Protection versus caution

Comments on Karen Maley “Lagarde rings a euro alarm bell”, 29/12/2011, Karen Maley http://www.businessspectator.com.au/bs.nsf/Article/Lagarde-Italy-bonds-euro-debt-crisis-ECB-banks-pd20111229-PYSUE?OpenDocument&src=sph&src=rot

Perhaps it is helpful that there should be a distinction between appropriate caution and inappropriate protection.

One cannot expect either national parliaments or government not o exercise necessary caution and prudent measures when there are real risks, no matter it involves other governments or private sectors.

But at the same time, there are powerful governments and parliaments that take highly inappropriate protectionist policies or measures.

The US and EU, unfortunately, are among those powerful ones.

Nevertheless, the IMF shouldn't ask nations for their blind supports of bailing out some national governments without appropriate rewards.

This is especially so that the IMF has generally been biased more in favour of rich countries and more harsh towards developing countries in its history.

Further reforming IMF

Comments on Peter Hartcher “Perfect time to reform the IMF”, 17/05/2011, http://www.smh.com.au/opinion/politics/perfect-time-to-reform-the-imf-20110516-1eps7.html?posted=successful

Peter, this is a very good article with excellent insights.

Some reforms IMF could include:

1. to introduce some franchise into the IMF system, by having some regional sub-committees, which have decisive says on their regional economic affairs, perhaps similar to a federation structure. For example, an Asia sub-committee to have more power to oversee Asian economies.

2. The voting rights should incorporate more than existing or past financial contributions, with some sort of the nature of a senate introduced into it. More could be considered.

3. Of course, there should be some automatic redistribution of voting rights according to and in line with changed circumstances.

4. Rotating arrangement for top IMF candidates, by at least broad regions, or the top X number of voting countries, unless they agree to not exercise their rights.

An important is to initiate this sort of reforming discussions in the right circles.

When will US withdraw its troops from Korea peninsular?

Comments on Robert Edwin Kelly “Comparing North Korea to East Germany”, 9/04/2011, http://www.eastasiaforum.org/2011/04/09/comparing-north-korea-to-east-germany/

Should the two Koreas be unified and given China's the relationships with the Koreas, why will there be any need for the US to have its troops stayed in Korea at all?

Let's acknowledge it, China has not stayed its troops in North Korea since the truce in the peninsular and the US has had its troops there.

The former USSR collapsed and the cold war has ended now for over 20 years. The US still has its troops in the peninsular

So how long will US troops stay in there and what its purpose will be and who will they be against?

Whether the Koreas are unified or not, or when they will do so, there is always the question: when will the US withdraw its troops from the peninsular to both symbolically and really actually contribute to a more stable and peaceful Northeast Asia and East Asia?

It is ridiculous for the US to use its military bases in East Asia to conduct spy missions over other countries. Would the US accept others to do the same spy missions using planes or ships around it?

If this is what the US means for China to follow the rules, is that a just requirement?

You have the military power to project forces to anywhere in the world.

You have military bases bordering others.

You have nuclear arsenals to destroy the world many times over and you have the means to deliver those weapons in very short time to anywhere.

You have much superior technologies in nearly every combat areas.

You have invaded so many countries, for one reason or another, including Iraq that was pre-emptively conducted and is still going on.

You constantly spy on others.

You also bombed China's embassy.

You harassed China's ship in international waters.

So still, you want others to follow this rule forever?

Kevin's change of heart

Comments on Kevin Rudd “The 10 big global challenges facing Australia”, 16/01/2011, http://www.smh.com.au/opinion/politics/the-10-big-global-challenges-facing-australia-20110115-19rsb.html

First, it is interesting to note that Rudd's 10 big global challenges facing Australia only include his greatest moral challenges of human kind, that is, climate change and emissions reduction as a sub item to food security, energy security and climate change.

What a change from K Rudd, after falling from Australian Prime Minister in June 2010!

Is that a change of heart, or change from learning?

It will be interesting to see and know.
 
Second, some people would observe the difference he describes China's rise and India's, perhapsa sign that the shadow of his advice to the US on using force against China still lingers. Closely related is how his APC idea will go in the region. It is likely that will go down the drain, together with his ambition to become the UN Secretary General.
 
Third, Rudd puts the continuing global democratic deficit before his number 10 challenge - the problem of global governance – so central to dealing with practically all the above challenges. This must be wrong order of priority for him.

