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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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Southeast Asia

Explaining Gendered Wartime Violence: Rohingya Ethnic Cleansing

Devika Khandelwal

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Image source: Al-Jazeera

The United Nations described Rohingyas as ‘amongst the most persecuted minority groups in the world.’ News reports and refugee testimonies have confirmed that the plight of Muslims in Rakhine State of Myanmar is atrocious. The humanitarian crisis taking place in the Rakhine state has led to the death of an appalling number of Rohingya’s Muslims. It has been reported, that nearly 500,000 people have fled destruction of their livelihood and, are currently living in refugee camps in Bangladesh. The UN reports suggest that Rohingyas have faced “killings, torture, rape and arson”, by Burmese troops. It has been categorised as a ‘textbook case of ethnic cleansing’ of Muslims in Myanmar.

Rohingya Muslims represent the largest percentage of Muslims in Myanmar, and the majority lived in Rakhine state before the violence broke out. Myanmar is predominantly a Buddhist country which has for decades denied Muslims citizenship, they have been subjected to brutal government and police violence, and their identity has been decreased to that of an ‘illegal immigrant.’ On the 25th of August, 2017 the Rohingya militant army launched a deadly attack on the Muslims which has culminated into a systematic case of ethnic violence, turning into ethnic cleansing. They have slowly, but successfully forced majority of the Muslims to flee the country, resulting in one of the deadliest case of violence in the 21st century.

Within this Muslim minority exists another kind of minority, ‘Rohingya Women’ who have been subjected to sexual violence and rape by the army militants. It has been reported that tens of thousands of young girls and women of the Muslim community have been sexually violated and raped by the army militants In the report prepared for the UN Commission on Human Rights, Gay J. McDougall defined wartime rape as “a deliberate and strategic decision on the part of combatants to intimidate and destroy ‘the enemy’ as a whole by raping and enslaving women who are identified as members of the opposition group.” However, wartime rape is not a new phenomenon. Many historical and anthropological researchers have provided us with evidence that rape during war can be traced back to earlier wars. It was reported that during the Second World War, the city of Berlin witnessed extremely high levels of rape and sexual violence against women by the Soviet forces. It has been estimated that around 900,000 women were raped and violated during the war.The infamous ‘Rape of Nanking’ is another case where Japanese soldiers reportedly raped an estimated 20,000 to 80,000 women in the city of Nanjing, China in 1937.

According to the Human Rights Watch report titled ‘All of My Body was in Pain: Sexual Violence against Rohingya Women and Girls in Burma’, women and girls are brutally being raped and sexually violated, humiliated, beaten up and even killed by the Burmese militants. They also suffer from the ordeal of seeing their children, parents or partners being murdered in front of them. The Burmese militant army is using systematic rape as a weapon of war in the massacre of the Rohingyas – using women to be the easy target, and thereby making the Rohingya crisis a grave gender concern. Priyanka Motaparthy, a senior researcher in the Emergencies division of the Human Rights Watch, mentions in a Human Rights Watch report, “These horrific attacks on Rohingya women and girls by security forces add a new and brutal chapter to the Burmese military’s long and sickening history of sexual violence against women.”

It is believed that sexual violence and rape is systematically used against women during wartime due multiple reasons. In addition to women being ‘easy targets’, they are subjected to this ordeal in order to break down the reproductive cycle of an ethnicity, which thereby can result in eliminating that ethnic population altogether. It is also used to decrease or break down the morale of their enemy population, who are responsible for securing their women and girls, thus weakening their opponents. Therefore, the connecting factor between ‘gender based violence’ and ‘wartime’ are the underlying patriarchal values that persists in societies and dictates their culture. Within this structure, it is often assumed that a woman’s honor resides in her reproductive system, violating her reproductive system is seen as a way of stripping her honor, subjecting her to humiliation and furthermore gaining ‘power.’ It is a way of systematically destroying a community as a whole.

This is not the first time the world is witnessing gender based violence. However, the silence on the issue and lack of action by international authorities such as the United Nations is alarming. Urgent and crucial steps need to be taken by the Burmese government along with other International Organizations to bring relief to these women and girls. There is also an urgent need to implement stringent policies and necessary actions must be taken against people who use of sexual violence during wartime. However, the most urgent need of the hour is to overthrow patriarchal values from societies all across the world. Even though this is optimistic, it is important to instill a sense of equality between men and women, which in turn could help in eliminating the use of sexual violence as a weapon of war.

