Recent regulations in Indonesia have looked to cap foreign ownership in the high-risk mining sector, such as this coal mining operation in the Derawan Islands in the Sulawesi Sea. Source: jaundicedferret's flickr photostream, used under a creative commons license.

Indonesia’s economy saw a confidence-boosting 6.5 percent growth in GDP in 2011 fueled by a strong middle-class consumer demand and surging foreign direct investment (FDI) inflows of $19.3 billion that year. Indonesia has continued to ride a wave of investor optimism in the first quarter of 2012 with a record 30 percent surge in FDI inflows valued at $5.6 billion. With Moody and Fitch having upgraded the country’s credit rating to investment level for the first time since the 1997 Asian financial crisis, optimism about the country’s strengthening economy has prompted optimism that Indonesia is ready to join other emerging economic superstars on the world stage.

This enthusiasm has been tempered, however, by recent protectionist moves, particularly in the mining sector. The Ministry of Energy and Mineral Resources rattled investors March 7 with the announcement of new regulations aimed at restricting foreign ownership in the mining sector to 49 percent. Under the new regulations, foreign companies must gradually reduce their stake in mining enterprises to 80 percent in six years and 49 percent in 10 years. Although domestic private investors will be able to bid on foreign shares, public sector entities will be given priority. Indonesians have long called for such restrictions on foreign ownership of mining and processing out of a sense of resource nationalism, but foreign observers view the new policy as an unanticipated lurch toward protectionism.

Opaque regulatory measures like the new mining law, where no input was solicited from the industry itself, have renewed investor anxiety about the direction of Indonesian economic policy. Such protectionist measures have complex negative reverberations as investors question whether similar restrictions might be levied against the manufacturing and service sectors in the future. Apprehension about the new mining law played a role in Standard & Poor’s decision to forgo upgrading the booming market’s credit rating in response to recent “policy slippage.”

The Indonesian government plans to establish an auction mechanism to handle the divestment of foreign mining shares. It is critical that this mechanism be operated transparently and that foreign investors receive competitive commercial prices for their shares, if the government hopes to allay concerns about investing in Indonesia’s high-risk mining environment.

The Indonesian government needs to take prompt steps to ensure an orderly adjustment to the new regulation, including:

1) Vetting entities looking to acquire stakes in mining operations to ensure their operations will not be disrupted by incompetence.

2) Creating sufficient oversight to make sure these new regulations have their intended effect of benefiting the Indonesian people and proving to foreign investors and Indonesians that the regulations will not just enrich the well-connected.

3) Strengthening conflict resolution mechanisms and corporate law should be a priority. Dispute mechanisms circumventing costly battles in court or through arbitration will be essential if Indonesia wants to burnish its image as an investment hub.

If Indonesia’s policymakers are determined to purse greater nationalization of extractive industries, they can look to other resource-rich nations for lessons on some do’s and don’ts. Politicians in South Africa and Mongolia have flirted with resource nationalism with chilling effects on foreign investment. In contrast, Botswana’s takeover of its diamond mining industry and the successful management of mining operations by a domestic diamond company provide a positive alternative example.

Optimism, particularly in Asia, regarding Indonesia’s investment environment remains quite high despite the new mining regulations. Thus, it is important that the Indonesian government pursues policies that attract foreign investment inflows through stable, transparent governance and a business-friendly environment. How well the government plays its role as an honest broker in the mining sector will mean the difference between perceptions of a one-time protectionist regulation or heavy-handed nationalization.

Mr. Sakari Deichsel and Mr. George Gorman are research interns in the Southeast Asia Program at the Center for Strategic and International Studies.

Myanmar punctuated its emergence from isolation and pursuit of reforms by announcing its desire to Chair the 2014 Summit meetings of the Association of South East Nations (ASEAN).  ASEAN (too?) quickly agreed. International scrutiny will be intense on Myanmar’s stewardship of ASEAN’s programs and on whether its domestic reforms make it a credible ASEAN representative.  It is a coming out party with high risks, but high payoffs.

Myanmar’s move to chair ASEAN is a curious twist. The country rejected being a founding member in 1967 due to concerns about intrusion in its domestic policies. Now ASEAN has transformed itself into a rule-based institution, championing good governance and democracy, and engaging on member’s national issues that affect the group’s shared commitment to security, peace, and prosperity. Myanmar is doubling down on its ASEAN gambit, with the payoff being positive regional and international recognition.

The international donor community could take advantage of the developments in Myanmar and ASEAN.  Rather than creating a new compact for assistance programs, it could use Myanmar’s commitments in ASEAN to align their assistance programs.

Topics covered by substantive ASEAN commitments cover both Myanmar’s own development objectives and the international donor community’s top priorities. ASEAN is seeking to build an ASEAN Community based on political/security, economic, and socio-cultural measures grounded on international principles.  These same areas match Myanmar’s development priorities. ASEAN issues encompass the entire spectrum of issues likely to be considered important to donors: human rights, governance, anticorruption, capacity building, health, labor, trade, investment, environment and disaster management.

By aligning assistance programs with Myanmar’s ASEAN commitments and work programs, donors would leverage assistance, promote Myanmar’s national development as well as its integration with ASEAN and the broader international community.  Such assistance could support specific development achievements that Myanmar could highlight when it chairs ASEAN. The U.S. government is well positioned to orchestrate this process. As of July this year Myanmar will be the country coordinator for ASEAN-U.S. dialogue, complementing a nascent bi-lateral diplomatic relationship.

Aligning assistance programs with Myanmar’s ASEAN commitments would mean that all — Myanmar, ASEAN, the US and other donors – would be pulling in the same direction.  Chances for a successful coming out party would only increase.

James Wallar is the Senior Vice President, International, of Nathan Associates, an economic consulting firm. He spent two years working in the ASEAN Secretariat after a career in the US Treasury working on trade, finance, and development issues, including in Iraq and Afghanistan.

Jakarta's skyline. Source: yohanes budiyanto's flickr photostream, used under a creative commons license.

The world has found Indonesia and it wants to invest.  However, under the granular focus brought on by outstanding growth and decades of latent opportunity, Indonesia’s ambiguity about how much investment and trade it wants has been revealed. U.S. companies and policymakers need to go to a new level of engagement to find alignment with their Indonesian counterparts. The fact is, both sides are interested in the same things, and a paradigm shift could offer relief, prevent counterproductive policies from being implemented, and spur sustained historic new investment and growth levels.

Indonesia’s economic situation is draped in a certain irony. The country worked hard for many years to get the attention of investors. The archipelagic nation comprised of more than 17,000 islands had a certain allure as the largest country and largest economy in ASEAN. As Soeharto fell, the country was focused on political reforms, not business and economics, becoming the world’s third-largest democracy. In addition, seemingly endemic problems ranging from lack of infrastructure to corruption to political risk assessments kept many potential investors at arm’s length. Even the world’s largest companies, those deploying proactive regional strategies in Southeast Asia, found that their market penetration and sales in Indonesia underperformed globally and relative to other ASEAN countries.

The macroeconomic situation has changed. Indonesia is now bounding forward as a large economy with a GDP of approximately $1 trillion that grew by 6.5 percent last year. The World Bank projects GDP growth will continue at 6.1 percent this year. Politics are relatively stable. Indonesians are looking to move ahead, make money, and invest in the future. They are innovators and social media mavens, creative and open to new ideas.

As investors press their noses against the proverbial shop-front window of Indonesia, peering in at the multitudinous opportunities on display, they are becoming more and more frustrated with a set of policies that smack of economic nationalism. These policies appear to want to force investors to do what investors would prefer to do without a regulatory gun to their head—namely, invest in the country. In that sense, such policies are counterproductive.

Indonesia’s proposed new Trade Law offers many relevant examples. Armed with the country’s strong macroeconomic performance, consumer-fueled growth, and over-confidence borne of an economy that has arrived, Indonesian policymakers have tabled a dizzying array of new regulations. These seek to protect local companies, implement old-fashioned import-substitution requirements, and require foreign companies to give up control, equity, and the power to distribute their goods while demanding that they invest.

These policies do not appear to be coordinated, but instead are the response of a bureaucracy under enormous pressures from a few well-resourced local interests focusing on aspects of the economy they hope to protect. There is also an ideological dimension, namely a long standing skepticism of capitalism and the market which is particularly embedded in some parts of the bureaucracy.

