s representation on corporate boards is even lower than at the managerial level.  This ranged from 11.6% in Indonesia to 1.9% in South Korea. In 2011, India and Malaysia established 30% mandatory gender diversity quotas for senior management and board positions in corporations. However, implementation has been slow. As of 2016, women accounted only for 8.6% on corporate boards in Malaysia and 5.2% in India.  

Banking at the most senior management level in particular remains male territory in the region, since the share of female representation at this level reached only 6.9% on average, according to data gathered by the Financial Times.

While developing countries in Asia and Pacific are embracing new financial technology to make rapid progress on financial inclusion, the gender gap is felt here too. Women accounted for just 35% of bank depositors and borrowers in these countries in 2016. 

Increasing women’s participation in the workforce and closing the wage gap would have a tremendous growth impact for the region. ILO in 2017 estimated that this could add $3.2 trillion to Asia and Pacific region economies.

Increasing women’s access to finance can have life-changing impacts on not only their lives, but those of their families and communities. For example, women-led small and medium-sized enterprises in Sri Lanka are benefitting from facilitated access to credit to grow their businesses through an ADB project, which has been further supplemented by a grant from the Women Entrepreneurs’ Finance Initiative (We-Fi). Since last year, over 323 women’s businesses,  employing 3,934 people, have financially benefitted from the project. 

Financial institutions targeting female clients will be more successful at understanding and responding to customers’ needs if their personnel mirrors the market. Including female professionals and managers in research product selection and marketing will lead to better custom-tailored products.  That is one reason why ADB’s Trade Finance Program has been running a gender initiative to support its participating banks to improve its workplace gender equality/family-friendly policies.

There is growing evidence that gender equality in management and leadership results in higher productivity, more diverse decision-making, and better and more sustainable results. This is particularly true for female leaders in the banking sector. A study by the International Monetary Fund recently found that a higher share of female senior leaders is associated with greater stability and more prudent management. 

Moreover, it is true for any type of organization that effective women leaders provide positive role models and contribute to changing social perceptions about women and girls.  Policymakers and multilateral development banks like my own must lead by setting good examples, and work with the banking sector to address the gender gaps. 

On its part, ADB is committed to accelerating progress in gender equality in its developing member countries. And it is championing the cause within its own institutional structure and corporate culture.

Among other sectors, ADB supports various projects with a gender focus in such areas as technical and vocational education and training, urban and water, rural development, transport, and renewable energy. It has also provided technical assistance for legal and judicial reforms in support of gender equality, as well as women’s leadership within government and communities at all levels.

Last year, 56% of ADB’s sovereign and nonsovereign lending at entry had strong gender design elements. ADB is setting even higher standards for itself. In July 2018, ADB’s Board of Directors approved a long-term corporate strategy called the Strategy 2030. Under this, ADB aims to ensure 75% of its projects in the public and private sector will include gender designs by 2030. 

Strategy 2030 sets gender equality and women’s empowerment as one of its operational priorities for the next decade. ADB will promote women’s economic empowerment by expanding entrepreneurship opportunities for women and promoting their access to quality jobs in higher-paying sectors and the science, technology, engineering, and mathematics sectors where women struggle to enter. 

ADB’s approach is also informed by a recognition of the importance of tackling discriminatory social norms and institutions. It includes  supporting legal, institutional, and governance reforms at public level to explore measures are carried out to remove gender-based discrimination, enhance women’s participation in public resource allocation, and support leadership at all levels

Another major thrust is reducing the domestic responsibilities faced by women through improved water, electricity, and transport infrastructure. In the Asia Pacific, women spend from 2 to 11 times more time on unpaid care work (caring for family members, cooking, cleaning, fetching water, etc.) than men. That time spent represents an important barrier to pursuing economic pathways.

In 2016, ADB Management took bolder actions and set higher targets to improve workplace gender balance by enhancing recruitment of talented women, career management, training, development, and retention of female staff within ADB. ADB also has a gender target for various levels of management that is closely monitored and transparently reported upon. Leadership development programmes are now being conducted to prepare women for senior positions and enable senior staff to become better managers of diverse teams. 

Gender equality will indeed be at the heart of ADB’s priorities under Strategy 2030 and across the institution. 

On a wider scale, women’s empowerment is not just an objective in itself; it is essential to achieving inclusive and sustainable development in Asia and the Pacific. Given the economic, environmental, and technology challenges facing society in Asia and Pacific, it is about time to utilise the ingenuity, creativity, and energy of the region’s entire population. To do this, countries must fully engage women; and educate and empower them to allow for their contribution. At the same time, we should ensure we include, educate, and equip all men and boys for this transition to make this journey together and leave no one behind.

ADB

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Southeast Asia

How Countries in Southeast Asia are Working Together to Accelerate Human Capital Development

MD Staff

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In their decades-long efforts to spur strong economic growth and significantly reduce poverty, countries in the Association of Southeast Asian Nations (ASEAN) also successfully improved education and health outcomes for their people. Today, however, ASEAN’s average indicators on education, skills development, and health are below what is expected of its current income levels. These persistent gaps can undermine future growth and prosperity in the region.