PS: the site where Rudd's post appeared did not allow normal comments but on twitter, so I could not submit my comments, so you will not be able to find my comments there.

A need for effective and innovative economic policies

From my earlier comment today on the issue of the international Financial Stability Board issue and international financial stability architecture, raised by Masahiro Kawai and Michael Pomerleano of ADBI, it is clear that little innovation has been seen in the international scene on international financial stability issue.

There is an urgent need to be practical, effective and innovative in policy designs. Many people just fall back to their comfortable zone in developing new policies and recycle what has been there and repackage them a little, that is all.

That will not work, unfortunately.

If the existing convention does not work well, then one has to consider why it has not work well and deal with it not just in the conventional framework that can be very limiting, but also considering in new frameworks.

Develop an institutional framework for an East Asian community

Comments on Satoshi Amako “China as a ‘Great Power’ and East Asian integration”, 4/04/2010, http://www.eastasiaforum.org/2010/04/04/china-as-a-great-power-and-east-asian-integration/

This article appears to be fairly constructive, although some of its views may clearly be outdated and incorrect, such as the characterisation of the “Chinese conception of world order”.

I would focus on what is likely to be more important to a successful East Asian community that will benefit all East Asian countries including China.

I regard it extremely important to develop a representative, democratic, dynamic and flexible regional governing mechanism that recognises both national sovereignty and contributions, that is fair representation, responsibility and accountability.

To that end, nations should have open dialogues and discussions.

I think the current political system of representative and senate mechanism has some attraction.

The representative half is good for representation of contributions and population, hence responsibility and accountability. The senate half recognises the sovereignty irrespective a nation's size. A combination of these two should be flexible enough to accommodate the needs of every member.

The concern of a Chinese hegemony in an East Asian community can be addressed in that framework. The rights and interest of small and smaller nations can be safeguarded.

Having said that, I would argue that can only act as a default or fall back position. Nations should seek to develop an even better and more superior system for an effective and beneficial regional community.

Wake up to modern and real world please

Comment on Terry McCrann “Rio Tinto gets to grips with a new reality in China over Stern Hu & co”, 27/03/2010, http://www.theaustralian.com.au/business/opinion/rio-tinto-gets-to-grips-with-a-new-reality-in-china-over-stern-hu-co/story-e6frg9if-1225846167483

With all respect, it appears that the author relies too much on "guess" work and has used too little rational analysis and intuition based on facts.

Closer economic ties with China do not necessarily mean any loss of sovereignty or dignity for Australia, in a modern, globalised and progressive world.

The past and outdated mentality of power international politics emanating from Australia's reliance on the US as a protector has had too much bearing on some Australians, so they cannot escape from it and continue to use that in their analysis of the future.

Closer economic ties in the context of different political systems and values to some extent means both ways: we need China and China needs us, it should be a win-win to both, not the situation where one wins and other loses.

The world is moving to a multi polar system and becoming more equal as opposed to hegemony, or two camp rivalries. Politically speaking, differences in size like population are becoming less and less important.

Our analysts and commentators cannot live in the past forever but to catch up with the new international reality.

Otherwise they will become irrelevant.

PS: the fact that it has been so difficult (maybe for some even impossible) to come to terms that Stern Hu and his other three colleagues have accepted bribes, just manifests so clearly how close-minded some people in Australia are. Don't any Australians commit crimes or behave inappropriately ever?
Rio was adamant that Stern Hu did not do anything wrong earlier on, how did it know for that sure? Did it monitor their movements in China all the time? Was that possible? That simply blind faith just defies logic and begs belief.

What should be ahead for G20?

Comments on Paul Kelly, “Shift to G20 was matter of time”, 28/09/2009, http://www.theaustralian.news.com.au/story/0,25197,26133473-7583,00.html

Australia deserves a seat at the top table, because of its dominant position in the Pacific region.

However, as Kelly acknowledged that "the sceptics are right to warn of the risks: that the G20 will be too big, too divided and unable to deliver genuine outcomes by consensus."

So there should be a consolidation of the G economic grouping to make it both representative and workable. It should be smaller in size and also has a workable and efficient and effective governance structure.

In this regard, an article "Deciding who decides at the G20 summit" on http://www.eastasiaforum.org/ has shed some light and is worth reading. I have provided some comments that further complement that article’s ideas.

G grouping of world economic affairs

Comment on Nina Hachigian “Deciding who decides at the G20 summit”, 26/09/2009, http://www.eastasiaforum.org/2009/09/26/deciding-who-decides-at-the-g-20-summit/

This is an important issue that is evolving and should be decided by a core of the current G20 members, the sooner the better.

