Tectonic Shifts
ASEAN centrality requires greater understanding of the external forces that are buffeting the world's fastest growing economic region
UPDATE: First up in today’s Long Mekong Daily is a reprint of Amitav Acharya’s assessment of ASEAN Centrality. Neither a new or distinctive term it is related more to leadership and regional architecture than anything else. This is pertinent today with the triad of China-EU-US reconfiguring the international landscape around ASEAN.
Second: The Long Mekong Daily will attend the 13th Regional Stakeholder Forum: Co-Creating Solutions for a Healthy Mekong River Basin, in Ho Chi Min City next February. The event has been postponed from its original December 2022 date, but join me for what will be the first big Lancang-Mekong event of 2023.
Second: Is China’s President Xi Jinping being rehabilitated by the The Washington Post? Owned by Amazon owner Jeff Bezos, the Washington Post has run an article, which some believe shows a softened China approach by the Biden administration following President Xi’s late 2022 diplomatic flourish. While the Long Mekong Daily editor does not subscribe to this notion, as some do, both the article on President Xi and a critique of the article lead today’s edition of the Long Mekong Daily.
Third: German Chancellor Olaf Scholz has written an article on “Zeitenwende: an epochal tectonic shift,” bringing him into the fold of global leaders who have read what Xi Jinping has been saying for a decade. There are no surprises here, only justifications for the status quo with an echo of “strategic autonomy”. Can Germany be relevant, or is Herr Scholz just placating the US in the vain hope that Germany will be spared more economic injuries from a predatory Washington?
Fourth: Arms sales are on the rise, no surprise there, but it is not all about Ukraine. Stockholm can hardly be considered neutral, but SIPRI is publishing what its subscribers pay for - more arms.
Fifth: Europe’s self-inflicted energy crisis has driven prices up by more than 40% since 2021.
Last: The United States is making record profits from the EU’s predicament and adding insult to injury through predatory state-led industrial policies that subsidise reindustrialisation through on-shoring of semiconductor, electric vehicle and battery production.
The Myth of ASEAN Centrality?
“ASEAN centrality” has become a prominent and perhaps fixed notion in the vocabulary of Southeast Asia’s and Asia’s international relations. But its origin is obscure and meaning unclear.1And there are misconceptions or myths about ASEAN centrality that need to be understood and clarified.
First, contrary to what many observers may think, ASEAN centrality is not an entirely novel or distinctive term. Rather it is related to a number of similar concepts: ASEAN as the “leader”, the “driver”, the “architect”, the “institutional hub”, the “vanguard”, the “nucleus”, and the “fulcrum” of regional processes and institutional designs in the Asia-Pacific region. A second popular misconception about ASEAN centrality is that it is about ASEAN itself. More accurately, it is really about the larger dynamics of regionalism and regional architecture in the Asia Pacific and even beyond. A third myth about ASEAN centrality is that it is the exclusive handiwork of ASEAN members — it is not.
Herman Kraft, a Filipino scholar, speaks of a “significant shift in the evolution” of ASEAN “from an association dedicated to keeping the Southeast Asian region free from being enmeshed in great power rivalries to one which accepted its ‘centrality’ in a wide East Asian and Asia-Pacific regionalism, a process that would entail accepting involvement of and engaging the major powers in the context of the region”.2 Well put, but the very notion that ASEAN “accepted” its centrality implies that it did not necessarily create it.
At least not alone. ASEAN centrality is as much a product of external players in Southeast Asia as it is of the ASEAN members themselves. In fact, one suspects that its emergence had more to do with the dynamics of Great Power relationships than with any projection of ASEAN’s internal unity or identity.
Download the full article here.
13th Mekong River Commission Regional Stakeholder Forum postponed to Feb 2023
Among the key agenda items is for attendees to learn of the early findings from the landmark “Joint Study” between the MRC and the Lancang-Mekong Cooperation Water Center on behalf of the 6 riparian Mekong-Lancang countries. (The Mekong is known as the Lancang in China.) That Joint Study, which was launched in June this year at the 12th Regional Stakeholder Forum, aims to understand changing flow regime due to climate and developments, to enhance information sharing about the impact of reservoir operations on the Mekong’s water flow, water release and water quality as well as seek solutions to mitigate and adapt to impacts. Such data also serves as an early warning to the millions of fishing and farming families as well as countries downstream, which enables them to plan accordingly for any changes, and to take advantage of opportunities.
Other agenda topics during the 1.5-day event will include:
How the MRC’s new integrated river and environmental monitoring system, known as the Core River Monitoring Network, is crucial to safeguarding the Mekong’s health.
Updates on several hydropower projects (HPP), including the Don Sahong HPP, the Sanakham HPP, the Sekong A HPP, and the proposed Phou Ngoy HPP.
Discussion of how HPP development impacts Mekong fisheries and livelihoods, including mitigation measures, alternate sources of income, and other forms of “sustainable living.”