These factors are combined with an entirely rational desire to ensure Indonesia is involved in making value-added products, not just supplying raw materials for more developed economies to turn into higher value products.

However, the bureaucracy does not have the level of experience and coordination needed to marry these objectives with incentives that will result in attracting the desired value-added investment. To do so requires a careful linkage between line ministries, investment promotion, and finance. Lastly, Indonesia’s constitution promotes a defensive ideology by emphasizing that natural resources belong to the state. In the end, these factors combine and the result is that many of the proposed new regulations affect other ministries and are inconsistent with Indonesia’s laws and its international commitments.

The current policy dynamic needs to shift. It has set Indonesian policy and investors on opposite sides of the table, and this does not need to be the case. U.S. companies and trade policy officials should proactively work to change the paradigm.

The fact is that U.S. companies want the same things that Indonesians want: they want Indonesians to have more equity in their companies and growth in their economy; they want to create jobs and invest in training, education, and communities; they want to bring money and technology to Indonesia and implement nationwide business plans. U.S. companies are well poised – and eager – to support the Indonesian government’s ambitious new Master Plan for the Acceleration and Expansion of Economic Development (MP3Ei).

While U.S. companies and their Indonesian counterparts are just a step away from alignment, the same is true for trade and economic officials. For instance, USTR just announced a new model for bilateral investment treaties, commonly known as BITs, with adjustments to seek progress in large developing economies like China and India. That new model should be tabled with Indonesia as soon as possible.

History shows that protectionist policies can push countries into a middle-income trap, unable to invest in infrastructure and missing the ingredients of long-term growth and innovation. Indonesian policymakers are right to be deeply concerned about Indonesia becoming “stuck.” However, allowing laws that force divestment or localization kills investment and exploration, and creates the equivalent of regulatory extortion. The proposed Indonesian mining law, for example, contains policies that will force divestment, limit future exploration, and undercut stated goals of enhancing investment in valued-added development of metals and energy in Indonesia.

The situation begs the question of what Indonesia’s economic growth numbers could be if leaders were empowered to make new deals and coordinate policies that brought investment and international standards to Indonesia. Growth rates of 6.5 percent could be closer to 8 or 9 percent.

Indonesia faces a key decision point. Should it use this time, when the world wants to participate and invest in Indonesia’s growth, to put in place forward-looking policies that encourage investors and empower local companies? Or should it play defense and protect a near-term opportunity for large domestic companies to dominate their respective sectors and soak up the benefits of the current growth cycle?

Indonesia has the vision to make the determination to build a sustainable foundation for growth that builds equity, capabilities and opportunities for its citizens.  Good partners should support and encourage that strategy.

Ernest Z. Bower is senior adviser & director of the Southeast Asia Program at CSIS.

[Editor's note: This post is the first in a new blog series, The South China Sea Frame-by-Frame. It incorporates data and imagery from the CSIS  Southeast Asia Program's innovative policy tool, The South China Sea in High Resolution.]

The Philippines opened yet another chapter in the ongoing South China Sea dispute with its neighbors on February 29, 2012 by inviting foreign companies to take part in its long awaited fourth Energy Contracting Round. This round opens bidding on 15 oil and gas blocks. Two blocks, Areas 3 and 4 near the Reed Bank, fall within China’s so-called “9 dash line” claim, which is mirrored by Taiwan. Beijing quickly responded to Manila’s announcement by lodging a formal protest, reiterating its “indisputable sovereignty” over the islands and waters of the South China Sea, and calling any oil exploration “unlawful.” Taiwan’s foreign ministry followed suit with a March 13 statement saying, “The Reed Bank is part of the Spratly islands . . . and we reject any claim or occupation by any means of the islands and the surrounding waters.”

What is clear in this instance is that China and Taiwan’s claim cannot rest on the “9 dash line” alone and be taken as legitimate. There is simply no basis in international law supporting that grandiose claim – a fact even Beijing seems to increasingly recognize, as evidenced by the much-analyzed Chinese Foreign Ministry statement earlier this year that the South China Sea dispute is about the “islands and adjacent waters,” not the sea in its entirety. The “islands” in this case are the Spratlys.

The question then is not whether Areas 3 and 4 lie within the “9 dash line,” but whether they fall within the adjacent waters of nearby islands claimed by China. This is the point made last month by Robert Beckman. Under the UN Convention on the Law of the Seas (UNCLOS), to which both China and the Philippines are signatories, a country’s islands generate an Exclusive Economic Zone (EEZ) out to 200 nautical miles in it has exclusive rights to all natural resources, including oil and gas.

The key word here is “islands,” as distinguished from rocks, shoals, banks, or other features. Under UNCLOS, an island must meet two criteria: it must remain above water at high tide, and it must be capable of sustaining human life and economic activity of its own. The latter requirement, habitability, is ambiguous; the former is not. Any feature that does not meet these requirements is eligible only for territorial waters out to 12 nautical miles, and there are no features within 12 nautical miles of the blocks in question. Nanshan Island and Flat Island are the closest Spratlys above water at high tide, though they are still twice as far as the Philippine coast is from the blocks.

As China and Taiwan would eagerly point out, much, though not all, of Areas 3 and 4 would fall within their hypothetical 200 nautical mile EEZs. While accepting both islands as habitable for the sake of argument, it is worth noting that neither has fresh water or significant vegetation, both are currently occupied by the Philippines, and the larger of the two, Nanshan, is only about 1000 feet across at its widest point.

Since the EEZs of Nanshan and Flat Islands overlap with that of the Philippines, being less than 200 nautical miles away, a compromise would need to be reached on their respective boundaries. Under UNCLOS, such a settlement can be reached bilaterally or through arbitration at one of several international forums, most importantly the International Tribunal on the Law of the Seas (ITLOS). Not only do these forums exist, but they have decades of precedent to rely upon. The starting point for any settlement on maritime boundaries under international law is almost always equidistance (there are other methods of arbitration such as the angle-bisector method that can apply in the case of adjacent coastlines, but would not make sense in the case of an island).

By delimiting the halfway point between Flat and Nanshan Islands, and the Philippine coast, it is possible to estimate with some accuracy where China’s best-case EEZ limits would fall. They are best-case because such a settlement would go against all prior precedent. As the recent ITLOS decision concerning Bangladesh and Myanmar reiterated, the most important consideration in delimiting maritime boundaries has traditionally been the principle of avoiding inequity – including by considering the relative length of relevant coastlines, and by taking into account any bays or other concavities that unduly influence the EEZ boundaries. This case would involve two islands with combined coasts of less than half a mile versus a Philippine coast of hundreds of miles – a clear inequity. In addition, the entire disputed portion of the blocks is a result of the concavity in the gap between the Philippine islands of Palawan and Mindoro – another inequity. Both of these facts would almost certainly result in shifting the equidistance line significantly toward the islands.

What this exercise reveals is that a sliver of two oil and gas blocks, roughly 250 square miles out of more than 4,700 square miles, or just over 5 percent, could conceivably be considered disputed under international law. And even that would require a remarkable deviation from prior legal precedent. For the time being, Manila might be better off taking the high road and removing the sliver in question from Areas 3 and 4 until an eventual settlement of EEZs is reached. That would let the Philippines appear magnanimous and greatly strengthen its claim to be the party following the law while ceding almost nothing.

Mr. Gregory Poling is a research assistant with the CSIS Southeast Asia Program.

The future of Cambodia's prosecution of former Khmer Rouge officials is in doubt after yet another judge's resignation due to interference. Source: Extraordinary Chambers in the Courts of Cambodia's flickr photostream, used under a creative commons license.

Judge Laurent Kasper-Ansermet submitted his resignation from the Extraordinary Chambers of the Courts of Cambodia, or ECCC, on March 19 after five tumultuous months as its international co-investigating judge. The United Nations and the Cambodian government established the tribunal to prosecute crimes against humanity by the former Khmer Rouge leadership, which ran the country for a terrifying three and a half years from April 1975 through January 1979, but the ECCC has struggled to demonstrate efficacy and impartiality. Kasper-Ansermet cited repeated obstruction by his Cambodian counterpart, the national co-investigating Judge You Bunleng, and the dysfunctional situation within the ECCC as reasons for his departure.