To thrive in the global economy, where new technologies will create industries that have yet to be imagined, and where the changing nature of work prizes higher-order skills, ASEAN countries will have to go back to basics – and invest in its children.    

The challenge is significant. Almost a third of children in the region have stunted growth due to chronic malnutrition, making them highly prone to life-long cognitive and physical limitations. These can lead to poor school performance and diminished career prospects overall. And though schooling rates are high across ASEAN, limited education quality generates large learning gaps – 21 in 100 children have low reading comprehension skills at the end of primary school. Some 15% of 15-year-olds living today will not reach the age of 60 mainly due to noncommunicable diseases such as diabetes, cancer, and cardiovascular and respiratory illnesses. Both issues are partly a result of unequal access to basic services, including healthcare and education, which in turn contributes to widening income inequalities.

ASEAN countries, while linked geographically and economically, have varying levels of life expectancy, job productivity, and education quality. At the core of these challenges is the need among all countries to accelerate human capital development. This month in Bangkok, Thailand, leaders from the region came together to discuss how to take this further.

“Disparity, poverty, education and health, remain a challenge in ASEAN. We have to make Human Capital Development an integral part of our development,” ASEAN Secretary-General Lim Jock Hoi told the ASEAN High-Level Meeting on Human Development on September 9, 2019.

Organized by Thailand’s National Economic and Social Development Council (NESDC) and Ministry of Foreign Affairs, the World Bank and UNICEF, the high-level meeting was designed to facilitate dialogue among member states to share successful policy frameworks and emerging challenges, as well as help identify new approaches to human capital development and move towards a set of common, yet adaptable, policy directions.

ASEAN has their work cut out for them. The World Bank’s Human Capital Index projects that upon adulthood, children born in ASEAN today will be just 59% as productive as they could have been. To change this, political commitment to shift public investments to the right places is critical. 

Thailand, for example, reduced the rates of child stunting from 25 to 11% over the last 30 years through targeted, community-based nutrition programs in areas with high levels of poverty. The successful approach brought together health, agriculture, education, water and sanitation by close community-level coordination to address malnutrition.

Anutin Charnvirakul, Deputy Prime Minister and Minister of Public Health, shared how Thailand kickstarted its Universal Health Coverage (UHC) scheme in 2002 even though it was still regrouping from the 1997 Asian Financial Crisis. The UHC scheme entitled every Thai citizen to essential health services, and coverage reached 100% in 2018.

“UHC is about national commitment. We don’t have to wait until we are rich to get UHC. We just have to commit,” Anutin said.

Other countries in the region have also performed well in various areas. Vietnam stands out with its high-quality basic education system due to its commitment to education reform and substantial public spending, while Singapore initiated successful schemes to retrain and employ older workers.

Experts presented delegates with data that illustrated how globally, investments in health and education, especially for young children, generates high returns on productivity. It gives the future workforce the necessary cognitive and social skills to navigate a knowledge-based economy. The meeting ended with recommendations for accelerating human capital development in ASEAN. These include fighting malnutrition with nutritious foods and quality healthcare, orienting the entire education system around improved learning for the young and lifelong learning for adults, and achieving UHC to provide everyone with quality health services and financial protection from health-related shocks to their income.

But as Laurence Chandy, UNICEF’s Director of Global Insight and Policy Office, reminded participants, to realize these goals, countries will have to make “fiscal commitments and more importantly set clear policies for implementation that are specific to each country.”

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Southeast Asia

Limits to the Asia-Pacific Growth

Meseto Abe

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Following the massive  socio-economic success of the largest continent, corruption is the next battleground in the development of the Asia-Pacific. Lately, it has hampered inclusive and sustainable development and is a primary cause of the difficulty experienced by developing Asian-Pacific countries in advancing beyond the middle-income bracket.

Fostered by weak regulation and enforcement frameworks, corruption comes in many forms, including bribery, embezzlement, and cronyism. It undermines not only business ethics and positive social norms, but also people’s trust in political and economic systems, institutions, and leaders.

Transparency International’s Corruption Perceptions Index (CPI), which measures corruption in 180 countries annually, reveals that high-income countries experience far less corruption than their lower-income counterparts do. With Singapore in sixth place and Afghanistan in 177th, the Asia-Pacific is home to countries at both extremes of the CPI. China and India, the world’s most populous countries, are ranked 77th and 81st, respectively.

Countries in the Asia-Pacific have made some efforts to combat corruption, but that the problem remains widespread throughout the region tells us that these are not enough. In fact, there seems to be a willful lack of attention among these countries about tackling corruption head-on.

Corruption affects every aspect of society

This lack of attention may be due to the widespread belief that corruption helps “grease the wheels” in business activities. Top companies pay large amounts to receive faster and better service from authorities; this, the thinking goes, makes the economy more efficient. In the Asia-Pacific, this often manifests itself as bribes, gifts, banquets, and favors given by business entities to politicians and bureaucrats. In the view of its proponents and those who tolerate it, corruption speeds up the wheels of commerce and positively impacts companies’ development by easing bureaucratic barriers. Corruption can also facilitate a company’s entry into a highly regulated economy that is difficult to penetrate otherwise.

