Brookings: Topics - Southeast Asia

Top Five Issues President Obama and Chinese President Xi Jinping Should Discuss

Richard C. Bush III, Cheng Li, Jonathan D. Pollack, Eswar Prasad and Ian Wallace — Tue, 04 Jun 2013 15:23:00 -0400

President Barack Obama and Chinese President Xi Jinping will meet in California later this week, where they are scheduled to hold in-depth meetings on a wide range of issues in the U.S.-China relationship. Brookings experts identify the top five topics the two leaders should discuss: cybersecurity, North Korea, China's foreign investment, China's new government and East and South China Seas dispute.

1. Cybersecurity

All countries engage in some form of spying, but China’s cyber-spying on American industries is especially threatening. If China refuses to curtail the practice, Ian Wallace explains, the U.S.-Sino relationship could be profoundly undermined.

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Cyber-security: Putting China on Notice

2. North Korea

North Korea’s brinksmanship is disturbing to the region and problematic for the Chinese government, which is often asked to calm the country down. China agrees that North Korea needs to change, notes Jonathan Pollack, director of the China Center at Brookings.

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North Korea: China's Problem

3. China's Foreign Investment

China’s foreign investment is staggering and continues to grow. China’s dollars also buy political influence around the world and could even hinder U.S. industrial growth. It may be unsettling but there’s little the U.S. can do. Eswar Prasad has the details.

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China's Foreign Investment: Purse Strings and Political Power

4. China's New Government

The tension between the U.S. and China is largely fueled by their respective desire to reach the same goal: they both want to be the world’s preeminent power; but Cheng Li says this isn’t as ominous as it sounds.

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The U.S. and China: Mutual Respect, Mutual Fear

5. East and South China Seas Dispute

Maritime rights have been a long-festering problem affecting several countries in the East Asian region. It’s an issue that can destabilize the neighborhood or the world and could possibly lead to war as Richard Bush, director of the Center for Northeast Asian Policy Studies, explains.

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East and South China Seas Disputes

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Authors

Image Source: © POOL New / Reuters

Obama and Xi at Sunnylands: Maritime Tensions

Richard C. Bush III — Mon, 03 Jun 2013 16:00:00 -0400

When President Obama met China’s former president, Hu Jintao, during the first year of his first term, they probably didn’t talk about tensions in the East and South China Seas. Now, when Obama meets Hu’s successor, Xi Jinping, in the first year of his second term, maritime issues are likely to be on the agenda – because they could foster conflicts that drive the United States and China further apart than they already are.

Maritime tensions stem from several, linked disputes that are cumulative in their effect (for more, see my book, The Perils of Proximity: China-Japan Security Relations). The principal driver is the quest of all countries for natural resources to fuel economic growth, in this case oil, natural gas, minerals, and fish. To secure those resources in the maritime domain, the countries concerned—China, Taiwan, Japan, Vietnam, Malaysia, the Philippines, and Brunei—claim various rocks and islands in the East and South China Seas, and the broadest exclusive rights to exploit fish in the sea and hydrocarbons and minerals in the seabed. Each creates a self-serving version of history and international law to fortify its case. Each acts diplomatically and in other ways to assert its claims before the world. Nationalistic publics push governments to be firm in protecting these national interests.

China claims the Diaoyu/Senkaku islands northwest of Taiwan and the Paracel and Spratley Islands in the South China Sea (and it has not denied a claim to the waters of the South China Sea as well). The United States, of course, has no territorial or resource claims in East Asia, but we do care a lot about how claimant countries assert and enforce their claims. For one thing, we have defense treaties with Japan and the Philippines, and so might get drawn into a conflict between either of them and China. Washington has stated explicitly, for example, that the Senkaku/Diaoyus fall within the territorial scope of our treaty with Japan. Second, we have interest in the consistent application of international law to the maritime domain (regrettably, the United States has not yet ratified the UN Convention on the Law of the Sea, even though we adhere to it). And we have an interest in the peace and prosperity that flows from multilateral stewardship of the maritime commons.

What makes the rivalry in the East and South China Seas so dangerous, and where the interaction between Presidents Xi and Obama could have a salutary effect, is the rather aggressive way in which maritime agencies of various countries conduct operations to protect and assert territorial and resource claims. China is probably the most at fault in this regard, but others are not without blame. And China has begun a pattern of exploit actions by others to define a new status quo, whether it is with the Diaoyu/Senkakus or the Spratleys. When a large number of vessels from contending countries operate in close proximity, accidents will happen. And when some of those vessels are armed, the consequences of accidents are compounded. To make matters worse, no country in East Asia has good crises management capabilities, particularly when nationalistic publics are in full fury.

It will be impossible in the short- or medium-term to resolve all aspects of theses maritime disputes (particularly territorial differences). The parties concerned should therefore start by addressing the aspect that is easiest to bring under control, and that is how maritime agencies operate in close proximity. There are concrete crisis-avoidance and risk-reduction measures that might be applied and adapted to the East and South China Seas through discussions between China and its neighbors. But Presidents Obama and Xi have an opportunity to recognize together the danger that these small disputes pose to the interests of their two countries and the entire East Asian region. They can set a tone and create a context for reducing the danger most immediately at hand, which will then permit a shift to more cooperative approaches.

Authors

Richard C. Bush III

Image Source: © KYODO Kyodo / Reuters

An American Perspective on Malaysia's Elections: Preserving Najib Razak's Gains

Jeffrey A. Bader and Douglas H. Paal — Wed, 01 May 2013 00:00:00 -0400

Malaysian Prime Minister Najib Razak has called national elections for May 5. This date is perilously close to the statutory deadline to hold the elections, suggesting he is concerned that the results may lead to his departure from office. Malaysia, the United States, and much of the world have a stake in the outcome.

The traditionally dominant party, the United Malays National Organization (UMNO), and its partners in the long-ruling Barisan Nasional coalition have experienced internal divisions. Ethnic preferences for Malays in government and the economy have alienated many Chinese, who are a minority (roughly 40 percent of Malaysia’s population) but economically dominant. Najib’s efforts at internal reform have threatened traditionalists associated with former prime minister Mahathir Mohamad. Younger, urban voters seem itching for change.

There is a strong challenge from an opposition coalition headed by former deputy prime minister Anwar Ibrahim. His Pakatan Rakyat coalition includes Chinese and Islamic parties and is close enough in some polls to win outright.

But many longtime observers believe the real election is within UMNO, between old warhorses associated with Mahathir and the reformists surrounding Najib. The argument is that if Najib cannot bring in a result that preserves UMNO’s two-thirds majority and capacity to rewrite the constitution, old-line leaders, possibly current Deputy Prime Minister Muhyiddin Yassin, would displace Najib and stem reforms.

This is where the stakes need to be clearly stated. Under Mahathir, opposition to perceived residual Western colonialism was a rallying cry and a frequent and increasingly anachronistic theme. His successor, Abdullah Badawi, was less shrill but did not move significantly away from Mahathir’s policies. Najib has fundamentally repositioned Malaysia internationally. He has moved away from the old UMNO policy seeking to divide Asia from the United States and has seen the United States as an important partner for Malaysia and ASEAN.

Najib and his top officials have been forthright in speaking about democratic values in international forums such as the ASEAN Regional Forum. They have been critical of states such as North Korea and even Myanmar before reforms commenced there, something that would not have been countenanced in an earlier period when criticism was aimed solely at the West.

Najib has done all this as part of a strategy to retain domestic (Chinese) investment and attract foreign investment in order to accelerate Malaysia’s development. As a demonstration of his commitment to a more open Malaysian economy, he has joined the discussions on the Trans-Pacific Partnership trade agreement with ten other nations.

After economic contraction in 2009, Malaysia’s GDP growth has rebounded to a robust 5 percent, led by double-digit export growth in 2010 and large FDI inflows in 2010 and 2011. Gross investment for 2012 was up 9 percent over the last year, with the fastest growth in private and domestic investment (up 22 percent and 55 percent, respectively). The current account surplus is expected to narrow in the near term, and employment growth is expected mostly in domestic-oriented sectors such as services, in line with Najib’s New Economic Model that aims to create more sustainable, equitable, high-income growth. The Asian Development Bank forecasts that Malaysia’s GDP will grow by 5.3 percent in 2013, accelerating a little to 5.5 percent next year. Malaysia’s strong performance under Najib stands in marked contrast to the ethnic preferences and frequent allegations of corruption and cronyism under Mahathir.

Domestically, Malaysia remains an impressive Muslim-majority nation with a democratic system, pluralism, and generally good standards for human rights protection. Najib has given a number of speeches in international settings denouncing terrorism in the Islamic world and indeed has preached formation of a league of moderate nations to fight terrorism.

Under Najib, Malaysia also has moved to significantly tighten its previously porous export-control system, which had made the country a transit point for shipment and financing of dual-use products going to Iran. Defense cooperation with the United States and others has been normalized, and it has not remained a forum for grandstanding against the West.

Najib has moved to dismantle one of the instruments of repression, the Internal Security Act inherited from the British when Malaysia became independent. Under his guidance the legislature has replaced the law, which provided the basis for lengthy detention without trial.

These are not just achievements for Najib’s leadership, but they are gains for Malaysia, the region, and the world.

As the election campaign unfolds, it will be interesting to see what issues UMNO and its Barisan National coalition and Anwar with his Pakatan Rakyat coalition use against each other (see the table below).