Kasper-Ansermet’s predecessor, Judge Blunk of Germany, resigned October 31, 2011, citing similar concerns. Though Kasper-Ansermet was appointed and approved by both the United Nations and Cambodian government as a reserve judge in 2010, Judge You Bunleng’s office refused to acknowledge him as Blunk’s replacement, arguing he needed to be permanently appointed. The Cambodian Supreme Court vetoed his nomination in January, but the UN special expert to the tribunal, David Scheffer, said Kasper-Ansermet had the clear authority to proceed with investigations.

The ECCC has so far managed to bring two cases, 001 and 002, to trial, but its future rests on cases 003 and 004. Those cases involve current members of the Cambodian government, and Prime Minister Hun Sen has said he will not allow them to go to trial because their prosecution could destabilize the country, though this assertion is dubious. Initial investigations into the cases were closed in April 2011, leading to allegations of political pressure and government interference in the court. Kasper-Ansermet reopened the cases in February and attempted to push them forward by notifying suspects of the charges against them in early March, without approval or cooperation from the Cambodian side of the court. The following week, drafters of the ECCC’s 2012 and 2013 budget failed to allocate resources or time to the cases; according to the drafters of the budget, the ECCC’s investigations and Pre-Trial Chamber are expected to be phased out by 2013.

Kasper-Ansermet released a 14 page memo on March 21 citing specific examples of how his office was blocked by his Cambodian counterparts, including not responding to official requests, not including documents in case files, and being denied access to translators, drivers, and even the official seal of the court. The authorities’ blatant interference in the ECCC raises a red flag about Cambodia’s ability to play a leadership role in human rights, good governance, and rule of law as it takes over as Chair of ASEAN this year.

In response to the memo, United Nations Secretary General Ban Ki-moon’s spokesman Martin Nesirky said impunity for former Khmer Rouge officials will not be tolerated, and there is talk among analysts such as Ou Virak, president of the Cambodian Center for Human Rights, that the United Nations could pull out of the court all together. The Cambodian government contends that the tribunal remains a model, independent court. The court was founded in 2003 in the hopes of obtaining justice for the millions of victims of the brutal Khmer Rouge regime, but charges of political interference, delays, and perennial budgeting shortages call into question its effectiveness and whether the United Nations should continue to legitimize its proceedings.  That said, there was always a sense of where there is a will there is a way.

Despite the ECCC’s troubles, Australian Foreign Minister Bob Carr announced this week that his government will donate $1.7 million to the tribunal. However, now that Kasper-Ansermet has left, it is unclear if investigations into the remaining cases will continue, and the muted responses to Kasper-Ansermet’s resignation show that broad support for the ECCC is waning. What is clear is that there is little desire to do so on the Cambodian side of the court. If justice is to be served, it will require a strong push from the international community, but the will is wearing thin.

Last week Ambassador David Shear stopped by to discuss the U.S.-Vietnam relationship, including recent developments on trade, human rights concerns, and prospects for a strategic partnership in the context of common interests in regional stability. Ambassador Shear emphasized that since the normalization of relations with Vietnam in 1995, the depth and breadth of international connections has steadily expanded. You can watch his conversation with CSIS Southeast Asia Program Director Ernie Bower below:

Tuna are the biggest economic link between the Pacific Islands & the United States. Source: David L.'s flickr photostream, used under a creative commons license.

Tuna is the largest economic interest shared by the United States and the Pacific Islands, consequently the 1988 South Pacific Tuna Treaty has served as the cornerstone of US-Pacific relations. Originally designed to provide aid and development to the island nations in return for U.S. access to the Western and Central Pacific Ocean’s tuna resources, it has recently become clear that that the treaty has not lived up to expectations. In May 2011 Papua New Guinea unilaterally announced it was withdrawing, giving all parties one year’s notice before the treaty would be nullified. With the Obama administration pledging to reengage the region, the 18 parties to the treaty have scrambled to breathe new life into the agreement.

The treaty collapsed for several reasons. First, it has failed to adapt to conservation measures. Tuna has become increasingly popular and scarce over the past 50 years, with Pacific fisheries now providing more than 50 percent of the global catch. With Tuna being one of the Pacific’s major natural resources, the parties to the treaty have aimed to create a sustainable fishery. It was revealed by the late 1990s that simply limiting the number of fishing vessel was ineffective as boat capacity increased. Therefore, in 2007, the Vessel Day Scheme (VDS) was launched that instead limited fishing efforts by capping the number of days that tuna vessels could operate. Overall, the South Pacific Tuna Treaty has failed to adapt to the VDS although it has become a standard operating procedure in the Pacific tuna industry; the US has had the right to operate 40 vessels fishing for unlimited periods of time.

Second, the treaty has not adapted to the increase in the price of tuna. According to the treaty’s original terms, the United States pays $21 million dollars in aid and rent, equivalent to $1,800 per fishing day under the VDS, a sum that is below market value considering that Japan pays an average of $6,050 per fishing day.

However, the treaty’s woes cannot be blamed solely on the United States. The United States has demonstrated a willingness to change the treaty’s terms by requesting (1) a framework explaining what the VDS actually entails, (2) copies of bilateral agreements concluded under the VDS, and (3) the amount of additional aid needed to maintain the treaty. Yet, the framework, treaties, and figures have not materialized until recently because of long-standing issues with transparency.

The South Pacific Tuna Treaty is currently being renegotiated, with the latest round of talks held February 27 in Hawaii. Negotiators have made impressive progress: Papua New Guinea’s requirement that the United States agree to pay $45 million to rejoin the negotiations has been met, and, during the January talks in Fiji, the United States offered $58 million for 9,000 fishing days ($6,444 per day) – significantly closer to the islands’ demand for $60 million for 7,000 fishing days.

The reason why the progress of this treaty is critical is about more than just the prized fish itself. If the treaty is not renegotiated successfully, the United States will lack a sound foundation to reengage the Pacific as promised. Consequently, anyone concerned with the United States’ ability to follow through in its “rebalance” toward Asia should pay attention to the outcome of the negotiations.

Ms. Elke Larsen is researcher for the CSIS Southeast Asia Program and the Pacific Partners Initiative.

Last week Ambassador David Adelman stopped by to discuss the latest dynamics in U.S.-Singapore relations with CSIS Southeast Asia Program Deputy Director Murray Hiebert. Ambassador Adelman expands on the launch of a new annual U.S.-Singapore strategic partnership dialogue, Singapore’s value for the U.S. economy and the watershed elections held in Singapore last May. You can watch the full video dialogue session below:

As India's regional parties are thrust onto the national stage, they may become pivotal foreign policy players. Here a group of Samajwadi supporters march in Mumbai. Source aljazeeraenglish's flickr photostream, used under a creative commons license.

Diplomacy is always challenging, but understanding both where power lies in Delhi and what Delhi wants can be difficult for those that live in Delhi, much less those that live in foreign capitals.  Yet, if India’s 2012 elections portend what may happen in 2014, then understanding both who is in power in Delhi and what Delhi wants is about to become much harder.

A third front government (a coalition led by a regional party) that may come into power in 2014 will be unlike any that have come before it.  The parties that won big in the last two years have little experience at ruling in Delhi.  And their foreign policy goals are even less developed.

The last non-BJP or Congress Prime Minister was I.K. Gujral, who led the last third front government, the United Front, in 1997.  No matter how one views Gujral’s performance as Prime Minister, he was experienced in dealing with foreign leaders and he had a developed world view.  Before becoming Prime Minister, he had served as Foreign Minister and Ambassador to Moscow. He is famous for his Gujral Doctrine which amongst its five principals expounded that India would not seek reciprocity with its neighbors, “but (will) accommodate them in good faith and trust.”

Now contrast Gujral’s world view and experience with the three potential leaders of a new third front: Akhilesh Yadav (of UP), Mamta Banerjee (of West Bengal) and Jayalalithaa (of Tamil Nadu). They themselves do not have deep foreign policy experience, and neither do people in their party.  Banerjee does have Amit Mitra, who served as President of one of the leading Indian Chamber of Commerce’s, FICCI.  But this is not a deep bench of foreign policy mavens.

