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Last quarter we focused on remarks by US President Barack Obama and Secretary of State Hillary Clinton proclaiming that “America is back in Asia,” an obvious dig at real and perceived neglect of Asia by the previous administration. This quarter, both were forced to postpone planned trips to Asia although, in Secretary Clinton’s case, not before giving a major Asia policy address in Honolulu. This quarter also ended the same as last, amid hints that Pyongyang really would, at some not too distant point (but not this past quarter), return to six-party deliberations. On a more positive note, it looks like arms control agreements are on the way back, following the announcement that the US and Russia had finally come to terms on a new strategic arms agreement, to be signed by both presidents in April. Speculation about the “changing balance of power” in Asia also continues as a result of China’s economic resilience and apparent newfound confidence, although it still seems premature to announce that the Middle Kingdom is back, given the challenges highlighted at this year’s National Peoples’ Congress. Political normalcy also appears to be a long way from returning to Bangkok where the “red shirts” have once again taken to the street, prompting the government to declare a state of emergency. North Korea: Still looking for the light at the end of the tunnel Hopes were raised at the end of last year that Pyongyang would soon return to the Beijing-hosted Six-Party Talks, aimed (at least in everyone else’s mind) at Korean Peninsula denuclearization. No such luck! While Beijing has been the source of most of the optimism, someone obviously forgot to tell “Dear Leader” Kim Jong-il. He continues to insist, first and foremost, on some “progress” in bilateral US-DPRK negotiations and an end to Washington’s alleged “hostile policy” toward the North. Among the various “proofs” sought by Pyongyang is a lifting of UN Security Council sanctions, imposed after the North’s second nuclear weapons test in May 2008 (the first was in October of 2006). A peace treaty between Washington and Pyongyang – excluding Seoul, of course – was also on the North’s wish list this past quarter. For its part, Washington – enthusiastically joined by Seoul and Tokyo and less so by Moscow (which finally, in late March passed the necessary legislation to implement UN-mandated sanctions) – continues to make it clear that the lifting of UN sanctions is a decision not for the US alone and that the formula for revision is quite clear: the lifting of sanctions first requires ∗ For those not steeped in American movie history, “they’re baaaack” was a famous line proclaimed by a little girl (played by the late Heather O'Rourke) in Poltergeist II, the 1986 classic about evil spirits invading a suburban home. Regional Overview 1 April 2010 Pyongyang not only to come back to the six-party process but to “resume significant progress on denuclearization.” As Deputy Secretary of State James Steinberg noted during remarks at the Wilson Center on Jan. 29, “we believe it's important that the Six-Party Talks resume expeditiously and that North Korea begin to take those irreversible steps to eliminate its nuclear weapons program. In the meantime, neither the United States nor our allies will provide incentives or material benefits for North Korea simply to return to negotiations. The terms of the UN Security Council Resolutions will continue to be enforced.” Perhaps, but Beijing is clearly marching to the sound of a different drummer. While paying lip service to UN Security Council (UNSC) sanctions, the Chinese leadership seems intent on trying (in time-honored fashion) to bribe Pyongyang back to the talks. To this end, Beijing reportedly agreed in early February to invest $10 billion to build railways, ports, housing, and other infrastructure in the North; an investment that, if confirmed, would be equal to roughly 70 percent of North Korea’s gross domestic product. This would also account for roughly 60 percent of total foreign investments in the country, a fact that is making Seoul (among others) increasingly nervous. Even if the truth turns out to be only one-tenth this amount, it would represent a sizable investment that could be seen as undercutting Seoul’s “Grand Bargain” proposal (not to mention the spirit and intent of UNSC Resolution 1874). Meanwhile, Washington will continue to exercise “strategic patience,” says Steinberg, while insisting that Pyongyang “live up to its commitments and its international obligations.” Once the North returns to six-way negotiations and “begins to make progress on denuclearization,” Washington will then, and only then, be prepared to engage “where appropriate,” – i.e., within the context of the broader multilateral framework – in bilateral talks. It would also be prepared, “with our South Korean partners,” to discuss “a permanent peace regime for the Korean Peninsula.” At the end of the quarter, rumors that preparations appeared underway for a Kim Jong-il visit to China raised hopes that an announcement of Pyongyang’s return to the Six-Party Talks would also be forthcoming once Kim is properly feted (and again rewarded). One very significant caveat: if it turns out that North Korea had a direct hand in the mysterious sinking of a ROK naval vessel in disputed (by Pyongyang) waters in the West Sea, this could derail any hopes of a near-term resumption, as Seoul