Saturday, March 24, 2012

Capitalizing on the visit of UN leader Ban Ki-moon

D. Supratikto, Jakarta | Wed, 03/21/2012 10:05 AM A | A | A |-Klipping The Jakarta Post

The current visit of United Nations Secretary-General Ban Ki-moon to Indonesia is undoubtedly a sign of his close personal relations with President Susilo Bambang Yudhoyono.

This has developed through intensive communications between the two leaders. They share a deep concern and personal engagement to contribute to efforts to address global issues. With this in mind, they focused on UN Peacekeeping Operations (PKOs) by visiting the Indonesian Peace and Security Center (IPSC) in Sentul in the West Java regency of Bogor, on Tuesday.

Indonesia has an impressive track record in peacekeeping missions under the UN, such as contributing troops to the Congo in the 1960s, Vietnam in the 1970s, Cambodia and Bosnia in the 1990s, and currently in Lebanon.

In addition, Indonesian troops also joined the United Nations Emergency Force I (UNEF) in 1957 and UNEF II (1974) in Sinai, so they were well-prepared when deployed to the borders of Egypt-Israel, Iran-Iraq and Iraq-Kuwait.

At present, there are 1,972 Indonesians — including 19 women — in PKOs around the world, consisting of both military and police personnel. In terms of troop numbers Indonesia ranks 15th among all the countries contributing to UN peacekeeping missions.

Indonesian peacekeepers are currently spread across several missions: UNIFIL in Lebanon (1,455 personnel); eight with UNMISS in Southern Sudan; 146 with UNAMID in Darfur; 192 with MONUSCO in the Congo; 70 with MINUSTAH in Haiti; and one with UNMIL in Liberia.

At the IPSC, the UN secretary-general met the Indonesian PKO alumni. Many of them have held top posts in the Indonesian Military, the police force and the government.

The roll call includes Ishak Rabin, Kemal Idris, Solichin GP, Rudini, Himawan Sutanto, Wiyogo Atmodarminto, Endriartono Sutarto, Ryamizard Ryacudu, Timur Pradopo and President Yudhoyono. Their experiences in facing battle and armed conflict proved a worthy training ground in developing professional and mature personalities.

Indonesian peacekeepers have been recognized as good mediators, being able when needed to encourage warring parties to come together to engage in reconciliatory dialogue, without allowing themselves to be co-opted by either side.

At the same time, they managed to build cooperation with peacekeeping forces from other countries. During the joint missions, Indonesian peacekeepers nurtured their leadership, putting their own different cultural backgrounds and challenges to one side.

Certainly, a PKO can be an ideal environment to groom future world leaders. And, indeed, the world needs leaders with superior qualities, simply because global issues are becoming increasingly complicated.

We have been witnessing changes in civilization, democratization in the Middle East, threats of a nuclear arms race, economic discrepancies, financial crises, food crises and energy crises, environmental degradation, climate change, natural disasters, as well as nontraditional threats such as human trafficking, people smuggling and acts of terrorism.

Recognizing the complexity of these global issues, the IPSC, which officially opened on Dec. 19, 2011, is designed to prepare personnel not only for peacekeeping operations or for reserve forces, but also for counterterrorism and natural disaster mitigation duties. They are trained in order to improve their capacities, horizons and professionalism.

So, when they are deployed in PKOs, they are ready to play a number of diverse roles with increased responsibility.

The visit to the IPSC is a clear message from the UN secretary-general that Indonesia is able to organize and run a modern center to prepare personnel for future PKOs.

Indeed, PKO duties are growing much heavier, since modern-day PKOs are multidimensional in scope and include many entities (not only military), such as humanitarian agencies, civil affairs, political affairs and international nongovernmental organizations.

Of course, Indonesian personnel should meet the necessary requirements if they wish to secure key positions within PKOs, including the commander-in-chief post.

Therefore, at the IPSC there should be a doctrine for personnel to promote their leadership mentality. In the end, surely, we will reap the benefits, since some among them may prove to be the future leaders of this country.

The writer is a diplomat. The opinions expressed are his own.
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| | | | | | | | Comments (1)
Tan Kok Tim, | Thu, 22/03/2012 - 11:03am
Ban was in Indonesia but did anyone tell the UN chief Ban to get UN to set up a joint-worldwide team to research into geothermal power and tapping lightning for generation of electricity? No nation or individual corporation will have the resources or strength to take on the oil majors to conduct such a research. The oil majors will prevent anyone from achieving success as it will make the oil industry become a sunset industry. The military weapons industry will not want anyone attaining success to affect their export business as it will mean the end of wars for oil in the Middle East. What is Indonesia's stand on these issues?
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RI-Austalia to begin negotiations for CEPA

The Jakarta Post, Jakarta | Thu, 03/22/2012 9:50 AM A | A | A | - Klipping The Jakarta Post

Gita Wirjawan: Indonesian Trade Minister. (Kompas.com/Riza Fathoni)
Indonesian and Australian trade ministers have agreed to start a round of negotiations for a comprehensive economic partnership agreement (CEPA) between the two countries and set a bilateral trade target of US$15 billion by 2015.

“We enjoyed about $11 billion of trade throughout last year. There is no reason for us not to be able to increase the figure in the future,” Trade Minister Gita Wirjawan said in Jakarta on Wednesday.

Australian Trade Minister Craig Emerson said that his meeting with Gita, Australian Minister for Agriculture, Fisheries, and Forestry Joe Ludwig, and 11 Australian business delegates in Jakarta was to prepare the ground work for a scoping study for the comprehensive partnership, involving business people in both countries.

“When it finally concludes, it will benefit not only the large corporations but also the small and medium enterprises as well as the people of Indonesia more broadly,” Emersossn said.

In addition, Gita encouraged all Australian business delegations to invest more in Indonesia, and designate Indonesia as their main investment destination.

“There are 124 Australian projects in Indonesia, but there has not been much investment in cattle, beef and the dairy sector. I believe that this would be a good sector for businesses to start with,” he said.

Craig said that through the Australian Centre for International Agricultural Research (ACIAR), his country had committed to spending $20 million over six years to improve 75,000 Indonesian smallholder cattle producers under a project called Indo Beef. The project will start in 2013, he said.

Besides the CEPA negotiations and cattle business, Gita said that the Australian government had stated its readiness to allow mangosteen and mangoes from Indonesia to enter Australia.

He said that mangosteen and mangoes from Indonesia were expected to enter Australia within two to three months.

