Monday, December 24, 2012


Can ASEAN achieve economic community?

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The history of regional economic integration in Europe tells us that an economic community is an essential stage prior to achieving a common market (CM).

Economic community begins with the free flow of goods (trade integration) to the free flow of capital (investment integration), then service sector liberalization and the free flow of people.

These are all necessary conditions for a common market. ASEAN is attempting to achieve comprehensive regional economic integration through its economic community scheme, ASEAN Economic Community (AEC) 2015.

ASEAN is in the early stages of regional economic integration, which is in intra regional trade with the role of AFTA (ASEAN Free Trade Area). Although ASEAN intra-regional trade increased from 17.5 percent in 1990 (before the implementation of AFTA) to 24.5 percent in 2009 (after the implementation of AFTA), average ASEAN intra-investment share is still fairly small at around 14 percent of total FDI inflows in ASEAN.

To achieve economic community, ASEAN needs to enhance its trade and investment integration. The EU needs a custom union (CU), but ASEAN does not have a custom union. Yet, an ADBI study on the Asian-wide economic community highlights an attainable option for ASEAN: “Once a region-wide FTA is formed, it may also be easier for Asian Countries to establish a custom union […] as the European Economic Community did in 1968” (ADBI, 2010)

This shows that regional economic organizations in Asia could achieve economic community throughout the “region-wide frameworks”. ASEAN has two two frameworks: the ASEAN Plus and AFTA Plus One. Could these be ways for ASEAN to achieve economic community as the EU did?

There are two essential differences between ASEAN and the EU that explains why ASEAN’s economic integration pattern is dissimilar to the EU’s. But despite the differences, ASEAN could still attain economic community. First, ASEAN economic integration is slightly market-driven, while the EU is government-driven. The fact that ASEAN is market-driven makes it feasible for it to adopt “open regionalism” framework, which widens ASEAN’s economic cooperation to non-member states, whereas the EU’s custom union is an exclusive trade liberalization among its member states.

Second, ASEAN’s decision making process model is bottom-up with an intergovernmentalism mechanism known as soft regionalism, while the EU’s is top-down with a supra national body mechanism known as hard-regionalism. It is believed that the latter model helps accelerate the decision making process in the region. Yet the soft-regionalism model is compatible only with open-regionalism, therefore it is feasible for ASEAN to widen its regional economic cooperation to non-member states.

In Asia, trade creation effects are higher than trade diversion effects (Urata and Okabe, 2007). Trade creation is effective in the enhancement of intra regional investment. Recent data also shows that intra ASEAN investment has demonstrated significant growth, particularly after the Asian economic crises and the implementation of the CEPT in 2003. Since ASEAN’s trade creation is higher than trade diversion, the enlargement of ASEAN’s economic cooperation to non-member states will, in the long-run, increase FDI investment inflows in ASEAN.

Moreover, this will increase the effectiveness of AFTA in attracting FDI inflows. Recently, AFTA has only been effective in enchancing intra regional trade. The combination of AFTA and the enlargement of ASEAN regionalism to non-members using the “ASEAN Plus and AFTA Plus One” will help ASEAN achieve comprehensive trade and investment integration in the economic community.

In addition, this ASEAN-wide regionalism will create a “win-win solution” for the member states, non-member states and the multilateral agreements (WTO). For its member states, regional enlargement under the “ASEAN umbrella” will defunct the complicated direct individual Bilateral FTA (BFTA) among ASEAN’s members and non-members. ASEAN enlargement will also protect ASEAN member states from the “hub-spoke” problem that can emerge when a member state deals directly with non-member states (BFTA). In ASEAN’s case, BFTA also substitutes the role of AFTA in attracting FDI inflows while weakening ASEAN’s intra regional trade. The latter proves that a “noodle-bowl” exists in ASEAN (Verico, 2011).

For non-member states, regional-wide FTA will minimize discriminative action against non-members (Drysdale, 2006; Garnaut, 1994; Yamazawa, 1990). This effect is in line with the main objective of non-dicriminative action among countries (Most Favored Nation), and this confirms that a regional-wide arrangement is complementary to the WTO multilateral agreements (Lamy, 2007).

The world will see that a regional economic organization can achieve economic community through either the utilization of a custom union like the EU or the implementation of regional-wide frameworks such as ASEAN-wide regionalism. The latter will complete the WTO’s main purpose of reducing trade discrimination among countries and shifting the ASEAN economic integration from regional free trade area to regional economic community. Back to my initial question, is it possible for ASEAN to achieve economic community without facing major difficulties?

The writer, who obtained his doctorate from Waseda University in Tokyo, is a researcher at the Institute for Economic and Social Research Faculty of Economics, University of Indonesia (LPEM FEUI).

Thursday, December 20, 2012


SBY hopes for bright ASEAN-India future

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President Susilo Bambang Yudhoyono has called on India and ASEAN countries to lower trade barriers and provide more incentives to businesspeople in an effort to achieve the US$100 billion 2015 trade target.

In his speech before participants at the ASEAN-India Commemorative Summit in New Delhi on Thursday, Yudhoyono asked for a more ambitious trade target for the next 20 years.

“India will remain one of ASEAN’s most important trading partners. The growing trade volume between ASEAN and India has surpassed the 2012 target. I am convinced that the 2015 target is achievable,” the President said, according to a copy of his speech sent to The Jakarta Post on Thursday.

“We have an opportunity to establish a new set of objectives that will further elevate our partnership and would synergize India’s ‘Look East Policy’ and ASEAN’s community building efforts. To that end, we need to set priority areas of strategic cooperation,” Yudhoyono told participants at the event to mark the 20th anniversary of ASEAN-India relations.

The meeting was led by Indian Prime Minister Mahmohan Singh and also attended by ASEAN leaders including Cambodian Prime Minister Hun Sen, Thai Prime Minister Yingluck Shinawatra, Brunei Darussalam Sultan Hassanal Bolkiah, Malaysian Prime Minister Najib Razak, and ASEAN Secretary-General Surin Pitsuwan.

With a combined population of 1.8 billion, preditcted to reach 2 billion in 2025, ASEAN and India must address the strategic issues of food and energy security, Yudhoyono added.

“I recommend that we task our relevant ministers and officials to initiate concrete efforts such as more joint research in the agriculture sector, and cooperation among centers of energy research in ASEAN and India,” he said.

The President called for maritime cooperation, given the Indian and the Pacific Ocean are vital for world trade and commerce.