Yet it would be a mistake to assume they do not have foreign policy goals.  Jayalalithaa is strong supporter of Sri Lankan Tamils; her missive this month to the Central Government was that the Tamil Nadu state government be given prior notice of visiting Sri Lankan officials, for their safety.   Her arch rival, the DMK, is threatening to withdraw support for the Congress government at the Center if India doesn’t vote against Sri Lanka at the United Nations.  Banerjee has been vocal in her defense of West Bengal’s right to use the Teesta River that it shares with Bangladesh.  She was upset enough about the central government’s decision in regards to the Teesta waters that she did not accompany Prime Minister Singh on his trip to Bangladesh last year as originally planned.  Yadav’s party, the Samajwadi, did support the US-India nuclear deal of 2008.  But it has never been entirely clear if that was a principled stand or a matter of expediency.  The basic premise of the Gujral Doctrine would certainly be called into question with a new third front.

In 2014, these three leaders could be at the forefront of a new third front.  It may be a long shot, but the chances are certainly greater than zero.  America and others should take notice – foreign policy may now have to also go through Lucknow, Kolkata and Chennai.

Prashant Agrawal is a senior principal at the Boston Consulting Group, a global management consultancy. Mr. Agrawal represented India at the B-20 in Cannes (on the sidelines of the G-20). You can follow him on twitter @agrawalprashant The views expressed here are his own.

The future of Japan's nuclear plants like this one in Takahama is murky, with significant costs for dropping it from the country's energy mix at odds with public opinion. Source: Eunhei's flickr photostream, used under a creative commons license.

In their piece, Choosing Fukushima’s Legacy, in the March 8 Wall Street Journal, CSIS’s Michael Green and Mike Wallace argue that the “consequences of not restarting Japan’s nuclear power program…are dire.”  Prior to March 2011, Japan – the world’s third largest economy – relied on nuclear power for 30% of its electricity.  Green and Wallace point out that without a stable nuclear foundation, volatile energy costs and the limits of LNG storage make Japan uniquely vulnerable to supply shocks.

Indeed, Japan’s replacement of nuclear power with fossil fuels has increased its dependency on Russia and the Middle East for energy supplies and (along with a stronger yen) has led to Japan’s first annual trade deficit since 1980.

Prior to the disaster at Fukushima Daiichi power plant last March, official policy was to increase Japan’s nuclear power capacity to meet 50% of electricity needs.   In recent weeks, calls for the continuation of Japan’s nuclear power program have been made by experts in Washington and Tokyo, and it is expected that the Japanese government’s forthcoming energy plan will preserve a significant role for nuclear power.

While the economic and strategic case for nuclear power in Japan is compelling, its backers may underestimate the strength of public opposition.

For decades, government and industry experts have been telling the Japanese public that nuclear power is safe.  This will make renewed efforts to win public support for nuclear power all the more difficult as the scope of the equipment failures, radiation releases and contamination of Fukushima continues to sink in.  As one recent editorial in the Mainichi Daily News began: “The illusion of nuclear power safety has been torn out by the root.”

A recent poll conducted by the Yomiuri Shimbun showed 24% of the Japanese public wanting to abolish nuclear power in Japan, and another 53% favoring a reduction from pre-disaster levels.  Only 15% of respondents supported a return to pre-disaster levels of production and just 2% favored an increase.

Advocates of eliminating nuclear power can now look to Germany’s plan to replace it over the next decade with conservation and renewables.  If, as expected, the last two of Japan’s 54 nuclear power plants are shut down this spring for testing and maintenance, Japan itself could temporarily “join the ranks of the 150 nations currently muddling through with all their atoms unsplit.”

As an island nation with few natural resources, a break with nuclear power would be riskier for Japan than for Germany.  However, through conservation and increased oil and gas imports, Japan has already raised thermal power’s share of electricity output from 62% to 86%, while reducing nuclear’s share from 31% to 7% from December 2010 to December 2011 (according to METI).  If any country has the ability to wean itself from nuclear power, it is Japan, whose civic-minded citizens made emergency blackouts unnecessary last spring and summer by dimming the lights and cutting back the air conditioning.

Japan’s Prime Minister at the time of the triple disaster, Naoto Kan, has added his voice to those who believe the risks of nuclear power outweigh the benefits.  In a March 8 piece in Foreign Affairs he wrote, “I have reached the conclusion…that the only option is to promote a society free of nuclear power.”

Kan, however, recognized that the coming decades will likely see a worldwide increase in nuclear power led by emerging nations like China, Russia and India.  As the March 10 cover story in the Economist notes, “nuclear power is about to become less and less a creature of democracies.”  To avoid future disasters, Kan calls for clear international rules on the safety of power plants and the disposal of radioactive waste, citing the nonproliferation treaty as a useful precedent and calling for UN involvement.

The former Prime Minister’s point complements one made by CSIS’s Green and Wallace that, “a strong U.S.-Japan relationship could form the basis for a renewed international effort to raise standards for nuclear power operations, security, safety and emergency response.”  While Kan may be ready to eliminate nuclear power, his vision for an international set of rules is more likely to be realized if Japan stays in the nuclear power business.

Should Japan disavow nuclear power at home, its voice in the political effort to raise international standards will be greatly diminished.  Leadership on reactor design, waste disposal and industry regulation will naturally flow to those who are in the game.  Moreover, the ability of Japan’s private sector to export safer nuclear technology that incorporates the lessons of Fukushima will be harmed by the absence of a stable home market.

Although critics may consider a reduced voice for Japan to be its just deserts for the failures of regulation and imagination at Fukushima, the country’s historical sensitivity to the dangers of atomic science have long given it an important role on the world stage.  Should Japan decide to follow Germany’s example and phase out nuclear energy, its absence from the first rank of nuclear powers would be a significant loss.

Tim Johnson is an attorney based in Washington, DC.  He recently practiced in Tokyo and Singapore where he represented clients making investments across the Asia-Pacific region.  He can be reached at timothynjohnson@gmail.com.

Timor-Leste faces a crucial step toward a consolidated democracy with the March 17 presidential election. Here Timorese vote in village elections in 2009. Source: United Nation Photo's flickr photostream, used under a creative commons license.

The people of Timor-Leste will go to the polls Saturday to elect their next president. Parliamentary elections will follow in June. This is the second election cycle for the country, and is being closely watched in Washington, New York, Canberra, and capitals around Southeast Asia. Much is at stake: whether voting on March 17 remains peaceful will help determine if the United Nations can end its peacekeeping mission by the year’s end, and if ASEAN accepts Timor-Leste’s bid for membership. Amid the U.S. rebalancing toward Asia, Washington has made it clear that another democratic voice in ASEAN would be welcome.

The United States has supported Timor-Leste since its independence, providing bilateral aid valued at $25 million in 2010, as well as multilateral aid through agencies such as the UN, the World Bank, and the Asian Development Bank. Much of this aid is focused on promoting good governance, stimulating economic development, and supporting professionalization of the military and the police.

The UN Security Council voted February 23 to extend its peacekeeping mission in Timor-Leste until the end of 2012. The UN Integrated Mission in Timor-Leste, or UNMIT, was established in 2006 to stabilize Timor-Leste as partisan violence brought it to the brink of civil war. In late 2011 an ASEAN working group was established to draft a road map for Timor-Leste to become the 11th member of ASEAN. Singapore previously rejected the country’s application, saying it did not think Timor-Leste could contribute to the grouping’s goal of establishing an economic community by 2015.

Whoever controls the new government will control the country’s Petroleum Fund, currently valued at $9.3 billion. The government is pushing for greater development through its Strategic Development Plan paid for by the Petroleum Fund, but implementation of the plan has been haphazard The poverty rate has fallen 10 percent since Timor-Leste started withdrawing money from the fund five years ago, but the current rate of withdrawal is not sustainable, and development remains low.

The presidency is mainly ceremonial, but the president grants permission to a party to form a new government, giving him a crucial political role. The country’s first two presidents, José Ramos-Horta and current prime minister Xanana Gusmão, pushed the boundaries of their position, inserting themselves into political struggles and domestic politics. If none of the candidates wins a majority in the March 17 voting, the top two candidates will compete in a runoff April 14.

Of the 12 candidates running for president, three are major contenders. Current president Ramos-Horta remains popular, but lacks the support of a major party. Francisco Guterres, or Lu-Olo, is head of the Revolutionary Front for an Independent East Timor, or Fretilin, the country’s most prominent political party. José Maria de Vasconcelos, or Tuar Matan Ruak, retired as chief of the armed forces in October 2011 to run. A former member of Fretilin, He received a significant boost when Gusmão’s National Congress for the Reconstruction in East Timor Party, head of the current ruling coalition, offered him its support.