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Southeast Asia

Malaysian-Saudi relations: A lesson in the pitfalls of authoritarianism and autocracy

Dr. James M. Dorsey

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Embattled former Malaysian prime minister Najib Razak was the main loser in last month’s election upset that returned Mahathir Mohamad to power as his country’s anti-corruption crusader. Yet, Mr. Razak is not the only one who may be paying the price for allegedly non-transparent and unaccountable governance.

So is Saudi Arabia with a Saudi company having played a key role in the 1Malaysia Development Berhad (1MDB) scandal in which Mr. Razak is suspected to have overseen the siphoning off of at least US$4.5 billion and the Saudi government seemingly having gone out of its way to provide him political cover.

While attention has focussed largely on the re-opening of the investigation of Mr. Razak and his wife, Rosmah Mansor, both of whom have been banned from travel abroad and have seen their homes raided by law enforcement, Saudi Arabia has not escaped policymakers’ consideration. Mr. Razak has denied all allegations of wrongdoing.

The geopolitical fallout of the scandal is becoming increasingly evident. Defence Minister Mohamad Sabu suggested this week that Malaysia was re-evaluating the presence of Malaysian troops in Saudi Arabia, dispatched to the kingdom as part of the 41-nation, Saudi-sponsored Islamic Military Counter Terrorism Coalition (IMCTC).

“The ATM (Malaysian Armed Forces) presence in Saudi Arabia has indirectly mired Malaysia in the Middle East conflict… The government will make a decision on the matter in the near future after a re-evaluation has been completed,” said Mr. Sabu, who is known for his critical view of Saudi Arabia.

In a commentary published late last year that suggests a potential Malaysian re-alignment of its Middle Eastern relationships, Mr. Sabu noted that Saudi wrath has been directed “oddly, (at) Turkey, Qatar, and Iran…three countries that have undertaken some modicum of political and economic reforms. Instead of encouraging all sides to work together, Saudi Arabia has gone on an offensive in Yemen, too. Therein the danger posed to Malaysia: if Malaysia is too close to Saudi Arabia, Putrajaya would be asked to choose a side.”

Putrajaya, a city south of Kuala Lumpur, is home to the prime minister’s residence.

Mr. Sabu went on to say that “Malaysia should not be too close to a country whose internal politics are getting toxic… For the lack of a better word, Saudi Arabia is a cesspool of constant rivalry among the princes. By this token, it is also a vortex that could suck any country into its black hole if one is not careful. Indeed, Saudi Arabia is governed by hyper-orthodox Salafi or Wahhabi ideology, where Islam is taken in a literal form. Yet true Islam requires understanding Islam, not merely in its Quranic form, but Quranic spirit.”

Since coming to office, Mr. Sabu has said that he was also reviewing plans for a Saudi-funded anti-terrorism centre, the King Salman Centre for International Peace (KSCIP), which was allocated 16 hectares of land in Putrajaya by the Razak government. Mr. Sabu was echoing statements by Mr. Mahathir before the election.

Compounding potential strains in relations with Saudi Arabia, Seri Mohd Shukri Abdull, Mr. Mahathir’s newly appointed anti-corruption czar, who resigned from the Malaysian Anti-Corruption Commission (MACC) in 2016 as a result of pressure to drop plans to indict Mr. Razak, noted that “we have had difficulties dealing with Arab countries (such as)…Saudi Arabia…”

The investigation is likely to revisit 1MDB relationship’s with Saudi energy company PetroSaudi International Ltd, owned by Saudi businessman Tarek Essam Ahmad Obaid as well as prominent members of the kingdom’s ruling family who allegedly funded Mr. Razak.

It will not have been lost on Saudi Arabia that Mr. Mahathir met with former PetroSaudi executive and whistle blower Xavier Andre Justo less than two weeks after his election victory.

A three-part BBC documentary, The House of Saud: A Family at War, suggested that Mr. Razak had worked with Prince Turki bin Abdullah, the son of former Saudi King Abdullah, to syphon off funds from 1MDB.

Saudi foreign minister Adel al-Jubeir came to Mr. Razak’s rescue in 2016 by declaring that US$681 million transferred into the prime minister’s personal bank account was a “genuine donation with nothing expected in return.”

The Malaysian election as well as seeming Saudi complicity in the corruption scandal that toppled Mr. Razak has global implications, particularly for the United States and China, global powers who see support of autocratic and/or corrupt regimes as the best guarantee to maintain stability.

It is a lesson that initially was apparent in the 2011 popular Arab revolts that toppled the leaders of Tunisia, Egypt, Libya and Yemen.

