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ASIAN (H)

The hard road from Hanoi

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Authors: Markus Bell and Marco Milani, University of Sheffield

Following the Hanoi summit, critics argue that the absence of an agreement between Trump and Kim is a sign that diplomacy between the United States and North Korea has failed. But even without a roadmap to denuclearisation, the summit promoted important goals in these early stages of negotiations: dialogue, a continued freeze on nuclear testing and hope for a gradual lifting of economic sanctions.

U.S. President Donald Trump and North Korean leader Kim Jong Un sit down for a dinner during the second U.S.-North Korea summit at the Metropole Hotel in Hanoi, Vietnam, 27 February 2019 (Photo: Reuters/Leah Millis).

The June 2018 summit in Singapore was the first time a sitting US president has met with a North Korean leader. Trump and Kim signed an agreement that included a pledge to denuclearise the Korean Peninsula, committing the United States and North Korea to working toward ‘peace and prosperity’.

But following the summit, Trump came under fire for not extracting guarantees from Pyongyang on the specifics of ‘denuclearisation’. Critics argued that promises to disarm were inadequate, as North Korea had advanced its ballistic and nuclear programs to the point where a testing pause made little difference.

The Trump administration countered that the summit was not supposed to solve the nuclear crisis, but rather set conditions for future talks in which North Korea would give up its nuclear arsenal in exchange for economic incentives.

Despite continued goodwill, there has been no forward momentum on either side. Washington refuses to lift sanctions and Pyongyang reportedly continues to develop its nuclear weapons program. As such, negotiations have languished.

The second Trump–Kim summit was expected to break the diplomatic stalemate and reignite the impetus for denuclearisation. Instead, the impasse remains.

While the Trump administration sought ‘complete, verifiable, irreversible’ denuclearisation (CVID) at the first summit, they came to the second summit more flexible and willing to listen. Trump stated that he wanted denuclearisation, but was in no rush. He praised the importance of his ‘personal relationship’ with Kim and took credit for the United States and North Korea avoiding a major war.

For Pyongyang, the Singapore summit bought Kim international legitimacy and the suspension of US–South Korea joint military exercises. Kim left Singapore confident that US pressure had been defused.

Easing sanctions was at the top of Kim’s Hanoi wish list. To achieve his goal and to provide evidence of a commitment to denuclearisation, Kim proposed shutting down and dismantling the Yongbyon nuclear facilities. Negotiations collapsed on this point — Yongbyon was not enough of a bargaining chip.

Trump claimed that Kim asked to eliminate the entire sanctions regime in exchange for the closure of Yongbyon. Such an agreement would have gone against the longstanding US position of CVID as a precondition for ending economic pressure on North Korea. But North Korean Foreign Minister Ri Yong Ho subsequently contradicted Trump, saying that North Korea had asked only for the partial lifting of sanctions, following the step-by-step approach favoured by Pyongyang.

Despite conflicting accounts, one point was clear: the leader-to-leader diplomatic approach had failed to bridge the gap between the United States and North Korea, prompting a new stalemate.

Perhaps the biggest ramifications for the breakdown of talks come in third-party nations.

In South Korea, Moon has been a mediator of US–North Korea rapprochement and is wagering considerable political capital on mending ties with North Korea. Moon’s popularity, at an all-time high in 2018, is now struggling amidst an economic slump. While US participation in inter-Korean reconciliation keeps domestic opposition to this process in check, the disappointment of the Hanoi summit will provide new impetus to the conservative opposition in South Korea. To manage these repercussions, Moon will likely resume his role as mediator.

China, meanwhile, was conspicuously quiet on the Hanoi summit. This should not be misunderstood as a lack of interest. Beijing has a vested interest in both the stability of its eastern borders and its influence on the Korean Peninsula.

With Chinese support, North Korea weathered a battery of economic sanctions. Chinese President Xi Jinping met Kim four times over the past year, most recently in January. China is unlikely to oppose plans for a denuclearised Korean Peninsula but will press for an accompanying reduction of US troops in the region.

North Korea is unlikely to offer more than the dismantling of Yongbyon in current negotiations. Without a more substantial sign that Pyongyang is ready to decommission its nuclear program, Trump will be less willing to spend precious political capital on meeting with Kim — especially as the 2020 US presidential elections approach.

While Hanoi might be seen as a disappointment, all is not lost. Despite initial US opposition, a gradual approach still represents the best path forward. This requires focusing on more realistic goals: a commitment to officially end the Korean War, limited but substantial steps in terms of North Korea’s denuclearization and a gradual relaxation of economic sanctions.

Markus Bell is a lecturer in Korean studies at the University of Sheffield.

Marco Milani is a lecturer in Korean studies at the University of Sheffield.

A version of this article originally appeared here on AsiaGlobal Online.



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Realising smart cities in ASEAN

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Author: Phidel Vineles, RSIS

Rapid urbanisation poses concerning implications across ASEAN by straining infrastructure, raising inequality and compromising public safety. If ASEAN is to overcome these obstacles, it needs to make greater use of technology. While the ASEAN Smart Cities Network (ASCN), already with 26 pilot cities, is a step in the right direction, a few flaws in its plan need attention.

A view of the Nanyang Technological University campus in Singapore 2 August 2016 (Photo: ReutersEUTERS/Edgar Su).