Indonesian fruit has often fallen victim to nontariff barriers imposed by advanced countries such as Australia and New Zealand because they apply high sanitary and phytosanitary standards (SPS). (nfo)

Monday, March 19, 2012

RI to develop outermost islands to boost presence

Mustaqim Adamrah, The Jakarta Post, Jakarta | Wed, 01/11/2012 9:56 AM A | A | A | - Klipping The Jakarta Post

The government has plans to develop the 12 outermost inhabited islands, which it says have abundant but as yet undeveloped natural resources, a Maritime Affairs and Fisheries Ministry official says.

The ministry’s director general for marine, coastal areas and small islands, Sudirman Saad, said infrastructure projects were among the government’s top priorities in developing the outermost islands of the archipelago.

“Small remote islands generally lag behind [major islands in terms of development],” he said on Monday as quoted by Antara on the sidelines of a signing ceremony in Jakarta.

At the ceremony, the ministry and South Sulawesi-based Hasanuddin University agreed to jointly develop Sebatik Island in Nunukan regency, East Kalimantan. The island is divided into Malaysian and Indonesian territories.

Sudirman said it needed comprehensive and integrated cooperation between the ministry and universities to develop inhabited remote islands, especially those bordering neighboring countries.

According to Sudirman 31 of the 92 outermost islands in Indonesia are inhabited.

The 12 islands that the ministry plans to develop this year are Sebatik, Nusakambangan (Central Java), Miangas (Talaud Islands regency, North Sulawesi), Marore (Sangihe Islands regency, North Sulawesi), Marampit (Talaud Islands regency, North Sulawesi), Lingayan (Tolitoli regency, Central Sulawesi), Maratua (Berau regency, East Kalimantan), Wetar (Southwest Maluku regency, Maluku), Alor (Alor regency, East Nusa Tenggara), Enggano (North Bengkulu regency, Bengkulu), Simuk (Nias Islands regency, North Sumatra) and Subi Kecil (Natuna Islands regency, Riau Islands).

Sudirman said he expected the government to have developed all of the 92 outermost islands by 2014.

University of Indonesia international relations expert Makmur Keliat said development on remote islands was essential to maintain the country’s sovereignty, and the government could maintain “effective occupation” only through administrative affairs carried out on the islands.

“One of the international principles of sovereignty law is that a country’s sovereignty will be effective only when administration runs on a day-to-day basis,” he said.

The outermost islands, he said, were also the point at which the country could measure how far its exclusive economic zone extended.

However, it would be hard for the central government to rely on local administrations to run its development programs on remote islands because it would not be politically expedient for local regional heads seeking votes, said Makmur.

“We cannot expect much from regional heads in developing those islands. What is considered strategic in national defense terms is not necessarily strategic in local politics terms.”

Echo-ing Makmur, University of Indonesia international law expert Hikmahanto Juwana said effective control of the outermost islands by the government would prevent the country from losing sovereignty over them.

Indonesia lost Sipadan and Ligitan Islands to Malaysia on Dec. 17, 2002, at the International Court of Justice. This led to nationwide popular disappointment and criticism of the government.

Strategic, outermost islands too precious to lose

Frederick Situmorang, Jakarta | Tue, 03/20/2012 8:04 AM A | A | A | - Klipping The Jakarta Post

People define an island as a piece of land surrounded by sea. If it is massive in size, an island becomes a continent, or if many, an enormous group of islands befalls an archipelago.

Being a piece of land in the middle of a sea, thus an island is inherently invaluable for supporting human habitation. In practice, the larger the size or number of islands becomes more valuable to the people or even a state.

Nevertheless, such a perception is not entirely correct since despite those aspects, any island is still potentially significant for both politics and economics.

The International Sea Law, the United Nations Convention on the Law of the Sea (UNCLOS), defines an island as “a naturally formed area of land, surrounded by water, which is above water at high tide”. In this case, there is no specification about the size and number.

On the other hand, since the Law of the Sea follows the terra firma principle, thus inherently any island may have some extra zones over the sea such as the 12-mile radius of Territorial Sea (TS), 200-mile Economic Exclusive Zone (EEZ) or in some cases 350-mile extended Continental Shelf (CS). Hence, although an island is only a dot on the map, it still can generate 144 square miles TS and 40,000 square miles EEZ.

Furthermore, the definition becomes vague since it is difficult to distinguish between island and rocks. According to UNCLOS, rocks do not have any sea zone. But regarding the difference between those two features, the article only stipulates that “rocks cannot sustain human life”.

As such, this creates ambiguity to verify whether the feature is an island or rocks. Even more, there is neither an article nor generally accepted criteria of “what can sustain human life”. Since those two features are so different in terms of legal consequences, as a result, states certainly tend to claim their sea feature as an island rather than rocks.

Because of the significance of the “island” status, states struggle to claim it for their sea features. An extreme example is a sea feature called Rockall. Living up to its name, Rockall is merely a group of rock somewhere in the North Atlantic Ocean, measuring about 25 meters wide and 31 meters long and 21 meters tall (during low tide), by which it is impossible to sustain human habitat.

Yet, Britain insisted on claiming Rockall as its island and thus may gain control over the fisheries around it. In order to support the claim, the British government sent elite troops to live on Rockall for 60 days in 1985 — just to show that Rockall is an island that “can sustain human life”.

For Indonesia, an archipelagic state with thousands of islands, perhaps losing one or two islands may not draw too much attention. Nevertheless, if it happens to the outermost islands, it will amount to a strategic loss.

The most obvious example is the loss of Sipadan and Ligitan to Malaysia. Since the International Court of Justice (ICJ) in 2002 ruled in favor of Malaysia over those islands’ sovereignty, it also affected Indonesia’s baseline delimitation. Worse, Malaysia also claims the Ambalat block, which Indonesia is defending under the TS and EEZ regimes.

Indonesia was so optimistic in winning the Sipadan-Ligitan dispute through the ICJ that it was too late for “the plan B” — preparing Karang Unarang as the Low Tide Elevation (LTE) for the new archipelagic baseline indentation — if Sipadan-Ligitan no longer exist in the Indonesian territorial map.

In fact, the Sipadan-Ligitan case also proved Indonesia’s failure to acknowledge the strategic meaning of an island. In the international law framework, there is a notion about one’s right that asserts, “If you don’t exercise it, then you’ll lose it.”

Upon the case, ICJ viewed Malaysia as the one who “exercising more of its right upon Sipadan-Ligitan, rather than Indonesia”. The development of Malaysian resorts and the islands and promotion of Malaysia tourism were some of the evidence.