Barisan National (ruling coalition) Coalition head: Najib Razak	Pakatan Rakyat (opposition) Coalition head: Anwar Ibrahim
The Economy
Gradually increase the government’s 1Malaysia People’s Aid (BR1M) handouts to RM1,200 for qualified households and RM600 for qualified singles Enact a more broad-based tax system and gradually reduce personal and corporate tax rates	Maintain BR1M cash assistance if elected Broaden income tax band, raise the income floor for the 26 percent tax rate to RM400,000 from RM250,000
Bumiputera (Ethnic Malays and Indigenous Groups)
Promote and improve Bumiputera policies that favor ethnic Malay businesses Provide RM500 million in seed funding to the Indian community	Equally distribute economic assistance regardless of race Undertake an inclusive development platform that includes all ethnic groups
Transparent Government
Establish additional corruption courts Elevate officers of Malaysian Anti-Corruption Commission to higher level	Introduce corruption elimination policy (DEBARAN) to free anticorruption institutions from political control and improve anticorruption prosecution Undertake electoral reform
Living Standards
Expand transport subsidies, education aid, food and housing assistance, public transportation, and rural infrastructure	Undertake similar populist policies, and raise minimum monthly income to RM4,000 by end of first term
Innovation
Enact the 2020 plan for high-income development based on innovation Attract RM1.3 trillion worth of investments and create 2 million new high-income jobs Channel investment to small and medium enterprises	Raise research and development expenditures to 5 percent of GDP Create a RM500 million national innovation fund Reshuffle tax incentives to give more assistance to small and medium industries
The Environment
Introduce financial incentives for renewable energy investment Voluntarily reduce emissions intensity of GDP by up to 40 percent by 2020 Pass stricter illegal logging laws	Halt work at the Lynas rare earth plant Review the implementation phases of the RAPID petrochemical project in Pengerang Reform logging regulation

Anwar has a mixed record. He earlier stood out as one of Malaysia’s leading progressive political figures and someone who creatively reconciled Islam and Western values. Since his imprisonment by Mahathir in 1998 on allegations of sodomy and a subsequent revival of similar charges in 2008 that was overturned in Malaysia’s courts, he has moved toward a closer alignment with Islamic politics. He has, for example, irritated women voters by suggesting that sharia law could be adopted by tradition-minded Malaysian states. Anwar nonetheless continues to be a strong public advocate of democracy and human rights and criticizes Najib as essentially continuing the more repressive policies of the Mahathir years.

Whether the winner is Najib or Anwar or the conservative forces within UMNO, Malaysians should consider seriously how to preserve the gains of the Najib era.

Authors

Jeffrey A. Bader
Douglas H. Paal

Image Source: © Bazuki Muhammad / Reuters

The Illegal Trade in Wildlife in Southeast Asia and Its Links to East Asian Markets

Vanda Felbab-Brown — Fri, 05 Apr 2013 13:45:00 -0400

Editor's note: In this book chapter from An Atlas of Trafficking in Southeast Asia (I.B. Tauris 2013), Vanda Felbab-Brown traces how increasing demand for wildlife and wildlife products has devastated regional and global ecosystems in Asia. Underlying the unsustainable and ill-regulated wildlife trade has been the limited progress to curb exploding demand for wildlife products.

Introduction

Mainland Southeast Asia, with its linkages into the larger Asian market that includes China, Indonesia and India, is one of the world’s ‘wildlife trade hotspots’ – that is, a region where unsustainable and ill-regulated trade in wildlife poses a disproportionally large threat to biodiversity and species preservation. Both the volume and diversity of traded and consumed species have increased to phenomenal and unprecedented levels. Wildlife is currently being extracted from Southeast Asia’s tropical forests at six times the sustainable rate. The region is a key supplier of the international market in wildlife, legal and illegal. Increasing global buying power, population growth and globalisation have led to a rise in demand for wildlife in developed, emerging and developing countries alike. However, Southeast and East Asia today probably represent the areas of the most intense legal and illegal trade in wildlife, with China as one of the biggest (if not the biggest) consumers of wildlife products in the world. China’s exploding demand, a result of the increasing affluence of its expanding middle class, has turned the country into a great vacuum, sucking natural environments empty of wildlife – not only from China’s and her Southeast, South and East Asian neighbours, but also from across the ocean in Africa and elsewhere.

Law enforcement efforts and public awareness of the ecological harms in Southeast and East Asia have been inadequate even to reduce the scale of the threat. Yet the need for vastly increased effectiveness of policy action is urgent. Unlike other illegal economies, such as the drug trade, that exploit resources that can be renewed, and thus can be conducted infinitely, the illegal trade in wildlife is drastically depleting its marketable products, unfortunately at an irretrievable cost to humankind and the world’s ecology. Once endangered species are extirpated at the hands of poachers and traffickers, they are gone and there is often no bringing them back.

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Authors

Vanda Felbab-Brown

Publication: I.B. Tauris

Image Source: © Stringer Bangladesh / Reuters

The Jagged Edge: Illegal Logging in Southeast Asia

Vanda Felbab-Brown — Fri, 05 Apr 2013 00:00:00 -0400

Editor's note: In this book chapter from An Atlas of Trafficking in Southeast Asia (I.B. Tauris 2013), Vanda Felbab-Brown presents an overview of the current state of illegal logging in Southeast Asia, a critical international hotspot of biodiversity. As demand for timber increases, the absence of effective policing and rule of law mechanisms to enforce the legality and sustainability of timber extraction and biodiversity protection poses unprecedented threats to forest ecosystems and global warming mitigation.

Introduction

One of the world’s most important hotspots of biodiversity, Southeast Asia is unfortunately also an area of the most intense deforestation in the world, with devastating and irreparable effects on its and the world’s forests and ecosystems. With illegal logging accounting for a very large portion of forest destruction in the region, Southeast Asia has the highest rate of deforestation of any major tropical region: 1.2 per cent of forest lost yearly, followed by Latin America (0.8 per cent) and Africa (0.7 per cent). At current rates, by 2100, Southeast Asia will have lost three-quarters of its forests and 42 per cent of its biodiversity. Increasing efforts since the 1980s to regulate timber extraction and make it sustainable have also resulted in the emergence of intense illegal logging throughout a region where there used to be free-for-all unrestricted forest felling.

Paradoxically, solving the problem of sustainable supply of timber does not equal solving the problem of how to sustain forest ecosystems and their biodiversity. This is because timber in general, though far from all species of trees and bamboo, is renewable through reforestation and plantation promotion, but the forest ecosystem overall is not. Plantations and reforestation can achieve neither the original forest’s structure or complexity nor its biodiversity. Yet in Southeast Asia the measures adopted have been geared primarily toward assuring a sustained supply of timber or mitigating other detrimental environmental effects, such as flooding, but not the preservation of natural, especially primary, forests.

Similarly, even effectively addressing the problems of illegal logging and timber smuggling, as difficult as they are, does not necessarily preserve sustainability. As demand continues to expand, it remains to be seen if timber extraction and consumption – whether legal or illegal – can be made compatible with biodiversity preservation.

However, there have been some positive developments. Various measures to address illegal logging and maintain forest biodiversity, such as certification of sustainably and legally logged timber and forest management plans, are increasingly being adopted in Southeast Asia and elsewhere. In some cases there are signs of at least their partial effectiveness in preserving timber and even forests. The question remains whether these measures, including demand reduction efforts, can be developed, adopted and enforced fast enough to avoid a major collapse of the world’s natural forests and irretrievable species loss.

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Authors

Vanda Felbab-Brown

Publication: I.B. Tauris

China and the Changing Myanmar

Yun Sun — Fri, 29 Mar 2013 13:50:00 -0400

INTRODUCTION

Myanmar’s rapidly political reform dazzled and puzzled many watchers, Chinese included. Multiple internal and external factors contributed to the decision to adopt the reform. Internally, the political change is the result of a process designed and implemented by the military government, which was necessitated by the military’s lack of professional governance skills and made possible by its consent. Externally, Myanmar’s desire to mitigate its overdependence on China, to improve relations with U.S. and to repair its reputation at ASEAN motivated its reform at home.

The democratic reform in Myanmar unveiled a series of unpleasant uncertainties for China. Economically, the suspension of the Myitsone dam project has encouraged further scrutiny and criticism of Chinese investments, threatening the viability of strategic projects such as the oil and gas pipelines. The pressure on Chinese existing economic interests on the ground is strengthened by the increasing competition from the west. Politically, the preliminary success of Myanmar’s democratic reform has raised questions inside China about China’s political system and the long postponed political reform. Strategically, Myanmar’s changing foreign policy undercuts China’s original blueprint regarding the strategic utilities of Myanmar at ASEAN, in the Indian Ocean and more broadly in the region.

As a result, China has adjusted its posture and policy toward its southwest neighbour. Since the suspension of the Myitsone dam, China has dramatically reduced its economic investment in Myanmar, intentionally cooled down the bilateral political ties while established historical relations with the democratic oppositions. At the same time, China also launched massive public relations campaigns inside Myanmar that aimed at improving its image and relations with the local communities. The security of China’s energy investment, such as the oil and gas pipelines and the Myitsone dam, remain China’s priority. And the issues are substantially complicated by the conflict in the ethnic border areas.