Rapid urbanisation is occurring throughout ASEAN with an additional 90 million people expected to move into cities across the region by 2030. Most of this growth is expected in medium-sized cities with populations of between 200,000 and two million. These cities are projected to drive 40 per cent of the region’s growth.

It is then crucial to adopt ’smart’ technologies to address the increasing challenges of urban development, including traffic congestion, pollution and strained infrastructure. The establishment of the ASCN, an initiative of Singapore for its 2018 ASEAN chairmanship, gives ASEAN member states leeway to adopt a cities-level mechanism for achieving next generation urban settings.

The ASCN framework was developed as a non-binding guide to facilitate smart city development in each ASCN city. It consists of three strategic objectives: competitive economies, sustainable environments and higher quality of life. Smart cities help economies become competitive by leveraging innovation and entrepreneurship, helping to generate business and job opportunities. They also promote sustainable environments by employing sustainable green technology and energy. Smart cities also enhance the well-being of people by applying innovative solutions, particularly in key areas such as in education and health services.

The ASCN allows ASEAN to capitalise on innovative technologies, especially in infrastructure and urban planning. In Thailand, the government established the Phuket Smart City Vision, aiming to boost tourism using big data analytics. One project is the City Data Platform, used to understand tourist behaviour in Phuket collected from Wi-Fi, Internet of Things and social media. The data collected at popular locations that tourists visit as they connect to Wi-Fi is also used to ensure their safety.

Smart city initiatives also promote the well-being of residents. Indonesia’s fifth largest city, Makassar, initiated its Smart City Plan in 2014, with one successful program being the mobile health service Dottoro’ta. Its services include diagnosis, emergency care and follow-up care.

The Philippines has been struggling to adapt to digital disruption. But Davao City’s establishment of the Public Safety and Security Command Centre (PSSCC), which supports the city’s security using new technology, deserves praise. The PSSCC’s centralised CCTV surveillance systems and geographic information systems analyse spatial information and processes mapping data to effectively add extra layers to the city’s protection.

The ASCN also raises the efficiency of innovative services. Singapore’s Smart Nation Initiative provides an open and accessible national e-payment infrastructure to facilitate seamless digital transactions. Singapore’s banking industry launched FAST (Fast and Secure Transfers) in 2014, improving money transfers between consumers and businesses across different banks.

Opportunities like these are only harnessed if the challenges of implementing smart city initiatives are tackled, and the ASEAN digital divide remains significant. While Singapore is the best performer of the 2016 Digital Adoption Index, the rankings suggest huge gaps, with Malaysia (41st), Brunei (58th), Thailand (61st), Vietnam (91st), Philippines (101st), Indonesia (109th), Cambodia (123rd), Laos (159th) and Myanmar (160th) trailing far behind.

High costs of high-speed internet are also stymying progress. While in Singapore it costs only US$0.05 per megabit per month, this is far more affordable than in Thailand (US$0.42), Indonesia (US$1.39), Vietnam (US$2.41), the Philippines (US$2.69) and Malaysia (US$3.16). The digital divide is the most significant barrier to be addressed.

An insufficient digital talent base also holds ASEAN back. Around 45 per cent of small-to-medium enterprises (SMEs) in the region are lacking understanding of digital technology, even though SMEs represent 99 per cent of ASEAN’s enterprises. Lack of trust and low consumer awareness also hinders the uptake of digital services. Around 89 per cent of Malaysians and 79 per cent of Indonesians have expressed concerns about sharing their personal information online.

ASEAN governments need to be more effective in implementing the ASCN. A coordinated system like Singapore’s Smart Nation and Digital Government Office, established to develop digital strategies across agencies, is a better system for designing digital roadmaps. But there are still regulatory elements that restrict the digital economy’s progress elsewhere. Malaysia’s heavy-handed Personal Data Protection Act 2010, enforced in 2013, compels data users to seek approval from authorities before moving personal data out of Malaysia.

Individual governments cannot build smart cities alone and it is important to partner with the private sector, helping to create better value in financing, planning and technical expertise. Thailand’s Chonburi Amata Smart City and Japan’s Yokohama Urban Solution Alliance have recently signed a letter of intent for a smart energy management system, helping the smart city set up its own smart grid project. More partnerships and external support would bring better operational capabilities.

The ASCN is instrumental in bringing ASEAN smart cities together. But realising the opportunities they present requires better action plans aimed at closing the regional digital divide, developing public confidence in digitalisation, coordinating government agencies and cooperating with the private sector and external partners.

Phidel Vineles is a Senior Analyst in the Office of the Executive Deputy Chairman at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore.

A version of this article originally appeared here on RSIS.



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Finer economic data for a fairer ASEAN economy

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Author: Jose Ramon Albert, PIDS

The Philippines and other ASEAN economies are experiencing stellar economic growth. Frontier technologies of the Fourth Industrial Revolution, such as automation and robotics, the internet of things, 3D printing, blockchain and nanotechnologies are rapidly transforming economies. To respond effectively to these changes and understand how they will impact different groups, governments need to collect and analyse a broader range of data — including more and better-quality disaggregated statistics.

Filipino employees work at the assembly line of Kinpo Electronics factory in Malvar, Batangas, Philippines, 10 August 2018 (Photo: Reuters/Erik De Castro).