Furthermore, the Malaysian government conducted deep research over many aspects of the islands, including their history. This effort resulted in the fact that Malaysia’s former colonialist, the British government, once used the islands to breed turtle eggs.

Unexpectedly, the story was Malaysia’s key point to win its claim over the two islands. For Indonesia, it was tragic, to lose its invaluable islands because of a “turtle eggs saga”. Yet, it did happen.

Based on the case, Indonesia should review and reestablish its policy regarding its islands. If state documents, such as the White Paper, have already promulgated the policy, then this is the time to put it into action.

According to the of Maritime Affairs and Fisheries Ministry, Indonesia may lose about 2,000 of its islands by 2030 if there is no concrete mitigation program. This is merely from natural causes.

In addition, the human factor, which comes from illegal sand mining, will exacerbate the condition and speed up the loss. Yet again, this should be regarded more seriously, not only the failing to take the sand’s money, but more importantly, the disappearance of the precious islands from the national map.

In conclusion, the campaign to re-proclaim Indonesia’s sovereignty over its islands should become an intensive and continuous agenda. It does not necessarily mean political or military action. Instead, it requires a multidimensional approach, which is to include economic and sociocultural measures.

A simple practice is by inhabiting the outermost islands as well as growing the local economy. From the international perspective, it may generate a positive attitude, viewing Indonesia as a state that is consistently exercising its rights.

To some extent it may strengthen the national defense, emulating the Japanese “island defense” of World War II, which was and is still regarded as the most formidable system ever.

The writer holds a master’s degree in maritime policy from the University of Wollonggong, Australia, and a postgraduate diploma in arts (strategic studies) from Massey University, New Zealand.

Nuke security relevance to S. Korea and Indonesia

Kim Young-sun, Jakarta | Tue, 03/20/2012 6:00 AM A | A | A | - Klipping The Jakarta Post

Nuclear proliferation and attempts to curb it continue to dominate international discussion. In addition to concerns coming from vertical and horizontal proliferation of nuclear among state actors, potential access and use of nuclear materials and substances by non-state actors — nuclear terrorism — has been perceived as a formidable threat.

A top-level summit to discuss this issue was first initiated and held by US President Barack Obama in Washington, DC two years ago. In a few days, South Korea will host the second summit. This article elaborates on the relevance of the 2012 Nuclear Security Summit to South Korea and Indonesia.

What is nuclear security? Referring to the working definition of the International Atomic Energy Agency (IAEA), nuclear security aims to reduce the risks of and manage “theft, sabotage, unauthorized access, illegal transfer or other malicious acts involving nuclear material, substances and facilities”. Despite the ongoing debate on the likelihood of nuclear terrorism, the UN has adopted the International Convention on the Suppression of Acts of Nuclear Terrorism in 2005, which has entered into force in 2007 following states ratifications.

Moving toward the same direction, the nuclear security summit aims to step up commitments of states to take stronger nuclear security measures. Multilateral response is essential in order to address the threat of nuclear terrorism effectively.

The 2010 Washington Nuclear Security Summit was a great success in heightening awareness of the dangers of nuclear terrorism through the adoption of the Washington Communiqué and Work Plan. The Communiqué and Work Plan laid out commitments and steps to secure vulnerable nuclear materials and facilities within four-year period, respectively. Around 30 countries made voluntary commitments to strengthen nuclear security measures, such as the elimination or return of HEU (highly enriched uranium) that can be weaponized.

Currently, it is estimated that around 1,600 tons of HEU and 500 tons of plutonium are stored in locations scattered around the world. This is enough nuclear material to fashion some 126,500 nuclear weapons. According to the Illicit Trafficking Database of IAEA, more than 2,000 cases of illegal trafficking, theft or loss of nuclear and radiological material have been reported around the world from 1993 to 2011, and of those around 60 percent have not been recovered.

It is of highest concern that nuclear materials and substances being trafficked into the wrong hands. As indicated by Albright, Brannan and Stricker in a Washington Quarterly article (2010), currently a systematic method to detect nuclear trafficking remains absent. Additionally, nuclear security measures also seek to prevent the possibility of terrorist attack to nuclear facility.

The 2012 Nuclear Security Summit, which will be held in Seoul from March 26 to 27 this year, is expected to be the largest summit in the security field attended by more than 50 heads of states and international organizations including President Susilo Bambang Yudhoyono. The Seoul Nuclear Summit seeks to review cooperative measures to combat the threat of nuclear terrorism, to protect nuclear materials and related facilities and to prevent illicit trafficking of nuclear materials, the result of which will be summarized as the “Seoul Communiqué”.

Furthermore, the Seoul Nuclear Summit offers a momentum to restore confidence in the peaceful use of nuclear energy on the aftermath of the Fukushima accident in 2011. Despite the debate on the use of nuclear energy resources, it remains a viable alternative to address the rising demand for energy as well as the volatility of oil prices, especially for a vast growing economy in East Asia (Northeast and Southeast Asia). Some have also agreed that the use of nuclear energy is inevitable to address climate change. On that note, the number of nuclear reactors (443 now) may double in the next 30 years globally.

The Seoul Nuclear Summit serves as an opportunity for Korea to earn international recognition following its hosting of the G20 Seoul Summit in 2010. This Summit also provides an avenue to discuss not only the issue of nuclear security, but also its interface with nuclear safety which is highly relevant to the region and has gained renewed attention following the Fukushima accident.

Moreover, it is our sincere hope that the Seoul Nuclear Security Summit will convey a strong message by the international community on the significance of the peace and stability on the Korean peninsula, which is plagued by the nuclear weapons program persistently pursued by North Korea.

Indonesia’s participation in the Seoul Nuclear Security Summit reflects the country’s continuous support to and role in the global nuclear nonproliferation regime. Indonesia’s past diplomatic records have indicated that the issue of nuclear nonproliferation has been one of Indonesia’s main diplomatic agenda in the international arena.

At the regional level, Indonesia’s take toward nuclear nonproliferation is in line with the regional policy of maintaining Southeast Asia Nuclear Weapon Free Zone (SEANWFZ).

It is hopeful that Indonesia’s participation in this summit will emphasize that Indonesia, together with the international community, supports the peace and stability of the Korean peninsula, which in turn would have a vital impact for peace and stability in ASEAN. Indonesia’s participation also reflects its recognition to the imminence of threat posed by nuclear terrorism to global and regional security.