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Authors

Yun Sun

Publication: Journal of Current Southeast Asian Affairs

Indonesia Field Report IV: Wildlife Trafficking, Illegal Fishing, and Lessons from Anti-Piracy Efforts

Vanda Felbab-Brown — Tue, 26 Mar 2013 00:00:00 -0400

The Cruel Wildlife Market

Hundreds of cages with birds, lizards, bats, and mammals were stacked upon one another, with tens or sometimes even hundreds of specimens crammed into one cage. Several dozen white-eyes (a bird genus) were squeezed into a cage appropriate for one canary. At least a hundred bats were stuffed into another container. In a cage atop this stack, more than fifty green agama dragon lizards, some dead, with their bodies rotting amidst those still alive, were desperately competing on the ceiling of their container for a little of bit space. Two baby civets, on sale for 400,000 Indonesia rupiah each (about USD 40) were shoved into an adjacent box. Like the rest of the unfortunate animals – squirrels, chipmunks, black-naped orioles, drongos, leafbirds, shamas, mynas, partridges, and the highly-prized and highly-threatened lories – the civets had no water and no protection from the full blast of the hot Indonesian sun. Many of the animals would die in this (in)famous Yogyakarta bird market before they were sold to new owners.

Meanwhile, however, the Yogyakarta bird market, like other wildlife markets in Indonesia and East Asia, serves as a perfect incubator for diseases that can mutate and jump among species, such as avian influenza and SARS. Such zoogenic diseases could potentially set off a catastrophic pandemic killing millions of people. The spread of the viruses to domestic animals and people is exacerbated by the trade in roosters for cock-fights, also on sale in the market amidst the wild-caught birds and animals. Even the animals sold before they die in the hands of their traders often do not survive as household pets – typically the fate of species such as woodpeckers, eagles, and owls.

The inhumane treatment of the animals in the many wildlife markets I visited during my research across the Indonesian archipelago was as heart-wrenching as the devastation this unmitigated trade in wild birds and other animals wreaks upon Indonesia’s ecosystems. Orange-headed thrushes and white-crested laughing thrushes, available in cages to eager buyers, are now exceedingly rare in the remnants of Indonesia’s forests, for example.

To reduce the consternation and criticism of international tourists, Yogyakarta’s wildlife market was moved more out of sight – away from its previous location next the frequently visited old royal palace. Nevertheless, enterprising Indonesian young men on motorcycles still bring Western tourists to the market’s new location. A young German woman, with a Lonely Planet Indonesia guidebook tucked in her purse, was eagerly taking photos of the cages, her very short shorts and tanktop as much an affront to Indonesia’s cultural sensitivities in this conservative Muslim city as the appalling conditions of the traded animals are to Westerners. An emblematic introduction to the fusion and confusion of conflicting values in this modernizing yet tradition-bound country?

Hunters and Buyers

In the Indonesian Market

Indonesian buyers and sellers rarely exhibit any qualms about the ecological impacts of the trade and the conditions of the animals. Wildlife trade, particularly in birds, is deeply entrenched in Java’s culture. A Javanese proverb states that every man should have a house, a horse (these days often interpreted as a car, or at least a motorcycle), a wife, a kris (a traditional dagger), and a bird. Because of this strongly-held tradition, at least one third of Javanese households keeps birds, I was told by representatives of a joint international-Indonesian environmental NGO, whom I interviewed on the condition of anonymity. Indeed, strolling through middle-class neighborhoods of Javanese towns reveals house after house with several cages of prinias, bulbuls, orioles, laughing thrushes. Eerily, however, there are precious few birds in the Javanese countryside, most having been caught by traders.

The bird trade is so culturally-ingrained that only some environmental NGOs operating in Indonesia dare oppose it. “Our current priority is to preserve and try to rehabilitate the devastated Indonesian ecosystems. The bird trade is just too difficult; too culturally sensitive. Attempting to stop it could get us shut down or hamper our other operations, such as trying to restore at least a tiny sliver of Indonesia’s lowlands forests. The Indonesian police are not interested in the bird trade anyway. We count ourselves lucky when we get law enforcement action against endangered mammals,” one of the NGO representatives told me after I repeatedly assured him that I would not identify either him or the NGO.

But even in this tradition-oriented society, tastes in the wildlife market do evolve. Unfortunately, in Indonesia and East Asia, wildlife tastes have been changing all too often toward a more expanded and voracious appetite for wild animals and wildlife products. One of the latest fads in Indonesia is keeping lizards; and young middle- and upper-class Indonesian men on the make now prefer them to birds.

Still, rare and highly-endangered birds, such as lories from Papua, or the Bali starling, continue to be highly desirable and can cost hundreds or thousands of dollars. A summer 2012 biological survey revealed that only 31 Bali starlings were left in the Bali Barat National Park, a conservationist involved in the survey told me. Then in July 2012, poachers coated a few trees with glue and captured six of the starlings in the park, eliminating one fifth of the population in the wild. A release of captive-bred birds is planned to boost the population of the species whose survival hangs on a thread as thin as the fishing nets that poachers also use to catch the birds. But without better law enforcement in the park and against buyers throughout the archipelago, and without a dramatic decline in the desirability of the Bali starlings by Javanese bird owners, will the released birds have any chance?

Some of the poachers are desperately poor. In the Moluccas or Papua, they are sometimes paid as little as a bowl of noodles for a day’s hunting, or a pack of cigarettes for a rare bird. But that pack of cigarettes can be enough to extirpate an endangered species. And traders can be shockingly frivolous in how many individual birds or animals they are willing to have killed for the survival of a few that would bring high profits on the international market. Ambonese hunters, mostly very poor, will be paid five dollars for a caught black-capped lori. In order to smuggle out the protected endangered and highly-desired species, traders will then shove the small birds into plastic bottles tied together, throw them into the sea, and fish them out miles away from the island and any possible law enforcement action. With the surviving birds fetching up to thousands of dollars, even a 95% loss of the captured birds (many would suffocate in the plastic bottles) will generate handsome profits. For a fistful of dollars, a species can be rapidly wiped out.

Keeping birds and consuming products from wild animals has a long history in Indonesia. The Dayak communities in Kalimantan, for example, have hunted hornbills for their feathers for centuries. In northern Sulawesi, the Christian community has had a strong taste for bushmeat, with anything that can be hunted often being highly craved for dinner (and very pricey in the Langowan and Tomohon bushmeat markets). One of the greatest delicacies—its consumption being a symbol of status and affluence -- is the black crested macaque, a primate endemic to Sulawesi. Over the past three to four decades, the species has been experiencing an 80% decline. Although deforestation in Sulawesi has eliminated much of the macaques’ habitat, hunting these days actually poses a far greater threat to the species. In addition to its highly-prized meat, its fur is used in traditional dancing to signify bravery; and its skulls decorate masks and costumes.

Protecting the threatened primate has become an environmental priority for conservationists in northern Sulawesi. In an inspired move, an NGO tried to reduce some of the hunting pressures on the macaques by producing artificial skulls looking identical to the real ones, so the replicas would be used for traditional costumes. Another NGO that is currently leading the effort to save the macaques near the Tangkoko Reserve – the Selamatkan Yaki project – has emphasized environmental education to explain to consumers that if they do not reduce the hunting to sustainable levels, all the macaques will be gone and there will be no more pricy meat or and no more fun of hunting the primates, a factor which many hunters identified as an important motivation. (Many of the wildlife traders I interviewed across the archipelago about the critical depletion of the species they were selling and the negative impact on their business if the animals were extirpated in the wild were shockingly unaware and indifferent. They would insist that the birds and animals would always be in the forest and dismiss my suggestions that the species could die out and their trade collapse.) As part of its environmental education and demand-reduction effort, the Selamatkan Yaki project has also tried to involve the local Christian church in the campaign for environmental conservation, as well as to get influential community leaders to declare that the macaque meat, unlike pork, is not crucial for celebrations. But these demand reduction efforts, as imperative as they are, are also very painstaking and slow-going. And for many species, the time is running out at a rapid pace.

In the Booming International Market for Wildlife

The portent of extinction has become all the more threatening as the volume of animals hunted for the local traditional markets is nowadays vastly surpassed by the volume of animals hunted for the booming international market. These international profits often dwarf those in the traditional trade, and international wildlife trading and trafficking are expanding at an exponential rate as a consequence. Many of the hottest wildlife markets are located in China and in East Asia.

Keenly embraced by East Asia’s increasingly affluent middle and upper classes, Traditional Chinese Medicine (TCM) concoctions promising extraordinary curative powers, enhanced longevity, and increased sexual prowess are more popular than ever. So is the consumption of exotic bushmeat. These international wildlife-demand markets have resulted in extraordinary numbers of animals being hunted, sometimes in the millions of specimen per year. The toll on genera such as pangolins, seahorses, turtles, or civets has been huge.[1] Just over a decade ago, for example, Malayan box turtles, then widespread across Indonesia, as well as two endemic Sulawesi land tortoises, fell victim to the Traditional Chinese Medicine craze. So that they would be eventually shredded in blenders into TCM jelly and paste, villagers in Sulawesi would collect them everywhere and sell them for 5000 Indonesian rupiahs (about half a U.S. dollar) per turtle or tortoise. According to a biologist from the Pacific Institute in northern Sulawesi, a subsequent three-month field research project in the area in 2007 found only 2 specimens of what used to be several plentiful species, including some found nowhere else. The turtles and tortoises were literally eaten off the island.

One of the newer fads in the Traditional Chinese Medicine market I encountered during my research in Kalimantan was for hornbill tusks. In Kalimantan, the bills and tusks would fetch 2 million Indonesian rupiahs (roughly USD 200), making the beautiful and enigmatic hornbills a new favorite of local Kalimantan hunters. In the demand markets of China, Singapore, Macau, and Hong Kong, the tusks would bring far more. The presence of well-heeled Chinese coal and timber companies in Kalimantan facilitated the trade, and the companies were often already paying off the Indonesian police, military, navy, and coast guard. Even without extensive bribes, stopping the trade in the tusks would be of far lower priority for Indonesian law enforcement agencies than interdicting artisanal illegal mining, for example, which the big mining companies have an interest in stopping and can financially motivate the law enforcement agencies to take action against.