and Washington will have to focus first and foremost on an appropriate response. Washington’s mixed message The announcement that President Obama planned a “spring break” trip to Indonesia, Australia, and Guam in March underscored his earlier message that “America is back in Asia.” Then, as it did so often with the Bush administration before it, reality set in, forcing him first to postpone the trip by a week (which would have then precluded his children from coming with him) and then until June (when the kids could once again join their father in visiting the Jakarta school where he studied as a child). The reason, which was understandable and fully understood by his Jakarta and Canberra hosts, was to ensure that his top priority health care package made it past a seemingly recalcitrant Congress. It would be at least a slight overstatement to say the legislation, Regional Overview 2 April 2010 which did pass, will “define his presidency.” It is less of an overstatement to say that failure to pass it would have done so as well. Some pundits were quick to label the cancellation “an insult to Indonesia and to ASEAN.” Nonsense! Indonesians were disappointed, but democratic governments and societies understand that domestic issues have priority and the quick rescheduling has served to limit the damage (assuming that he does in fact go in June). Some have even argued – in our view, believably – that Indonesian officials were somewhat relieved by the delay, since both sides were still frantically working on an unfinished “enhanced partnership” package. Meanwhile, the other ASEAN countries appear more interested in learning when Obama is going to visit them than they are heartbroken about his not going to Indonesia. This is clearly the prevalent view in the Philippines; officials there reveal privately that Manila feels somewhat neglected that no visit is yet planned there, despite its status as a formal treaty ally. The Aussies received a double shot, since Secretary Clinton, along with Defense Secretary Robert Gates had earlier cancelled their trip down under to return home to help oversee relief operations in the wake of the horrendous earthquake in Haiti. As “good mates,” the Aussies were quick to understand the rationale and look forward to the next opportunity to reaffirm the alliance relationship. Clinton’s “guiding principles” Secretary Clinton did manage to complete the first leg of what would have been her fourth Asia-Pacific trip before the earthquake struck. On Jan. 12, she gave a major address at the East-West Center in Honolulu on “Regional Architecture in Asia: Principles and Priorities.” In addition to cheering the fact that Honolulu was chosen to host the 2011 Asia Pacific Economic Cooperation (APEC) Leaders Meeting in 2011, Secretary Clinton also laid out five guiding principles that the Obama administration would use in examining East Asia regionalism and America’s role in the process. The stated goal: “to build an institutional architecture that maximizes our prospects for effective cooperation, builds trust, and reduces the friction of competition.” While Clinton is to be commended for clearly articulating the Obama administration’s position, our analysis shows that, at least in theory, these guiding principles represent little change from the Bush administration or its predecessors. First and foremost, “the United States’ alliance relationships are the cornerstone of our regional involvement.” Nothing new here but worth repeating and, as always, listed first. The US bilateral alliances – with Australia, Japan, the Republic of Korea, the Philippines, and Thailand – are not “leftovers from the Cold War,” as some would maintain, but the foundation upon which US involvement in East Asian multilateralism will be built: “Our commitment to our bilateral relationships is entirely consistent with – and will enhance – Asia’s multilateral groupings.” Second, “regional institutions and efforts should work to advance our clear and increasingly shared objectives.” In the security arena, these must include “nuclear proliferation, territorial disputes, and military competition – persistent threats of the 21st century.” From an economic perspective, “we must focus on lowering trade and investment barriers, improving market Regional Overview 3 April 2010 transparency, and … economic growth.” Politically, “we must support efforts to protect human rights and promote open societies.” All of these are long-standing US goals. What’s important here is the reminder, in a region where the process is often seen to be as (or more) important than the product, that substance matters. This thought is brought home in the third guiding principle: “our institutions must be effective and be focused on delivering results.” This has long been an enduring (if not necessarily endearing) US characteristic. What’s changed, according to Secretary Clinton, is that “Asia’s rise over the past two decades has given the region an opportunity for progress that simply didn’t exist before.” As a result, she argued, “it’s more important to have organizations that produce results, rather than simply producing new organizations.” Fourth, and potentially most controversially, “we must seek to maintain and enhance flexibility in pursuing the results we seek.” Noting that established institutions may sometimes “lack the tools necessary to manage particular problems,” Clinton notes that “where it makes sense, we will participate