But these benefits hold true only for a small number of companies. Corruption has an inverse U-shaped relationship with company revenue: a company may gain benefits when it pays bribes, but the benefits are subject to diminishing returns after a certain amount. Also, corruption has a significant negative correlation with companies’ overall satisfaction with their business environment. These two points seem to indicate that rather than “greasing the wheels,” corruption actually “sands the wheels.”

In fact, corruption has adverse effects on overall economic development. It reduces investment, lowers growth rates, and negatively impacts efficiency. At the company level, corruption absorbs returns from business activities and distorts entrepreneurial spirit and behavior. Companies that are involved in corruption report rises in operational costs of 10 percent on average, in addition to greater uncertainty. These factors ultimately have an impact on their strategic and investment decisions. This could explain why some studies have shown that foreign direct investment in countries that are perceived as corrupt is almost 5 percent lower than it is in countries that are relatively corruption-free.

Corruption also negatively impacts political and societal landscapes. As money that is meant for the public is funnelled away, the cost of providing and maintaining public goods and services increases. Vital goods and services like roads and telecommunications networks eventually fall into disrepair or are not delivered at all due to a lack of funds.

Corruption also undermines the rule of law and the government’s ability to combat externalities such as pollution and security risks. In addition, it hinders development by diverting resources away from productive sectors and reducing human capital and tax revenues. Corruption has been shown to decrease national productivity and diminish the effectiveness of foreign aid. On a macro level, these and other effects of corruption can strip a country of gains from trade in the absence of good institutions. Corruption also makes it more difficult for the poor and other disadvantaged groups, such as women and minorities, to obtain public services, thus deepening inequality.

How can countries reduce corruption?

Governments should introduce anti-corruption laws, which typically require government officials to declare their assets, and enforce strict penalties for corrupt practices. For example, in the wake of recent high-profile revelations of bribery and embezzlement at major state-controlled enterprises, Singapore’s anti-corruption watchdog plans to strengthen anti-graft laws with more severe financial penalties.

The introduction and strengthening of anti-corruption laws can have a massive impact. In 2005, India passed the Right to Information Act, which aimed to make administrative procedures transparent. The law reduced corrupt practices significantly and has since been hailed as a pivotal achievement in the country’s fight against corruption. The rule of law and administrative actions must be constant to be effective in reducing corruption.

Governments can also implement a number of reforms in their legal systems and administrative processes. Such reforms could include measures that provide oversight of the financial sector, public procurement, customs procedures, construction licenses, land registration, and corporate establishment and dissolution. These require adequate institutional capacity and financial support to be successful. Kazakhstan, for instance, has recently strengthened its anti-money-laundering regime: it is now largely compliant with international standards. However, the government still lacks the resources and expertise to properly enforce the regulations. To successfully tackle corruption, strong, transparent, and accountable institutions that deal with taxation, budgeting, and spending must also be established.

Indeed, an effective fight against corruption requires the building of robust democratic institutions, particularly those that champion trade openness, fair competition, and press freedom. Institutional structures are also important, as more decentralized states have lower levels of corruption. As can be expected, social norms and culture are important determinants of corruption levels, but they can be hard to measure. In general, strengthening governance is a good way to reduce corruption, because inefficient bureaucracies make it easier for corrupt practices to be carried out.

Beyond national governments, the United Nations and its various agencies must raise awareness of corruption in the Asia-Pacific. Addressing and combating the issue will pave the way for countries in the region to work towards the UN Sustainable Development Goals.

While Transparency International plays a leading role in exposing corruption worldwide, the World Bank has drawn up, and continuously updates, anti-corruption policies for governments. The International Monetary Fund also recently unveiled its new framework for addressing corruption. Developing countries in the Asia-Pacific must embed the principles of both the United Nations Convention Against Corruption and the OECD Bribery Convention in their governance frameworks. Engagement with international organizations can facilitate the development of an effective national anti-corruption strategy.

For this purpose, “a committed political leadership and broad political support are necessary” – says the independent expert in the field, Luigi Coretti of Canada. It well captures a consensus on the matter in the community of specialists. Coretti concludes:  “Engagement with local stakeholders, such as civil society organizations, the media, and academic institutions, helps build a sense of national ownership and ensure the acceptability and effectiveness of coordinated and comprehensive actions.” Both governments and companies are encouraged to report to these stakeholders their anti-corruption activities and outcomes achieved. They should also use all available communications channels, such as websites and flyers, to provide more insight into their assessment mechanisms and corrective actions.

Finally, it is to hope that more comprehensive research will be conducted to help identify ways to eradicate corruption and other business obstacles in the Asia-Pacific. One crucial issue in this arena is that many previous studies on corruption have been conducted jointly with local authorities, so their results are questionable. With the participation of the authorities in such research, surveyed firms and people are likely to be hesitant to offer their candid opinions on the level of corruption among officials. Before any anti-corruption strategies can be determined for a given country, we must have the full picture of the problem of corruption.

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