“As much as 90 percent of intercontinental trade and two-thirds of all petroleum supplies travel through these shipping lanes. Seventy percent of the world’s petroleum products pass through the
Indian Ocean,” Yudhoyono said.

From Lisbon to Barcelona – all the forgotten EU instruments

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There is a claim currently circulating the EU, both cynical and misleading: multiculturalism is dead in Europe. No wonder, as the conglomerate of nation-states/EU has silently handed over one of its most important debates — that of European identity — to the wing-parties, recently followed by several selective and contra-productive foreign policy actions.

Europe’s domestic cohesion, its fundamental realignment as well as the overall public standing and credibility within its strategic neighborhood lies in the reinvigoration of its transformative powers — stipulated in the Barcelona process of the European Neighborhood Policy as well as in the Organization for Security and Cooperation in Europe (OSCE).

By correlating hydrocarbons with the present political and socioeconomic landscape, scholar Larry Diamond revealed that currently 22 states in the world, which earn 60 percent or more of their respective gross domestic product (GDP) from oil (and gas) are non-democratic, authoritarian regimes.

All of them have huge disparities, steep socioeconomic cleavages, sharp political inequalities and lasting exclusion, not to mention poor human rights records.

These represent nearly half of the countries considered by the Freedom House’s annual reports as “not free” — the very same that are predominantly held accountable by the western media for domestic and regional insurgences, international armed conflicts, famines as well as for harboring and financing terrorists.

Hence, as many as nine of the 11 top crude exporters are usually labeled as dictatorships and/ or despotic monarchies.

Diamond calls it democratic recession. If so, there is not a single economic or political indicator in the Middle East — North Africa (MENA) region to imply any “Spring“ happening lately, but only a severe, lasting recession.

Indeed, modern history is full of examples where crude oil exporting countries’ development was hindered by the huge revenues. Far too often, the petro-cash flow did not assist but delayed or derailed necessary economic diversification and political reform.

It also frequently paved the way up for the elites, domestically felt as predatory, and externally used as — in CIA jargon — “useful idiots”.

 Conveniently though using revenues to buy and otherwise subsidize social peace, those regimes (or rentier states) were/are actually creating self-entrapment — ever stronger psychological and political dependence on hydrocarbons.
Therefore, a real “Arab Spring”, for the Middle East and the rest of us, will only come with a socio-economic decoupling and diversification, sociopolitical horizontalization, with a decisive de-psychologisation of and departure from oil-dependence. By no means, it will ever come by a purely cosmetic change of the resident in the presidential palace.

Fearing the leftist republican pan-Arabism and Nasserism, the US encouraged Saudi Arabia to sponsor the existing and establish a new large network of madrasahs all over the Middle East — Cleveland reminds us in his capital work: A History of the Modern Middle East.

In the last three decades, this tiger became “too big to ride“, as Lawrence Wright points out in his luminary book on al-Qaeda: The Looming Tower. Wright states that while representing only 1.5 percent of the world’s Muslims, Saudis fund and essentially control around 90 percent of the Islamic institutions from the US to Kazakhstan’ and from Norway to Australia.

By insisting on oversimplified and rigid, sectarian Wahhabi-Salafist interpretations of religious texts, most of these institutions along with their indoctrinated clerics are in fact both corrupting and preventing an important inner debate about Islam and modernity.

Self-detained in a limbo of denial, they largely (and purposely) keep the Arab and non-Arab Muslim world in a dangerous confrontational course with both itself and the rest of the world.

The sort of Islam Europe supported (and the means deployed to do so) in the Middle East yesterday, is the sort of Islam (and the means it uses) that Europe gets today.

Why and how?

Young generations of Europeans are taught in schools about the compact unity of an entity called the EU.

However, as soon as serious external or inner security challenges emerge, the compounding parts of the true, historic Europe resurface again. Formerly in Algeria, Egypt and Lebanon, then in Iraq (with
the exception of France) and now with Libya and Syria; Central Europe is hesitant to act, Atlantic Europe is eager, Scandinavian Europe is absent, Eastern Europe is bandwagoning and Russophone Europe is opposing.

The 1986 Reagan-led Anglo-American bombing of Libya was a one-time, head-hunting punitive action. This time, Libya (and currently Syria) has been given a different attachment: The considerable presence of China in Africa; successful circumventing pipeline deals between Russia and Germany (which will deprive Eastern Europe of any transit-related bargaining premium, and will tacitly pose a joint Russo-German pressure on the Baltic states, Poland and Ukraine); boldness (due to a petro-financial and strategic emancipation) of Iran; and finally the overthrow of the EU-friendly, Tunisian, Yemeni and Egyptian regimes — all combined — must have triggered alarm bells across Atlantic Europe.

Thus, in response to the MENA crisis, the EU has failed to keep up a broad, consolidated agenda and all-participatory basis with its strategic neighborhood, although having institutions, interest and credibility to do so — as it did before in its home; by silently handing over one of its most important questions, that of European identity, to escapist anti-politics (politics in retreat) dressed up in the Western European wing-parties. Eventually, Europe compromised its own perspectives and discredited its own transformative power’s principle.

It did so by undermining its own institutional framework: the Barcelona Process as the specialized segment of European Neighborhood Policy and the OSCE.

The only direct involvement of the continent ranged between a diplomatic delegitimization (by Goebbels-izing the media and punitive military engagement via the Atlantic Europe-led coalition of the willing (Libya, Syria). Confrontational nostalgia prevailed again over dialogue (instruments) and consensus (institutions).

Small wonder, that Islam in Turkey (or in Kirgizstan and in Indonesia) is broad, liberal and tolerant while the one in Northern Europe is a brutally dismissive, narrow and vindictively assertive.

The writer is Geopolitics of Energy editorial member and chairperson for international law and global political studies. This article is an excerpt from the key-note address: “From Lisbon to Barcelona — all the forgotten EU instruments” presented at the Crans Montana Forum, Oct. 18-20 in Geneva.

ASEAN, India conclude FTA talks on services, investment

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The 10-member Association of Southeast Asia Nations (ASEAN) concluded a long-bargained free trade agreement (FTA) with India on services and investment on Wednesday ahead of a two-day commemorative summit in New Delhi, India.

“The agreement will be able to significantly boost economic activities between India and ASEAN, as well as [those] between India and Indonesia,” Trade Minister Gita Wirjawan said in an SMS after the agreement was reached.

The FTA would also pave the way for discussions on a regional comprehensive economic partnership (RCEP) that ASEAN plan to seal with its six key trade partners, which includes India, Gita added.