in informal arrangements targeted to specific challenges, and we will support sub-regional institutions that advance the shared interests of groups of neighbors.” While she (along with all other members of the Obama administration) is careful not to use the term, she, in essence, is repeating the Bush administration’s warning that “coalitions of the willing” will be formed to fill the void when established institutions (regional or global) fail to address what are perceived as genuine US security concerns. She even cites the Bush administration’s most prominent sub-regional coalition, the Six-Party Talks, as an example “which show[s] the potential of an informal arrangement to advance shared interests.” She also cites the value of trilateral dialogues, using the examples of three-way dialogue among the US, Japan, and China, as well as among the US, Japan, and India. Fifth, “we need to decide, as Asia-Pacific nations, which will be the defining regional institutions.” Noting that “eyes may glaze over when you hear all these acronyms,” she specifically cites two organizations in which the US currently participates, as worthy of continued support: the ASEAN Regional Forum (ARF) and APEC. She also discussed at a more recent gathering US participation in an organization in which the US has not yet been formally involved, namely, the East Asia Summit (EAS), which involves the 10 ASEAN nations, their “Plus Three” partners – China, Japan, and South Korea – plus Australia, India, and New Zealand. Discussions were underway, she noted, “on how the United States might play a role in the East Asia Summit, and how the East Asia Summit fits into the broader institutional landscape, and how major meetings in the region can be sequenced most effectively for everyone’s time.” That the US will in some way become more involved in the EAS now appears clear; whether that involvement includes formal membership or some other form of association appears yet to be determined, however. Secretary Clinton also noted that “we should look for more ways to enhance military-to-military cooperation and decrease mistrust and misunderstanding.” At present, there is no formal multilateral mechanism involving senior-most defense officials, although ARF meetings now frequently include side dialogues involving defense establishment participants. Here we would Regional Overview 4 April 2010 humbly suggest that the Obama administration express its support for attempts by ASEAN to take its ASEAN Defense Ministers Meeting (ADDM) to the next level by establishing ADDM Plus (ADDM+), which many in ASEAN see as the more desirable alternative to the unofficial Shangri-La Dialogue, which brings regional and extra-regional defense chiefs together annually in Singapore under the auspices of the London-based International Institute of Strategic Studies (IISS). Which of these two efforts the Pentagon will choose as the “defining regional institution,” remains to be seen. In words that would provide embarrassingly prophetic, Secretary Clinton also noted that “I don’t know if half of life is showing up, but I think half of diplomacy is showing up.” She then promptly cancelled the remainder of her trip and returned to Washington. In fairness, she was talking about showing up for regularly scheduled events, such as ARF meetings and the APEC Leaders Meeting. In making the statement, however, she will cause any subsequent failure of the US to participate to become magnified. We can only hope that world (or domestic) events will not conspire to cause her or President Obama to miss any ARF or APEC events on their watch and that any subsequent decision to join the EAS comes with a solid commitment to make it to these meetings as well. A new ‘START’ for arms control President Obama made concrete progress in his effort to reshape US thinking about nuclear weapons this quarter. His overall approach was revealed in the Prague speech he delivered in April 2009 when he outlined his vision of a world free of nuclear weapons. That opened the door to talks with the Russians on a follow-up strategic arms reduction treaty (START), one originally scheduled to be completed as the 1991 Strategic Arms Reduction Treaty expired in December. That deadline came and went as negotiations proved more difficult than expected. The chief obstacle was reportedly Russian objections to US missile defense deployment plans. Moscow continues to fear a breakout scenario that neutralizes the deterrent capability that is increasingly important to Russia’s diminished military. Ultimately, Obama called the Russian bluff and a deal was announced on March 26. The new treaty caps the two countries’ deployed warheads at 1,550; it sets a combined limit of 800 deployed and non-deployed ICBM launchers, SLBM launchers, and heavy bombers equipped for nuclear armaments; and it limits deployed ICBMs, deployed SLBMs, and deployed heavy bombers equipped for nuclear armaments to 700. Verification measures employ old and new techniques, including on-site inspections and exhibitions, data exchanges and notifications related to strategic offensive arms and facilities covered by the Treaty, and provisions to facilitate the use of national technical means for treaty monitoring. Finally, the US insists the treaty “doesn’t have any constraints on testing, development, or deployment of current or planned US missile defense programs or current or planned United States long-range conventional strike