Discussion of how to enhance the partnership among the MRC, civil society organizations and the private sector – particularly, how to make that partnership more inclusive in the water sector. Projects that promote gender inclusion/equality will be discussed, too.
The draft programme will be posted here.
Register here.
A more pragmatic Xi Jinping launches a global charm offensive for China
In a five-day span in Bali, Indonesia, this month, Chinese leader Xi Jinping met with a string of world leaders including those from New Zealand, Japan, Singapore, France, the United States, Australia, Italy, South Korea and South Africa. (Xinhua and AFP/Getty Images)
In Indonesia, Chinese President Xi Jinping clasped President Biden’s hand and smiled warmly. He reminisced with Australian Prime Minister Anthony Albanese about a visit to Canberra. In Thailand, he told Prime Minister Prayuth Chan-ocha that the two should visit each other “as often as relatives” and assured Taiwanese envoy Morris Chang that he “looked good” after a hip operation.
After almost three years of staying cloistered within his own borders, Xi has been on a global charm offensive. In the six weeks since he secured a new term as the head of the Chinese Communist Party and the Chinese military, paving the way for him to rule indefinitely, he has met formally with at least 26 heads of state or government from every continent.
The campaign continues even as Xi faces a wave of internal dissent not seen in decades, triggered by the “zero covid” policies that he personally championed to keep the coronavirus at bay within his borders.
Read full Washington Post article here.
Why Is The Washington Post Rehabilitating President Xi’s Image In The Western Consciousness?
To be clear, this remarkable narrative event doesn’t mean that the Sino-American discussions over a New Détente will ultimately succeed, but just that enough progress has thus far been made by these two superpowers over the past month to begin preconditioning the Western public to accept a potential series of mutual compromises aimed at establishing a balance of influence between them.
A remarkable narrative event occurred on Sunday when the Washington Post (WaPo), which is regarded as one of the US’ premier platforms for managing public perceptions and considered to be connected to its national security apparatus, began rehabilitating President Xi’s image. In their piece about how “A more pragmatic Xi Jinping launches a global charm offensive for China”, the outlet praised the Chinese leader for the positive interactions that he shared with his Western counterparts since October.
The reason why this is worthy of analysis is because the US has repeatedly insisted that China is its only peer competitor capable of reshaping the international system. The ongoing New Cold War between the US-led West’s Golden Billion and the jointly BRICS- & SCO-led Global South of which China is considered by many to be the leader (for now at least) is over whether the global systemic transition should largely retain the trappings of unipolarity or continue evolving towards multipolarity.
Read A. Korybko’s full assessment here.
The Global Zeitenwende: How to Avoid a New Cold War in a Multipolar Era
By [German Chancellor] Olaf Scholz
The world is facing a Zeitenwende: an epochal tectonic shift. Russia’s war of aggression against Ukraine has put an end to an era. New powers have emerged or reemerged, including an economically strong and politically assertive China. In this new multipolar world, different countries and models of government are competing for power and influence.
For its part, Germany is doing everything it can to defend and foster an international order based on the principles of the UN Charter. Its democracy, security, and prosperity depend on binding power to common rules. That is why Germans are intent on becoming the guarantor of European security that our allies expect us to be, a bridge builder within the European Union and an advocate for multilateral solutions to global problems. This is the only way for Germany to successfully navigate the geopolitical rifts of our time.
The Zeitenwende goes beyond the war in Ukraine and beyond the issue of European security. The central question is this: How can we, as Europeans and as the European Union, remain independent actors in an increasingly multipolar world?
Germany and Europe can help defend the rules-based international order without succumbing to the fatalistic view that the world is doomed to once again separate into competing blocs. My country’s history gives it a special responsibility to fight the forces of fascism, authoritarianism, and imperialism. At the same time, our experience of being split in half during an ideological and geopolitical contest gives us a particular appreciation of the risks of a new cold war.
Read full article here.
Arms sales of top 100 arms companies grow despite supply chain challenges
Sales of arms and military services by the 100 largest companies in the industry reached $592 billion in 2021, a 1.9 per cent increase compared with 2020 in real terms. This is according to new data released today by the Stockholm International Peace Research Institute (SIPRI).
The increase marked the seventh consecutive year of rising global arms sales. However, while the rate of growth in 2020–21 was higher than in 2019–20 (1.1 per cent), it was still below the average for the four years leading up to the Covid-19 pandemic (3.7 per cent).
Supply chain issues seen in 2021 likely to worsen due to Ukraine war
Many parts of the arms industry were still affected by pandemic-related disruptions in global supply chains in 2021, which included delays in global shipping and shortages of vital components.
‘We might have expected even greater growth in arms sales in 2021 without persistent supply chain issues,’ said Dr Lucie Béraud-Sudreau, Director of the SIPRI Military Expenditure and Arms Production Programme. ‘Both larger and smaller arms companies said that their sales had been affected during the year. Some companies, such as Airbus and General Dynamics, also reported labour shortages.’