While there are merits in each of the proposals mentioned in the article, it seems that economic weight should be the key criterion.

Even using the size of the economy as the key criterion, then there is still a tough question: how to determine or calculate the size of a economy?

There is obvious a calculation based on market exchange rate. But it is well understood that the market exchange rate has some significant shortcomings. For example, it may vary substantially within a short period. Also it generally underestimates the real size of most developing economies due to their lack of international trade and especially export power.

So whether you use a market based or a purchasing-power-parity (PPP) based exchange rate to calculate a country’s economic size? Alternatively is it better to use a combination of the two with an equal weight to reflect both the real economy and its trade impact?

In order to enhance its regional representation, then the top economy in a continent could be included.

So I would propose that the group should comprise the top one economy in each continent, and then the next 15 world largest economy, with the size of the economy based on a combination of both PPP and current exchange rate to be calculated by the United Nations. This group should be updated every 5 years to reflect the new world economic reality to be representative.

There should also be a governing structure of the G grouping. The top 5 of the G group should be the standing members during the off meeting period. Again, they should be decided using the same criteria.

This G economic group should be a new branch of the United Nations, to enhance the multilateral nature of the group and the legitimacy of the United Nations.

Australia China economic relations and international order

Comments on Peter Drysdale “Weekly editorial – Stern Hu and the Chinese steel industry”, 20/07/2009, http://www.eastasiaforum.org/2009/07/20/weekly-editorial-stern-hu-and-the-chinese-steel-industry/

The recent world financial and economic crisis and the roles different economies have played in dealing with the challenges posed by the crisis suggest that the world is in a verge of a significant reshape of international economic order, or a new framework of economic governance.

Developing economies are increasingly having more economic weight or clout, while the relative weight of industrialised economies are on the decline. The relative shift of economic weight between the two camps and the current international institutions governing international economic affairs in which the past powers dominate the say requires reconciliation and realignment to reflect the changed and changing world reality.

In that broad context, it seems that the Australia China economic relations are a small part of it in a strange and interesting sense, i.e. equality (or inequality) and respect in dealing with each other.

The Stern Hu case has the feature of coincidence in that context, although many commentators and the public have made all sorts of speculations and comments, based on limited information and own systems of thinking. How much are correct and relevant remains to be seen for a long time.

The comments or demands by some politicians in Australia on the case reflect a deep rooted misunderstanding or contempt of another country and its system. That is where inequality and disrespect were shown and could be felt by others.

Of course, information through official channels was also strangely scarce. But it requires good analysis to see whether it was the beginning of a new process, or it was a response in a process.

But it is important for any new international economic order and governance to be fair to all, irrespective the past justice or injustice, equality or inequality, as well as sizes of the economy. It should be a new beginning to reflect universal justice and equality.

The international community needs to work in that direction, with great efforts and speed.

G-8 and more Gs

Comments on Nina Hachigian “The three-ring G8 summit”, 13/07/2009, http://www.eastasiaforum.org/2009/07/13/the-three-ring-g8-summit/

This raises an important issue, are the world most powerful leaders showing real leaderships among themselves, if they can't get their priority right and instead they waste their most valuable assets - their time?

Why don't they or their assistants decide how their time should be spent and what is the most appropriate forum for that?

Old powers' club is not willing to give up its privilege. Is that the case that it may diminish their status if they stand together with new ones?

If the G-8 wish to continue its ineffectiveness, why do the others join them at G-8?

The US has other moral obligations beyond the elimination of nuclear arms

Comments on Tomohiko Satake “Obama, and Japan’s going nuclear”, 2/06/2009, http://www.eastasiaforum.org/2009/06/02/obama-and-japans-going-nuclear/

A world free of any nuclear weapons will be good for everyone, except some handful. Nuclear disarmament of the two nuclear superpowers should be welcomed by all countries.

Just as Japan's nuclear dilemma, if the Americans are serious of world including Asia peace and stability, they should cease to continue their cold war thinking and strategies and put an end to NATO's expansion, and begin to dismantle all cold war military structure, treaties and organisations.

The world needs a new security structure that is based on UN Security Council. For that to be effective and reliable, the Security Council needs to be reformed. Broader permanent representation of the world current reality is required. The veto power by each of the 5 permanent members should change to make it less extreme.