capabilities.” Critics complain the treaty is too conservative and only ratifies unilateral cuts already in place. In fact, New Start represents a 74 percent cut from its predecessor, and a 30 percent cut below Regional Overview 5 April 2010 levels agreed in the Moscow Treaty that was signed in 2002 and expires in 2012. The launcher ceiling is a 50 percent cut from the 1,600 now permitted. Of course, there is no guarantee that either legislature will ratify the Treaty, but optimism is the prevailing sentiment among even realists in both countries. The Treaty is significant on two counts. First, it represents a genuine “reset” to US-Russia relations. The bilateral relationship has been on the rocks for some years now and it is vital that the two countries demonstrate that they can – and desire to – work together on key international issues. Missile defense issues are still a huge potential stumbling block but this agreement is an important signal. Second, the deal provides momentum for international arms control talks. Obama hosts a nuclear safety conference in mid-April; the new Treaty should convince the 43 heads of state that the two states with the biggest nuclear arsenals are serious about nonproliferation and disarmament. Hopefully that seriousness will prove contagious. In May, the Nuclear Nonproliferation Treaty Review Conference convenes at the United Nations. A global consensus is critical if the world hopes to roll back the North Korean nuclear program and cap Iran’s nuclear ambitions. A big two arms agreement could provide the cornerstone of a successful RevCon – and lead the way to a new round of nuclear weapons talks that includes still more states. The new US Nuclear Posture Review, published after the end of the quarter, will be taken up in the next issue of Comparative Connections. (Those who can’t wait, can get a first glance at its contents in “The 2010 Nuclear Posture Review: Moving Toward No-First Use,” by Ralph Cossa, PacNet 17, April 6, 2010). It is another important part of the effort to transform the nuclear weapons discussion. The new policy represents a critical shift in US thinking with the potential to move the center of gravity of the nuclear weapons debate. We shall see if it has that impact. About that changing balance of power … For some years now, there has been talk of the “changing balance of power in Asia.” Recently, the murmurs have become more pronounced. Blame a global recession that is widely seen as “made in the USA” along with China’s economic resilience and its newfound confidence; mix in US “distractions” – Afghanistan, health care, a poisonous political atmosphere in Washington DC, and precarious finances – and Asia’s strategic dynamics appear to be shifting. Financial Times foreign policy analyst Gideon Rachman made the case most explicitly in a March 8 column, but there are echoes of this thinking throughout the region, typically heard when trying to explain the seemingly new boldness in Chinese foreign policy. More subtly, it is implicit in calls for greater US engagement with the region by many Southeast Asian analysts and governments. This isn’t new – China’s rise has been “an ominous development” for nearly a decade. But the latest piece of the strategic puzzle is the new government in Japan: Prime Minister Hatoyama Yukio and his desire to “rebalance” relations with his ally and forge a new relationship with Asia. Rising tensions with Washington, triggered by delays in the Futenma relocation and the uncovering of the “secret nuclear pacts,” and the visit of Democratic Party of Japan kingpin Regional Overview 6 April 2010 Ozawa Ichiro to Beijing with several hundred businessmen and politicians in tow are manifestations of new thinking in Tokyo. Forget the rhetorical bows noting that the US-Japan alliance is the cornerstone of Japanese foreign policy. According to this logic, Hatoyama’s call for an East Asian community that excludes the US is proof of his real thinking and the final piece of evidence in the case for a shift in the balance of power. This is an overly simplistic and alarmist assessment of regional dynamics. China is rising, but there are real limits to its influence, strength, and allure. China is a big presence in the region, but Asian governments have little faith or confidence in Beijing. The current Japanese government, like each of its predecessors, is debating its place in the region and the world. Rapprochement between Tokyo and Beijing is a good thing, but the issues that have long divided those two countries will remain powerful obstacles to an intimate relationship. Both governments – and all others in the region – still see the US role as integral. No other nation can, and is ready to, provide regional security and stability. Washington’s power may be diminished, but it remains an integral part of the Asian order. Celebration and trepidation at the NPC This quarter also heralded the annual meeting of China’s National People’s Congress (NPC). The 3,000-odd part-time legislators look a lot like a rubberstamp legislature but the meeting itself affords a good look at the government’s worldview and policy priorities. In his work report, Premier Wen Jiabao touted the country’s impressive economic performance of the last year. While other nations struggled to escape the grip of the global downturn, China posted 8.7 percent growth, and even hit 10.7 percent in the last quarter of 2009. The target for 2010 remains 8 percent and