Disaggregated data about economies give clues about where growth is happening and help policymakers shape appropriate policy responses. But when countries produce growth reports, data is usually only disaggregated by economic sector. A full picture of the contribution of men and women in an economy, among other things, cannot be obtained — at best, policymakers can disaggregate the incomes of men and women using household and establishment surveys. These provide little insight into what is happening in the informal sector.

Policymakers need to value unpaid housework and care work. Time-use surveys report that the economic contribution of women through unpaid care is large. It is likely that GDP would look very different if unpaid care was properly valued in national accounts.

The importance of economic growth to poverty reduction is well known. Poverty rates across ASEAN were cut from 19.6 to 5.5 per cent between 2005 and 2015. This reduction is largely due to sharp declines in extreme poverty in Cambodia, Vietnam and Indonesia, where headcounts in this category have more than halved since the 1990s.

A picture of poverty conditions by sex (available from countries through their official poverty statistics) gives some clue about disparities in economic opportunities between men and women. But the seemingly small differences in poverty between men and women do not provide a clear picture of gender disparities in economic opportunities. Monetary poverty is measured for the entire household — every member of a poor household is considered poor, and there is no measure of intra-household welfare.

Gender disparities in accessing economic opportunities can sometimes be revealed by measuring vulnerability. Studies that measure vulnerability provide insight into the risks to future welfare faced by specific groups, such as farmers, women, children and the elderly.

In the Philippines, the vulnerability of these groups is much higher than that simply reflected in their share in poverty.  While about a fifth of Philippine women are poor according to data from 2015, more than half are at risk of being poor in the future. The corresponding estimates of poverty and vulnerability for men are similar to those for women, again masking the varying risks faced by women and men.

Several factors specifically influence the vulnerability of women in the Philippines, including how they participate in the economy. In all ASEAN economies, fewer women join the labour force. In the Philippines, about four in five working-age men are part of the labour force compared to only half of working-age women. Even in a relatively gender-equal country like the Philippines, women carry the burden of unpaid family work.

Although unemployment rates are nearly the same between men and women, the share of employed women across sectors varies with that of men. Women are dominant in services, with 7 out of 10 working women employed in the services sector. A fifth of working women are in agriculture and the rest are in industry. A third of working men are engaged in agriculture, more than two-fifths in services and the remaining fifth in industry.

While the average wage gap seems to favour women in the Philippine formal economy, huge gaps between genders can be seen in specific sectors and occupations. High-level positions generally have wages favouring women, who also have the lion’s share of the occupation. But men working as technicians and associate professionals, clerks, service workers, and shop and market sales workers are better compensated despite women having the bigger share in employment.

The traditional labour market has been designed for men, which leads to a relatively bigger share of employed women engaging in jobs that lack decent working conditions. These women either work with unregistered companies in the informal economy or as unpaid family workers. They have limited opportunities for social mobility and social protection.

Also contributing to the vulnerability of women in the Philippines is the extent to which new technologies, particularly automation, are putting jobs at risk. A study by the International Labour Organization suggests that over the next decade or two more than half of employment in Cambodia, Indonesia, the Philippines, Thailand and Vietnam is at high risk of automation.

The same report suggests that Philippine women, as well as workers who finish only primary school, are more likely to be employed in jobs that are at high risk of automation. Nearly 9 out of 10 workers in business process outsourcing firms in the Philippines, for which three-fifths of the workforce are women, face a high risk of having their jobs automated.

Data serve as inputs into social and economic policymaking and public interventions. For too long these data have focussed only on market activities and GDP, which can produce distorted policies that reinforce the status quo and do not promote inclusive economic participation. Policymakers have yet to adequately address the disproportionally large housework and care work burden that society places on women.

Approaches to poverty are largely curative but it is important to consider preventive approaches. In the wake of the Fourth Industrial Revolution, ASEAN governments and private sectors must work together to manage the disruptive consequences of automation by improving the technical and soft skills of the labour force. To manage this change effectively, policymakers will have to pay close attention to how different groups are affected, with a focus on how factors such as a gender, occupation and age interact.

Employers also need to focus attention on working conditions between men and women in all occupations and examine practices that may contribute to gender biases in the workplace, including issues related to compensation and sexual harassment. Policymakers should work to ensure that everyone gets a fair opportunity to participate in the economy and enjoy a better future.

Jose Ramon Albert is a Senior Research Fellow at the Philippine government think tank Philippine Institute for Development Studies (PIDS).



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SinoCorrugated IndiaCorr Expo 2019

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Dates: 
Sep 05, 2019Sep 07, 2019

Venue: 
India expo Centre Greater Noida

Location address: 
Plot No. 25,27,28,29, KnowledgePark-||, Greater Noida, Uttar Pradesh 201306, India

Country: 
India

Organizer: 
Reed Manch Exhibitions Pvt Ltd

Show URL: 
www.indiacorrexpo.com

Major exhibits: 

Corrugated box making machinery
Printing and lamination machines
Testing Equipment
Adhesives
Inks
Ancillary equipment
Kraft paper
Softwares

Show banner: 

ONE INDUSTRY, ONE SHOW!
IndiaCorr Expo is the leading global event serving the entire value chain of the corrugated packaging industry. It is the India edition of the world’s leading show—SinoCorrugated that takes place in China every year. The objective of the show is to cater manufacturers, buyers and users of corrugated packaging and allied technologies. The show is scheduled to be held from 05-06-07 September 2019 at India Expo Mart, Greater Noida, Delhi-NCR, India. With over 250+ exhibitors offering end-to-end solutions from both Indian & International brands. This exhibition has always been the most coveted show for corrugated packaging industry addressing the needs of corrugated box manufacturer, converters, designers for corrugated box & related packaging, industry consultants, printers, converters and end-users. IndiaCorr Expo with its concurrent shows, India Folding Carton 2019, India Flexography Expo 2019 and ICCMA Congress, is a benchmark among all packaging exhibitions in India with largest ever Indian and international participation.