Policy Responses

Reducing Demand for Wild Animals through Captive Breeding

Sometimes, a legal market in captivity-bred animals can greatly reduce pressures on the natural ecosystems and species. The prohibitions and restrictions on importing wild birds into the United States and European Union, coupled with a legal supply of desirable birds, such as parrots, from captive stocks, greatly reduced poaching for those markets. This legal supply of birds certified to have been bred in captivity have had a palpable impact in Indonesia too, where the bird trade to Europe and the United States dramatically declined, despite the fact that the trade had a centuries-old history, being established essentially at the time when Europeans first arrived in the Moluccas and Papua and saw the local exotic birds.

However, according to the environmental NGOs and conservation biologists I interviewed in Indonesia, bird-breeding facilities in Indonesia itself have not produced similarly positive conservation outcomes, and often serve merely as mechanisms for laundering birds caught in the wild. For a bribe, Indonesian officials often hand out fake licenses for such supposedly captive-breeding programs and the birds. For example, since selling wild-caught lories is illegal, traders often claim that they are captive-bred and produce fake documents to launder the birds.

Alternative Livelihoods for Hunters and Illegal Fishermen

These days hardly all hunters are desperately poor individuals. Nonetheless, even organized crime groups specializing in poaching frequently hire local people living on the edge or inside the forest as trackers, guides, and even shooters. In Indonesia, they can be very destitute individuals struggling to eek out a living and support their families, like those in the Moluccas, who will hunt endangered birds for a bowl of noodles a day. Providing them with an alternative means of livelihood is not only important from the perspective of human rights and human security, but also frequently critical for the success of conservation policies.

Occasionally, alternative livelihoods programs to reduce poaching have scored successes. On the Indonesian island of Seram, for example, twenty poachers of rare parrots were converted (through the work of Profauna, one of Indonesia’s NGOs most determined to fight against the illegal wildlife trade) into rescue-center staff and wildlife guides for tourists. As a result of this alternative livelihoods effort, poaching dramatically fell off. But the success depended on a steady flow of eco-tourists whom the newly-converted poachers could guide. For that, an international counterpart to the conservation effort helped recruit birdwatchers in the United States to travel to Seram. When that international supply of eco-tourists fell off, the income from wildlife guiding for the former poachers declined and the pressure to resume illegal hunting to generate livelihoods intensified once more.

The Seram story is a micro-example of the conditions on which successful alternative livelihoods depend. If poor poachers have an assured income from other sources, they are often willing to abandon the illegal hunting, even though poaching often brings more money. But their income from other sources needs to be steady and assured. The problem with many ecotourism alternative livelihoods efforts is that the income fluctuates greatly and tends to be sporadic and seasonal. Often, for an area to draw a sufficient number of ecotourists to generate income, it needs to contain large mammals that can fairly easily be seen by tourists. Thus, eastern Africa’s savannahs tend to attract many more tourists than rainforest areas.

Moreover, success in bringing an alternative income to potential poachers depends also on the number of potential poachers. It is one thing to employ twenty hunters (like in the Seram example) and quite another thing to bring employment to several thousand people who may reside in or near an ecologically-sensitive area and can become poachers (as well as illegal loggers). The number of jobs generated by ecotourism is often far lower than the existing local needs for employment and the number of illegal poachers, illegal loggers, and pastoralists who encroach on forests. Moreover, whether such ecotourism takes the pressure off poaching is also dependent on whether eco-lodges and ecotourism companies capture the vast majority of profits or whether local communities do in fact get a sufficient cut from the profits.

Note that the above discussion has not taken into consideration whether or not the influx of humans through high-impact ecotourism generates even greater environmental damage than the previous hunting and more profoundly disturbs the entire ecosystem, rather than just particular species.

Income generated by non-ecotourism alternative livelihoods efforts, such as converting hunters into producers of ethnic crafts or honey and other renewable wildlife products, rarely does better than ecotourism alternative livelihoods. Mostly, such alternative economies generate incomes too paltry and sporadic to be attractive to local communities to sufficiently wean them off poaching. Success of such efforts mostly tends to be lower than even the infrequent success in converting illicit crop farmers to farmers of legal crops. In the case of wildlife poaching, legal agricultural production can sometimes reduce hunting – though once again, the question is whether the required land conversion and deforestation will ultimately devastate the entire ecosystem even more. Just as in the case of alternative livelihoods for illicit drugs, success is predicated on well-enforced property rights, the availability of microcredit, good infrastructure, and other structural factors. Crucially, it also depends on well-established value-added chains and assured markets, neither of which are developed easily in remote areas where forests or biodiversity-rich savannahs still exist. Thus on Indonesia’s Flores island, one of the sensitive land and marine areas, there may well be first-rate avocados, but because of a lack of infrastructure and value-added chains, farmers often feed them to pigs instead of exporting them. Flores’s four kinds of mangoes could well be successfully sold in many international markets, but those markets have not yet been developed. And if one day they are, it is critical that they do not generate new deforestation to clear the way for the mango trees, compounding the pressures on already devastated natural forests of the island.

In the Komodo National Park area, for example, inducing local people to switch from dynamite-fishing that decimates the area’s biodiversity-rich marine ecosystems to carving wood crafts for tourists has met with some successes. However, the former fishermen got used to taking wood from the park’s mangroves, replacing one negative ecosystem impact with another. Persuading them to use jackfruit timber instead has become the new imperative. Similarly, seaweed farming in the Komodo area and around Sulawesi has become a popular alternative to fishing, and one that currently has a thriving international market. But careful assessments as to whether the seaweed farming – and of what particular seaweed species and through what precise methods - is fully compatible with coral conservation have yet to be made.

Scuba diving tourism is thriving in the area, bringing with it a variety of positive spillovers for the local economy, such as new restaurants, lodges, and markets. But it is mostly concentrated in Labuan Bajo, not benefiting all parts of Flores equally and many not at all. Moreover, most hotels and dive companies are not owned by local people, with much of the profit leaving for Jakarta or abroad. And only very few of the dive masters are local people.

Improved Law Enforcement

Without alternative livelihoods in place or the ability to change the structure of incentives for the many types of actors who participate in the illegal wildlife trade – as well as without reducing demand for wildlife products -- law enforcement is rarely a sufficient answer. But it is a critical and inescapable component of such efforts.

In Indonesia, enforcement of wildlife regulations has a long way to go. The problem starts with the laws themselves. With few exceptions, such as in the case of kingfisher species which are not allowed to be hunted, Indonesian law does not prohibit the killing and trapping of wild animals in general, only those protected by the Convention on International Trade in Endangered Species (CITES). Unsustainable legal hunting, often poorly monitored to assess its true environmental impact, thus devastates species in Indonesia, with Indonesia’s law enforcement agencies having no interest or means to counter it. Even for wildlife protected by CITES, the Indonesian law sets as the maximum penalty five-year imprisonment or a ten thousand dollar fine. But poachers and wildlife traffickers rarely face law enforcement action, frequently bribing their way out of punishment in Indonesia’s notoriously corrupt courts. If they are sent prison at all, it is usually for a few weeks at most.

Nonetheless, improvements in Indonesia’s wildlife protection enforcement are under way. Many new commitments, efforts, training, and better practices are stimulated by ASEAN’s Wildlife Enforcement Network (ASEAN-WEN) and its international government and NGO partners. The United States government is actively supporting those efforts; and INTERPOL has also elevated wildlife trafficking on its list of priorities. In turn, the importance of acting against wildlife trafficking has also risen for Indonesian law enforcement agencies, though it still retains a much lower priority than drug trafficking, for example, and hence rewards (such as promotion in rank) are not come easily earned for interdiction of wildlife trafficking. Such increased law enforcement efforts are very important and welcome. Setting quotas for the minimum of wildlife cases Indonesian law enforcement officers must catch is hardly the optimal law enforcement approach but, arguably, it shows at least an increased awareness of the issue.

Yet as is the case with law enforcement against all kinds of illicit trade, sometimes increased law enforcement only makes the markets more hidden. Certainly in Indonesia, sales of more politically and legally-sensitive species, such as monkeys, that are either sold outright illegally or whose trapping generates strong criticism from environmental NGOs, has been driven from public view. Nonetheless, behind closed doors, these species are usually available in many of the country’s big wildlife trading places. When in the huge Jatinegara wildlife market in Jakarta, where supposedly any animal, no matter how endangered and enigmatic can be bought, I tried to pull out my camera, I was met with a great deal of hostility and protests from local sellers and was essentially chased out of the market. One representative of an Indonesian environmental NGO, speaking on condition of anonymity, told me that tiger parts, rhino horns, or alive orangutans and Komodo dragons can all still be obtained in the Jatinegra market and from Indonesia’s other wildlife traders. Illegal pet shops in Jakarta boast that they can deliver any species within a week – and often the transaction is made over the internet.

Nonetheless, there have been some genuine successes in Indonesia’s law enforcement. In Bali, for example, the enforcement of the ban on catching sea turtles has been greatly strengthened. Used in traditional Balinese ceremonies, turtles had been caught at a rate many times surpassing the 1000 specimen catch per year allowed under local regulations. In 1999, 27,000 turtles, for example, were slaughtered. Profauna encouraged zero-catch quotas and pushed for greater law enforcement by the police and other law enforcement agencies, such as the Forestry Ministry. The fact that police units on Bali have a reputation for being less corrupt than elsewhere in Indonesia, and with greater international presence to help in the monitoring, the police confiscation of turtles increased significantly and the illegal catching decreased by 80 percent since.