looks to be easily achievable. That target is within reach, but there are plenty of reasons to be concerned. While promising a 17 percent jump in state lending, Wen worried that “latent risks in the banking and public finance sectors are increasing.” Corruption is always a problem – there are fears that stimulus efforts are being diverted and stolen. That is part of a bigger issue: widening inequality within the society and dangerously rising expectations. With tens of thousands – some say more than 100,000 – incidents of social unrest each year, public anger could boil over. The Chinese leadership worries about how it can rationalize the economy while ensuring that workers are not squeezed by the transition to a more market-driven economy. Even as new jobs are created, they don’t necessarily hire displaced labor. That is a delicate and difficult process. There were two other headline items at this year’s NPC. The first was the decision to hold the defense budget increase to 7.5 percent. That is the first time that China’s military budget has increased less than 10 percent since 1989. Critics will complain that the official budget still exceeds $77 billion, and that the official budget doesn’t include considerable expenditures; by some estimates, the real military budget is at least twice as large. But the smaller figure shows sensitivity to the need to choose between “guns and dofu” as well as concern about the constant complaints by other governments about a defense budget that appears to be at odds with the government’s reputed intentions. Regional Overview 7 April 2010 The second issue was the passage of the National Defense Mobilization Law, which lays down rules and procedures in the event of a national emergency. Its 72 provisions explain which government institutions have supreme authority in an emergency – the State Council and the Central Military Commission – and the extent of their power, which is sweeping. Indeed, the law calls for virtual full-scale mobilization of individuals, and control over almost all state and private assets. Passage of the law shouldn’t be seen as a portent: it has been discussed for some time. Some Chinese sources say the unrest in Tibet and Xinjiang underscored the need for better procedures in the case of an emergency to ensure that lines of communication and authority are clear. Bangkok boils over The situation in Thailand went from simmer to boil this quarter. The country’s Supreme Court primed the pump when it held that former Prime Minister Thaksin Shinawatra, deposed in a coup in 2006, was guilty of corruption charges and ordered the seizure of a substantial chunk of his $2.3 billion fortune. Thaksin, one of Asia’s richest men, lost $1.4 billion when the court concluded that the telecommunications magnate and his wife had hidden ownership of shares in a family business when he was prime minister. This created a conflict of interest, most evident in $127 million worth of loans given to the Burmese government, which would be used to buy satellite services from his company. Aiming for a Solomonic solution, the court concluded that it could not seize all his monies, as he had a considerable fortune before he took office that could not therefore be the fruit of those illegal activities. The court may have also reasoned that leaving him half his money would make it harder to call him a martyr. Fat chance! Thaksin vowed to fight the verdict, while urging his supporters to protest peacefully. That call fell on deaf ears: Immediately after the decision there was a series of explosive attacks on branches of the Bangkok Bank, which is widely believed to support the group that ousted Thaksin. In Bangkok’s red-hot political environment, many conspiracy theorists believed the bombings were done by the government to discredit the opposition movement. The “Red Shirts” that back Thaksin called for a million-person march in mid-March; supporters said about half that number turned out while other sources put the crowd at between 50,000-150,000. More significant than the events of that day was the fact that demonstrators have remained in downtown Bangkok ever since. This standoff culminated in televised three-hour peace talks between Prime Minister Abhisit Vejjajiva and the opposition in late March. That yielded no result, nor did a follow-up session the next day. His offer to dissolve Parliament a year early, in December, won him no plaudits either. Two days later, the government tried to buy off Thaksin’s supporters with a $1.3 billion debt relief program that looked a lot like the former prime minister’s plans. That too had little impact. Finally, after a ghoulish episode in which protestors threw blood at the government, the Parliament itself was overrun by protestors, forcing the evacuation by helicopter of some legislators. Mr. Abhisit issued a declaration of emergency, which is where the situation stood as we went to press. Regional Overview 8 April 2010 It is hard to see a solution to this crisis. Thaksin has to be found guilty to validate the coup that removed him from office; anything less delegitimizes the current government. But his fate is symbolic of the deeper divisions in Thai society. Thaksin stood for poor and disenfranchised Thais who had been spectators to the country’s economic success. To his foes, the former prime minister and his supporters are a threat to the established political order. There is increasingly little room for compromise.