Show Contact
Title: 

Sale Executive

Name: 
Vaishali Arya

Telephone: 

(91) 9911335153

E-mail: 

vaishali.arya@reedmanch.com

Mailing address: 

D – 2, Unit no. 3, 4 & 5, 1st Floor, Southern Park Building, Saket District Center

City / State / Province: 
Saket, New Delhi – 110017

Country: 
India



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India Folding Carton 2019

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Dates: 
Sep 05, 2019Sep 07, 2019

Venue: 
India expo Centre Greater Noida

Location address: 
Plot No. 25,27,28,29, KnowledgePark-||, Greater Noida, Uttar Pradesh 201306, India

Country: 
India

Organizer: 
Reed Manch Exhibitions

Show URL: 
www.indiafoldingcarton.com

Major exhibits: 

Paper Bag Manufacturing Equipments | Software | Testing Equipments | Paper | Ancillary Equipments| Printers- Digital, Offset, Flexographic | Lamination Solutions | Inks and Other Consumables

Show banner: 

India Folding Carton, your gateway to the world of carton and box making industry is coming on 05-06-07 September 2019 at India Expo Mart, Greater Noida, Delhi-NCR, India . The event will bring in industry leaders who want to be abreast of the most recent technology, innovation and progress. It covers the whole of the carton and paper industry and gives exhibitors and visitors a wide range of opportunities for making new business contacts and developing existing customer relations. With its higher scale effect, the exhibition highlights the one-stop solution combined purchasing, technology, information, trade, and education across the entire folding carton industry chain. As a dedicated and focused event, India Folding Carton 2019 is the international meeting point where manufacturers and dealers of pre-press equipments, carton making machinery, printing machinery, post-print equipments, designing software solutions and raw materials providers connect and close business deals.

India Folding Carton will be co-located with IndiaCorr Expo – SinoCorrugated 2019 will help folding carton manufacturers to evaluate feasibility of business expansion to the corrugated market; who will also meet with the R & D and procurement decision makers to enlarge networks and to catch business opportunities.

Show Contact
Title: 

Sale Executive

Name: 
Vaishali Arya

Telephone: 

(91) 9911335153

E-mail: 

vaishali.arya@reedmanch.com

Mailing address: 

Reed Manch Exhibitions Pvt Ltd D2 Unit no 3 4 & 5 1st Floor Southern Park Building Saket District Center Saket New Delhi

City / State / Province: 
Delhi, India

Country: 
India



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Can Thailand’s junta manage the election’s outcome?

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Author: James Ockey, University of Canterbury

For Thailand’s junta, the 2019 election is to be carefully managed so that the government can return to power with enhanced legitimacy, both among its own people and the international community. Yet the National Council for Peace and Order (NCPO) may have miscalculated its ability to control the elections effectively and so enhance its legitimacy.

Thailand's Prime Minister Prayut Chan-o-cha talks with a man as he visits Lumphini Park ahead of the general election, in Bangkok, Thailand, 20 March 2019 (Photo: Reuters/Soe Zeya Tun).

The constitution and electoral laws were carefully designed to disadvantage the two large parties, Pheu Thai and the Democrats. Meanwhile, the junta leaders are allowed to appoint the 250 senators who will join with elected MPs to choose the prime minister. The constitution also allowed junta leader Prayut Chan-o-cha to be nominated for prime minister without membership in a party. This gives him greater flexibility in seeking the additional 126 elected MPs whose support is necessary for him to remain in his current position.

While writing a favourable constitution and electoral laws proved possible, managing the campaign process is much more difficult. Yet strong efforts are being made. Elections are under the purview of the Election Commission of Thailand (ECT). PNet, an NGO that independently monitors the election process, recently awarded the ECT an ‘F’ grade for its performance, stating that it ‘has failed to demonstrate it is not under undue political influence’.

So far, the ETC has decided that a government handout to the elderly and the poor just prior to the beginning of campaigning did not violate election laws and that the pro-government Phalang Pracharat Party (PPRP) had not accepted illegal donations at a fundraiser. Most recently, it ruled that the prime minister could actively campaign with the party that nominated him (a step too far even for Prayut himself, who instead has chosen to follow the party on the campaign trail).

In contrast, in the case of the anti-government Thai Raksa Chart party, the ECT recommended dissolution without following its own procedures in a rush to judgement. The Constitutional Court would later follow that recommendation.

In January and February, I interviewed candidates from a range of parties, in all four regions of Thailand. None expressed any faith in the ECT. Candidates of pro-regime parties thought the ECT was ineffective. Candidates of anti-regime parties not only questioned the ECT’s capability, but also feared that it was focused on identifying any small violation of the law that would justify banning opposition candidates and parties.

Opposition parties also have to defend themselves from the National Broadcasting and Telecommunications Commission (NBTC). The NBTC sought to shut down the opposition-oriented Voice TV for 15 days during the election, only to see the decision reversed by the courts. Other threats have come from criminal investigations, with leaders of the Future Forward party charged under the Computer Crime Act.