Some of the biggest challenges facing the elections are the institutional weakness of the election commission and the national police, which remain largely untested in riot and crowd control. A lack of reliable polling makes it difficult to predict who will win the elections. A recent rise youth violence has raised concerns about possible mob violence if the election results do not match the expectations of certain groups. Violence after the 2007 elections was partly triggered by constituents believing that their party had fared better than it actually had.

So far, the campaign has been largely nonviolent and key candidates and political leaders have pledged to ensure peaceful elections. Whether a democratic transition has been achieved won’t be known until after the new government is formed. Limited economic development leaves the country with a long to-do list, and winning the election will be only the first of many hurdles facing the country’s new leaders.

Ms. Kathleen Bissonnette is a Researcher for the CSIS Southeast Asia Program.

Increased competition in the Arctic is changing strategic dynamics for countries in the Pacific. Source: U.S. Geological Survey's flickr photostream, used under a creative commons license.

[Editor's Note: The following is the second post in a series on the Strategic Implications of an Open Arctic for the Pacific. You can read part one here]

Norwegian Roald Amundsen is remembered as one of the world’s great explorers. His accomplishments include reaching both the North and South Poles and being the first to sail through the Northwest Passage. Remarkably, these feats were achieved in the early-1900s, long before the age of Gore-Tex® and modern survival gear.

After all of his great adventures, Amundsen was lost not on expedition but rather conducting a rescue mission to save a friend in the Arctic. His death reflects the harsh reality of life in the High North. This is not lost on Ambassador Wegger Chr. Strommen of the Kingdom of Norway, when he pulls down an inflatable globe, points to the Arctic, and stresses, “These are extreme conditions. These are not the tropics. You have to use military assets and military equipped platforms to have any kind of presence for search and rescue.” In this respect, not a lot has changed since Amundsen’s days. But, what has changed is that the ice is melting and Arctic sea lanes are opening. This has profound strategic repercussions for the eight member states of the Arctic Council.

Eddie Walsh, a non-resident fellow at Pacific Forum CSIS, therefore sat down with Ambassador Strommen to discuss his views on the political, economic, and environmental implications of an open Arctic, both for the Arctic-Pacific region and the rest of the world.

In recent years, there has been major progress in delimiting Arctic maritime borders, including the agreement between Norway and Russia. However, a number of border disputes remain, particularly over extended continental shelves. Do you see further progress on the outstanding disputes in the years ahead? If not, can the current security architecture properly manage intractable disputes?

One has to keep these things in perspective. Too often when you study a theme, it grows before your eyes into an enormous problem. These border disputes might cover great areas but these disputes can be resolved between sensible states. What we have in the Arctic shouldn’t be exaggerated. It took us 40 years but we managed to solve our dispute with the Russians. That is a major accomplishment. It split an area almost in two of 175,000 square kilometers. In the end, we succeeded. But, we had to be patient. We now have good bilateral relations and cooperation in these areas as a result.

We must remember that we managed the border with the Russians during the Cold War. That was much, much harder. Now that the Cold War is over, things can improve. We can manage these border disputes separate from other security issues between the West and Russia. They can be dealt with alongside other issues of mutual interest, such as safety and security, maritime coordination, etc. With time and hard work, I am confident they will all be resolved in this way using existing mechanisms.

At the 2011 Henry Bacon Seminar, the Norwegian Deputy Minister of Defense, Roger Ingebrigtsen, “stressed the importance of the allies’ presence in the Arctic and the fact that increased activity and harvest of renewable resources could be a benefit for all as long as it takes place within an agreed legal framework and respects the environment.” When you speak of urgency, have your other allies in NATO prioritized the Arctic sufficiently and what is your outlook for the future?

Security is more than NATO presence. It is fare to say in terms of the Arctic Council, we welcome more states involvement and building of capacity. Take ice breakers for example, which is an issue everywhere. There is going to be ice for a long, long time. There is Russian capacity and half the Arctic coastline is the Russian Federation. They have ice breakers and operate air fields on floating ice. But, we want others to build up capacity.

If you envision maritime transportation routes in the Arctic, which we need to start thinking more about, we need to start asking important questions. How are we going to deal with search and rescue up there? How are you going to deal with environmental disasters? We would like capacity, plans, and preparedness for disasters. We need anyone who is interested in exploiting the commercial shipping routes to engage in those questions. This is a part of the world with very limited capacity. Even though the ice goes away, the darkness does not. For parts of the year, it is dark. For other parts of the year, it is very, very dark. These are extreme conditions.

What should be the role of non-Arctic states in the Arctic region? Should they have a stronger role in the region?

Within a generation, we have seen a major physical change in the environment in the Arctic.  The ice is melting everyday and the Arctic is already opening up. You will soon be able to sail over the North Pole. As a result, access to oil, gas, and fisheries in the Arctic is now easier to access but no less dangerous. So, we need to sit down together and think about how we manage these changes through international cooperation. The Arctic is a volatile area. There are environmental and safety concerns here that you don’t see in other places on the planet. All countries should be party to those talks.

From Norway’s perspective, it’s perfectly legitimate that others take an interest in the Arctic. That is not to say that non-Arctic countries don’t have to respect the legal frameworks. One cannot address these issues by saying that the normal laws of the sea don’t apply to the Arctic. The legal framework for the Arctic is there. The Arctic is a sea surrounded by states which is regulated by U.N. Convention on the Law of the Sea (UNCLOS). It is completely the opposite of Antarctica, which is a continent surrounded by sea. Unfortunately, the United States has not ratified UNCLOS yet, and we hope they do so soon.

So, the Arctic follows the same rules as Africa, North America, Asia, and others. But, issues like maritime transportation need to be the joint responsibility of everyone. There are going to be many flags flying in the Arctic as it opens. If a non-Arctic country is going to send a ship and be commercially active, their involvement is necessary.

Eddie Walsh is a senior foreign correspondent who covers Africa and Asia-Pacific. He is a non-resident fellow at CSIS Pacific Forum and founder of the Asia-Pacific Reporting Blog. Follow him on twitter: @AseanReporting

Prime Minister Najib must call elections by March 2013. Source: Gen Kanai’s flickr photostream, used under a creative commons license.

The “million dollar” question in Malaysia these days is when Prime Minister Najib Razak will call parliamentary elections. The pending elections have the potential to be a watershed moment in Malaysia.

In 2008, the ruling coalition Barisan National (BN) for the first time since independence in 1957 lost its two-thirds majority in Parliament. Not long after that, Najib’s predecessor, Abdullah Badawi, was pressed to step down. Najib would certainly like to better the 2008 results to cement his grip on power.  Some speculate that he could face challenges from within his party if he doesn’t top Abdullah’s showing.

For much of last year pundits predicted Najib would call elections early in 2012.  However, recent events ranging from a series of political scandals to a flurry of new government programs  suggest that he won’t call the elections for at least the next six to eight months. Najib doesn’t have to call the elections before March 2013.

Protests about patronage politics has risen to the forefront as revelations unfold in the National Feedlot Corporation (NFC) scandal involving Minister of Women, Family and Community Development Shahrizat Abdul Jalil.  Her husband is the chief executive officer and their three sons hold executive positions in the NFC.  The family is accused of misappropriating $83 million in government loans directed towards the development of a cattle-rearing and farming project. Media reports in Malaysia suggest that the funds have been used alternatively to purchase up-scale apartments in Kuala Lumpur, parcels of land, and a $180,000 Mercedes Benz. Despite calls from both ruling coalition leaders and opposition parties for her to step down, Shahrizat clings to her post.

This is not the only corruption scandal to taint the image of the ruling coalition.  In December 2011, former chief minister from the ruling coalition for the state of Selangor, Khir Toyo, was sentenced to a year in jail on corruption charges. With the spotlight on patronage politics, the scandals have fueled increasing criticism of the prime minister’s leadership.  Najib needs the furor over corruption to tamp down before he calls elections.