The intensification of law enforcement interdiction in Indonesia has been critically enabled by the increase in animal rescue shelters. In the past, the Indonesian police often used the small number of available animal shelters as an excuse for not undertaking interdiction raids, claiming that they could not care for the rescued animals. Indeed, according to a very impressive young female Muslim veterinarian in Bali who has supervised some of the rescue shelters, about 95 percent of animals confiscated in wildlife markets or private collections are too sick and damaged to be returned to the wild. With few releases possible, because they might introduce new diseases that could devastate the wild populations, most of the recovered animals will have to be treated at the shelters for the rest of their lives or euthanized. Unfortunately, rehabilitation shelters in Indonesia have depended almost exclusively on foreign funding. Several important international donors have been disappointed with Indonesia’s performance in cracking down on the wildlife trade and have not renewed their donor commitments, leaving some of the shelters struggling to operate.

Challenges in Cracking Down on Illegal Fishing

To some extent, improvements have also been registered in Indonesia’s efforts to combat illegal domestic fishing in protected areas. The Komodo National Park provides an example. Fifteen years ago, dynamite and sodium-cyanide fishing, both extremely destructive to the marine ecosystem, were prevalent and perpetrated by local communities around the park and by fishermen from the eastern parts of Flores as well as other islands, such as Sulawesi and Sumbawa, as already mentioned above. When confronted by local communities trying to prevent the destructive fishing, fishermen from the eastern part of Flores and surrounding islands would often admit that the reason they were coming to fish in the Komodo National Park was the lack of fish available in their home areas, where local stocks were depleted as a result of the destructive fishing.

Pressure from international NGOs and intergovernmental agencies, such as UNESCO, on law enforcement agencies operating in and around the Komodo National Park stimulated better law enforcement action and diminished the dangerous illegal fishing practices. The fact that the Komodo National Park, including its extraordinary marine ecosystem, obtained high international visibility, and hence international pressure for protection, critically helped.

Surprisingly, because the issue can be construed as one of national security and certainly of national sovereignty, Indonesia has been far less capable of cracking down on illegal fishing by foreign fishing fleets, including Chinese, Taiwanese, Japanese, and Philippine, that invade its waters. Some of the Indonesian fishermen I interviewed about international illegal fishing in their waters maintained that they were afraid to confront the foreign fleets because the foreign fishing ships were presumed to be armed. They believed that the presence of guns on the fishing ships also deterred action by Indonesia’s coast guard. Some of the fear can perhaps now be offset by the creation of a community patrol “coastal watch” effort run by the Ministry of Fisheries, for which the U.S. government has installed a communications technology that allows the fishermen to report the presence of illegal fishermen in real time and thus enables a heftier law enforcement response.

Most of the interviewed fishermen, however, believed that the lack of robust law enforcement action had to do with large amounts of corruption money sloshing around in the international fishing industry which could easily buy off Indonesia’s naval and coast guard patrols. Church and NGO activists in Labuan Bajo, Flores, for example, recounted how they suspected that local police and navy officials were involved in the smuggling of the endangered Napoleon wrasse (also known as humphead wrasse), the trade in which is prohibited by several countries and whose possession in Indonesia requires special permits from the government. Nonetheless, the species is highly sought after in Taiwan, China, and other East Asian markets. Repeated tipoffs to local Labuan Bajo police and navy units regarding the illegal catching and smuggling of the wrasse fell on deaf ears, with the law enforcement agencies demanding proof from the activists before they would take any kind of law enforcement action against the identified smugglers. The activists thus invited local media to the port where the wrasse smuggling was taking place, and “by accident” spilled one of the boxes transporting the smuggled wrasses, forcing the police to acknowledge in front of flashing cameras that illegal fishing was taking place there. Nonetheless, a visit to the Chinese market in Labuan Bajo in October 2012 revealed Napoleon wrasse on sale. The trade in other exotic fishes, even if not necessarily protected species (CITES only prohibited the trade in some sharks and manta rays in March 2013), was thriving there. Local buyers were eagerly haggling with fishermen over lips from parrotfish, manta ray parts, and sharks fins.

Lessons from Indonesian Anti-Piracy Efforts for More Robust Law Enforcement Action against Illegal Fishing and Wildlife Trafficking

The anti-piracy efforts in the Strait of Malacca and around Indonesia can provide insight into the factors which can stimulate better law enforcement action by Indonesia. Before the frequency of maritime piracy spiked around the Horn of Africa and West Africa, pirate attacks on ships at sea in Strait of Malacca amounted to almost half of the world’s piracy incidents. Out of the more than 250 yearly attacks in the Strait and around Indonesia during the first half of the 2000 decade, the majority originated in Indonesia.[2] Indonesia’s archipelago provided many safe-haven opportunities for pirates, while law enforcement action against them both on land, such as on the Riau islands, and at sea was sporadic and limited at best.

As the frequency of pirate attacks kept growing, it came to present a threat to Singapore’s economy – critically dependent on the safety of its seaborne commerce and accessibility of its port, with more than 50,000 vessels carrying 40% of world’s trade passing through the Strait yearly. Backed by the United States, Singapore pressured Indonesia to take more robust action against the pirates and delivered a variety of financial incentives-- delivering technologies, patrol assets, and ultimately paying for much of the anti-piracy effort Indonesia mounted. Anti-piracy intelligence sharing among Singapore, Indonesia, and Malaysia, previously inhibited by traditional rivalries, also increased, even though many of the proposed “joint” patrols among the three navies really amounted only to “coordinated” patrols. In the latter part of the 2000 decade, piracy in the Strait fell off by about three-fourths – even though the actual number of interdiction operations on the seas remained very small. Just the greater deployment of patrolling assets and importantly actions by Indonesia against the pirates on land created a robust deterrent effect.

The fact that Singapore mounted strong pressure on Indonesia is not surprising. Nor is it surprising that ultimately Singapore had to back up the pressure by extending various modes of assistance to stimulate greater law enforcement action against the pirates. What is more interesting is that in the case of maritime piracy, unlike in the case of its many other large-scale illicit economies, such as illegal logging and mining, Indonesia was able to overcome the corruption that has long plagued its law enforcement apparatus and undermined the interdiction and deterrence efforts. In other words, it was pressure from Singapore, underwritten by material assistance from that city-state, that stimulated Indonesia’s resolve to go after the pirates. But what accounts for Indonesia’s improved capacity to carry out the law enforcement effort?

To a great extent, the answer appears to lie in the low profits and un-institutionalized form of corruption surrounding maritime piracy in the area. Unlike in the case of piracy off the Somalia coast, the profits from piracy around Indonesia were fairly low, with attacks often amounting more to robberies on the seas and in ports, rather than to long-term hostage and cargo seizure with ransom payouts in the millions of dollars. (Indeed, the “pirate” attacks around the Indonesian archipelago that have taken place over the past three to four years remained mostly thefts and robberies when ships are anchored in Indonesia’s ports.) Consequently, the bribes from piracy paid to either Indonesian coast guard or navy officials or to local government officials on land in areas that the pirates used as safe-havens were not very large, nowhere on the scale of the bribes paid by illegal logging or mining companies. Nor have the Indonesian law-enforcement agencies become addicted to the piracy bribes for their institutional budgets, unlike in the case of bribes and problematic profits from natural-resource extraction on which Indonesia’s military and law enforcement agencies have come to depend for sustaining their operating budgets.[3] The political costs Jakarta had to absorb to make law enforcement agencies act against the pirates and the muscle it had to exercise to corral local officials into compliance were far lower with respect to piracy than the political costs would be for Jakarta to enforce compliance with resource-extraction regulations. The number of political and institutional actors with a vested interest in perpetuating piracy (because of the rent payouts it generated) was also much smaller than in illegal logging and mining, and the management problem for Jakarta therefore also much simpler. The resolution of secessionist militancy in Sumatra’s Aceh region, after the 2005 peace deal, is sometimes also put forward as a factor enabling the more robust law enforcement action against the pirates.[4] But there are limitations as to how far this explanation carries, given that most of the pirate attacks did not originate from Aceh and the area was not a prime safe-haven area for the pirates. (The fact that many of the former Free Aceh Movement combatants continue to be unemployed and economically-frustrated could easily make them an easy recruitment pool for pirate businessmen. Other illicit economies, such as marijuana cultivation, have in fact been thriving in the region.)

For combatting wildlife trafficking and illegal logging in Indonesia, the anti-piracy story has two implications. On the positive side, in the case of wildlife trafficking, the vast majority of the conservation actors and Indonesian government officials I interviewed agreed that corruption surrounding wildlife trafficking was not institutionalized. Nor was it believed to generate large off-budget income for the law enforcement institutions, like logging and mining. Tackling individualized corruption, as difficult as it is, is still far simpler than weaning entire institutions of illicit budgets.

On the negative side, the bribery profits from illegal fishing for Indonesia’s law enforcement agencies are considerably higher than those from piracy. For some agencies, such as the coast guard and the navy, the bribes may well constitute corruption payoffs akin to that from mining and logging that go beyond individual bribes. That is bad news for developing more robust law enforcement action.