In fact, the focus on nuclear security in this Summit will complement Indonesia’s important role in the nuclear nonproliferation treaty (NPT). Indonesia’s ratification to the Comprehensive Nuclear Test Ban Treaty (CTBT) during the NPT Review in 2010 is a noteworthy example of this role.

Moreover, with Indonesia’s stern effort to combat terrorism, it is only logical that Indonesia becomes a partner in preventing the trafficking and illicit use of nuclear material by terrorist groups and other nonstate actors both domestically and regionally.

As a leading country in Southeast Asia and “Strategic Partner” of Korea, Indonesia’s participation renders continued interest to and support for the 2012 Seoul Nuclear Security Summit.

The writer is Ambassador of the Republic of Korea.

Thursday, March 15, 2012

UN Convention on workers could strengthen RI position

Elly Burhaini Faizal, The Jakarta Post, Jakarta | Fri, 03/16/2012 9:54 AM A | A | A | - Klipping The Jakarta Post

Ratifying the United Nations (UN) Convention on International Migrant Workers will put Indonesia in a much stronger position when it comes to negotiating agreements to protect and promote the rights of its migrant workers in other countries, an activist says.

Migrant Care executive director Anis Hidayah said that other countries that had ratified the convention, adopted by the UN in 1990, had succeeded in protecting the rights of their workers and
families.

“Countries that have ratified the convention, such as the Philippines, have a much stronger bargaining position in negotiating regulations on workers dispatched to other countries. They will be more open in negotiating and reaching agreements to protect the workers,” she said in a discussion on plans for the ratification of the UN Convention on International Migrant Workers and revision of Law No. 39/2004 on Migrant Workers.

Anis said the ratification of the convention could protect Indonesia’s migrant workers although its negotiating partners, such as the Saudi Arabia, had not yet ratified the convention.

“It still matters. Remember that we have mechanisms in the UN through which we submit annual reports on the protection and promotion of the rights of our migrant workers. Once we face problems, we can ask for support from countries that have ratified the convention,” she said.

Data from the International Labor Organization (ILO) said that more than 700,000 workers went overseas to find jobs every year. More than 78 percent of them work as domestic workers.

About 4.3 million Indonesians were estimated to work abroad in 2009.

Remittance sent by Indonesian migrant workers reached US$6 billion annually, placing it as the second-largest contributor to the country’s foreign exchange income. Despite their huge contribution to the national economy, many migrant workers still suffer from exploitation and abuse both within the country and abroad.

Indonesia has ratified six main human rights conventions and the 1990 UN convention on migrant workers is the last convention on human rights it should ratify. The convention sets principles on global migrations which are safe and in line with human rights standards.

The Presidential Mandate (Ampres) on the ratification of the UN convention on migrant workers was signed by President Susilo Bambang Yudhoyono on Feb. 7.

Both the draft law and the academic paper were submitted to the House of Representatives on Feb. 9

“The next process is in the hands of the lawmakers. Some of them have indicated that they will discuss the bill in the next sitting session starting in May,” said Muhammad Anshor, director of human rights at the Foreign Affairs Ministry.

By ratifying the convention, he said, Indonesia could refer to the convention’s principles in negotiating arrangements of labor dispatch with receiving countries.

“We haven’t been able to refer to the convention as we haven’t ratified the convention,” he said.

Anis said Indonesia should see the ratification as the initial step to move forward with its plans to better protect and promote the rights of the country’s migrant workers.

“Ratification is not the end of everything,” she said.

Wednesday, March 14, 2012

Closer economic integration in ASEAN and beyond (Part 2 of 2)

Anwar Nasution, Yogyakarta | Wed, 07/13/2011 7:00 AM A | A | A | - Klipping The Jakarta Post

For a number of reasons, all ASEAN+3 countries have sterilized the surplus in their balance of payments (both in the current account and the capital account) and therefore have accumulated large international reserves.

The first reason is to control inflation rates and dampen overheating by controlling their monetary base and money supply. In theory, those countries that adopted the IMF Program in 1997-1998 (Thailand, Indonesia, the Philippines and Korea) had shifted to independent floating.

This exchange policy is replaced by inflation targeting as a monetary policy operating strategy and is supported by conservative fiscal policy and a sustainable debt strategy. In theory, the flexible exchange rate requires a smaller war chest of foreign reserves as the system reduces the need for market intervention.

The second reason for building up foreign exchange reserve is to use the reserves as tools for intervention to avoid large exchange rate fluctuations and prevent adverse impacts on their economies.

In reality, the monetary author is still accumulating foreign exchange reserves and intervening in foreign exchange market to stabilize the exchange. In contrast to the fixed exchange system, there is no more exchange target under the current floating exchange rate system.

The third reason is to prepare for a defense against speculative attack and foreign exchange instability due to shortfalls in exports and capital flow reversals. Large portions of securities of ASEAN countries denominated in national currencies are absorbed by volatile short-term capital inflows. This is because institutional investors (such as pension funds and insurance companies) are at early stages of development in this region. Unlike in Japan, there is no Postal Saving Bank in ASEAN countries that can mobilize low cost domestic savings.

The current crises in the peripheries of eurozone indicate that securities denominated in domestic currencies are shielded from currency risk but not from interest rate risks that could cause fiscal crisis. In 1997, Malaysia introduced market based capital control to prevent massive capital outflows.

The fourth reason is to provide a fiscal space when facing economic crisis. Because ASEAN countries were treated badly when they sought help during the Asian financial crisis in 1997, these countries are reluctant to turn to the IMF.

The fifth reason that the less volatile exchange rate minimizes currency risk of foreign borrowing of domestic companies. As mentioned earlier, this is because the dependency of companies, banking system and the public sector in this region on foreign financing.

Sitting on huge foreign exchange reserves, it is natural for ASEAN+3 to strengthen regional cooperation to provide for financial needs, particularly during the crisis. The meeting of ASEAN+3 Finance Ministers (AFMM+3) in Madrid 2008 made strategic decisions to enlarge the size of the currency swap facility under the Chiang Mai Initiative (CMI), increase the portion that is non-linked to IMF Programs and multilateralize it.

Multilateralization of the CMI is a great leap forward towards greater political cohesion in this region as the member countries transfer some national powers to a regional institution. The multilateralization of the CMI will result in the pooled fund becoming self-managed under a single contract thus reducing costly and time consuming bilateral and wasteful duplication of loan contracts.

In theory, the multilateralization of the CMI, along with the existence of bilateral currency swap arrangement between central banks in ASEAN+3 countries and the revisions of the IMF conditionality should reduce the need for self-insurance by holding external reserves.