Ironically, but perhaps not surprisingly, attempts to manage the outcome of the election appear to have created a backlash against the regime. Recent polling done by the Nation newspaper shows the PPRP winning just 62 of 350 constituency seats, with the anti-regime Pheu Thai party winning 136. A recent rally of the PPRP in Korat drew just a few hundred supporters, leaving thousands of empty seats.

Perhaps more interesting are the results of a recent King Prajadhipok Institute poll, which indicate that 96 per cent of eligible voters intend to vote. One would not expect that level of enthusiasm if voters were happy with the government and the status quo.

Political parties also seem to be reacting to anti-government sentiment. The Democrat party, which is likely to win the second most seats after Pheu Thai, recently announced that it would not support the return of Prayut as prime minister. The Democrat Party had previously been deliberately ambiguous regarding its stance. It also set conditions for potential pro- and anti-government coalition partners.

In an interview with Bloomberg, Bhum Jai Thai (BJT) party leader Anuthin Charnvirakul stated that the party will wait for the outcome of the election before finalising its stance, so that it can take into account the voice of the people. BJT has long been considered to be firmly on the government side. Answering this way, even as a campaign tactic, indicates concerns with being seen as too firmly on the side of the junta.

Despite these indications of very limited support for the government, it is expected that the junta will continue to manage the outcome. In the interviews I conducted in January and February, academics and candidates suggested that the junta will expend resources to convince both small parties and individual MPs to join the pro-government side after the election, ensuring support will go well beyond the elected members of the PPRP.

One leading member of a large party noted that the ECT has 60 days to certify the results of the election. They raised concerns that during that period anti-government parties might be dissolved to ensure the junta remains in power.

While Prayut is likely to return to power, it will not be with the clear mandate he seeks. The manipulation of the elections to ensure his return is more likely to result in a decline in legitimacy and support at home, although even a manipulated election may help relieve international pressure to return to democracy. Under such circumstances, concerns about future government stability are likely to remain.

James Ockey is Associate Professor at the School of Language, Social and Political Sciences, University of Canterbury.



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What’s next after the Trump–Kim summit?

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Author: Vu Minh Khuong, Lee Kuan Yew School, NUS

The 12 June Trump–Kim summit has turned something that was only recently unthinkable into a plausible future scenario: a completely denuclearised North Korea that is working rapidly towards global integration and economic development.

North Korean leader Kim Jong Un and US President Donald Trump listen to questions from the media during their one-on-one bilateral meeting at the second North Korea-US summit in the Metropole hotel in Hanoi, Vietnam 28 February 2019 (Photo: REUTERS/Leah Millis).

For a major change to take place in a country, three driving factors — receptivity, pressure and enablers — must reach certain critical levels. While none of these driving factors are currently very strong in North Korea, they have far surpassed any previously observed levels.

On its receptivity to change, just like China and Vietnam before their economic reforms, North Korea has learned the costly lesson that a command economy and economic isolation lead only to disappointing results, regardless of how much corrective effort is made internally. Moreover, the impressive success of China and Vietnam has proven that making decisive change through economic reforms and global integration is the only way for a country to not only survive but also prosper.

With regard to pressure, the economic sanctions imposed by the United Nations since 2017 and the ‘maximum pressure’ approach adopted by the United States have had a severe economic impact on North Korea. The country is more isolated than ever before: it is losing its trade links even with its closest ally and faces the risk of falling into economic crisis.

And there are now unique factors enabling North Korea to enact change. On the diplomatic front, the proactive and sincere approach adopted by South Korean President Moon Jae-in and the unorthodox method used by US President Donald Trump have been highly effective in demonstrating to North Korea the advantages of changing course towards peace and global integration. On the economic front, globalisation, the digital revolution, the economic success of South Korea and the rise of Asia are all significant enablers that can help North Korea reap substantial benefits upon embracing reform.

Examining the summit in this light suggests that North Korea is entering a paradigm shift in its commitment to change. Profound change has become likely, but questions remain about how far and how smoothly this change will occur. The dynamics of this will depend on two major drivers: the North Korean leadership’s vision for their country’s future and the strategy and efforts that the United States and South Korea pursue in facilitating North Korea’s transformation.

Although Kim Jong-un’s vision for his country is still unclear, his apparent interest in learning about Singapore’s socioeconomic development success reveals early signs of his aspiration for North Korea’s future.

The way that the United States and South Korea coordinate in working with North Korea seems to have worked well so far. In particular, the ‘breakthrough’ approach adopted by Trump in engaging Kim has not only produced a ‘breakthrough’ symbolic outcome but has also formulated a productive platform for the United States, North Korea and South Korea to work together.

To encourage North Korea to do its best in implementing the Trump–Kim agreement, the United States and South Korea should effectively address the three strategic priorities that a communist country considers in making a major policy change: political stability, economic improvement (distinct from economic aid) and national pride. The foundation has already been laid for this endeavour: the impressive success of China and Vietnam, which were impoverished just a few decades ago at the beginning of their reform periods, has had a powerful impact on the thinking of North Korea’s leadership.