The barriers to international cooperation against illegal fishing are also far higher than against piracy. Major fishing offenders such as China, Taiwan, Thailand, and Vietnam would have to take on their domestic fishing industries -- a high-cost political action they have not been willing to mount, just as Indonesia has not been able to effectively take on its logging industry, for example. Vietnam and Indonesia have announced joint anti-illegal fishing patrols, but whether these will amount to more than window dressing by Vietnam yet remains to be seen.

Beefed up law enforcement action against wildlife trafficking and illegal fishing is critical. Providing effective alternative livelihoods for poor hunters is a policy that enhances human rights and human security as well as greatly facilitates law enforcement. Unfortunately, alternative livelihoods efforts are rarely effective, with auspicious circumstances mostly lacking and structural problems difficult to overcome. Ultimately, there are great limits to what even much more effective law enforcement and much more effective alternative livelihoods can accomplish unless demand for wildlife products around the world, and particularly in East Asia, is rapidly reduced. So far, demand reduction efforts in the region for bushmeat and Traditional Chinese Medicine have registered thinner, even if somewhat improving, results than demand reduction efforts to reduce the consumption of illicit drugs. But time is running out for Indonesia’s magnificent biodiversity –both on land and in the sea.

[1] For details, see Vanda Felbab-Brown, “The Disappearing Act: The Illicit Trade in Wildlife in Asia,” Working Paper No. 6, The Brookings Institution, June 2011, http://www.brookings.edu/~/media/research/files/papers/2011/6/illegal%20wildlife%20trade%20felbabbrown/06_illegal_wildlife_trade_felbabbrown.

[2] “Piracy Down 3rd Year in Row: IMB report,” Journal of Commerce Online, January 23, 2007; and “Pirate attacks Up 14 Percent Worldwide in Jan-Sept Period, Maritime Watchdog Says,” Associated Press, October 16, 2007.

[3] See, for example, International Crisis Group, “Indonesia: Natural Resources and Law Enforcement,” Aseia Report No, 29, December 20, 2001, http://www.crisisgroup.org/~/media/Files/asia/south-east-asia/indonesia/Indonesia%20Natural%20Resources%20and%20Law%20Enforcement.pdf; and Vanda Felbab-Brown, “Indonesia Field Report III – The Orangutan’s Road: Illegal Logging and Mining in Indonesia,” The Brookings Institution, February 7, 2013, http://www.brookings.edu/research/reports/2013/02/07-indonesia-illegal-logging-mining-felbabbrown.

[4] Michael Shuman, “How to Defeat Pirates: Success in the Strait,” Time, April 22, 2009.

Authors

Vanda Felbab-Brown

Image Source: © Chaiwat Subprasom / Reuters

Myanmar: Making the Reforms Count

Tue, 26 Feb 2013 10:00:00 -0500

Event Information

February 26, 2013
10:00 AM - 11:30 AM EST

Falk Auditorium
Brookings Institution
1775 Massachusetts Avenue, N.W.
Washington, DC 20036

Myanmar is rapidly emerging from half a century of isolation. Over the last two years, the government has made great strides in political and economic reforms and in improving its diplomatic relationship with the international community. Despite these changes, Myanmar faces many challenges in sustaining the momentum of reform and transformation. In addition, the international community has not developed a strategy for working together to assist the country's progress.

On February 26, Global Economy and Development at Brookings and the International Monetary Fund (IMF) hosted a discussion on the shifting landscape and new challenges in Myanmar as well as the IMF and international community’s role in addressing these. Panelists included: Priscilla Clapp, former U.S. mission chief to Myanmar; Brookings Nonresident Senior Fellow Lex Rieffel; Anoop Singh, director of the Asia and Pacific Department at the International Monetary Fund; and Frances Zwenig, president of the US-ASEAN Business Council Institute, Inc. Vikram Nehru, senior associate in the Asia Program and Bakrie Chair in Southeast Asian Studies at the Carnegie Endowment for International Peace, moderated the discussion.

Audio

Myanmar: Making the Reforms Count

Indonesia Field Report III – The Orangutan’s Road: Illegal Logging and Mining in Indonesia

Vanda Felbab-Brown — Thu, 07 Feb 2013 00:00:00 -0500

Kutai’s Destruction

Like in a desolate Edward Hopper landscape, the orangutan was clinging to the one last tree that stood next to the river in Kutai National Park in eastern Kalimantan. The joy of seeing this magnificent primate was spoiled by his destroyed habitat. Under normal circumstances, the orangutan would never venture so far out from trees, but here he was in a beyond-degraded and marginal habitat, probably looking for food that he could no longer find inside the forest.

Although once a jewel of biodiversity in Indonesia, teeming with Sumatran rhinoceroses and bantengs (wild Asian cattle species), and long-portrayed as one of the greatest wilderness areas left on the Indonesian side of Borneo, much of Kutai today looks like a devastation zone. Kilometers deep into its boundaries, the park has been stripped of trees. Despite the fact that the park is nominally a protected area, the trees have been logged for their hardwoods as well as to cultivate palms. The park was also badly affected by extensive fires several years ago. The big dipterocarp trees that are the essence of a Southeast Asian rainforest and on which many animal species depend for survival – and the hardwood of which is unfortunately highly valuable – have been all but eliminated in vast tracks of the park. The one last standing dipterocarp a kilometer deep into the forest has become an attraction to show to tourists. As a result, and also because of hunting, few hornbills are left in much of the park: Over the days we spent there, we saw only three species of hornbills: wrinkled, rhinoceros, and Asian pied. Overall, despite hours and hours in the forest, we could saw few other species of birds and mammals, including those that should be common genera in this kind of habitat, such as bulbuls and broadbills. One of the most common bird species in the park, even as deep into the forest as that which several hours of hiking would bring us, seemed to be the blue-eared barbet, a typical forest-edge species whose prevalence well inside the forest indicated that the forest is destroyed and of marginal quality and resembles more a forest edge, rather than a high-quality lowland growth.

We cut the motor of our canoe to watch the orangutan male, but instead of birds and insects, we continued hearing engines and industrial noise from a major coal mine that churned on nonstop for 24 hours a day right on the edge of the forest. Quite possibly, the mine could actually lie at least partly inside what was once national park. Park boundaries in Indonesia are exceedingly easy to redraw to accommodate mining and logging interests and generate revenues for local officials. During interviews with artisanal loggers in villages inside and around Kutai and in other national parks throughout the archipelago, I was told that local government officials and park managers would occasionally clandestinely encourage or at least tacitly tolerate artisanal logging and mining for gold and coal. The initial opening up of the ecosystem and thereafter its degradation would then allow them to apply to national offices in Jakarta to have parts of the park redesignated as unprotected environmentally-degraded land so they could issue permits for industrial-scale logging and mining concessions or African oil palm plantations, which bring great revenues. As efforts to improve local resource management and governance have produced various rankings of how much revenue local officials raise and “invest” in local communities, few regencies (the local administrative unit in Indonesia equivalent to a county) have an incentive to be saddled with forest that cannot be exploited. Whether the Reducing Emissions from Deforestation and Forest Degradation (REDD+) schemes, discussed below, will succeed in altering the structure of incentives remains to be seen and depends as much on local political-economy structures and power distribution as on their technical and financial feasibility.

The river within which we had canoed was itself clogged by piles of tailings, and spots of gasoline and some industrial runoff floated on the surface with regularity. Two several-hours-long night trips revealed only two buffy fishing owls and three common sandpipers, while no kingfishers or mammals could be sighted. Ornithologist Keith Barnes who has studied birds throughout Africa and Asia commented that until our research trip to Kutai, he had not been on a river in Southeast Asia for more than one hour without seeing at least a squirrel: “There is something seriously wrong with this forest.” For one, vast tracks of the forest are gone, with empty grassland and brambles, and not even secondary forest growth, left in its wake. Indeed, lowland forests throughout Indonesia have been destroyed or are facing tremendous pressures from logging; and even highland forests, such as in Sumatra, Sulawesi, and Halmahera, are increasingly shaved off by logging companies that decide to stomach the logistical expenses of hauling away the timber from steep hills and mountains or by poor artisanal loggers and farmers who desire more land.

Deforestation in Indonesia Going Down?

During the 2000s decade and beyond, deforestation in Indonesia has slowed down, but that is partially because so much forest has already been cut down. Indonesia’s President Susilo Bambang Yudhoyono has won international accolades for promising to reduce greenhouse gas emissions in Indonesia 26% by 2020 through reducing deforestation (even while maintaining a 7% annual growth). Indonesia, one of the world’s largest carbon-emitters, may well come close to succeeding in that goal, but it will be to an important extent because much of its forests have already been commercially logged out, not because conservation efforts have become more robust and effective. Commercially-viable lowland forest in Sumatra is gone, pockets still remain in Kalimantan, and Papua is the hotspot of logging and chainsaw profits.

What is highly disturbing about Indonesia, however, is that the small slivers of forest that are left (often designated as protected areas) continue to be invaded by loggers, poachers, and miners – whether poor artisanal ones who operate illegally or official companies with formal licenses obtained through bribery. Because law enforcement continues to be exceedingly poor and many officers are on the take, even protected areas are far more degraded than similar protected areas elsewhere in Southeast Asia, such as Malaysia or Thailand. These countries too have logged out their forests, but what areas they set aside for conservation, even though small they might be, they tend to protect far better than Indonesia does. Moreover, many of the areas designated as protected in Indonesia, even national parks, are those that had already been commercially logged out and had their biodiversity degraded – the forests of Sulawesi provide a prime example. Setting logged forests aside and protecting them from new encroachment has the potential to greatly boost biodiversity; but whether once species that have become extinct or come close to extinction in a particular area can return and biodiversity be fully restored to its original richness (to that of a primary unlogged forest), no one knows. Many of the tree species and ecosystems they support take several hundred years to grow and reach maturity.