In terms of assets and branch network, the commercial banking industry is the core of the financial systems in ASEAN member countries. Financial intermediation is primarily in the form of bank lending rather than issue of bonds and equity in capital market. Banks operations are mainly concentrating in traditional deposit taking and lending and less involved in capital and bond markets.

Despite the rapid growth of their assets, the role of the non-bank financial institutions (NBFIs) is still relatively small and only beginning to provide a competitive challenge for the banks. Domestic financial institutions used few financial innovations such as structured products, derivative and securitization. In addition, their consumer and housing indebtedness are still relatively small.

The leading NBFIs are insurance companies, pension and provident funds and mutual funds. In a least developed country such as Indonesia, most of the pension funds are for civil servants and the military and a few large companies.

The roles of state-owned and family owned banks are dominant in many ASEAN countries. The government has started to corporatize the state-owned financial institutions and reduced intervention on their day-to-day operations. In Indonesia, markets for public sector banks are still well protected. By government regulations, the group of state-owned banks has exclusive monopoly on public sector deposits. Regional development banks are cashiers to their owners, namely, the provincial governments, regencies and cities. Stricter enforcement of legal lending limits regulation reduces related lending provided by private banks to their sister companies that are prone to insider trading and principal-agency problems.

To tap the high domestic savings in ASEAN, local and regional institutional investors need to be developed to provide financing of long-term investment for both the private companies and the public sector, such as infrastructure. The deeper local money and financial markets would allow replacement of foreign institutional investors with domestic financial institutions. The more matured local markets also allows diversion of investment from the US government papers that produce low yields to high returns investment in this region.

At present, most of the monetary authorities in this region sell securities with high coupon rates to buy the foreign exchanges. The yields from their investment in foreign assets (mainly in the US government papers) are close to zero because of the monetary easing policy in advanced economy to push down interest rate close to zero.

Central banks of the EMEAP countries, the ASEAN+3 Asian Bond Market Initiative and ASEAN+3 Bond Market Forum have addressed various important technical issues on how to develop local bond markets in this region.

The issues include new debt instruments, settlement processes, standardization of market practices and harmonization of regulations for cross-border transactions.

The progress, however, is very slow because creation of effective and efficient market also requires modernization of legal, judicial and accounting system to help solve asymmetric market information problem. The legal reforms allows better enforcement of business contracts, protection of property and creditor rights, and makes it possible to define, pledge and execute collaterals.

The writer is professor of Monetary Economics at the University of Indonesia. He is former senior deputy governor of Bank Indonesia, the country’s central bank. This article is based on his presentation at a recent international conference in Yogyakarta hosted by Gadjah Mada University.

Closer economic integration in ASEAN and beyond (Part 1 of 2)

Anwar Nasution, Yogyakarta | Tue, 07/12/2011 10:49 PM A | A | A | - Klipping The Jakarta post

The negative impacts of the recent global financial crisis of 2007-2008 on East Asian economies gave a signal for the need to speed up the promotion of closer regional integration in trade, the creation of a regional crisis financing facility and the development of the financial market.

The crisis filtered into the export-oriented East Asian economies through the current and capital accounts of the balance of payments.

The crisis hit the economies of this region hard through declining commodity prices, trade, capital outflows and lower remittances from citizens working overseas.

At that time, foreign demand for this region’s exports fell sharply as the interconnected world economy began to show signs of having entered a dangerous downward spiral: recession shown by low global economic growth, falling commodity prices, rising unemployment, faltering stock markets, exchange rate realignments, collapsing property values, the implosion of hedge funds, foreclosures, bankruptcies and write-offs, as well as a credit crunch.

To offset the negative impact of declining exports to its traditional markets in the United States and Europe, this region needs to gradually replace the current export-oriented development strategy with the promotion of sufficiently robust domestic demand and large intra-regional trade.

To overcome the economic crisis, many countries, including those in the ASEAN region, expanded domestic demand by introducing fiscal stimulus in 2008 and 2009.

Another way to boost domestic demand is to improve the social security system through social insurance and social assistance programs to reduce the need for the households to save for economic insecurity. Well-developed insurance companies and pension funds can provide financing for long-term investment projects.

Intra-regional trade can be promoted by pursuing trade liberalization, with the ASEAN FTA (AFTA) as a base, with a series of major trading partners, such as China under the ASEAN-China FTA (ACFTA).

This agreement came into force on July 20, 2005 and was fully implemented in 2010. It replaces non-tariff barriers with tariffs and at the same time reduces import tariffs. The ACFTA offers a wide range of benefits; however, it also creates problems for ASEAN countries since China is a destructive competitor to its neighbors.

The effects of China (and, to some extent India) on the goods markets of its regional neighbors, including in the ASEAN, are immense. The rapid industrialization, urbanization and motorization in China (and India) have caused positive external shocks, particularly export market shocks in ASEAN countries because these rapidly growing economies need more energy and many different types of raw materials that will raise their prices.

The rising consumer income, urbanization and demographic change increase demand for food and shift its structure toward high value added foods, partly exported from ASEAN. On the other hand, ASEAN countries import low-priced products from China.

On the negative side, China has become a destructive competitor to ASEAN mainly because of the undervaluation of Chinese currency, the renminbi (RMB), as a principal instrument for export-led development strategy.

Despite the policy change in its exchange rate regime, including the replacement in July 2005 of the RMB-dollar to pegging to several currencies, the pace of the RMB appreciation has been very slow.

Goldstein and Lardy (2008) estimate that the real effective exchange rate of the RMB (on trade-weight basis) is still undervalued on the order of 15 to 25 percent. Exchange rate undervaluation is a protectionist trade policy since it is like a combination of an import tariff and export subsidy.

It is interesting to note that Indonesia, the only ASEAN member country in the G-20, and the current chair of the ASEAN grouping never raised the issue of the exchange rate misalignment, either in the G-20 or at ASEAN meetings, to defend the economic interests of ASEAN.

Only India, Brazil and other member of BRICS have made loud noises about this. The reason is because these two countries and other emerging economies, such as those in ASEAN, are the main victims of China’s exchange rate policy as they compete more closely with China.

ASEAN also benefited from the second external shock, namely, the low interest rates in international markets during Alan Greenspan’s term at the US Fed and the quantitative easing policy adopted in OECD countries to overcome the Global Financial Crisis in 2007-2008. The low international interest rate reduces the cost of foreign borrowing for companies, banks and the public sector of ASEAN that were traditionally highly dependent on foreign financing. A combination of a high rate of growth and high interest rates in ASEAN has, again, attracted massive capital inflows to this region since 2009. The high interest rates in ASEAN are partly a result of inefficiencies and distortions in their banking systems, which are the core of their financial systems.