Creating a robust platform for all the involved parties to address any emerging concerns and to enhance mutual understanding and trust is vital. Respect, reciprocity and reliability should be the norms in building any partnership with North Korea. If North Korea offers to do something positive, the United States and South Korea should do a bit more in return. Kim Jong-un needs to build on his own confidence and enhance his people’s national pride in this early fragile stage of change. This approach is particularly effective for East Asian nations such as North Korea. To make changes in North Korea more robust, broad-based and predictable, the United States and South Korea should proactively engage the countries that can provide North Korea with inspiring and relevant experiences such as Singapore, China and Vietnam.

In any circumstances, North Korea will be an exciting case of change and transformation in the years to come. Although the risks and challenges remain substantial, it is likely that the world has entered a new era in which a major security threat is averted and a once-closed nation will undergo profound change.

Vu Minh Khuong is Associate Professor at the Lee Kuan Yew School of Public Policy, National University of Singapore.



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Investing in care key to boosting economic growth

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Authors: Elizabeth Hill, Marian Baird and Michele Ford, University of Sydney

The need to increase women’s labour market participation and economic security is on the ‘to do’ list of most governments and major global institutions. By 2025, global GDP could increase by 26 per cent — US$28 trillion — if women participated in paid work to the same extent as men.

Women take part in a women-only financial seminar named Kinyu Joshi (Finance Women) in Tokyo, Japan, 4 October 2018 (Photo: REUTERS/Issei Kato).

But if this goal is achieved, who will look after the children, the elderly, the disabled and ill? Although both women and men participate in care, global estimates show that women assume responsibility for around three-quarters of all unpaid domestic and community labour.

Tensions between women’s participation in paid work and unpaid care work are especially acute in Asia and the Pacific. In this region, women perform more than four times as much unpaid labour as men. Managing this unpaid workload makes it difficult for women to increase participation in paid employment at a level commensurate with their increasing levels of education and training.

Home to over half the world’s population, the Asia Pacific is diverse and changing rapidly, with economic growth delivering new opportunities for women. Hundreds of millions of young rural women have been drawn into factory work, English-speaking women are employed in call centres and back-office processing centres, and highly educated women are engaged by local and global firms in the full range of professional services. This changing employment landscape, alongside other social and economic changes, has significant implications for households and for the care work traditionally performed by women.

Data from Indonesia, the Philippines, Vietnam and Myanmar reveal some of the key points that must be addressed if women’s participation in paid work is to increase. In all four countries women’s labour-force participation remains below men’s, even though it has increased steadily since 2000. High rates of informal employment, common to the region, mean that most women in paid work remain beyond the purview of labour laws and have little or no access to critical social protections like paid maternity leave.

Even when women are formally employed and covered by workplace laws, problems with implementation are pervasive and leave black letter law impotent in the daily lives of many women workers. The gender pay gap, limited access to career progression and associated underrepresentation in senior management roles weaken many women’s attachment to the labour market.

Demand for care is also intensifying. Despite falling fertility rates, care for children remains a pressing issue in Indonesia, the Philippines, Vietnam and Myanmar. Rapidly ageing populations also raise the demand for care services. Between 6 and 10 per cent of the population in all four countries is projected to be over 65 years of age by 2026.

Governments are vital in delivering social services to help households reconcile their work and care responsibilities. Currently most Southeast Asian governments report low public expenditure on such essential care infrastructure as public childcare, aged care services, age or disability support pensions and maternity leave.

Governments are beginning to pay attention to these issues, but Indonesia, the Philippines and Vietnam still spend less than the regional average on these services. Yet recent International Labour Office calculations show that even low-income countries can afford the cost of social protection for the most vulnerable citizens.

Inadequate government provision of social services infrastructure leaves millions of households across Southeast Asia reliant on low-paid, unregulated and mostly female domestic labour. The unregulated nature of this work leaves many care workers vulnerable to exploitation and abuse. The long hours associated with many of these jobs makes it difficult for these women workers to manage their own care responsibilities. Decent jobs for informal and formal domestic care workers will be essential in making sure that all women are able to reconcile their work and care duties.

Investment in care infrastructure must be part of the workforce participation agenda. Official efforts to improve economic empowerment and security for women requires unpaid care work to be recognised, reduced and redistributed. This will require considerable expenditure on essential care infrastructure and may challenge small and low-income countries in Southeast Asia. But failure to build gender equitable workplace and public care infrastructure will leave global calls for an increase in women’s labour market participation floundering.

Care infrastructure includes legislated workplace policies that allow for family and community care, publicly funded formal care services, and decent work and wages for the care workforce.

While care work is essential to the gender equality equation, it is rarely included in standard prescriptions for increasing women’s economic participation. This is partly because women’s unpaid household labour is not included in GDP, leaving care work invisible to policymakers. But the significant gains to national prosperity and well-being attached to women’s increased economic participation make this an urgent issue.

Workplace and public policy design that promotes recognition and redistribution of care between men and women is essential for gender equality at work and in the home. If women are to take up their rightful place in the region’s workplaces, men will have to step up and take on additional care work. Generating a global understanding that care roles can and should be shared between men and women can act as the first step towards more gender-equal work and care.

Elizabeth Hill is Associate Professor of Political Economy at the University of Sydney.

Marian Baird is Professor of Gender and Employment Relations at the University of Sydney.

Michele Ford is Director of the Sydney Southeast Asia Centre and an ARC Future Fellow at the University of Sydney.