Indonesia’s Law Enforcement and Its Complicity in Illegal Economies and Other Regulatory Problems

Indonesia’s law enforcement and military forces are not only inadequate and under-resourced, they are also deeply complicit in various illicit economies, including illegal logging and mining. The corruption problem goes well beyond many individual officers being in on the take. During the Suharto era, Indonesia’s military had investments in large parts of Indonesia’s economy. Although it was forced to give up many of these past investments, it continues to rely on outside-the-budget revenues for large parts of its income. A decade ago, as much as a third of revenues for the military came off budget, and that dependence and problem has been poorly tackled since and has not fundamentally changed.[1]

Local police officials and military officers not only close their eyes to illegal resource extraction, they at times actively encourage it in order to promote their family businesses. Some representatives of the mill concessions I interviewed in eastern Kalimantan’s business hub Samarinda even claimed that local law enforcement officials would make them accept illegally cut timber for processing or the mills would face raids. “Look, realistically, we have few incentives to comply with regulation,” one of the logging company executives told me. “Getting all the permits and licenses takes a lot of time. You have to pay bribes to local officials and to those in Jakarta. And these days, bribes are complicated and unreliable. If we don’t pay bribes, it will take two years to get a license. And then what? The police or the military will hold up the logs on the river, sometimes for weeks on, until the timbers starts rotting. It’s far simpler just to pay off everyone right away.” He went on to bemoan how corruption used to be far simpler during the Suharto era, with a 10% standard rate for everything. “But these days, the military are angry that the police are getting a cut too, and they’re both jealous of who gets to be paid more. And yes, the coast guard and the navy make money off the coal exports.” Complicity and impunity debilitate regulatory policies. This is particularly so in a deeply corrupt system, such as Indonesia’s, where big violators often hold great political power, including sometimes by being members of Indonesia’s parliament or local administrations, rarely are arrested; and even then can bribe their way out of the law’s punishment.

Strategies to improve natural resource management and protect the environment in the face of seductive vast profits have been undermined in Indonesia not just by poor law enforcement, as key as that is. Efforts to develop effective and equitable regulatory frameworks have also been complicated by overlapping and competing bureaucracies, unclear regulations, poor local management and government capacity, and lack of clear land titles. Poor local administrative capacity and poor local law enforcement capacity are exacerbated by the fact that for a variety of reasons line ministry, law enforcement, and military officials are often rotated out of many postings and areas after a few months. Such short-term assignments guarantee that the officials are in a perpetual catch-up effort to learn local issues, or lead them to simply ignore local contexts. The short-term rotation system is based on the assumption that it limits how deeply involved in local corruption schemes the deployed officials can become. Instead, they often have an incentive to make as much money as fast as possible before they are sent to a less lucrative posting.

Community Ownership as the Solution?

To the extent that law enforcement raids do take place, whether to satisfy Jakarta or silence international criticism, they often target the poorest participants in the illegal economies, such as illegal miners and loggers. Their activities are hardly benevolent; rather, they have significant and highly negative effects on the environment. Overall, their impact may be less detrimental than in the case of large Indonesian or multinational companies, but they often significantly disturb and destroy fragile ecosystems, such as highland forests where commercial logging is unviable and which thus become some of the last strands of forest standing. But the reality also is that the basic livelihoods of artisanal loggers and miners can be profoundly dependent on these illicit economies, and their human security entwined with their participation in illegality. Lacking access to legal livelihoods, microcredit, and titles, they are also far less able to pay license fees and bribes, as well as having little capacity to bribe their way out of being arrested. The sentence of several months or even years in prison may deter some from further illegal logging. But some of the villagers whom I interviewed had been imprisoned for illegal logging and stated that they merely switched to poaching. They could not make ends meet legally and faced lesser sanctions for poaching than for illegal mining and logging. Among the variety of illicit economic activities surrounding resource extraction, Indonesia’s law enforcement frequently makes the most effort to crack down on artisanal illegal mining because large mining companies have an interest in keeping the artisanal loggers out of their way.[2]

Democratization and power decentralization in Indonesia were expected to better align the behavior of local officials with the interests of local communities, strengthening local communities’ rights and improving environmental protection. That promise has not often materialized for a variety of reasons: First, powerful interest groups and large businesses, often linked to local politicians, tend to be far more effective at lobbying than local civil society groups. Indeed, many of the NGOs working in the community rights or natural resource sectors I interviewed throughout Indonesia felt impotent; along with journalists, they would expose violations of laws and regulations, but no one would be punished and behavior would not change. Second, feeling they have poor choices and that most politicians are corrupt anyway, many voters are easily seduced by cheap handouts from politicians before elections. Rather than poorly- performing government officials being voted out of power, they are often reelected or arrange for their family members to be elected. Throughout Indonesia, resource-baron local dynasties have been emerging. Third, decentralization has greatly empowered local officials in Indonesia – in fact, often to the extent that they believe they can get away with a lot in violating edicts from Jakarta and disobeying the national government. Conflicting local and national regulations only further permit escaping desirable regulations.[3]

Furthermore, it is not always clear that local communities are fundamentally opposed to economic exploitation that destroys the local environment. Occasionally, they will resist and protect their land from logging or mining and even do so effectively – such as in the famous case of the Wehea Forest in Kalimantan. The level of social cohesion plays a critical role. In tightly-knit indigenous communities spiritually-linked to a forest, as in the Wehea case, the capacity to resist the lure of short-term profits can well be strong and effective resistance action can be organized. But many communities in Indonesia’s frontier areas such as Kalimantan are transmigrasi migrants. They do not have attachments to the area, they do not necessarily plan to stay there for the long term, they do not know their neighbors in the shack next door, and they often do not have land titles. They have moved to the logging and mining areas precisely to make money. They are in it for the quick buck, and their horizons tend to be very short, even shorter than the horizons of many local government officials. When I questioned the officials about the sustainability of their primary commodity exploitation-led growth, many would delightedly reply that they had coal supplies for twenty years – “a very long time.” And even communities with more established roots in an area but that are struggling with marginal livelihoods are easily tempted to sell their land to big companies for exploitation.

Many resource-extraction companies have also learned that they can get away with unsustainable strategies, not only politically and legally, but also economically. For many years, Indonesia’s timber and mill industry was eating its own tail, slashing the forests at a rate that was unsustainable while the industry was becoming more and more bloated. But instead of suffering the painful effects of having to downsize their operations as Indonesia’s forest shrank and the Indonesian national government became more interested in limiting deforestation (if only to get its hands on the REDD+ money), many companies were able to diversify or altogether switch into African oil palm cultivation or mining.

International Mechanisms to Foster Corporate Social Responsibility and Environmental Sustainability I: REDD+

The Reducing Emissions from Deforestation and Forest Degradation (REDD+) and, more broadly, approaches such as paying-for-ecosystem-services (PES) schemes are based on the idea that if the economic structure of incentives pushes toward environmental degradation because natural ecosystems are not economically valued, one can change the structure of incentives by pricing environmental services, such as carbon capture. These financial transfers pay for an undesirable – such as, environmentally-destructive – economic activity like logging or mining not to take place. Western governments who care about tropical forests not being destroyed or Western companies that need to offset their carbon emissions pay for forests elsewhere not to be cut down and carbon emissions thus not to be released. In the best of outcomes, such schemes will reduce carbon emissions and preserve forests and biodiversity. After several years of tough and protracted negotiations, Indonesia and Norway agreed in December 2012 on such a REDD+ scheme which pays for a protection area to be established abutting the Tanjung Puting National Park in Central Kalimantan, to create an important buffer zone around it. Investors in the Rimba Raya forest include Russia’s giant gas producer Gazprom and a large German financial institution Allianz. The project was originally supposed to start in 2010, but then stalled as the Indonesian government proposed to cut the amount of land devoted to the conservation area because an African oil palm plantation company had overlapping concessions that it was not interested in relinquishing.

REDD+ mechanisms were at the center of the stalled UN climate change negotiations in the latest November 2012 Doha round. And just like the overall climate change negotiations, they too are mired in international political disagreements. The procedure on which to base reference emission levels, i.e., the baseline from which the level of carbon emission that would take place in the absence of REDD+ is counted, is developed; but key emitters, such as Brazil, have refused to submit to international verification and monitoring procedures. In a country with deep corruption and pervasive regulation evasion such as Indonesia, credible external monitoring will be key for making REDD+ and other PES efforts effective.

A second major problem is that the lack of emissions reductions commitments from the United States, China, India, Canada, and Russia raises doubts about how and whether funding for REDD+ will be generated and at what levels. China and India are loath to commit to any emission reductions until the United States makes a move, and perhaps not even then. Nor has it been agreed as to how much of the burden and responsibility middle-income countries like Brazil and Indonesia need to share. Indonesian officials I interviewed often expressed a desire that the REDD+ is used to pay for law enforcement in the national parks and other protected areas, for example; but Indonesia is not so poor that it requires international payoffs to pay its park rangers better. Anyway, the problem often lies as much with actors outside the national park as with the rangers themselves.

And here lies one of the potential difficulties with REDD+. The payoff goes to either the national government or a local government. But surrounding the two and between the two, there are often complex webs of powerful vested economic actors. Even equitable and proportional transfers between the national government and local governments do not guarantee that local government officials will develop the muscle and wherewithal to resist corruption and coercion from powerful economic groups, particularly if those economic groups are the military and police, like in Indonesia. Nor will the money necessarily make its way into the hands of the artisanal loggers and miners. In other words, the domestic payoff transfer and internal distribution of the money and transferred resources will affect the REDD+ effectiveness as much as their international component.

