Atlantic Sentinel

Author: Richard Colapinto

  • Careful Balancing Act for Southeast Asia

    On Monday, South Korean president Lee Myung-bak visited Burma and promised to extend loans and grants to the poverty stricken country.

    The surprise visit came as Japan and South Korea have stepped up their diplomatic engagement in Southeast Asia over the last month, which, in turn, comes on the heels of closer engagement by the United States since 2009.

    This stems not only from a desire to gain access to the region’s natural resources but more importantly, to bolster their soft power in the Mekong region, an area that is becoming increasingly important as concerns persist about Chinese foreign policy amid the rapid modernization of the People’s Liberation Army. However, while the Mekong countries are interested in the economic and political benefits from closer relations with the United States, they are mindful of the risk of antagonizing China. (more…)

  • ASEAN Takes Step to Enhance Economic Integration

    In order to insulate their economies from the continuing financial uncertainty in Europe, the Association of Southeast Asian Nations along with China, Japan, and South Korea, known as ASEAN+3, announced steps last Thursday to enhance economic cooperation between Asian states.

    The countries will double the size of a liquidity fund that member states can tap into to $240 billion. They also increased the quota of unconditional funds each country can access from 20 to 30 percent before triggering an International Monetary Fund program as well as an extension of the maturity of currency swaps from ninety days to twelve months.

    Officials are particularly optimistic about the economic prospects for ASEAN. At the Asian Development Bank’s board of governors meeting in Manila last week, chief economist Rhee Changyong was extolling on the future of ASEAN, stating that “a new growth force is coming in Asia, one that would come to match the economic growth seen in China and India.” (more…)

  • Vietnam Key to Japan’s Southeast Asia Policy

    During the Mekong-Japan Summit held in Tokyo last month, Japan announced additional development aid for and investments in the countries that make up the Mekong Delta region.

    The summit was further evidence of Japan’s goal of developing stronger relations with Southeast Asian states as the Japanese economy is beset with tepid growth and due to the uncertainty and mistrust with the region’s biggest and fastest growing power, China.

    However, the headlines last month overlooked one of the most important outcomes of these meetings thus far, the steady improvement of Japan-Vietnam relations to the level of strategic partnership. (more…)

  • Japan’s Central Bank Tries More Quantitative Easing

    In a move widely expected, but one which ultimately left markets disappointed, the Bank of Japan announced more measures that it hopes will fight off deflationary pressures and spur economic growth as well as weaken the yen versus the dollar to boost exports.

    Japan’s central bank is expanding its government bond buying program by ¥10 trillion ($124 billion) to ¥40 trillion, extending the duration of corporate bonds it buys from two up to three years maturity and increasing the size of its total asset buying program by ¥5 trillion ($61 billion) to ¥70 trillion.

    In addition, the central bank’s policy board voted unanimously to keep interest rates at virtually zero or .1 percent.

    Market reaction was initially positive but when investors digested the news in its totality, sentiment soured. Given the size of Japan’s economy, the amount of easing was seen as fairly tepid. (more…)

  • Vietnam, United States Announce Military Drills

    Vietnam and the United States have announced that they will hold five days of “noncombatant” military exercises in the central part of the country near the city of Da Nang at the end of April 2012.

    Press reports indicate that the drills will be focused on skills like navigation and maintenance.

    The cooperation between the former enemies points to the new dynamic at play in the region with the smaller nations fronting the South China Sea increasingly falling into the arms of the United States due to their fear of a rising China.

    The American-Vietnamese plans to conduct drills comes against the backdrop of a fresh dispute between China and the Philippines. The latest confrontation between the two nations was triggered when Chinese fishermen were discovered in waters claimed by both China and the Philippines. The Chinese deployed navy ships and planes to the area in support of what it said were its sovereign rights, forcing the present Philippine warship to vacate.

    Relations between Vietnam and the United States have steadily improved over the last ten years as they share mutual concern over China’s rise and future plans in the region. Vietnam, like the other littoral states, has claims to portions of the South China Sea which is believed to hold vast reserves of oil and gas deposits.

    As the Chinese navy vastly increased its capabilities in recent years, Vietnam has also embarked on expanding its naval posture. In 2009, it bought six Russian diesel submarines worth $2 billion, in addition to eight Sukhoi fighter jets, with plans to buy more in the future.