This article is abridged from a version that appears in the latest issue of East Asia Forum Quarterly, ‘Investing in Women‘.



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ASIAN (H)

The Philippines’ dilemma over Chinese capital

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Authors: Aaron Francis Chan and Alvin Camba

Since the end of the commodity boom, Asia’s developing countries must keep up with domestic growth expectations and regional competition by securing foreign direct investment (FDI) and directing it into major infrastructure projects. These development pressures are rising alongside increasingly available Chinese capital, while non-Chinese multinational firms have, relatively speaking, lost their appetites for overseas investment.

Protestors display placards during a rally by leftwing activists outside the Chinese Consulate to protest Beijing's continued reclamation activities in the South China Sea, Makati, Metro Manila, Philippines, 10 February 2018 (Photo: Reuters/Erik De Castro).

A combination of high political risk and relatively low return deters most from investing in critical job-creating sectors, leaving Asia’s developing nations with few options when Chinese capital comes calling. They must find ways to better harness the opportunities presented by Chinese capital while preparing for the potential risks.

The wealthier members of the Organisation for Economic Co-operation and Development are strengthening institutional responses to cope with the flow of Chinese capital overseas. Since the announcement of the Belt and Road Initiative, the traditionally open investment regimes of most Western economies are taking on a more protectionist cast.

Australia and New Zealand now judge foreign investment by net benefit assessments, weighing up a project’s contribution to the economy against expectations of technology transfer and potential national security risks. The Committee on Foreign Investment in the United States is receiving renewed attention over fears of technology theft and economic espionage. In the European Union, politicians and bureaucrats are discussing a common foreign investment framework across member states.

The Hanjin Heavy Industries and Construction Philippines (HHIC-Phil) bankruptcy is emblematic of these wider issues faced by developing economies. When HHIC-Phil declared bankruptcy in January 2019, it triggered the largest corporate default in Philippine history and a slow-burning crisis for the Philippine government over the uncertain future of the firm’s Subic Bay shipyard.

Few details have emerged on the financial state of HHIC-Phil, but the Philippine central bank reassured the country that HHIC-Phil’s debt comprised 0.24 per cent of total gross domestic loans. Its Philippine creditors have already agreed to work on a restructuring plan that will trade existing debt for equity in a new managing entity. But government alarm at the thousands of potential layoffs is prompting conversations about selling the assets to Chinese investors, or even nationalisation.

The Philippine Department of Trade and Industry confirms reports that two Chinese firms — one state-owned — are expressing interest, fanning fears that the country could be selling critical infrastructure to an unfriendly, if not malign, actor. Retired Philippine Vice Admiral Alexander Pama called the bankruptcy ‘a very significant national security issue’. And Philippine Defense Secretary Delfin Lorenzana publicly implied the possibility of nationalisation to keep the shipyard, and its prize location near a deep water port, in Philippine hands.

But instead of leaving the Philippines more vulnerable to Chinese strategic influence, an orderly and transparent sale of HHIC-Phil’s industrial assets that includes only private bidders — Chinese or Western — better serves Philippine interests. It would secure local employment and ensure the long-term economic viability of the country’s shipbuilding industry.

There are important distinctions between types of Chinese capital. Chinese private capital, which mainly comes as FDI or venture capital, is driven mostly by commercial considerations. Chinese state-backed capital, typically channelled through the FDI of major state-owned enterprises, construction contracts or concessional finance, is motivated more by political concerns.

Since the 2013 inauguration of the Belt and Road Initiative, China has ramped up overseas lending through institutions like the China Export-Import Bank (Chexim). Such lending relies on government concessional loans or preferential buyer’s credit to court foreign governments into using Chinese firms for construction contracts on infrastructure projects. The development impact of Chinese capital varies by project and by country. Sri Lanka’s Hambantota Port is an infamous case, where Chexim financing for the US$1 billion project led to the China Harbour Engineering Company (CHEC) seizing the port.

Chinese state-backed capital for Philippine ports can generate high levels of debt or create tensions over sovereignty, as seen in the controversy over CHEC’s proposals for port development in Cebu and Davao. But HHIC-Phil is an entirely different case. Any potential buyer would either take on the firm’s existing obligations or share equity with its creditors, depending on the final restructuring plan. This shields Philippine taxpayers from taking on any debt through the resolution process.

Despite Pama’s warning, HHIC-Phil’s shipyard appears valuable mainly for its industrial equipment. It is not, by any objective standard, critical infrastructure like energy or telecommunications.

The buyer would still have to lease the land from the Philippine government, giving the Philippines bargaining power over future operations. These safeguards are possible precisely because a HHIC-Phil sale would welcome Chinese private capital, but not Chinese state-backed capital and its attendant risks.

The Philippine government should harness Chinese private capital inflows to generate employment, transfer knowledge, and improve capacity in key sectors like manufacturing, services, and other commercial sectors. Developing stronger institutional mechanisms to engage with the politically-riskier Chinese state-backed capital is needed in the meantime.

The Philippines is not alone among developing economies in facing acute pressure to protect its national security while competing for the economic opportunities of foreign investment. The open and transparent sale of HHIC-Phil’s industrial assets to all private bidders would allow the Philippine government to capitalise on this opportunity and fulfil its economic and national security goals.

Aaron Francis Chan was previously Assistant Vice President covering Philippine clients at ING Bank N.V., as well as Economic Advisor for the British Embassy in Manila. He holds a MSc in International Political Economy from the London School of Economics.