The writer is professor of Monetary Economics at the University of Indonesia. He is former senior deputy governor of Bank Indonesia, the country’s central bank. This article is based on his presentation at a recent international conference in Yogyakarta hosted by Gadjah Mada University.

What ASEAN can learn from the EU crisis

Rudi Winandoko, Jakarta | Thu, 03/15/2012 9:57 AM A | A | A | - Klipping The Jakarta Post

The Association of Southeast Asian Nations (ASEAN) and the European Union (EU) have very different social and economic characteristics. Based on GDP, the economic power of the EU is more than nine times that of ASEAN. The EU already started its integration in 1958, long before the Bangkok Declaration of ASEAN in 1967. Despite the differences, the current EU debt crisis may give ASEAN valuable lessons for the future.

The Eurozone crisis was triggered by many complex factors. Although economists might argue over the real cause of the crisis, there are at least three interrelated factors that ASEAN can take lessons from.

First is the disparity in economic competitiveness of member countries. It creates trade imbalances. Strong economies, such as Germany, have exports whose value is far exceeds their imports. At the same time, weak economies such as Portugal, Ireland, Italy, Greece and Spain (PIIGS) are in the opposite condition.

PIIGS export products have lost competitiveness in global market, forcing them to rely more on debts to finance their trade deficits. The euro, as a single currency, exacerbates the situation since PIIGS cannot independently devalue the currency to make their products cheaper.

Because of the persistence trade imbalances, weak countries accumulate debts until reaching the point where they cannot pay anymore. Their behavior is driven by the fact that the incentive to collect debts increases along with a decreasing interest rate after they joined the euro.

The second reason is lack of commitment from EU leaders. The 1992 Maastricht Treaty explicitly says that euro members must have a maximum 3 percent of GDP in annual borrowing limits and 60 percent debt-to-GDP ratio to ensure the stability of the Eurozone and prevent reckless fiscal behavior. Years later, everyone seems to forget they ever had such limits.

Needless to say that Greece ignored this restriction, resulting in a budget deficit of 12 percent of GDP and 160 percent debt-to-GDP ratio. Some media accused Greece of manipulating Maastricht rule by using complex derivatives and financial engineering. What bothers us are Germany and France, two biggest countries in the eurozone. They also exceeded the minimum rules by making a 4 and 7 percent budget deficit and 83 and 82 percent debt-to-GDP ratio, respectively. It leads us to a perception that the EU leaders cannot maintain their own rules.

Last week, EU member countries, except the UK and Czech Republic, signed a landmark fiscal-compact treaty to improve previous agreements. They made the rules stricter, including granting the right to European Court of Justice to check whether countries implement budget rules properly and creating an automatic mechanism to force countries to correct their budgets. It remains to be proved whether they actually can implement the new rules consistently.

The third reason is the loss of confidence in all euro members. This factor is a common response to all the previous factors. Markets became anxious over whether the euro currency can be maintained and leaders are capable of containing the crisis. The interest-rate indicators show that euro countries have reached the highest point since the inception of the single currency, meaning the public does not have much faith in European economy.

Concern of a worsening crisis has loomed large since rating agencies responded to the crisis by reducing sovereign ratings of several weak countries to below investment grade or “junk” — although critics say that the rating agencies seemed to have been overreacting since they did not give a proper warning before the crisis exploded. ASEAN is the most integrated regional organization in the developing world. It may not take the EU as a role model for its economic development, but undeniably, the eurozone crisis can give an insight on how economic integration should be handled with care.

The main important lesson for ASEAN is that every economic integration should start with efforts to reach the same economic development in each member state. It is important to avoid the economic imbalance that happens in the eurozone. If ASEAN wants to deepen its integration, it must ensure all member states grow economically with the same pace and leave no country behind.

For now, economic imbalance among ASEAN member states may have little influence on ASEAN
development. In ASEAN, trade with external partners is far more significant than intra-ASEAN trade, so member states seem more vulnerable to shock outside ASEAN rather than inside the region. But, in the future, this condition will evolve as ASEAN will be more integrated. Sustainable growth in a region can only be achieved if all member states are in the same stage of development.

Learning from the EU crisis, ASEAN should also create a mechanism to ensure fast and proper response when a crisis happens. The credibility for ASEAN is needed so that markets believe ASEAN can handle a crisis well.

Resisting globalization is like defying the law of gravity. Economic integration is inevitable and trade agreements are necessary to make products competitive in the global market. But the more integrated countries, the more vulnerable they are to another’s internal problems. ASEAN, with the sense of community, should handle its integration carefully so that it can bring more good that harm.

The writer is a diplomat at the Indonesian Foreign Ministry. The opinions expressed here are his own.

Tuesday, March 6, 2012

US: China, ASEAN should strengthen Spratlys pact

Jim Gomez, Associated Press, Manila | Mon, 10/04/2010 2:22 PM A | A | A |-Klipping The Jakarta Post

China and the Southeast Asian nations disputing ownership of the Spratlys islands need to turn their 2002 accord into a legally binding code to prevent clashes and keep the vast region open to commerce, the U.S. ambassador said Monday.

China and the 10-member Association of Southeast Asian Nations signed a nonbinding edict eight years ago that called for a peaceful resolution of competing claims to ownership of the Spratlys in the South China Sea and a freeze on any steps that could spark fighting.

The United States is concerned that the dispute could hurt access to one of the world's busiest commercial sea lanes. President Barack Obama and ASEAN leaders recently reiterated their support for a peaceful resolution of the disputes, which some fear could spark Asia's next conflict.

"They should develop a code of conduct," U.S. Ambassador Harry Thomas Jr. told foreign correspondents in a news forum. "This was agreed to in 2002 and it should be expanded."

Asked if a new Spratlys accord should be legally binding, Thomas replied: "Of course."

He did not specify any feature Washington wanted to see in a new Spratlys accord but added that if asked, the United States would be willing to extend any help when negotiations start to craft such an agreement.

A new code of conduct in the disputed region should "ensure regional stability and freedom of navigation for international commerce," he said.

Responding to another question, Thomas said it was not up to Washington whether claimants should be required to disarm or demobilize forces stationed in the contested region under a new pact.