The new agreement will add to the FTA on goods between ASEAN and India, said to have created one of the world’s biggest free trade areas with a market of around 1.8 billion people and a combined gross domestic product of US$2.8 trillion.

Bilateral trade between ASEAN and India totaled $55.4 billion in 2010, up 41.8 percent from 2009. During the 8th ASEAN-India Summit in 2010, leaders set the target to attain bilateral trade of $70 billion by 2012.

The trade in services and investment were not included in the FTA, which was signed in 2009 and took effect early last year, as both parties failed to reach agreement in time over several key issues.

India, for instance, demanded ASEAN open up its service sector further, including steps to cover independent professional services and contractual service suppliers at all levels.

The grouping has affected certain limitations on to the sector as well as protection and liberalization of investment.

However, the discussions have notably progressed since the ASEAN Summit in Phnom Penh, Cambodia, last month with ASEAN leaders showing stronger commitment to the expanded FTA.

Trade Ministry director general for international trade cooperation, Iman Pambagyo, said that the agreement was reached after various points were met by both sides, including India dropping its request for independent professional services and as a trade-off ASEAN dropping its request for prudential measures in financial services.

“ASEAN members and India will also put requirements and limitations of contractual service suppliers in its own schedule of commitment [of liberalization],” he said in a written statement.

Each country was expected to finalize legal documents for the pact on services and investment by February 2013, the signing is scheduled for August next year during a consultation between ASEAN Economic Ministers and India’s minister of commerce and industry in Brunei Darussalam.

“The completion of the FTA on goods and investment will smooth the process of RCEP talks as the features in this agreement is similar to other deals with ASEAN FTA partners, such as negative listings for investment and a positive approach for trade in services,” Iman said.

ASEAN and six partners — Australia, China, India, Japan, South Korea and New Zealand — will start first-round talks on the RCEP next year, which are expected to form the world’s economic bloc in 2015.

The trade pact has been considered a way for ASEAN to maintain its centrality after new challenges had arisen for other regional trade agreements, such as the Trans-Pacific Partnership (TPP), which does not include all 10 ASEAN member nations.

Tuesday, December 18, 2012


Why foreign aid for REDD+ implementation does not work here

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We are willing to pay as long as we can be sure that we are paying for actual emission reductions. Donor countries need credible figures as a basis for asking their parliaments for money for this,” said Norway’s chief negotiator to Point Carbon, when Reducing Emissions from Deforestation and Forest Degradation Plus (REDD+) was negotiated in Doha a few weeks ago, according to redd-monitor.org.

In relation to Norway’s commitment of around US$1 billion in assistance under the Letter of Intent (LoI) it signed with Indonesia in 2010, this statement clearly shows Norway will only disburse the rest of the funds ($800 million) if Indonesia can reduce carbon emissions. The initial funding of about $200 million is being used to prepare the REDD+ initiative, to be formulated by the REDD+ task force.

As we may be aware, every year the Forestry Ministry spends about $600 million, including for the salaries of around 15,000 employees scattered across Indonesia.

Some activists and experts, however, have blamed the country’s high deforestation rate on poor governance in the forestry sector. To make the REDD+ a success, Indonesia requires forest policy reform.

The notion of policy reform is to alter the current forest governance system, which is associated with bad governance practices, including corrupt administration.

The Forestry Ministry has initiated institutional reforms by participating in the “bureaucracy reform” process introduced by the Administrative Reforms Ministry. Arguably, this transformative initiative is characterized by reform in incentives through salary increases in order to enhance productivity and discourage corruption. Unfortunately, the House of Representative rejected this remuneration reform.

Ironically, with regard to the Norwegian funds, much of the initial $200 million has been spent on hiring international and national consultants, who earn much more than the Forestry Ministry, to prepare REDD+ mechanisms. The inequality in pay may spark resentment and skeptical views about REDD+ among forestry staff, and without the ministry’s full backing, the program will only remain an idea.

International donors that have committed to supporting REDD+ in Indonesia need to inject more assistance to support institutional reform within the Forestry Ministry.

Contestation among institutions in designing REDD+ agency initiatives is another challenge that may inhibit efficacy of foreign aid in supporting the program.

Indications rivalry appeared when the REDD+ task force proposed the establishment of a new REDD+ agency. The Forestry Ministry resisted the creation of a new agency from the beginning due to reasons related to the long history of forest governance in Indonesia.

Apparently, it’s all about power. Pelluso, a political-ecology expert from the University of California, explains in her book Rich Forest, Poor People that the Dutch colonial administration strongly influenced the forest governance system in Indonesia.

The colonial legacy has enabled the government to control forest resources until today. The government’s authority, adopted from the colonial system, includes institutions and rules. These components allow the application of this very specific form of power to control the forest and the communities living in the forests.

The system, described as an “extractive” institution by Acemoglu and Robinson in their book Why Nations Fail, sees only a few elites control the political and economic opportunities, including in the forest sector.

This system, they say, is the main reason why a nation cannot grow well in the long term. Almost all European colonial countries, including the Dutch, adopted this extractive institution, which has unfortunately been maintained by the Indonesian government.

On the other hand, Acemoglu and Robinson recommend an inclusive and pluralistic institution in forest management. It might be a reason why the REDD+ task force insists on establishment of a new REDD+ agency that is designed to accommodate many stakeholders including consultants, NGOs, civil society groups and government agencies.

Even though the complexity of this system may disturb the implementation of REDD+ in Indonesia, contestation has increased public awareness of the importance of forest policy reform in Indonesia.

With respect to support for deforestation, international donors should evaluate and learn from their previous projects. Historically, several environmental projects in Indonesia, more specifically in forestry sector, have left observers asking the question, “Where did all of the aid go?”

Many environment projects only produced dozens of reports just to meet donor requirements. Many skilled experts and bureaucrats have profited from these projects.

The experts were hired as consultants, while the bureaucrats became the brokers of the projects. Oftentimes, skilled government officials were recruited to work for the international donors’ project at the expense of Indonesian forestry institutions, which lost skilled administrators.

Has the Indonesian environment improved following those projects? It is not clear since deforestation, biodiversity loss and environmental degradation are still ongoing.

Again, the fundamental aspect of this failure is institutional, as highlighted by Acemoglu and Robinson. While institutional problems — the main driver of environmental degradation in Indonesia — are obvious, international donors keep their “top-down” strategy intact as they think it will work well in curbing environmental issues in Indonesia.

