Tuesday, February 20, 2018

What if we asserted our victory in the Arbitral Tribunal and did not depend on China loans and credits, $24 Billion economic package?

I normally don’t respond to comments that go into a blame game. That’s the usual defensive narrative in the South China Sea debate. When did it start? Why blame the present? 

The point is we won in the July 12, 2016 ruling of the Arbitral Tribunal and the Philippines could have immediately gone into a diplomatic offensive and there were many big guns that immediately expressed support for us like the US, Japan, India, Australia, Vietnam, EU, calling on all parties to respect the Rule of Law. But the Philippines opted to set aside the ruling. We could have even gone to the UN General Assembly to deliver speeches condemning China’s illegal occupation and disregard for the Rule of Law. The UN Security Council would not be a good forum because of China’s veto. Then we had the ASEAN Summit of 2016 followed by the Asean Summit here.The very graphic photos of China’s militarized artificial islands would have made a very good UN General Assembly speech entitled "Clear and Present Danger to the Philippines and the Rest of the World” a la Cuban Missile Crisis.

Would such diplomatic offensive work? Perhaps not. But not acting on the Arbitral Tribunal Ruling certainly did not tame the Dragon and made it more aggressive.

 What about the $24 Billion economic package which PRRD got in October 2016 after his Beijing visit? It’s been more than a year but we haven't seen much out of that yet. I think it is more of a carrot being dangled now that could be withdrawn if we do not behave well.

We can get a lot from Japan which has been very aggressive and much faster in the implementation of projects they are funding. 

Please note the following:


Japan’s Own Belt and Road

Tokyo is ramping up international partnerships and investments to offer an alternative to Beijing’s signature foreign-policy project.

Japanese Prime Minister Shinzo Abe and Indian Prime Minister Narendra Modi prior to a bilateral meeting in Ahmedabad, India, on Sept. 14, 2017. (Prakash Singh/AFP/Getty Images)
Japanese Prime Minister Shinzo Abe and Indian Prime Minister Narendra Modi prior to a bilateral meeting in Ahmedabad, India, on Sept. 14, 2017. (Prakash Singh/AFP/Getty Images)  
For the first time in 15 years, Japan’s foreign minister last month paid a visit to the tiny island nation of Sri Lanka, shepherding a dozens-strong delegation of business leaders eager to deepen economic ties between the two countries after a year of increasing security cooperation.
The visit underlined how Sri Lanka is turning into a microcosm of the sharpening geopolitical competition between Japan and China. Sri Lanka, after Pakistan, is one of the clearest examples of how China’s ambitious infrastructure development plans — known as the Belt and Road Initiative — are spooking neighbors who worry about Beijing’s rapidly increasing influence and military reach. Those fears were made manifest late last year, when Sri Lanka handed over the port of Hambantota to China to cover its debts to Beijing.
The kerfuffle over Hambantota helps explain why Japanese Foreign Minister Taro Kono made a point of ending his visit with a tour of Sri Lanka’s other big port, Colombo, announcing plans to help build a natural gas import terminal. It was just one of a whirlwind of Japanese visits and investment announcements from Southeast Asia to Pakistan to the Baltics in recent months.
Japan, faced with the abrupt disengagement of an inward-looking United States under President Donald Trump, now finds itself playing the leading role in pushing back against China’s grand plans to extend its influence throughout Asia and into Europe.
Japan, faced with the abrupt disengagement of an inward-looking United States under President Donald Trump, now finds itself playing the leading role in pushing back against China’s grand plans to extend its influence throughout Asia and into Europe.
To do so, Tokyo is increasingly joining up with other countries and especially India, launching a $200 billion infrastructure plan, and even boosting its military efforts in the broader Indian Ocean area in what is seen as a deliberate bid to counter Beijing’s growing heft. The effort even extends as far afield as Eastern and Central Europe, where Japanese Prime Minister Shinzo Abe made a historic visit just last month.

“Abe has been very active in proposing an alternative to China in general and the Belt and Road in particular,” said Céline Pajon, a Japan expert at the French Institute of International Relations. “It serves to complicate China’s strategic calculus and also maintain a multipolar world as much as possible.”
Since World War II, Japan has played a largely secondary role to the United States in Asia, sheltering under the American security umbrella while focusing on business. But now that Washington has bailed out of the single biggest project meant to push back against China’s growing influence in Asia — the Trans-Pacific Partnership (TPP) trade pact — Japan has been forced in many ways to pick up the slack.
Abe appears to be embracing this role. Both times he has led Japan — from 2006 to 2007 and again since 2012 — he has sought to make Tokyo a bigger player on the regional stage, even against domestic opposition. In 2016, he launched his own version of a development and security plan for Asia, designed as an explicit alternative to China’s vision. That includes a deliberate focus on building “quality” infrastructure, a dig at the perceived flaws of Chinese-built projects.
“These trends were around before Trump,” said Robert Dujarric, the director of the Institute of Contemporary Asian Studies at Temple University Japan.
“These trends were around before Trump,” said Robert Dujarric, the director of the Institute of Contemporary Asian Studies at Temple University Japan.
 But they’ve been kicked into overdrive in part to “compensate for a lack of U.S. leadership,” he said.