Russia’s invasion of Ukraine in February 2022 has added to supply chain challenges for arms companies, not least because Russia is a major supplier of raw materials used in arms production. This could hamper ongoing efforts in the United States and Europe to strengthen their armed forces and to replenish their stockpiles after sending billions of dollars’ worth of ammunition and other equipment to Ukraine.
‘Increasing output takes time,’ said Dr Diego Lopes da Silva, SIPRI Senior Researcher. ‘If supply chain disruptions continue, it may take several years for some of the main arms producers to meet the new demand created by the Ukraine war.’
While reports indicate that Russian companies are increasing production because of the war, they have had difficulty accessing semiconductors. They are also being impacted by war-related sanctions. For example, Almaz-Antey (not included in the Top 100 for 2021 due to lack of data) has stated that it has not been able to receive payments for some of its arms export deliveries.
US companies dominate the Top 100, but sales decline
The arms sales of the 40 US companies in the listing totalled $299 billion in 2021. North America was the only region to see a drop in arms sales compared with 2020. The 0.8 per cent real-terms decline was partly due to high inflation in the US economy during 2021. Since 2018, the top five companies in the Top 100 have all been based in the USA.
A recent wave of mergers and acquisitions in the US arms industry continued in 2021. One of the most significant acquisitions was Peraton’s purchase of Perspecta, a government IT specialist, for $7.1 billion.
‘We can probably expect to see stronger action from the US government to limit arms industry mergers and acquisitions in the next few years,’ said Dr Nan Tian, SIPRI Senior Researcher. ‘The US Department of Defense has expressed concern that reduced competition in the industry could have knock-on effects on procurement costs and product innovation.’
Europe: Aerospace sales fall, shipbuilding rises
In 2021 there were 27 Top 100 companies headquartered in Europe. Their combined arms sales increased by 4.2 per cent compared with 2020, reaching $123 billion.
‘Most of the European companies that specialize in military aerospace reported losses for 2021, which they blamed on supply chain disruptions,’ said Lorenzo Scarazzato, a researcher with the SIPRI Military Expenditure and Arms Production Programme. ‘In contrast, European shipbuilders seem to have been less affected by the pandemic fallout and were able to increase their sales in 2021.’
Dassault Aviation Group bucked the trend in the military aerospace sector. The company’s arms sales saw a sharp 59 per cent increase to $6.3 billion in 2021, driven by deliveries of a total of 25 Rafale combat aircraft.
Chinese companies drive rapid growth in Asian arms sales
The combined arms sales of the 21 companies in Asia and Oceania included in the Top 100 reached $136 billion in 2021—5.8 per cent more than in 2020. The eight Chinese arms companies in the listing had total arms sales of $109 billion, a 6.3 per cent increase.
‘There has been a wave of consolidation in the Chinese arms industry since the mid 2010s,’ said Xiao Liang, a researcher with the SIPRI Military Expenditure and Arms Production Programme. ‘In 2021 this saw China’s CSSC becoming the biggest military shipbuilder in the world, with arms sales of $11.1 billion, after a merger between two existing companies.’
The combined arms sales of the four South Korean companies in the Top 100 grew by 3.6 per cent compared with 2020, reaching $7.2 billion. This was largely due to a 7.6 per cent rise in arms sales by Hanwha Aerospace, to $2.6 billion. Hanwha’s arms sales are expected to grow significantly in the coming years, after it signed a major arms deal with Poland in 2022, following the Russian invasion of Ukraine.
Read the full SIPRI assessment here.
Europe’s Energy Crisis and the Global Economy
Read the entire story at Visual Capitalist.
Biden’s ‘America First’ Economic Policy Threatens Rift With Europe
Europeans consider vast U.S. subsidies for cars, clean energy, and semiconductors a danger to their economies. After a nearly two-year honeymoon since the inauguration of U.S. President Joe Biden, major rifts are opening up between Washington and its European allies over economic policy. Unless these rifts are handled deftly, the Biden administration’s vision of a new global economic order in which the United States works with allies and partners in Europe and Asia to contain Chinese and Russian ambitions could degenerate into a world of competing economic blocs.
After quietly rumbling for months, the spats burst into the open last week. Thierry Breton, the European Union’s internal market commissioner, announced he would pull out of this week’s meetings in Maryland of the U.S.-EU Trade and Technology Council, a key coordinating body for trans-Atlantic economic policy. He said the agenda “no longer gives sufficient space to issues of concern to many European industry ministers and businesses,” pointing to EU complaints over new U.S. subsidies for electric vehicles and clean energy that disadvantage European carmakers and other companies. Instead, he said, he would focus on “the urgent need to preserve the competitiveness of Europe’s industrial base.”
French President Emmanuel Macron, who was in Washington last week to attend the first White House state dinner held since the outbreak of the COVID-19 pandemic, said that U.S. subsidies “are very good for the U.S. economy, but they weren’t properly coordinated with European economies.” In advance of the visit, Bruno Le Maire, French minister of the economy and finance, accused the United States of pursuing Chinese-style industrial policy.
Read the full article here.