In order to make REDD+ assistance work, it is advisable that international donors take into consideration the political and economic conditions in Indonesia.

Understanding the history and local needs is important to support the success of REDD+ in Indonesia. If not, aid will not effectively help Indonesia realize the reduction of emissions from the forest and land use, and these donations will become “unhelpful help”.

The writer is currently studying international development and forest carbon management at the department of forestry, Michigan State University, USA.

Thursday, December 13, 2012


Is RI’s economy immune to global turmoil?

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It is interesting to note that Indonesia could be immune to global turmoil as stated by Rintaro Tamaki, deputy secretary-general of the Organization for Economic Cooperation and Development (OECD) at the ASEAN Business Summit in Phnom Penh last month.

Indonesia’s economy will grow by an average 6.4 percent from 2013 to 2017 — the fastest among the 10 ASEAN member countries.

This reminds me of similar comments made by international financial organizations before the crisis in 1998, which praised the Indonesian economy as being healthy with stable economic growth that was
managed in prudent ways.

Everybody was optimistic about the Indonesian economy at that time and nobody expected a severe economic crisis with multidimensional impacts to strike.

Although the Indonesian economy is currently encouraging, it is good to remain alert to the dangers. Before the crisis in 1998, the property sector had been booming, as shown by the development of mega projects that absorbed a big portion of commercial funds.

The property sector became one of the main causes of a bubble economy that led to the crisis. Today, we witness mushrooming super bloc mega projects along Jl. Casablanca in Jakarta — just to mention an example.

There is an alarming sign that property development is aiming at high income groups only (Kompas Dec. 7).

Meanwhile, the government has acknowledged the shortage of funding to develop infrastructure projects, which have been neglected since the 1998 Asian crisis.

Therefore, the government has introduced the public-private partnership scheme in order to bring in private companies to undertake infrastructure projects.

This scheme has been initiated since 2005, but unfortunately progress is still slow in improving infrastructure.

As we know, the improvement of infrastructure is needed and vital to spur economic development.

It is laudable that Finance Minister Agus Martowardojo has introduced fiscal approaches in addressing the impact of global turmoil.

Those are to prepare the fiscal stimulus by increasing budget balances, to increase readiness in anticipating the crisis, to conceive a framework of bond market stabilization, to prepare a standby loan and to utilize the emergency fund of Chiang Mai Initiatives under the ASEAN+3 (China, Japan and Korea) cooperation.

However, the above fiscal approaches are not sufficient enough. These should be integrated in more comprehensive undertakings in order to build a strong economic foundation.

In fact, global economy is currently less conducive to supporting a country facing crisis. The European crisis is far from at an end and although the European Union succeeded in making decisions to fix Greece’s economy, still are still gaps.

Meanwhile, the US is busy with its own domestic economic problems, particularly addressing the threat of a fiscal cliff deepening the state of recession. Perhaps China is the only economic powerhouse expected to play a role, but it’s likely that China will adopt a strict inward-looking policy for protecting its domestic market.

At this critical juncture, Indonesia needs to improve its industrial capacity. The Indonesian economy cannot be sustained by only producing low quality products.

Understandably, Indonesia had received Japanese and Korean foreign direct investment (FDI) for export substitution for some years. But it’s hard to understand that Indonesia should again receive the relocation of FDI from China for the same reason, even with low quality products.

Therefore, it is important to note National Development Planning Minister Armida Alisjahbana’s statement when receiving the Chinese investment mission several weeks ago. She reminded that Chinese investment should be oriented toward exports, not for the Indonesian market.

Moreover, Indonesia should impose strict requirements on foreign companies to transfer their technology, if they want to gain market access.

These measures will hopefully drive constructive industrial development. This can promote high quality products leading to the improvement of labor welfare.

In addition, the agricultural sector also needs to be improved. It is always a vicious circle in managing the domestic agriculture market, especially in relation to several sensitive products like soya bean, rice, corn and beef.

Recently, people have had to deal with the hike in beef prices. Again, the reason is due to the shortage of supply, especially from domestic production. As a result, importers have enjoyed a price hike from these importations.

We never hear of farmers enjoying the increased prices of their own products. On the contrary, when they harvest their products the prices tend to decline.

A very recent case is in the Central Java town of Purworejo, where farmers ignored their chili trees because the price dropped sharply and the trees were too costly to maintain (Kedaulatan Rakyat, Dec. 6).

Perhaps by introducing a new price mechanism, Indonesian farmers can experience dignified lives, like what the farmers of developed countries have long enjoyed. Their governments stop importing similar products when harvest time arrives, so people only buy their own farmers’ products at reasonable market prices.

To sum up, Indonesia should be able to improve its industrial and agricultural sectors. These two strategic sectors have absorbed the most part of the labor force in Indonesia.

 This is certainly not an easy task, but it is a must for Indonesia in order to have a strong economic foundation. In doing so, then we can say that our economic immunity is not an illusion, but a reality.


The writer works at the Yogyakarta Cooperation and Investment Board. The opinions expressed are his own

ASEAN services to flood RI

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Indonesia is slated to ratify the eighth package of the ASEAN (Association of Southeast Asian Nations) Framework Agreement on Services (AFAS) next year, which will further open the country’s service sector to regional players.

The deal is a prelude to the establishment of the ASEAN single market in 2015 that will see free flows of labor, trade and services among the association’s member nations.

AFAS ratification will affect sectors related to telecommunications, business services, education, tourism, health, recreation and logistics, covering around 22 subsectors, according to the Trade Ministry.

The agreement is expected to strengthen Indonesia’s commitment to the liberalization of the sectors by 2015.

“In 2015, companies [from other ASEAN nations] will be able to have as much as 70 percent of foreign equity participation in Indonesia,” said the ministry’s director for trade and service negotiations, Sondang Anggraini, on Wednesday during a workshop hosted by the ministry.

The government is preparing several legal frameworks to further regulate the service trade that will help local firms to achieve greater gains from liberalization, such as by selling services to other countries, according to Sondang.

“The policy will help shift the country’s source of foreign currency from the export of goods to the export of services,” Sondang said.

In recent years, Indonesia has seen a rise in the contributions made by the service sector to its economy.

Service-related sectors accounted for 53.13 percent of gross domestic product (GDP) in 2011, up from 48.20 percent in 2006.

Indonesia Logistics and Forwarders Association (ALFI) executive director Theo Kumaat was cautious about liberalization in the logistics sector, as it would severely impact local logistics players still struggling with output inefficiency.