    Although they share a communist ideology, bilateral relations between China and Vietnam have been historically difficult. The two fought a war in 1979 after China became concerned that Vietnam was developing closer relations with the Soviet Union. This was a time when Sino-Soviet ties were strained and there was a fear that Chinese interests in Indochina would be affected.

    The war was inconclusive militarily but sent the message that China would not tolerate with outside meddling in its backyard.

    Beijing has tended to bully its neighbors when it is powerful. In 2011, it warned Vietnam that it would not hesitate to use military force to enforce its claims in the South China Sea region.

    Despite China’s threats, in April 2012, Vietnam partnered with Russia’s Gazprom company to develop two offshore gasfields in the ocean.

    Vietnam faces a quandary of seeking help from the United States against China without allowing the country to open up to political reform. The government has succeeded, however, in keeping tight control over power even as it reformed the economy, much like China has done. Following its economic reforms, foreign direct investment flowed into the country lifting average annual growth to 8 percent from 2003 to 2007. However, the World Bank predicts that Vietnam’s economy faces tough prospects going forward from rising inflation and increasing unemployment.

    As such, the old axiom holds true in Southeast Asia as elsewhere. The enemy of one’s enemy is one’s friend. China and the United States aren’t quite enemies but the region’s smaller countries share concerns about its military expansion and what it means for their interests going forward. For this reason, China is pushing countries like Vietnam to seek out support from the Americans in order to balance China’s power.

    For its part, America is eager to reestablish its position in Asia as it has announced that its economic and political interests lie here in the twenty-first century, hence President Barack Obama’s “pivot” to Asia. Therefore, we can expect to see additional plans for drills between militaries as the specter of a rising China hangs over the region and the world.

  • Britain, Japan Initiate Bilateral Defense Relations

    Japan and the United Kingdom have agreed to an expansion of their defense relationship. Theirs is the first of its kind for Japan with another country besides the United States since the end of World War II.

    In what was the first leg of a four day trip to Asia to promote British trade and investment, Prime Minister David Cameron met his Japanese counterpart Yoshihiko Noda in Tokyo and announced that the two countries would cooperate on identifying defense programs for joint development and production.

    Though no specifics were mentioned, one Japanese newspaper reported that Cameron had mentioned developing helicopters or protective gear against chemical weapons. In a joint statement, the two countries stated they would launch at least one program as soon as possible in addition to developing joint military training and unit to unit affiliations.

    Japan lifted its restriction on exporting weapons and cooperating with other nations in defense programs in December 2011. The ban had in place in accordance with its pacifist constitution and was in effect with all countries except the United States which ostensibly provide for the defense of Japan.

    For Japan, this agreement should be considered in the context of continued economic weakness, domestic politics and the specter of a growing China.

    The economic benefits of greater trade with Britain amid the continuing global economic crisis will be welcomed. Japan’s economy has been struggling to recover amid the slowdown in the European Union and a rising yen.

    Its decision last year to opt for the F-35 stealth fighter by America’s Lockheed Martin over the Typhoon jet made by a consortium of European countries was controversial because Japan chose the more expensive plane during a time of scarce resources and a stagnating economy. Increased contact with the British military may result in more competition for Japanese defense expenditures in future procurement deals.

    As China has become the number one trade partner to countries in Asia, Japanese security planners no doubt join others with concern about China’s long-term goals in the region.

    There is strong apprehension about China using its growing leverage to bully its neighbors in trade and territorial disputes. This fear, and the continuing threat from North Korea, has resulted in deeper cooperation with the West both economically and militarily by Japan and other nations in Asia as evidenced by the much vaunted Asian “pivot” by the United States.

  • Japan Ready to Shoot Down North Korean Missile

    Japan has activated its emergency alert system in anticipation of a long range ballistic missile test by North Korea.

    Japan, South Korea and the United States have deployed navy ships equipped with anti-missile systems in the waters surrounding the Korean Peninsula as it was reported that the North moved to the preparation stage for a long range rocket test.

    The North Korean government has said that it is preparing to launch a weather satellite into space in the coming weeks but Washington and its allies in the region suspect that it is really a cover for a long range ballistic missile test. (more…)