Dujarric called Japan’s central and surprising role in salvaging the TPP even without U.S. participation “exhibit A.”
That new role is crystallized in Japan’s growing strategic partnership with India. The two are working together to develop much-needed power plantsrailroads, and port facilities in Sri Lanka, Bangladesh, Myanmar, and on Indian Ocean islands.
More ambitiously, they’re jointly promoting something called the Asia-Africa Growth Corridor, an outgrowth of Abe’s own plan meant to deepen the economic connections between Africa and South and Southeast Asia. Not coincidentally, it’s positioned as an alternative to China’s own leapfrogging across the Indian Ocean to East Africa.



Now, let’s see how the China funded projects have been doing in the Indo Pacific Region (from Wikipedia, Belt & Road Project):

The Philippine Government, in evaluating the implementation and feasibility of projects listed under China's $24 Billion economic package pledged to President Duterte in October 2016 should look at these derailed Built & Road projects. Reasons for derailment are "violation of bidding rules," "financing issues," "not subcontracting sufficient work" to local companies. Even close China ally Pakistan rejected $22.3 Billion worth of rail, airport and dam projects due to "ownership" issues. Here are the derailed projects:
"Derailed projects
"According to Associated Press reports there are numerous stalled and aborted OBOR projects in several nations including the following:[50]
Nepal - US2.5 billion: $2.5 billion Budhi Gandaki Hydro Electric Dam Project was canceled by Nepal in November 2017 for the violation of bidding rules.
Hungary: European Union is investigating Hungary-Serbia high-speed railway project build by Chinese contractors for the violation of bidding rules.
Myanmar - US3 billion: $3 billion refinery contract to China was terminated after financing issues.
Pakistan - US22.3 billion: $10 billion Karachi rail project and $260 million Gwadar airport were stalled and US12 billion Diamer-Bhasha Dam in Gilgit-Baltistan was cancelled due to ownership stake.
Thailand - US15 billion: High-speed railway was cancelled in 2016 for not subcontracting sufficient work to Thai companies.
Tanzania - US11 billion: Bagamoyo Port was stalled due to financing issues.
Sri Lanka - 1.5 billion: Hambantota Port led to Sri Lanka running into financial problems due to the high interest rate of loan given by Chinese, leading to assets transfer to China.
Asia, Africa, and the Middle East projects: BMI Research database of Asia, Africa and the Middle East shows many projects are too vague and some are planned up to 30 in the future.
From Wikipedia


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We should learn from Indonesia. President Widodo is now regretting they selected China funding for their huge railway project. 


Widodo woos Japan as infrastructure ambitions stall

China fails to deliver the results the Indonesian leader needs to show voters
JUN SUZUKI, Nikkei staff writer
Indonesian President Joko Widodo, right, shakes hands with Toshihiro Nikai, who visited Indonesia as a special envoy for Japanese Prime Minister Shinzo Abe on Jan. 19. (Photo courtesy of the Indonesian President's Office)
JAKARTA -- Amid major delays in his trademark infrastructure program, Indonesian President Joko Widodo is working to strengthen ties with Japan in hopes of building a legacy ahead of the 2019 presidential election.
Widodo called for the swift development of Indonesian infrastructure in a meeting Jan. 19 with Toshihiro Nikai, secretary-general of Japan's ruling Liberal Democratic Party. The Indonesian leader named five projects Japanese players are involved in, such as the development of the Patimban port and the construction of a mass rapid transit system in Jakarta. He seemed satisfied when told that construction at Patimban would begin in May and that a portion of the port would open in March 2019.
Key gubernatorial elections are coming up this June, to be followed by the presidential vote in April 2019. The proposed timeline fits perfectly with Widodo's hopes to make tangible progress on infrastructure development before he likely seeks re-election next year.
Bilateral ties seem to be warming as the countries celebrate their 60th anniversary of diplomatic relations this year. But Widodo, who took office in October 2014, has not always been on such great terms with Japan. Though his administration denies it, he is said to be relying more on China to help develop infrastructure.
Widodo has played Japan and China against each other for a piece of his 5,000 trillion rupiah ($366 billion) infrastructure initiative. A key example was with Indonesia's first high-speed railway. The Southeast Asian nation was initially leaning toward adopting Japanese shinkansen bullet trains using yen-denominated loans. But Widodo, eager to avoid debt, decided in September 2015 to go with the Chinese bid, which came at no cost to the Indonesian government.
His administration also jumped on Chinese proposals for new power plants and other projects, which promised a quick turnaround and no cost to the government. Chinese direct investment in Indonesia rose to $2.7 billion in 2016, nine times the 2013 figure.
But many of these projects may end up pipe dreams. Two years after the groundbreaking on the high-speed railway in January 2016 to much fanfare, all that has happened is site preparation along a portion of the planned route. The Chinese side refuses to cough up promised funds until Indonesia secures all necessary land, bringing the project to a standstill.
The railway stands little chance of opening as planned in 2019. This was a major miscalculation for Widodo, who hoped to have it completed before the election. The government began quietly reviewing its plans in January on the president's orders.
Only such relatively low-profile projects as highways and regional ports have made much headway, while Widodo's most prominent initiatives face delays. The only major projects that could still be completed before the April 2019 election are the Patimban port and the MRT -- both joint projects with Japan.
Indonesia has hit snags in plans to bolster its infrastructure through participating in China's Belt and Road Initiative. Issues including maritime disputes in the South China Sea have also soured public opinion on the Asian giant, making it hard for Widodo to push for greater cooperation.

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