According to Theo, Indonesia’s high costs of doing business had undermined its performance relative to its regional peers.

Indonesia ranks 59th on the World Bank’s 2012 logistics performance index, lower than fellow ASEAN members Vietnam and the Philippines

Despite the low ranking, Indonesia has seen a significant improvement in logistical handling competency and tracking systems, according to the World Bank.

“Most of our local companies are not yet ready to compete with regional players. If the government insists on liberalization, I am afraid that local players will only deal with subcontracting work to serve foreign companies,” Theo said.

The logistics sector, according to Theo, was still grappling with a shortage of skilled local workers. Opening more doors for more skilled foreign workers could result in jobs filling up once liberalization takes place.

In anticipation of changes in labor regulations, local stakeholders are planning to set up an institution that will establish standards and certifications for both local and foreign workers.

Liberalization of logistics services under the eighth AFAS comprises two major sectors: packaging and freight transportation, including maritime, freight, rail and road transportation; cargo handling services; storage and warehousing; freight transportation agency services; and courier services.

Indonesian Logistics Association (ALI) chairman Zaldy Masita said the government should keep the 49 percent cap for foreign ownership in local firms ahead of 2015.

“In general, our domestic players are not ready because there are so many issues that have yet to be addressed by the government. Only big local firms will thrive under liberalization,” he said.

At present, several foreign companies own majority stakes of up to 95 percent in local logistics firms as they operated before the government included logistics on a list of investments restricted for foreign entities in 2010. At present, foreign ownership is capped at 49 percent.

Toward a disaster-resilient ASEAN community

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One of the key challenges in building the ASEAN community is coming up with tangible outcomes that benefit the people directly. This is a tall order, since many of ASEAN’s objectives are at the regional level. Realization of ASEAN’s goals and aspirations will happen only when each member nation converts regional commitments into national policies and practices.

The key issues here are follow-up and implementation. ASEAN has over 300 agreements in place. It remains to be seen whether the member states will be able to implement them all by its self-imposed deadline of Dec. 31, 2015.

This seems like a daunting challenge. However, recent progress in regional disaster management offers interesting insights on ASEAN’s readiness to take up the tasks ahead.

Disaster risk reduction and management are major concerns for ASEAN, considering the region’s vulnerability to natural disasters. Earthquakes, typhoons and floods, are among the perpetual threats
facing ASEAN countries.

In November, a magnitude-6.8 earthquake struck Mandalay and Sagaing provinces in Myanmar. Most recently Typhoon Bopha created havoc in Mindanao in the Philippines. Both caused severe damages and loss of life.

ASEAN acted quickly. Spearheading the action was the ASEAN Coordinating Center for Humanitarian Assistance on Disaster Management (AHA center). The center was established by ASEAN leaders at the Bali Summit in November 2011.

From its base in Jakarta, the center deployed emergency rapid assessment team (ERAT) to Mandalay and Mindanao.

Within a week after the earthquake struck Mandalay, the ERAT delivered over 250 multipurpose tents and 70 rolls of tarpaulin sheets to aid local citizens coping with the destruction of many houses, schools and hospitals.

In Mindanao, the team conducted a rapid needs assessment. The dispatch of emergency goods is
pending.

A key to the swift action by the AHA center is the ASEAN regional emergency stockpile, located in Subang, Malaysia.

The regional stockpile was awaiting formal inauguration when the disasters occurred. Nonetheless, it went into full operation and has performed well.

In brief, through the AHA center and the regional emergency stockpile system, ASEAN has demonstrated a promising competence in regional disaster management.

Several factors contributed to ASEAN’s success. First, ASEAN has had ample dose of natural disasters. Some of the recent, most catastrophic disasters hit ASEAN countries directly, e.g. the Indian Ocean in Aceh in 2004, Typhoon Nargis in Myanmar in 2008. This led to an accumulation of experiences in managing natural calamities.

Second, ASEAN has proper region-wide mechanisms and procedures in place. This is epitomized in the ASEAN Agreement on Disaster Management and Emergency Response (AADMER).

Signed in July 2005 and coming into force in December 2009, AADMER is the umbrella framework that guides ASEAN’s concerted actions in the event of a disaster.

Under the purview of the AADMER, ASEAN has worked out necessary measures for improving its preparedness and response. This includes standard operating procedures, disaster information sharing and communication network, and regional emergency stockpile and logistics systems.

The AHA center is the hub of these activities and facilitates operational coordination.

Third, ASEAN receives strong support from various dialogue partners. Among them, Japan contributed significantly to development of the AHA center.

The center’s state-of-the-art IT facilities and systems were provided by Japan. To ensure seamless and uninterrupted connectivity between the national disaster management offices (NDMO) of the 10 ASEAN member states, Japan has provided similar IT systems to NDMO of Cambodia, Laos and Myanmar.

The ASEAN regional emergency stockpile and logistics system in Subang also receives generous support from Japan, totaling more than US$11 million.

The challenge for the AHA center is ensuring sustainability of such cooperation. Disaster operations are time-sensitive and expensive. At stake are the lives of the people in disaster-stricken areas. Resource and expertise mobilization is therefore a standing priority to allow the AHA center to execute its mandate smoothly.

ASEAN and Japan share a natural bond given similar experiences in facing natural disasters. Those ties have now reinforced by Japan’s initiative for a comprehensive disaster management cooperation plan covering utilization of satellites for disaster management to develop early warning systems for remote, poor areas across ASEAN.

For its part, ASEAN continues working out technical preparations and operational guidance relating to disaster preparedness and responses as stipulated by the AADMER.

Combination of the above proves effective in bringing about tangible and quick actions that benefit the people. This raises hope that a people-oriented, disaster-resilient ASEAN community is indeed in the pipeline.

ASEAN will need more success stories and conclusive proof in its community-building endeavors. Its success in regional disaster management can hopefully be a catalyst for other areas being pursued.

The writer is director of the Japan-ASEAN Integration Fund (JAIF) management team at the ASEAN Secretariat. The views expressed here are his own.

Insight: ASEAN, China and the chance of a collision at sea

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In 2011, when Indonesia chaired ASEAN, the prospects for managing the problems in the South China Sea appeared promising.

After almost a decade since the Declaration of Conduct (DoC) in the South China Sea was agreed to in 2002, China finally agreed in July 2011 to sign off on guidelines for its implementation.