Americans not only have the moral obligation for eliminating all nuclear arms, they, as the sole superpower and the leader of the only cold war era legacy of NATO, also have the moral obligation to bury all cold war legacies and to establish a new collective world security.

Eventually, the world should be a place of humanity of permanent peace and every country, every nation, irrespective large or small, no matter of rich or poor will live with dignity, peace and harmony. They will compete (just like the market economy) as well as cooperate with each other for prosperity and better living standard.

In this light, the title of Tomohiko Satake' article does not appear to be well conceived. At least it does not sit well with Japanese foreign minister's 11 benchmarks for global nuclear disarmament, as mentioned in the article.

History is not necessarily always rational but full of surprises

Comments on Jonas Parello-Plesner “The G-2: no good for China and for world governance”, 23/05/2009, http://www.eastasiaforum.org/2009/05/23/the-g-2-no-good-for-china-and-for-world-governance/

I personally don't like power politics much, as a personal preference for world governance, to start with. In this sense, I have some sympathy to Jonas Parello-Plesner's arguments in this article.

But one has to be reminded, even though counter to my personal preference, that during the cold war era that stretching a few decades in the not so long past, it was the two world superpowers that dominated so many world affairs. The whole world had lived in the shadow of the display of the two superpowers.

However, there were two good things that came out of that long agony. One was that there were two superpowers, not just one, so they sort or balanced each other out and did not lead the world into another world war. Another was that the collapse of the former USSR proved an important point to all nations and human beings that any system has to produce good both economically and politically, otherwise it will not last in the long term.

The two cold war world superpowers gave way to the sole superpower of the US. What we got from that? Certainly the world had collectively sighed a great relief that the constant threat of a global nuclear destruction had gone. But what else have we got? We got heightened terrorist attacks, culminating by the 9/11 attack on the US and the subsequent invasions of Afghanistan and Iraq by the US and some of its allies and friends. The invasion of the former was internationally justified that Al Qaeda was harboured there.

The invasion of the latter was not necessarily so, and in fact many have argued that was the act of the sole remaining world superpower and that there was little international justification for its so called pre-empty actions. The matter of fact is that the main excuse for the war in Iraq, that it had weapons of mass destruction, has been irrefutably proven to be false. But that war has had huge costs, in terms of both human and economically. Even the US has paid dearly for that adventure with rising military tolls and military and other spending related to that war. Yet, no one has been responsible for those huge costs!

That was a legacy of an unconstrained or unrestricted sole world superpower. It can do what it wants and sometimes what it does can be very bad to others and to itself in the long run.

Even now the UN Security Council is still governed by the vested veto power to each of the five largest victors of World War II. That is an uncomfortable reality. Although there have been calls for reforms to the UN governing structure, there have been also difficulties to change that outdated structure, one has to admit.

Why and how the two superpowers did came into existence? It was probably not anyone’s wishful thinking or doing. It was the natural evolution in the aftermath of World War Two. The US, a traditional power, emerged as the leader of the west, while the USSR, a new and emerging power with a different system became the leader of a number of aspirant but relatively poor nations that were struggling to seek to change their countries’ destiny.

The two different systems competed and fighted with each other. They hated each with. They each wanted to destroy the other. So they built up their camps militarily with each having nuclear arsenals to destroy the whole world a few times over. On that point, the leaders of each camp had some sanity with them over that period, so they resorted to the principle of mutual deterrence that worked and saved the world from destruction. But eventually, one collapsed and disintegrated suddenly perhaps to the surprises of many including the very sophisticated intelligence of the other opposing camp. That was not the outcome of anyone’s well thought design. History has been full of surprises in that regard.

What about the G-2 concept? I don’t have an opinion at this stage, meaning I personally don’t have any idea. It may or may not work. Again history may present its surprises to us, irrespective whether we like it or not.

Nevertheless, I hope that any development along that line will not follow the competing and opposing two superpowers of the cold war ear, even though they do represent two different systems and also one traditional power and the other emerging power. I hope if they do emerge as G-2, they will work cooperatively rather than competitively with each other, for humanity's sake. We have come a long way, havn't we?

The experience of the superpower politics in the cold war era, as well as the recent history including the wars and the current great recession, should serve as a useful reminder to any superpowers in the years/decades/centuries to come, perhaps for all sides, both positively and negatively. Any superpowers should not assume they will be superpowers forever. They have their historical roles to play, but each of them will also have their sunset time. That is for sure, so don’t over play your role as a superpower.