Further suggestions that the elections aren’t pending came from Najib’s January 13 interview with the Wall Street Journal during which he said that the government still had to deliver on its promises of reforms, and implied that the elections would be held only once the people have benefited from them. Since the prime minister’s comments, he has announced a series of programs and initiatives. In January, Najib unveiled the 2012 budget and the 1Malaysia People’s Assistance (BR1M) scheme, which allocated roughly $7.3 billion in subsides for the poor.  He also assembled a committee to review the civil servant salary and bonus structure and suggested that the government was willing to increase both.

In recent weeks, Najib has announced a series of economic and social programs that seek to deliver on the government’s reform and economic plan. The prime minister, through the Economic Transformation Program (ETP) and affiliated projects, announced on February 17, that new projects would create an estimated 150,000 jobs in the state of Sabah.

On the same day, Human Resource Minister S. Subramaniam implied that a decision on the minimum wage legislation would be delivered in March. If approved, the minimum wage would range roughly from $266 to $330 and would affect an estimated 33 percent of workers in the Malaysian private sector. The prime minister has also implemented a program giving undocumented Indian Malaysians citizenship papers and launched a social media strategy to reach out to youth and the Chinese community.

Najib will need to wait for public anger about corruption and abuse of power to subside and the benefits of the recent programs to begin to kick in before dissolving Parliament. These signs taken together suggest its unlikely that Najib will call the elections until late 2012.

Blake Berger is a researcher with the CSIS Southeast Asia program covering Malaysia.

The U.S. has high hopes for partnership with India. Here Indian and U.S. soldiers discuss small arms during bi-lateral exercise Yudh Abhyas. Source: #PACOM's flickr photostream, used under a creative commons license.

Recently the U.S. Department of Defense released its new strategic guidance, which reflected the expected shift toward the Asia-Pacific region, touted by U.S. officials since the fall of last year. What was a bit unexpected was the attention given to India in such a key document. Long-standing Asian allies such as Australia, Japan, Korea, and others were lumped under the label of “existing alliances,” while India was singled out with the following passage: “The United States is also investing in a long term strategic partnership with India to support its ability to serve as a regional economic anchor and provider of security in the broader Indian Ocean region.”

The specific mention of India raises interesting questions about how India fits into the United States’ vision for security in the Asia-Pacific region. Washington and New Delhi have been actively building their defense relations through defense sales, exercises, and high-level military engagements. India now conducts more exercises with the United States than with any other country, and it is gradually integrating U.S. platforms and systems into the various branches of its armed forces. India has also performed admirably in counter-piracy operations off the Horn of Africa and elsewhere throughout the Indian Ocean. It has been actively engaging countries throughout the Asia-Pacific region with ship visits, high-level defense meetings, and the provision of military equipment, and it has even demonstrated leadership by establishing the Indian Ocean Naval Symposium and organizing the MILAN naval exercises held every two years.

Despite the impressive progress in recent years, questions still remain about India’s commitment and ability to be a security provider in Asia. Each of New Delhi’s defense engagements abroad is closely scrutinized and calibrated with an eye toward available military capacity, the scope and optics of the mission, and how a particular defense engagement will be politically perceived at home. Rather than being guided by an overarching national security strategy or strategic planning documents, these decisions are usually made on a case-by-case basis.

Which brings us back to the U.S. defense strategy. As the United States implements its pivot toward the Asia-Pacific region, it will actively seek capable and reliable partners to cooperate on maintaining security and stability in Asia. With the recent announcement of 2,500 marines deploying to Australia on a rotational basis, positioning of littoral combat ships in Singapore, and discussion of intensified defense cooperation with the Philippines, questions may arise within the U.S. security establishment and Asia about what India’s enduring contributions will be to this endeavor after being so prominently mentioned in the United States’ defense strategy. Knowledgeable people inside the Pentagon and at Pacific Command know it will take a long time for India to emerge as a credible provider of security in Asia. They also know about India’s inhibitions regarding a closer U.S. partnership—ranging from India’s desire to preserve its strategic autonomy to its reluctance at being ensnared in a U.S.-led “counter China” strategy. U.S. policymakers understand these limitations and, consequently, do not expect India to be a consistent, “go-to” security partner anytime in the near future. Aside from the 2004 tsunami episode, instances of bilateral cooperation on operational matters have been scarce.

So why even mention India in the document? For the simple reason that the United States is making, in Secretary of State Hillary Clinton’s words “a strategic bet” that India will promote peace and security in the long term. While Washington waits (and hopes) to benefit from its bet, Washington and New Delhi should continue working toward a security partnership that evolves from conducting exercises to becoming reliable partners during crises. Such an evolution will take time. However, Asia is currently experiencing a dynamic and changing security environment. Asian countries are rejuvenating regional security architecture through their respective partnerships, not just with the United States but with each other, in response to China’s growing military power. India has been a party to some of this change with the U.S.-India-Japan trilateral dialogue and its participation in the East Asia Summit in Bali last year. But a country with India’s growing political, economic and military capabilities has more to offer than just participation in multilateral forums. New Delhi knows that the security landscape in Asia is rapidly changing, and it should act accordingly to prevent any missed opportunities for playing a more decisive role in Asia.

To that end, India should develop its own strategic guidance for deploying its military and seriously consider closer engagement with the United States in shaping Asia’s evolving architecture. Partnering more closely with the United States in Asia amplifies India’s strategic impact in a way that India cannot have acting alone. Rather than viewing such an endeavor as sacrificing its strategic autonomy, New Delhi should view this as an opportunity to augment its own capabilities until such time as it can confidently act on its own and have strategic impact. In the meantime, U.S. military planners will implement the new strategic guidance and continue “investing” in the India partnership with the hope that one day soon India will become that provider of security for which the United States and Asia have been waiting.

Dr. S. Amer Latif is a visiting fellow with the Wadhwani Chair in U.S.-India Policy Studies at CSIS in Washington, D.C.

For more you read Victor’s post on CNN’s Global Public Square blog here

Increased attention for the Arctic is changing strategic dynamics for countries in the Pacific. Source: U.S. Geological Survey's flickr photostream used under a creative commons license.

[Editor's Note: The following is the first post in a series on the Strategic Implications of an Open Arctic for the Pacific.]

Norwegian Roald Amundsen is remembered as one of the world’s great explorers. His accomplishments include reaching both the North and South Poles and being the first to sail through the Northwest Passage. Remarkably, these feats were achieved in the early-1900s, long before the age of Gore-Tex® and modern survival gear.

After all of his great adventures, Amundsen was lost not on expedition but rather conducting a rescue mission to save a friend in the Arctic. His death reflects the harsh reality of life in the High North. This is not lost on Ambassador Wegger Chr. Strommen of the Kingdom of Norway, when he pulls down an inflatable globe, points to the Arctic, and stresses, “These are extreme conditions. These are not the tropics. You have to use military assets and military equipped platforms to have any kind of presence for search and rescue.” In this respect, not a lot has changed since Amundsen’s days. But, what has changed is that the ice is melting and Arctic sea lanes are opening. This has profound strategic repercussions for the eight member states of the Arctic Council.

Eddie Walsh, a non-resident fellow at Pacific Forum CSIS, therefore sat down with Ambassador Strommen to discuss his views on the political, economic, and environmental implications of an open Arctic, both for the Arctic-Pacific region and the rest of the world.

The Norwegian Minister of Foreign Affairs has said that the Arctic is the most important strategic priority of Norwegian foreign policy. What is meant by this statement and what are the implications for Norwegian foreign policy outside of the Arctic?

The Arctic is our identity. Norwegian territory is only 16% is land. The rest is water. We are basically a water country with a small land mass and large continental shelf dotted with islands. And, most of these territories are to the North. Our people are also a coastal people. Over 90% of our citizens live along the coast and they are pretty evenly dispersed. Roughly 500,000 live in the North.  So, the North is our home turf. It’s where we make our living. If you look at what pays for my shirt and my tie, its oil, shipping, fisheries, and oil supply services. Our people have always depended on such maritime resources.

With respect to our foreign policy, our renewed focus on the North will not change our international commitments. It is clear that our defense budget has not gone down and we are fortunate to have a good economy right now. There should be sufficient resources for us to do our fair share of international operations, like Afghanistan, and look after our vast maritime territory in the North.

Some worry that rapid change in the Arctic will undermine peace and stability in the region. Arctic states appear to prefer the existing “multi-lateral, multi-stakeholder approach” to manage any disagreements but others argue for new institutions and mechanisms that are more inclusive of non-Arctic states. As the Arctic opens up, do you think the status quo can be maintained or will a new security architecture be required?