Expectations were high that ASEAN and China would be a step closer to reaching an agreement on the more binding Code of Conduct (CoC) in the South China Sea, which would provide a framework for joint cooperation, a mechanism to prevent conflicts and to manage crises whenever they arose.

However, expectations began to wane as the ASEAN Summit in November 2012 in Phnom Penh did not result in an agreement between China and ASEAN on when CoC talks would officially proceed.

China continued to insist at the summit that the discussion on the CoC could only take place “when the time is ripe”. Indeed, the absence of significant progress on the CoC has again raised international and regional concerns about peace and stability in the region.

Such concerns are not groundless. Recent developments in the South China Sea point to a growing risk of misperceptions and miscalculations, which could in turn increase the potential for new tensions among claimant states and other regional stakeholders.

What has happened over the last few weeks after the November ASEAN Summit is of particular concern here.

First, China issued a new passport that included a map with a dotted line that includes a disputed area of the South China Sea. The move immediately invited strong reaction not only from claimant states such as Vietnam and the Philippines, but also from Indonesia. Foreign Minister Marty Natalegawa described the move as “disingenuous, like testing the waters to see the reaction of its neighbors”. While the map has no legal effect, it does add a new complication to the already rising tensions in the relationship between China and other claimants.

Second, there have also been strong reactions toward the passing of new regulations by Hainan province to allow its public security border defense units to board and search vessels illegally entering waters under Hainan’s jurisdiction. While China clearly has the right to do so within its territorial seas and internal waters, the regulations have created confusion, due to the different interpretations by other countries regarding the vague reference to “waters under Hainan’s administration”.

Third, in early December, Vietnam complained about the latest incident, in which it accused Chinese fishing boats of cutting a seismic cable of one its oil exploration ships near the Gulf of Tonkin. As similar incidents have also taken place in the past, the latest complaint from Vietnam clearly suggests that tensions remain high between the two claimants. Vietnam has also announced that it would send more patrols to protect its fisheries in the South China Sea.

Fourth, India, whose state-run oil company Oil and Natural Gas Corporation (ONGC) previously signed an agreement with Vietnam’s national oil company, Petro Vietnam, to explore oil and gas in the South China Sea, has begun to take a more assertive stand. Indian Navy chief Adm. DK Joshi remarked that India was prepared to send warships to protect its interests in the South China Sea.

What makes these developments even more worrying is the fact that they have taken place within the
already-tense strategic context in the region. For one, there have been increasing concerns among regional states about the prospect of Sino-US rivalry, which could spill over to the South China Sea.

ASEAN countries are also increasingly worried about the breakdown of unity among its members over this issue, especially in the face of China’s growing assertiveness. India-China relations could also become another factor.

As tensions escalate and the risk of misperceptions and miscalculations grow, the urgency for a mechanism to prevent conflicts and manage crises has become even more pressing. Despite the absence of progress on the talks about the CoC, China and ASEAN need to double their efforts in 2013 to find a new compromise that will facilitate progress. Otherwise, we are all destined to collide at sea, and that is definitely not a scenario that we want.

The writer is executive director of the Centre for Strategic and International Studies (CSIS), Jakarta.

Wednesday, December 5, 2012


The ASEAN approach to human rights

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The long-awaited document that had become the center of attention among human rights observers and activists across the region was finally adopted by ASEAN leaders at the 21st ASEAN Summit in Phnom Penh recently.

Criticism from NGOs and representatives from the UN’s Office of the High Commissioner on Human Rights had poured in prior to the adoption of this historic document. The main concern of the critics was that the standard of the ASEAN Human Rights Declaration could fall below international standards.

The two primary conventions for global human rights are the International Covenant on Civil and Political Rights (ICCPR) and the International Covenant on Economic, Social and Cultural Rights (ICESCR). These two conventions serve a good comparison for the ASEAN HR Declaration.

Besides the two conventions, there is a certain development that exceeds international expectations, such as an acknowledgement of the right to development and the right to peace.

The right to peace is even more interesting since there are no similar provisions in the other international conventions on human rights.

The main criticism against the conventions is their universality principle, which prevails against regional or national contexts. This principle was embodied in the Vienna Declaration and Program of Action in 1993, a declaration which the ASEAN HR Declaration refers to.

Arguably, this principle contradicts the ASEAN code of non-interference. As a matter of fact, ASEAN is an organization based on the principle of non-interference as stated in Article 2 (2) of the ASEAN Charter. The principle has existed since ASEAN’s inception in 1967. Therefore, the ASEAN HR Declaration would have run counter to the ASEAN Charter had it adopted the universality principle in accordance to the Vienna Declaration.

In practice ASEAN has always taken into consideration the regional and national contexts of their member states in its decision-making process. This is somehow different from the Vienna Declaration, which sets aside regional and national contexts in order to respect human rights as universal rights.

Despite the criticisms, certain developments are recognized in the ASEAN HR Declaration, including the acknowledgement of the right to development and right to peace, which can be found neither in the ICCPR nor the ICESCR.

The right to development in the ASEAN HR Declaration is an inalienable human right from economic, social, cultural and political development for the benefit of present and future generations.

There are at least two interesting interpretations concerning this right. First is the inalienable human right from political development. This somehow has a broad interpretation. It could be interpreted as the right of citizens to participate in the political development of ASEAN member states, including enjoying its benefits or it could be interpreted in a narrow way of participating in democracy.

Second is the recognition of the principle of intergenerational equity as in the sustainable development concept. Some ASEAN member states are blessed with mega biodiversity, which has to be developed in a sustainable manner to meet the needs of future generations.

The right to peace is nowhere to be found in international conventions, except for UN General Assembly Resolution 39/11 (1984) which is non-binding.

However, the intention of ASEAN to declare this is nevertheless a form of creating a secure, stable and harmonious Southeast Asian region. Therefore, regional stability is one of the key points addressed many times by ASEAN leaders.

Recently, ASEAN tried in vain to develop a Code of Conduct in the South China Sea as a measureto reduce ongoing tensions between China and its ASEAN neighboring countries, such as Vietnam and the Philippines.

The ASEAN HR Declaration is just an initial step for establishing a human rights mechanism in Southeast Asia. Like the Bangkok Declaration in 1967 that established ASEAN, it was not until 2007 when the ASEAN Charter was adopted, that ASEAN developed an international legal personality with its rights and obligations under international law.

Therefore, ASEAN should aim to develop a binding human rights document while, at the same time, playing a harmonizing role amid the political development gap between ASEAN member states so that the relevant human rights provisions can be enforced effectively in the region.