The rollback of the achievements of most of those revolts backed by autocratic leaders in Saudi Arabia and the United Arab Emirates bent on reshaping the Middle East and North Africa in their mould has contributed to the mayhem, violence and brutal repression engulfing the region.

In addition, autocratic rule has failed to squash widespread economic and social discontent. Middle Eastern states, including Algeria, Morocco, Egypt, Lebanon Iran, and most recently Jordan have witnessed  protests against rising prices, cuts in public spending and corruption.

“The public dissatisfaction, bubbling up in several countries, is a reminder that even more urgent action is needed,” warned Christine Lagarde, the managing director of the International Monetary Fund (IMF).

Elections, if held at all, more often than not fail to serve as a corrective in the Middle East and North Africa because they are engineered rather than a free and fair reflection of popular will. Elections in countries like Iraq and Lebanon serve as exceptions that confirm the rule while Iran represents a hybrid.

As a result, street protests, militancy and violence are often the only options available to those seeking change.

Against that backdrop, Malaysia stands out as an example of change that does not jeopardize stability. It is but the latest example of Southeast Asian nations having led the way in producing relatively peaceful political transitions starting with the 1986 popular revolt in the Philippines, the 1998 toppling of Suharto in Indonesia, and Myanmar’s 2010 transition away from military dictatorship.

This is true even if Southeast Asia also demonstrates that political transition is a decades-long process that marches to the tune of Vladimir Lenin’s principle of two steps forward, one step backwards as it witnesses a backslide with the rise in the Philippines of President Rodrigo Duterte’s authoritarianism, stepped up jihadist activity, the 2014 military coup in Thailand, increasingly autocratic rule in Cambodia, the rise of conservatism and intolerance in Indonesia, and the plight of the Rohingya in Myanmar.

If anything, Malaysia constitutes an anti-dote.

“Malaysia’s institutions proved more resilient…and descent into authoritarianism has been averted – offering a lesson not only to aspiring dictators, but to those in the United States who argue that propping up corrupt leaders is in U.S. interests,” said Alex Helan, a security and anti-corruption consultant.

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Indonesian Muslim leader signals global shifts in meetings with Pence and Netanyahu

Dr. James M. Dorsey

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Yahya Staquf, a diminutive, soft-spoken leader of Nahdlatul Ulama, the world’s largest Muslim movement, and Indonesian president Joko Widodo’s advisor on religious affairs, has held a series of meetings in recent weeks that reflect the Muslim world’s shifting attitudes towards Israel and the Palestinians and a re-alignment of socially conservative Muslim and Christian interests.

Just this month, Mr. Staquf, a staunch advocate of inter-faith dialogue and religious tolerance, met in Washington with Vice President Mike Pence, a devout evangelist Catholic who has described himself as “a Christian, a conservative, and a Republican, in that order,” and in Jerusalem with Israeli Prime Minister Benyamin Netanyahu.

Messrs. Pence and Staquf were joined by Reverend Johnnie Moore, an evangelist who in May was appointed by US President Donald J. Trump as a member of the board of the US Commission on International Religious Freedom.

Mr. Staquf’s discussions would likely raise eyebrows at any given moment.

But they take on added significance because they came in the wake of Mr. Trump’s controversial recognition of Jerusalem as Israel’s capital, stepped up US support for Israel in United Nations bodies, and in advance of a whirlwind visit to the Middle East by US peace negotiators Jared Kushner and Jason Greenblatt.

Palestinian President Mahmoud Abbas’ Palestine Authority has refused to engage with the Trump administration since the US recognition of Jerusalem and Palestinian officials were unlikely to meet with Messrs. Kushner and Greenblatt during their Middle East tour that focused on a draft US plan to resolve the Israeli-Palestinian conflict.

Details of the plan, described by Mr. Trump as the ‘deal of the century,’ remain under wrap, but Palestinians fear that it will be heavily geared towards supporting Israeli negotiating positions.

That fear has been reinforced by the Trump administration’s fiery support of Israel in the UN. The United States this month withdrew from the United Nations Human Rights Council, citing, among other reasons, the council’s repeated criticism of Israel.

Whether by design or default, Mr. Staquf’s meetings appeared to reinforce efforts by close US allies like Saudi Arabia, the United Arab Emirates and Egypt to stifle opposition to Mr. Trump’s approach to Israeli-Palestinian peace. Turkey has been in the forefront of condemnation of US policy that resonates in Muslim public opinion, particularly in Asia.