The disputed territories include the Spratlys, claimed in whole or in part by four ASEAN members - Malaysia, the Philippines, Brunei and Vietnam - plus China and Taiwan. Also contested are Scarborough Shoal, claimed by the Philippines and China, and the Paracel Islands, disputed by China and Vietnam.

Although largely uninhabited, the areas are believed to be sitting atop vast reserves of oil and natural gas. They straddle busy sea lanes and are rich fishing grounds.

Chinese Ambassador Liu Jianchao last week said that China and the other claimants have begun discussions to forge a stronger code of conduct over the Spratlys.

"The document is still in the process of being negotiated," Liu told reporters.

"We are open to different formulas and initiative in preserving peace, prosperity and stability in this region," Liu said, without elaborating.

China and ASEAN members have not specified how they want the 2002 accord to be strengthened or how provisions under a new code of conduct can be made legally enforceable.

Beijing angrily reacted after U.S. Secretary of State Hillary Clinton told an ASEAN regional security forum in Vietnam in July that the peaceful resolution of disputes over the Spratly and Paracel island groups was in the American national interest.

Beijing said Washington was interfering in an Asian regional issue.

The conflicting claims have occasionally erupted into armed confrontation. Chinese forces seized the western Paracel Islands from Vietnam in 1974 and sank three Vietnamese naval vessels in a 1988 sea battle.

ASEAN to bring in US as counterbalance to China

Tini Tran, Associated Press, Hanoi, Vietnam | Fri, 10/29/2010 3:58 PM A | A | A | - Klipping The Jakarta Post

Southeast Asian nations are welcoming the United States into their club, a move seen as bringing a counterweight to China following a series of aggressive maritime moves by Beijing.

The 10-member Association of Southeast Asian Nations, or ASEAN, will formally invite the U.S. and Russia to join their annual East Asian Summit on Saturday in the Vietnamese capital.

During a stop in Hawaii en route to Hanoi, U.S. Secretary of State Hillary Rodham Clinton stressed that the U.S. would remain a major power in the Asia-Pacific region and called on China to expand cooperation with the U.S.

"It is not in anyone's interest for the United States and China to see each other as adversaries," she said.

Southeast Asian nations have become increasingly rattled in recent months, accusing China of being a bully following a series of territorial spats on the high seas, including run-ins with Vietnam and a nasty row with Japan.

China has strongly pushed to keep territorial disputes over islands in the South China Sea out of talks held by ASEAN, preferring instead to deal with clashes one on one. But the smaller countries have refused to back down.

"ASEAN should have one voice before we venture (into) talking to other claimants," Philippine President Benigno Aquino III said, adding that he and other Southeast Asian leaders' aired concerns during a dinner Thursday centered around maintaining peace and keeping busy shipping lanes open in the South China Sea.

At another meeting in Hanoi this summer, Clinton enraged China by announcing that the U.S. has a national interest in seeing territorial disputes in the South China Sea resolved, ensuring vital shipping lanes remain open and that navigation within international waters be free for everyone.

China has laid claim to strategically placed and potentially oil-rich islands in the South China Sea, but parts of the territory are also claimed by several Southeast Asian countries, including Vietnam.

Meanwhile, China and Japan met Friday in an attempt to repair soured relations over a maritime territorial dispute, with Japan also asking for the lifting of a block on rare earth exports crucial to its high-tech manufacturing.

Japanese companies have said those exports were frozen after the dispute flared up in late September, though the Beijing government denied that it has blocked the exports.

China's Foreign Minister Yang Jiechi and his Japanese counterpart Seiji Maehara went into private talks on the sidelines of a regional Asian summit, hoping to lay the foundation for a meeting between Premier Wen Jiabao and Prime Minister Naoto Kan.

"The discussion took place in a good atmosphere. It was held calmly while both sides said what we should say. I believe it is likely that the leaders of China and Japan will hold a meeting here in Hanoi," Maehara told reporters after the hour-plus talks in the Vietnamese capital.

The two countries have sought to repair ties brought to a new low after a Chinese fishing trawler collided with Japanese patrol boats last month near disputed islands in the East China Sea. Tensions have remained high, despite Japan's release of the boat captain, with anti-Japanese protests flaring up in cities across China.

Japan also asked China to unblock the export of rare earths and reopen talks on the joint development of gas fields in the East China Sea, Maehara said, adding that China responded that it would consider both requests. Beijing suspended the gas field talks during the spat.

A day earlier, Maehara met with Clinton in Hawaii where she said the restrictions served as a "wake-up call" for the global high-tech industry to diversify its suppliers. China currently produces 97 percent of the world's exotic metals, used in everything from laptops to cell phones.

China said Thursday it will not use the metals as a "bargaining tool."

Tokyo recently said it planned to mine rare earths in Vietnam as a way to reduce its dependence on China, which ships 60 percent of its metals to Japan.

Maehara also said that Japan "repeated its position firmly" regarding the territorial issue over the East China Sea islands, known as Senkaku in Japanese and Diaoyu in Chinese. Both countries claim the islands.

Anti-Japan sentiment has continued to flare in China with multiple protests across several cities, including one earlier this week where a Japanese flag was torched outside a consulate in southwestern China.

Japan on Tuesday said it was considering increasing the size of its navy submarine fleet amid growing concerns that China's maritime muscle is becoming too strong and could tip the balance of power in the Pacific, where the United States also maintains a strong presence.

Chinese Premier Wen Jiabao is expected to meet with leaders from Japan and South Korea when in Vietnam.

----

Associated Press writer Jim Gomez contributed to this report.

US 'must respect our regional interests', says Chinese FM

Wu Jiao and Zhang Chunyan (China Daily), Asia News Network, Beijing | Wed, 03/07/201211:04 AM A | A | A | - Klipping The Jakarta Post

Yang Jiechi: China Foreign Minister walks to the platform before a news conference at the Great Hall of the People in Beijing on Tuesday. Sheng Jiapeng/China News Service
The United States must respect China's interests in the Asia-Pacific region, Foreign Minister Yang Jiechi said as Washington tries to assert more influence in the area.

China and the US "have more converging interests in the Asia-Pacific region than anywhere else in the world", Yang said at a news conference during the national legislature's annual session.

"We hope to see and welcome a constructive role by the US in this region and at the same time we hope that the US will respect China's interests and concerns.

"We are ready to work with the US and other countries to develop an Asia-Pacific region that enjoys greater stability and development," he said.

Yang's remarks come against a backdrop of the US focusing more on Asia-Pacific affairs amid military disengagement from Iraq and Afghanistan.

US President Barack Obama unveiled a defense strategy in January which advocated a greater military presence in the Asia-Pacific region.