To be honest, people like to talk about Arctic security issues but very often it is not clear what they mean. More often than not, they are talking about safety or outstanding territorial disputes. But, I am sure the ones left will be resolved in the confines of international law. The international community shouldn’t be too concerned about the Russians planting a flag on the North Pole.

For many non-Arctic states, Arctic security is a new area although there have institutional arrangements in this area for centuries. With time, international support for these institutions will come. As the existing institutions, such as the Arctic Council, dig into the main security issues, like scientific research, search and rescue, and environmental concerns, and the international community sees how the issues are managed, there will be acceptance.

For example, there will clearly be a joint responsibility for anyone using Arctic commercial transportation routes. We need to make them safe and protect the environment. But, there are institutions for that. The IMO has been around for a long time. It would be ridiculous to take these issues away from them. They have been doing this everywhere else on the planet so they should be doing it in the Arctic. But, there are some particular concerns about that and we welcome discussing Chinese concerns on these things.

You mention the Arctic Council (AC) but as you know both UNCLOS and AC are expressly prohibited from discussing security issues. This is precisely why some argue for new institutions. Given the potential security concerns arising in the Arctic, don’t you think it is time then to reconsider the Arctic Council’s charter?

The framework for security cooperation is already there. It is fairly old and well-established. We have the institutions we need. The world doesn’t need new institutions. We should utilize the ones that we have and work through them. We don’t share the view that we need to clear the decks and start over again. Instead, the Arctic Council should expand its scope through new themes and allow in observers.

One of the countries who might wish to challenge the status quo in the Arctic is China. Clearly, as a non-Arctic state, it is difficult for them to advance their national interests in the region. What are your thoughts on how China can be properly accommodated in the Arctic?

When we think of China, we think about it as an Arctic issue. For Norway, China is not someplace you get to by sailing through the Suez Canal or around Africa. It is somewhere you get to by going over the top of the world. If you live in Africa, you may have a different geographic view. But, for us, our Asian Century will be over the top.

So, we welcome the Chinese concerns. They will be sending ships to the Arctic along with many others. In fact, we had commercial routes through the Arctic to China last summer. Issues such as maritime transportation will need to be the joint responsibility of everyone. If you are going to send a ship up there and be commercially active, your involvement is necessary.

We also have research facilities in the Arctic at 80 degrees, which is seriously to the North. We welcome others there for research. The Chinese, as well as the Americans and others, are already there. The scientific impact is huge. The Arctic is a laboratory for many things from temperature change to oceanic research. We certainly want more countries, including those from Asia, to be able to take advantage of Arctic research opportunities.

Eddie Walsh is a senior foreign correspondent who covers Africa and Asia-Pacific. He is a non-resident fellow at CSIS Pacific Forum and founder of the Asia-Pacific Reporting Blog. Follow you him on twitter: @AseanReporting

By Elke Larsen

United Nations flag. Island nations in the Pacific are increasingly likely to leverage their General Assembly votes for loans. Source: sbakshi's flickr photostream, used under a creative commons license.

When tiny Nauru, a nation of less than 10,000 people, is offered $50 million from Russia for a single vote its clear a market has emerged for purchasing support at the United Nations. As an unintended consequence of the UN system, at least 11 independent Pacific Island nations have found themselves in a unique position: they each have a vote at the United Nations and yet, because of their isolation, have no national interests in many of the distant disputes that fill the UN’s agenda. With a surplus of ‘unused’ votes, a market has been created where voting at the UN is exchanged for monetary assistance.

With a high level of dependence on foreign aid, Pacific Island nations have sought to diversify their income sources away from traditional donors such as Australia, New Zealand, and the United States in the name of increased sovereignty. The result is that, over the past four decades, the island nations have actively encouraged the formation of an “aid market.” Two negative consequences of this market can be observed from the China-Taiwan rivalry for diplomatic recognition. In 2009, it was estimated that Beijing’s aid in the South Pacific, including both grants and concessionary loans, totaled $209.9 million, while Taiwan’s was $60-$90 million. These aid transactions have not been transparent. This has less to do with undermining Western development efforts and influence and more to do with market-based incentives.

By not disclosing the details of their aid donations, both China and Taiwan hope to create a situation of imperfect information and pay below market price for the countries’ UN votes. This lack of transparency in grant-giving has too often resulted in money being funneled to violence, as happened in 2000, when a $25 million Taiwan grant was used to fuel violence in the Solomon Islands, and again in 2006, when Chinese aid likely supported the coup in Fiji. Moreover, China’s emphasis on concessionary loans is concerning. An estimated $183.2 million of China’s $209.9 million in aid in 2009 was in the form of soft loans, leading some states to overextended themselves—for instance, the Kingdom of Tonga holds debt equal to 32 percent of its GDP. Although many of these island nations believe their debt will be forgiven, such leniency seems unlikely given the leverage it provides China. Instead, these loans, taken in the name of greater autonomy, may actually be causing Pacific Island countries to give up sovereignty to their creditors.

For the traditional regional leaders, Australia and New Zealand, this market for votes pose a security threat by creating instability. Although there has been some success in their pushed for greater transparency via the Cairns Compact, the potential for instability remains. It is in the long-term interests of the United States, Australia, New Zealand, and the peoples of the Pacific to ensure that aid and loans are used to their full potential—to fund development projects rather than fuel corruption, violence, and unsustainable economic burdens. As one of the traditional regional leaders, the United States has a great deal of soft power in the South Pacific and it would be in all parties’ interests for it to use this political and social clout to press the islands’ donors to be more responsible with their assistance.

Propaganda artwork of Kim Il-sung and Kim Jong-Il. Source: Joseph A Ferris III's flickr photostream, used under a creative commons license.

North Korea’s recently deceased ruler, Kim Jong-il, received a 70^th birthday celebration that will go down in the history books…literally. The Democratic People’s Republic of Korea (DPRK) officially renamed February 16, “Day of the Shining Star,” following a tradition Kim set for his father and predecessor. The founder and “Eternal President” of North Korea, Kim Il-sung, has his birthday named “Day of the Sun.” – currently North Korea’s two biggest holidays.

The week-long birthday celebration –replete with the unveiling of bronze statues of Kim Il-sung and Kim Jong-il riding on horses, the 16^th annual Kimjongilia festival (a display of 30,000 potted Kimjongilia flowers), the standard military shows of soldiers marching in goose step, and an ice sculpture festival –can be seen to serve a double function.

First, these public events immortalize Kim Jong-il as they did his father. Second, they cement the legitimacy of the ruling Kim family, and consequently, the legitimization of Kim Jong-un’s succession.

Moreover, the overall tone of this week contrasts starkly with the breast-heaving, hair-renting, sobbing view of inconsolable North Koreans during their memorial service for Kim Jong-il last December. The pre-planned, flashy, celebrations can easily be interpreted as a politicized move by the regime to show the masses that there is a brighter future ahead. But the question that may have gone unnoticed is: who really runs these celebrations?

When Kim Il-sung passed, Kim Jong-il was clearly in charge of putting together an elaborate funeral and all future celebrations. In fact, while Kim Jong-il was being groomed for succession, he helped create the personality cult of Kim Il-sung. Historians have credited Kim Jong-il with the creation of the Kimilsungia flower and virtually hundreds of propaganda films immortalizing Kim Il-sung.

Simply put, Kim Jong-un has not contributed significantly –if at all –to paving his own rise to power. Most of the birthday celebrations had already been pre-planned, leaving no real innovation required of the Great Successor and thus, depriving him of the leadership role that Kim Jong-il once played. Even the bronze statues that have been heralded as the first statue of Kim Jong-il had already been discussed by Kim with party officials pre-death.

Another glaring example of leadership ambiguity is his conspicuous absence during what media reports was a secret meeting that occurred at the “secret” camp located on the sacred Mt. Paektu last weekend, in which three of the most powerful elites (Ri Yong Ho, Kim Ki Nam, and Choe Thae Bok) met with other senior members of the North Korean military and political party to “vow loyalty” to Kim Jong-il.