The writer works at the Economic and Sociocultural Treaties Directorate at the Foreign Ministry. The opinions expressed are his ow

Enhancing RI-Australia military ties

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Indonesia is sandwiched between two great bodies of water: the Pacific and the Indian oceans. Indonesia, with economic growth that has placed the country in a group of countries with gross domestic products greater than US$1 trillion, will continue to grow in importance, both from a political and a security perspective.

Friendly, warm and intimate military relations between Indonesia and Australia have developed significantly since the 1980s. Yet, this does not mean that close relations between the nations had not flourished before that time.

Historically, Australia and Indonesia have been good neighbors since Indonesia became a nation. Australia was one of the first countries that officially acknowledged the independence of Indonesia on Aug. 17, 1945.

Just as in the relations between other nations in the world, there have been highs and lows reflecting the dynamism between Indonesia and Australia, each with its own cultural background and perspective.

Thus, it was inevitable for the two countries to experience some friction in their relations, such as during the period of Sukarno’s konfrontasi, or confrontation, with Malaysia in the early 1960s, or when East Timor seceded from Indonesia in 1999.

Other factors, such as human trafficking, drug smuggling and marine border disputes have also surfaced from time to time.

However, generally speaking, the dynamism of the nations’ bilateral relations has not had any significant impact on the security and stability of the Pacific region.

For the last 50 years, harmonious relations among the member nations of ASEAN and other Pacific nations have never reached the boiling point.

 We can confidently say that any major direct attack on the Indonesian homeland is very unlikely to happen in the short- to medium-term. Bridging the air-sea gap around the coastlines of the region would require a massive transport and logistical effort that only a few powers have the ability to conduct.

However, while the chance of a direct invasion of Indonesia look to be remote, low-level armed clashes are still possible.

Further, the very intimate and close relationship among the military elites of ASEAN member nations and Australia has contributed positively to the security of Pacific Rim. And when we look more deeply, Australia and Indonesia are, in fact, the final decision makers in maintaining cordial ties among Pacific countries.

However, the US, as one of the most massive military powers in the world, also plays a significant role in the region.

Military relations between Indonesia and the US cannot be detached from their pre- and post-Cold War contexts.

Examining Indonesian–US military relations evokes sensitive issues, such as human rights, or terrorism, where al-Qaeda and other extremists are the main actors.

On a larger scale, the prolonged economic crisis afflicting the US and European countries and the magnificent growth shown by Asian countries such as China and India have shown the transition of power, and of strategic policies, to the Pacific region.

During the transition, Indonesia’s military ties with Australia and the US have become more important in stabilizing the region — an outcome that has become quite difficult to predict politically, since developed countries have continued to struggle with economic crises.

Hence, Indonesia and Australia had best refer back to the early 1980s to find a stepping stone to advance the military relations between the nations, whose speedy development has been supported by a willingness evinced on both sides. Both armed forces, for example, have established joint training and education programs for junior officers.

However, military training in the Pacific region should focus on the current border disputes and incidents in the South China Sea.

It is becoming Indonesia’s responsibility, as part of the Pacific community, to be able to oversee any threat to our own national interests. And now, the problem is how to maintain Indonesian-US relations within the framework of the Pacific region amid security challenges.

Closer relations between the US, Australian and Indonesia militaries can contribute to the security of the region. Joint training and education for junior officers are just two ways that closer ties can be fostered in the region.

The writer, a retired air chief marshal, was Air Force chief of staff from 2002 to 2005.

Forging our future in the Asian region (Part 2 of 2)

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We do not consult and talk with China at the Head of Government and Ministerial levels in the regular manner we should in the Asian Century. Although it will be more difficult because of cultural and political differences, political and business and academic leaders should communicate regularly with their counterparts.

This will not be easy but it is important. As a foundation member of the Australian-American Leadership Dialogue, I am conscious of the extent to which that dialogue has deepened the political engagement with the US of Australian politicians on both sides of politics.

We still lack a sufficiently deep engagement with China beyond trade and to understand more fully Chinese views. Just as alliance should not equate to compliance in the case of the US, understanding need not equate to agreement in the case of China.

The recent and present debate about China mainly assumes that Australia has no choice but to support American primacy in Asia against the threat of a perceived rising Chinese hegemony.

Former prime ministers Paul Keating and Malcolm Fraser have argued that this is a simplistic notion which should be challenged.

Similar concerns have been raised by a number of Australian business leaders, academics and commentators. No global regional problem can now be resolved without China’s involvement.

As well as rebalancing our relationships with China and the United States, we need to deepen and strengthen substantially our engagement, as the White Paper has indicated, with Japan, India, South Korea, Indonesia and the other ASEAN countries. To this list I would add Russia. Twenty years after the collapse of the Soviet Union it is clear that Russia is determined to restore its international influence and is also seeking to play an active role in the Pacific.

It is a nuclear super power, with a major naval presence in the Pacific, and it is an important supplier of energy. It successfully hosted the recent APEC meeting in Vladivostok.

The White Paper sensibly argues the importance of strengthening Australia’s diplomatic network in Asia. It is also a question of diplomatic style. As I have already noted, we need to strengthen regular improved consultation, as a habit, with the main Asian countries on a wide range of issues in advance of major policy decisions, especially those which affect them. A recent example of a failure to do so with negative consequences was the decision to ban live cattle exports to Indonesia.

In the handling of the so-called boat people and asylum seekers, both the government and the opposition, seem to be engaged in a race to the bottom, motivated by domestic politics, in sharp contrast to the handling of the Vietnamese refugees and boat people of the late 1970s and, indeed to the sentiment expressed in the second verse of our National Anthem.

We also need to avoid the perception in Asian countries that racism and religious intolerance remain present in our political and public attitudes. Because of our history, including the White Australia policy, and statements by some politicians we are on a “good behavior bond” in the eyes of many thinking Asians who remain uncertain about the depth and sincerity of our commitment to our Asian and South West Pacific neighborhood.

In the context of our identity as a nation, issues like moving out of the United Nations’ Western European and Others Group (WEOG) and moving into the Asian group and also the establishment of an Australian Republic are important.

They are not merely symbolic. They are significant indicators of the international image Australia should project and how we see ourselves and our place in the world. Occasional references to Australia as being part of the “Anglosphere” are outdated, except in an historical context, and are very unhelpful now to our increasing involvement in Asia.