Frustration with US and Israeli policies has undermined popular Palestinian support for a two-state solution that envisions the creation of an independent Palestinian state alongside Israel.

Hamas, the Islamist group that controls the Gaza Strip, has facilitated weeks of protests along the border between Gaza and Israel in support of the Palestinian right to return to lands within Israel’s boundaries prior to the 1967 Middle East war during which Israel captured East Jerusalem, the West Bank, Gaza and the Golan Heights.

Israel has since annexed East Jerusalem and withdrawn from Gaza, which it blockades together with Egypt in a bid to undermine Hamas’s rule.

At least 142 Palestinians have been killed by Israeli forces since the protests erupted in late March and some 13,000 wounded.

Mr. Netanyahu trumpeted the political significance of his meeting with Mr. Staquf in a statement following their encounter.

“Muslim states are becoming closer to Israel because of the common struggle against the Iranian regime and because of Israeli technology. … The prime minister hopes that there will be progress in our relationship with Indonesia, too,” Mr. Netanyahu’s office said.

Indonesia and Israel do not maintain diplomatic relations but do not stop their nationals and officials from travelling between the two countries. Mr. Staquf has insisted that he was visiting Israel in his private capacity rather than as an advisor to the Indonesian president.

Indonesia recently revoked Israeli tourist visas in protest against Israel’s hard-handed tactics in Gaza. In response, Israel has threatened to ban tourist visas for Indonesians. Some 30,000 Indonesians, mostly Christian pilgrims, obtain visas to visit Israel each year.

Indonesia in May exempted Palestinian imports from custom duties in a bid to support the Palestinian economy.

Mr. Staquf insisted that his visit to Israel at the invitation of the American Jewish Congress was intended to promote Palestinian independence. “I stand here for Palestine. I stand here on the basis that we all have to honour Palestine’s sovereignty as a free country,” he said in a statement posted on his organization’s website.

Nonetheless, Mr. Staquf did not meet Palestine Authority officials during his visit. Osama al-Qawasmi, a spokesman for Mr. Abbas’ Al Fatah group, charged that his visit was “a crime against Jerusalem, against the Palestinians and Muslims in the world, and constitutes support for the criminal Israeli occupier against our fighting and resolute people.”

Mr. Staquf was the second NU leader to visit Israel in the past two decades. Abdurrahman “Gus Dur” Wahid travelled several times to Israel before and after his presidency but not while he was Indonesia’s head of state.

Muslim leaders, many of which have long reconciled themselves to recognition of the State of Israel’s existence, have largely been reluctant to publicly engage with Israeli officials as opposed to non-Israeli Jews as long as Israel and Palestine have not made substantial progress towards peace.

Mr. Staquf like Mr. Wahid before him broke ranks by travelling to Israel, a move that sparked criticism and condemnation on Indonesian social media and from some members of parliament.

While the criticism has focussed on Mr. Staquf’s visit to Israel rather than his meeting with Messrs. Pence and Moore, it is also rooted in widespread perceptions of evangelists as purveyors of rising Islamophobia and anti-immigrant sentiment.

Lost in that criticism is the fact that Saudi Crown Prince Mohammed bin Salman is being hailed by some evangelists as heralding a new era with his projection of greater religious openness in the kingdom and his unprecedented statement that both Palestinians and Israelis “have the right” to have their own land.

“You know I couldn’t believe my ears actually when I was watching the news report where the crown prince of Saudi Arabia said directly, verbatim, He said this kingdom will become a kingdom for all religions. I had to watch it again and he was crystal, crystal clear.

You know as evangelicals this is a new day for us in the Middle East. Evangelicals are the baby Christians in the region… What we’re seeing is a new openness to what evangelicalism is, which I think is a move of the Holy Spirit.” Mr Moore said.

Mr. Staquf projected his visit to Israel as promoting the concept of rahma or compassion and mercy as the basis for a solution to the Israeli-Palestinian conflict and the forging of relations between Israel and the Muslim world.

In practice, by design or by default, it supports US and Saudi efforts to impose their will on the Palestinians and the larger Middle East that potentially could produce as many problems as they offer solutions.

In doing so, it pays tribute to Prince Mohammed’s ability to project himself as an agent of change in Saudi Arabia even if the precise contours of his vision have yet to emerge.

In a twist of irony, it is a tribute by the leader of a movement that was founded almost a century ago in opposition to Wahhabism, the ultra-conservative Sunni Muslim worldview that long shaped Saudi Arabia and that Prince Mohammed is seen as disavowing.

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