Alvin Camba is a doctoral candidate at the Department of Sociology, Johns Hopkins University. He works on Chinese capital, development and elite competition in Southeast Asia.



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US–China commercial espionage will crush prospects for technology cooperation

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Author: Sourabh Gupta, ICAS

Technology has become a new battlefield in US–China relations. But it could also be an arena for immense cooperative possibility if the framework underpinning two-way technology flows is fair, equitable and reciprocal. There should be no space to secure under-handed advantages via cyber-enabled intellectual property (IP) theft. Fair competition and technology cooperation are two sides of the same coin.

A man types into a keyboard during the Def Con hacker convention in Las Vegas, Nevada, United States, 29 July 2017 (Photo: Reuters/Steve Marcus).

In this regard, the course of US–China trade and investment relations in the decade ahead could well hinge upon two events set just hours apart at the turn of November 2018.

On 1 November, US Attorney General Jeff Sessions announced the establishment of a China Initiative within the Department of Justice to combat Chinese economic espionage.

US accusations of China’s state-linked, cyber-enabled economic theft are as long-standing as China’s ‘indigenous innovation’ plans, starting with the 2005 Medium-and-Long Term Science and Technology Development Plan. In the early 2010s, an unprecedented wave of top-dollar outbound investments into firms in the United States and Europe was accompanied by a less-virtuous endeavour to gain unauthorised access to commercially-valuable proprietary information — including trade secrets — in a number of high-value manufacturing sectors.

To put a stop to this theft, former US president Barrack Obama extracted a commitment from President Xi in September 2015 that China would refrain from cyber-enabled IP theft for commercial advantage.

Judging that the 2015 commitment was not being honoured, Sessions and his successors have — since 1 November 2018 — brought a string of trade-secret theft cases against Chinese state-linked and private actors. The most recent case concerns Huawei’s alleged conspiracy to steal T-Mobile USA’s intellectual property.

Mere hours before Sessions announced the China Initiative, Donald Trump placed a call to Xi Jinping after a months-long hiatus, kicking-off the most productive phase of negotiations since US­–China trade tensions erupted in March 2018.

China wants to perpetuate a symbiotic high-technology trade and investment relationship with the United States. The dynamism of China’s domestic innovation system is based in large part on US-owned core technologies. That Washington’s foreign acquisitions and export control rules do not exclude Chinese innovators from acquiring these technologies abroad or working them at home is the key driver of President Xi’s readiness to level China’s tilted foreign investment regime and facilitate fair and reciprocal access for US businesses in the 90-day trade truce talks.

Both sides formally continue to treat these two tracks — law enforcement and negotiation — separately.

While this separation may be true as a matter of form, the two are intertwined. The indictments, and targeted embargoes imposed subsequently, against Chinese technology companies under the China Initiative could well cancel out the technology-sharing privileges that flow from a successful 90-day truce talks agreement. Effectively, that which Donald Trump allows on one hand, his Justice Department could just as easily take away with the other (even if Trump nominally enjoys the legal authority to override the Department).

In early November 2018, the US Justice Department charged Fujian Jinhua, a state-owned memory chip manufacturer and prospective national champion, with trade-secrets theft. The Commerce Department simultaneously imposed an embargo on US sales of software components to the company. Lacking access to critical imports, the company stands today on the brink of a production shut-down. Although latest reports suggest that a bilaterally negotiated effort may rehabilitate Fujian Jinhua, the threatened crippling of the company foreshadows the intertwining of negotiation and law enforcement that will characterise US–China high-technology interactions in the years ahead.

The Fujian Jinhua example is also a cautionary tale of the blowback that Chinese businesses could suffer from suspicions — and aspersions — of illicit state-enabled commercial gain. The less China resorts to such cyber-linked tactics and the more liberal and reciprocal its foreign investment and mergers and acquisitions regime become, the more likely that US administrations will continue to draw their ‘national security’ perimeter narrowly and facilitate the two-way intercourse in these civilian cutting-edge and foundational technologies.

The US law enforcement-on-steroids strategy against China’s technology theft is not without its risks.

A jury in 2017 dismissed T-Mobile USA’s allegation in the aforementioned Huawei civil case that the Chinese company’s actions were ‘wilful and malicious’. Now, the Justice Department intends to make those charges stick in a criminal case where the required burden of evidence is higher.

As late as spring 2018, the US State Department — the agency monitoring Beijing’s compliance with the 2015 Obama–Xi cyber commitments — had not cited any specific violation. With the trade war now underway, the Justice Department slaps a new Chinese trade theft case every other day, in turn inviting charges of politicisation. It is not sufficient to conclude that because players ‘associated’ were involved that the Chinese government too was involved; state intent and action must be shown.

It is also somewhat hypocritical for Washington to sermonise against state-linked actions intended to produce a commercial gain at a time when the full weight of the government has been thrown behind an orchestrated, and failing, campaign to skew private markets by discouraging whole countries — not just companies — from embracing Huawei’s 5G telecoms equipment.

At the end of the day, the bottom line is immutable: China’s state-linked cyber espionage for commercial gain must absolutely end. A rupture in the US–China trade, investment and IP relationship is too dear a price to pay for its continuance.

Sourabh Gupta is Senior Fellow at the Institute for China–America Studies in Washington, DC.



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