On the one hand, Kim Jong-un could simply be acting as a figurehead. The real reins of power may be held by the North Korean troika, Ri Yong Ho (the vice marshal of the Korean People’s Army with operational control of the military), Jang Seong-Taek (Kim Jong-il’s brother-in-law), and Kim Kyeong-hui (Kim Jong-il’s sister). On the other hand, these examples could be indicators of Kim Jong-un being unfit, unprepared, and largely seen as illegitimate for the succession. In reality, it is probably some combination of the two.

How long can this uncertainty surrounding Kim Jong-un last? U.S. officials will meet with DPRK officials next week in Beijing to discuss the nuclear disarmament and food aid deal for the first time since Kim Jong-il’s death. With the strange, shifting dynamics of power in Pyongyang and the Great Successor’s notable absences at key events, the prospects for progress seem dim, and the potential for instability increasingly apparent.

Barbra Kim is a research intern with the CSIS Office of the Korea Chair.

Vice President Xi meeting with U.S. Speaker of the House Boehner. Source: Speaker Boehner's flickr photostream, used under a creative commons license.

Earlier this week, China’s vice president Xi Jinping arrived in Washington for a high level visit. To some, Xi—and China—mean everything to the United States. These observers view Asia’s risks and opportunities through the China prism. This narrow Sino-centric perspective is not strategic, however, nor is it practical. Understanding China, its rise, and what it wants to be is a core requirement for a successful and enduring U.S. approach to Asia, but it is not the whole game.

In fact, a balanced approach to Asia takes China into account but puts emphasis on other key relationships such as U.S. treaty allies in the region, strategic partners such as India and Singapore, and comprehensive partnerships such as with Indonesia, Malaysia, New Zealand, and Vietnam.

Deepening ties across the Asia Pacific will take time, dedicated resources, and a retooling of U.S. foreign policy, national security, and military infrastructure. It will also require a new political script in the United States, one in which the leader of this country makes the case for Asia’s primary role in the United States’ economic and security future. America needs to begin to relate to Asia—not only politically from Washington, or financially from New York, or culturally from San Francisco and Los Angeles: it must connect at its center. Americans need leaders who can explain why Asia is fundamentally important to U.S. jobs, savings, economic growth, and security.

Xi may help. He has stronger ties to the U.S. than his predecessor, Hu Jintao. He is going to spend time in Iowa, right in Middle America. The best deliverable we can hope for from Xi’s trip is to set the foundation for the United States and China to begin to understand one another better. The United States and most of China’s neighbors have had cause recently to question China’s intentions and what path it will take. Over the last 20 years, its economic ascendance in Asia has been nothing short of breathtaking as it has moved from a more ideological country to a more confident and agile newly industrialized country with economic might to spare.

As China began to test its newfound economic power—it had become the largest trading partner of most Asia-Pacific countries between the late 1990s and 2011—it triggered real concern by asserting its sovereign interests in Northeast Asia, in the South China Sea, and along its common border with India. Countries, including the United States, realized that China might want to test its new power in ways inimical to neighboring states.

As I have argued on cogitASIA previously here and here, to manage this trend and convince China that it can grow, prosper, and answer existential questions such as how to manage its energy, food, and water security for the coming decades, the United States decided to join other Asia-Pacific countries in developing regional security and economic frameworks that will encourage China to use its seat at the table to make rules along with others, and to implement and live by those guidelines.

This is emphatically not a containment strategy, as many in the media have suggested. No strategic planner with a solid grounding in history, geopolitics, or economics would believe that containment is a viable or constructive approach when it comes to China. Vice President Xi likely understands this very well already, but his American hosts will have emphasized this point repeatedly during his visit.

The United States’ friends around Asia will review the visit closely. They do not want the United States and China to enter a period of confrontation or conflict. At the same time, they would also resist the concept of too close a U.S.-China relationship in which their needs and desires could be easily overlooked by a global condominium.

An elite core of U.S. policymakers understands this strategy and the importance of the nuanced messaging needed around Xi’s visit. Current U.S. policy is to speak very directly to the Chinese, say what is meant, and follow through. U.S. officials believe this approach will provide strategic clarity to the Chinese, who are trying to understand what the Americans want.

President Barack Obama’s proclaimed “pivot” back to Asia is widely misread in China,  particularly by economic nationalists and military hawks who interpret the move as an American surge designed to slash Chinese power at its base, contain the country’s growth, and put at risk its access to energy, food, and water. This is not the United States’ design, and President Obama and U.S. leaders need to make that clear to Vice President Xi potentially China’s leader for a decade.

At the same time, China must step forward and convince the United States that it does not intend to use its new economic power and growing military capabilities to force smaller neighbors to bend to new interpretations of sovereign territory. China must convince the rest of Asia and the world that it realizes it can become a major power by playing by rules that it makes along with the rest of the world. It must demonstrate that it can achieve its security goals—including long-term supplies of vital inputs—through a rules-based market system.

Xi’s visit means much to China and to the United States. Deepening mutual understanding, or at least setting a foundation for advancing that goal, will define success in this visit. That outcome is also very important to other countries in the Asia Pacific because enhanced understanding, transparency, and cooperation is the only road to a twenty-first century characterized by peace and prosperity.

Ernest Z. Bower is a senior adviser and director of the Southeast Asia Program at the Center for Strategic and International Studies in Washington, D.C.

India's web censorship policies have drawn unfavorable comparisons to those of China. Source: runran's flickr photostream, used under a creative commons license.

Kapil Sibal’s recent remarks about the Indian government not making any attempts to stifle social media were designed to counter the growing furor, both online and offline, regarding the world’s largest democracy’s latest attempts at censorship. For one, Indian censors have deemed the Oscar-nominated Girl with the Dragon Tattoo “unsuitable” for public release due to director David Fincher’s refusal to cut separate scenes depicting rape, and consensual sexual intercourse. Simultaneously, the exhausting debate that surrounds Salman Rushdie’s Satanic Verses—which is still banned in India—continues with Rushdie’s recent forced cancellation of an appearance at the Jaipur Literature Festival. While the government strenuously denies any attempts to ban Rushdie entering the country, the fact remains that even a video-conference with Rushdie was deemed far too provocative for the protesters who had gathered around the venue. And now, with the looming threat of government prosecution, several Internet companies including Google and Facebook have begun to comply with government requests to remove allegedly provocative and objectionable content from their websites.

Google’s bi-annual transparency report isn’t very flattering of the government, either. Between January and June of 2011, there were 68 government requests for a removal of 358 items, the majority of which were on social networking site, Orkut, and had been identified as being critical of the government. Google’s records state that the requests came from, “… state and local law enforcement agencies to remove YouTube videos that displayed protests against social leaders or used offensive language in reference to religious leaders.”

While the increase in content removal requests in India is hardly incongruous with an emerging global trend of internet content regulation, India’s requests stand out because the majority of them were made without official court orders. In fact, Indian laws make it unnervingly easy to remove online content. The Centre for Internet and Society recently found that in order to “remove something from the Web, one needs to send an email complaining about it to any of the string of ‘intermediaries’ that handle the content: the site itself, the web host for the site, the telecom companies that deliver the site to your computer/mobile […], etc.” The company then has 36 hours after being notified to take down the content to avoid prosecution. An underdeveloped legal framework surrounding censorship of the internet in India, or even a system of monitoring complaints in order to record and penalize frivolous ones, is concerning. When a nation legally can, and does, use the excuse of “[content] prejudicial to national integration” to stifle dissent and criticism, it increasingly threatens the basic freedoms of its citizens.

With the internet acting as the front line of discourse the world over, India’s awkward attempts to control its citizens’ activities online are shifting further and further away from the liberal democratic principles that inform the US-India relationship, and towards the cliché of “Asian democracy”, where individual freedoms and rights are secondary to societal cohesion.  High Court Justice Suresh Kait went as far as to say, in regards to the Facebook and Google court case, that if websites don’t remove offensive content, India would “like China, block all such websites.”

As U.S. Secretary of State Clinton recently noted, “When ideas are blocked, information deleted, conversations stifled and people constrained in their choices, the Internet is diminished for all of us.” The US and India have had a smooth sailing relationship partly due to their shared values. India’s departure from upholding these common values of freedom of speech and the freedom of expression not only affects its citizens, but also an important pillar of the US-India relationship.

Ms. Ritika Bhasker is a research intern with the CSIS Wadhwani Chair in U.S.-India Policy Studies.