Trade issues have also come to the fore recently and the US Senate on Monday voted to uphold Washington's ability to impose duties on what it claims are subsidized goods from China. Opponents of the measure say it escalates tension between the two countries.

US Secretary of State Hillary Clinton is also pressing for a greater US diplomatic presence in the region. When taken together some analysts believe that these measures are aimed at containing China's growing regional influence.

Liu Jiangyong, vice-dean of the Institute of Modern International Relations at Tsinghua University, said Yang's remarks highlighted the influence both countries have not just in the region but on the world stage.

China advocates inclusive regional economic cooperation to benefit all participants rather than the strategy of alliances, at the exclusion of others, pursued by Washington, Liu said.

"China does not want the US excluded from the region, but China also opposes one country dominating," Liu said.

China and the US also have interwoven military interests in the region, he added.

Qu Xing, head of the China Institute of International Studies, said that China often emerges in an unfavorable light during a presidential election year and greater effort should be put into establishing a more balanced relationship.

China and US also differ on some major international issues, including Syria and Iran.

While China advocates dialogue and negotiations in solving those issues, the US prefers sanctions and even military intervention.

Yang highlighted the fact that China opposes unilateral sanctions and many countries share this stance.

Yang refuted suggestions that China's stance has run into opposition from some Arab countries.

"China and Arab countries have no historical grievances. We have growing common interests and an agreed consensus on jointly maintaining peace and promoting development."

Yang added that China and Arab countries share the same objective in safeguarding the stability, development and prosperity of the Middle East though they may differ on the specifics.

"Cooperation between China and Arab countries is comprehensive and strategic, and the friendship between the two can stand the test of changing international circumstances," Yang said.

This view was echoed by Duncan Freeman, senior research fellow at the Brussels Institute of Contemporary China Studies.

China's stance on the Middle East is different from the US and Western countries, he said. While China believes that the people in the Middle East should decide their own destiny, the US and some other countries think intervention may be necessary.

Although there are some differences and disagreements between China and the US, on the whole the Sino-US relationship has been moving forward rather than backward, Yang said.

This year marks the 40th anniversary of the issuing of the Shanghai Communique which helped lay the groundwork for the establishment of diplomatic ties.

Bilateral relations have forged ahead despite some twists and turns in the past four decades, Yang said.

Yang also called on the US to "cautiously and properly" handle issues related to China's core interests such as those concerning Taiwan and Tibet.

Andrew Browne, China editor of The Wall Street Journal, said as China is getting more involved in world affairs and plays an increasingly important role, the annual press conference by the foreign minister makes China's foreign strategy better understood.

Sunday, March 4, 2012

China to up defense spending by 11.2 pct in 2012

Christopher Bodeen, Associated Press, Beijing | Sun, 03/04/2012 1:19 PM A | A | A |- Klipping The Jakarta Post

Chinese military delegates arrive for a meeting at the Great Hall of the People in Beijing, China, on Sunday. China says it plans to boost defense spending by 11.2 percent in 2012, as strong economic growth continues to fuel rapid military expansion. (AP/Vincent Thian)
China said Sunday that it would boost its defense spending by 11.2 percent in 2012, the latest in a nearly two-decade string of double-digit increases.
Although the planned figure is less than last year's 12.7 percent increase, China's military leaders have said they are unhappy with recent moves by the Obama administration to increase the U.S. military presence in the Asia-Pacific region. Only twice since the early 1990s has the increase been less than double digits.
National People's Congress spokesman, Li Zhaoxing, said China's defense spending would increase by 11.2 percent over actual spending last year to hit 670.2 billion yuan ($106.4 billion) in 2012, an increase of about 67 billion yuan.
China's official defense spending is the largest in the world after the United States, but actual spending, according to foreign defense experts, may be 50 percent higher, as China excludes outlays for its nuclear missile force and other programs.
Li, speaking at a news conference a day before the opening of the annual session of the congress, said China's military spending was small as a percentage of gross domestic product compared to other countries, especially the United States.
"China is committed to the path of peaceful development and follows a national defense policy that is defensive in nature," Li said. "You see, China has 1.3 billion people, a large territory and long coastline, but our defense spending is relatively low compared with other major countries."
Last year's military spending amounted to 1.28 percent of China's economy, Li said. By contrast, the ratio stood at 4.8 percent for the U.S. in 2010, according to the World Bank.
Beijing has mounted a robust defense buildup for more than two decades that has transformed the military into a formidable regional force, increasingly able to project power far from China. While chiefly aimed at the U.S., the buildup is also jangling nerves among Asian rival India and neighbors Japan, Vietnam and the Philippines, which have maritime disputes with China.
Mindful of the unease the burgeoning military has created among its neighbors and the opportunity it has given the United States to raise its profile in the region, Li repeated several times that China's intentions are peaceful and defensive.
"China's limited military strength is aimed at safeguarding sovereignty, national security and territorial integrity and will not pose a threat to other countries," he said.
With the huge outlays, the Chinese military's armories include the home-built J-10 jet fighter, new nuclear submarines and modern surface vessels armed with supersonic anti-ship missiles. Last year, China began testing a new J-20 stealth fighter and launched sea trials of its first aircraft carrier, a refurbished hulk purchased from Ukraine. Cyber-warfare programs are also burgeoning.
While Beijing insists its military is defensive and is not a threat, defense analysts say the new capabilities are aimed at keeping foreign forces, especially the U.S., out of the seas and air space around China. The South China Sea has become a new potential flash point, with Beijing's more powerful navy and an assertive policy to defend contested claims to groups of islands, reefs and atolls, and the U.S. has declared its own interest in making sure sea lanes remain open.
Growing Chinese power and East Asia's economic importance is driving neighboring countries to boost defense spending and has prompted the U.S. to redirect defense resources to the region. Washington's moves to rotate new troops to Australia, shore up alliances with other traditional allies Japan and the Philippines while forging new military ties to Vietnam has heightened Beijing's fears of encirclement.

Three Pillar of NPT

1.Disarmament,
2.Non-Prolefiration,
3.Nuclear For Peaceful Purposes.

Triple Track Strategy :

1.Pro Growth,
2.Pro Job,
3.Pro Poor.

Foreign Policy Forum - " Indonesia Economic Diplomacy : Reinforcing Provincial Resources ", Surabaya, 29 February 2012

Sosialisasi Perkembangan Hubungan Kerjasama ASEAN Dengan Mitra Wicara, Unibraw, Malang, 27 Februari 2012