Also, if one is talking about the future there are some other issues which I believe we need to consider. Australia is a wonderful country, with great potential, which I have represented mostly with pride overseas for many years.

The Asian Century now offers us major new opportunities as the White Paper points out. To take full advantage of them however, Australia must maintain its strong economy and continue the process of economic reform originally launched in the early 1980s by Bob Hawke and Paul Keating. Australia must be competitive if it is to take advantage of the opportunities created by a resurgent Asia.

Despite advancing years I still have causes which I hope to live to see achieved. One was that I did not want to go to my grave as our last representative on the Security Council. This has now been achieved and Australia will be a member of the Council from the 1st of January. Another is the Australian Republic, which I have
already mentioned.

The Republic was not mentioned in the White Paper but I believe that it should not have been overlooked. Australia is still a work in progress. The next constitutional step in the unfolding story of Australia should be the establishment of the Republic which will be, like Federation itself, a defining moment in our history.

Our anachronistic links with the English Monarchy and the fact that our Head of State is still the Queen of England limits the understanding overseas of Australia’s place in the world. The Queen of England is of decreasing relevance to an increasing number of migrants from many countries, including Asia, which have no links with the United Kingdom.

We are now a multi-ethnic, multi-cultural society and the severance of this link with the British crown could be a rallying point for all Australians regardless of their origins.

Prediction is always a hostage to fortune and that the prospects for more effective management of common problems at the international level remain uncertain. Complex issues such as potential competition for scarce resources, climate change, continuing poverty, food insecurity, nuclear proliferation and unresolved territorial disputes in the Asia Pacific region all need to be addressed, and this puts a strong focus on how best to achieve more meaningful and coordinated action at a regional level to reduce tensions.

There is, for example, a danger that adversarial attitudes toward China could become a self-fulfilling prophecy. While China can be expected to resist American “hegemony” over the Asian region, it welcomes a continuing constructive US involvement in Asia.

China is not a natural enemy of the US. It is essential that both countries and the other major countries in the region develop the habit of discussing frankly difficulties as they arise within existing cooperative frameworks, such as the G-20 and the East Asian Summit which is a de facto emerging Asia-Pacific community.

Australia faces great opportunities and challenges in the Asian century. My comments about where Australia should be heading are based on sixty years’ experience working inside and outside of Australia and inside the public service and in the private sector, I have put them forward.

But it is for a new generation of forward looking men and women to carry the torch to ensure Australia is in the future a less complacent and a more economically competitive and compassionate country, integrated more fully with its Asia and South West Pacific neighborhood. We need to think big and not small. We need to be less inward looking and more outward looking, especially toward a resurgent Asia-Pacific region.

This article is excerpted from the “2012 Annual Hawke Lecture” delivered by Ambassador Richard Woolcott on Nov. 5 at the Adelaide Town Hall. Mr Woolcott is Australia’s veteran diplomat who has been assigned to many postings, including Jakarta and the United Nations in New York. He was prime minister Hawke’s special envoy in the development and evolution of the Asia Pacific Economic Cooperation Forum (APEC) throughout 1989.





Bob Hawke’s comments

He (Woolcott) spoke about some fundamentally important things and none more important than the question of China and the US and Australia in terms of that relationship.

Now there is so much bloody nonsense talked about China and so good to hear a man of this experience and erudition, clearing away that fog of nonsense.

There is an attempt in some parts in the US and elsewhere to almost equate China with the Soviet Union as the enemy we must have. You know, they suffer from the EDS, the enemy deficiency syndrome. Got to have an enemy.

Now it is absolutely absurd to attempt in any way to equate China with the Soviet Union. The Soviet Union by definition was an eudemonistic organization committed to expansion and the conversion around the globe.

China has not got an eudemonistic history. Remember about 600 years ago now, admiral Ho made those seven voyages with the biggest fleet ever heard of, the largest troops, going from China all the way through the Southeast Asia, Asia, right down the east coast of Africa with no attempt to colonize.

Essentially doing what they’re doing today, opening up trading opportunities and trying to go guarantee the safety of trading routes.

The contrast with the situation of the US and the Soviet Union during the Cold War and comparing with China and the US now, there simply is no comparison. The basic point being of course that in the period of the Cold War there was no economic relationship at all between the Soviet Union and the US.

They didn’t trade with one another, didn’t invest. Whereas in the present situation China and the US fundamentally depend each upon the other and intelligent self-interest will demand that they work out a modus vivendi. I must say that essentially I am optimistic. It’s not good just being optimist, it’s going to work out, we have to work on it but the essentials are there for the emergence of, as I say, a modus vivendi because it’s in the intelligent self-interest of both the US and China that that should happen.

The situation is one where Australia should, as Dick said, recognize that we should have no part of any concept of containment.

I know from my personal experience that the Chinese leadership understand when you tell them that we have a historic relationship with US, we’ll continue that, but it is not either/or. You can continue that relationship but get a burgeoning, developing, growing and deepening relationship with China.

There’s no doubt that the critical issue for the future peace of the region of the world is going to be the quality of the relationship between the US and China and Dick has spelled that out and I agree with every word he has said about that.

Just a couple of other comments. Dick, you rightly referred to the question of the republic. Our friends in Asia don’t understand it. My view, which I have put to Julia (Prime Minister Julia Gillard), is this; that there should be a referendum put to the Australian people in two parts.

One, are you in favor of Australia becoming a republic? The republic to come into effect at the end of the reign of the present monarch. And I believe that you’d get a 95 percent vote if you did that.

I’m not concerned about the Queen as the Queen of England but as head of the Commonwealth she has done an effective job. She hasn’t just been a figurehead, she’s been actively involved and people recognize that.

So we can wait. Let’s make the decision and let it come into effect at that time. I think that makes sense as far as Australia is concerned and it would clear the air as far as our friends in Asia are concerned.

Let me conclude by saying that historically the phrase about Australia and our position in the world was that we suffered from the tyranny of distance. That was coined, the term, in the period when the center of economic gravity was in mid-Atlantic in Europe, England.

But now we do not suffer from the tyranny of distance. We have the benefit of proximity. The benefit of proximity to the fastest growing region in the world and we all have the responsibility, this University, the state government, the federal government and all of us as business people and as citizens, if we want to get the best of our future for our children and grandchildren that is going to be done by forging the most effective, cordial, congenial, productive bonds with the people of Asia in general and I would suggest of China in particular.

This article is part of former prime minister Bob Hawke’s vote of thanks to Ambassador Woolcott’s presentation transcribed from audio recording.
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