Such problems with government compensation to local forest owners for preserving natural forests have been experienced even outside of the carbon schemes. If monitoring and law enforcement is poor and the local community places little intrinsic value on forest and biodiversity preservation, local communities will often collect the money and log anyway, or in other cases face invasion by logging companies from outside the community. Similarly, if payments are set too much below the value of logging the forest, even compensated owners can be tempted to participate in illegal logging while collecting no-cutting rents.[4] And making sure that the money reaches the forest-dependent communities and is not usurped by corrupt powerbrokers is often a challenge.

Another aspect of REDD+ that could have important effects is developing local capacities to better manage forests. But those better sustainable practices will once again run into local economic interests that either need to be bought via the REDD+ transfers or coerced by law enforcement to comply with regulations. What the REDD+ initiatives have already accomplished in Indonesia is to force officials in the Forestry Ministry – a notoriously corrupt institution which regards its task as making as much money out of forests as possible, rather than preserving forests and biodiversityn – to conduct much better assessments of existing forests and even publish that data. Previous self-monitoring and data collection on deforestation has been rather unreliable in Indonesia.

Critically, the price structure of the payoff schemes will be a significant determinant of their effectiveness not only for capturing carbon, but also of preserving the world’s biodiversity.[5] Surprisingly, a certain price structure could have a negative effect on the preservation of natural forests, and the failure to incorporate biodiversity considerations in forest management designs could be compounded by emerging carbon-for-forest payoff schemes. In some countries and under some circumstances, where there is strong government commitment, successful cooptation of key logging industry stakeholders, and effective law enforcement, such financial transfers can halt deforestation or even expand existing forest cover.[6] But for that to be likely, the compensation payments need to be far greater for preserving natural, and especially primary, forests than for capturing carbon by degraded forests or replanted forests or timber plantations. And these differentials – with by far the most compensation going for primary forests, smaller amounts for secondary forests, and the least for non-native monoculture plantations – need to be sufficiently great to steer government decisions toward keeping forests intact. Without such a price structure in place, with any tree accorded an equal or similar carbon-capture value, governments could be tempted to maximize profits by intensely logging their forests first and then signing up for carbon offsets for halting further deforestation, including from forests that are no longer viable for commercial logging or through biodiversity-poor reforestation and plantations. Even if the logged forest regenerates timber through replanting or natural recovery, it often cannot do so in a manner that will restore its original biodiversity. Without a far greater unit price for carbon captured by intact natural forests rather than by forest plantations and other reforested areas, the carbon schemes thus encourage the preservation of any forests – including monocultures – rather than native primary forests.[7]

International Mechanisms to Foster Corporate Social Responsibility and Environmental Sustainability II: Green and Other Certification

Since the 1990s, certification labeling of the legality and environmental sustainability of harvested timber or African palm oil or of the absence of conflict in the extraction of minerals has emerged as a key mechanism to suppress undesirable behavior associated with economies that cannot be fully prohibited. Certification is supposed to mitigate inherent harms and negative externalities, such as human rights violations, social strife and violent conflict, and environmental destruction. To combat illegal logging, timber certification is meant to designate that the logged and traded timber has been sourced and transported in a legal or environmentally-sound way and that illegal timber has not been mixed in with the legal timber. Ideally, such certification examines and approves the entire custody chain; the traded timber would be certified from the moment it is carefully, legally, and sustainably selected for cutting in the forest to the moment a customer buys a piece of furniture in a Western furniture store. Any gap in controls in the custody chain increases the chance that illegal timber enters the trade and is effectively laundered.

The Forest Stewardship Council (FSC, an independent, international NGO) certification, which tracks timber from forest to the shelf, is often considered the current gold standard of certification labels for timber. However, by the end of the 2000s, the FSC still certified only approximately 220 million acres, of which 110 million are in North America, while there are 10 billion acres of forested land on Earth.[8] Less than 2% of tropical timber was covered by FSC certification.[9] Getting certified is expensive, costing about U.S. $50,000 per concession, and customers are not always eager to absorb the higher costs.

Given the size of the trade and the complexity of certification – as wood changes many hands along trade routes and is processed into many, often minute pieces, over extensive periods of time – the reliability of the process is frequently problematic, with many opportunities for fake certificates, falsification, or timber laundering along the way. The more timber subject to certification, the more challenging it will be to maintain quality and reliable certification. When I asked a logging company representative in Samarinda about whether they were concerned about failing to obtain green certification and whether they altered their practice as a result of increasing desire for such certification in Western markets, he just laughed: “For us, it’s just another bribery item. We pay for the inspectors. And anyway, they go out for two days out of a year – how much can they see?”

Beyond the sheer volume and the previously discussed challenges of law enforcement intensity, fake documentation, and the amount of time it takes to check a sufficient amount of timber to discourage laundering and smuggling, certification schemes are also plagued by other problems: The most important one is that timber may be certified as legal, but may not be harvested sustainably and in an environmentally sensitive way. Some of the legality verification is very limited, confirming only that timber originated in a particular concession area and that the company had the necessary permits. Other legality certification can involve more rigorous evidence of compliance with harvesting regulations and other operational matters. [10] Even then sustainability may not necessarily be a part of the certification evaluation. Since most legislation mandating certification of wood and wood products, including the expanded U.S. Lacey Act and the European Union’s Timber Regulation due diligence requirements, centers on its legality, as opposed to its sustainability, suppliers have concentrated on precisely assuring timber’s legality but not necessarily sustainability. Moreover, getting a certification for sustainability takes considerably longer and is far more expensive than the legality certification.

Certification problems often start with forest management plans. Both the design and implementation of forest management are often pervaded by serious problems, even though the mere existence of such a plan can qualify the logged timber for certification. Not all forest management plans ensure sustainability and minimal environmental damage, including measures to protect biodiversity. Often forest engineers, large numbers of whom are required to design programs for all the logging operations, are incompetent and corrupt. Moreover, since natural forest regeneration often takes decades in the tropics, there is not any easy way at present to see whether the management programs are effective, and to correct policy if they are not. Thus certification does not always involve all three components: legality, timber sustainability, and biodiversity protection. Certificates are issued only for one or two components of desirable practices, with law enforcement officials and customers having no idea what exactly is being certified and whether the certified timber in fact reflects optimal practices.

In addition, consumer preferences and regulatory requirements for certified wood have given birth to some certification schemes of dubious quality. Many of these certification labels represent simple cases of “greenwashing,” i.e., illegal and unsustainable wood being certified as legal and sustainable. In other cases, major retailers – even in the United States and Western Europe where customers are overall greener and the regulatory oversight greater – have appropriated and advertized green labels, including that of FSC, without ever being certified.[11] At other times, timber and wood product suppliers have obtained FSC’s chain-of-custody certification indicating that they have adequate capacity to check their supply chains without actually handling any FSC certified timber.[12] Extensive unreliability of certification can whitewash consumer conscience and encourage greater, and undesirable, consumer demand. Large numbers of certification schemes also make law enforcement more difficult. Watching the watchdogs, or in this case certificate issuers, and establishing lists of reliable certifiers, is essential for certification to reduce illegal logging.

Critically compounding the limitations of certification is the fact that some of the most important and emerging markets, such as India and China, fundamentally do not care about corporate social responsibility or mitigating the multiple harms that various economic activities can generate. Mining company representatives I interviewed in Sulawesi, Kalimantan, and Sumatra all said how they love to sell coal to India. “The Indian companies just don’t care about anything,” the representative in Kalimantan opined. “Not any environmental issues, social conflict, nothing. It’s a pleasure dealing with them. They even don’t care about the quality of the coal. They just want more and more of it.” Clearly, to improve the effectiveness of certification, it is necessary to create certification inspectors who are fully independent and not paid by the business firms or governments seeking the particular legal, environmental, or social certification. It is also necessary to fundamentally change attitudes toward corporate social responsibility and environmental sustainability in emerging markets. Not surprisingly, many Asian companies and multinationals tend to behave better at home than abroad, like in Indonesia. Indonesian logging and mining companies are hardly, however, paragons of virtue.

While critical, a regulatory framework only partially determines the effectiveness of policies. Local institutional and cultural contexts matter a great deal and can facilitate or render ineffective regulatory frameworks. The overall level of corruption and the quality of law enforcement and rule of law matter as much as the regulatory design itself. And in Indonesia they have a long way to go to improve.

As we were leaving Kutai, we stopped at a roadside shack to take some photographs of the destroyed forest. A local Dayak woman was selling various wares. While trying to talk us into buying parts of animals her father killed in the park, such as hornbill feathers, she told us that she frequently sees orangutans cross the paved highway. On either side of the road, there was little forest left – just palms as far as the eye could see. It was not clear to us where the orangutans would be going or why: Perhaps there is so little food left in the forest that even here, in a national park, they are forced to eat the insides of the African oil palms, a foraging coping mechanism that frequently puts them in conflict with people and gets them killed. While I was looking at the road and the destroyed forest, a paraphrase of the famous line from Cormac McCarthy’s post-apocalyptical novel The Road ran though my head: Borrowed time and borrowed world and whose eyes with which to sorrow it?

[1] See, for example, International Crisis Group, “Indonesia: Natural Resources and Law Enforcement,” December 20, 2001, http://www.crisisgroup.org/~/media/Files/asia/south-east-asia/indonesia/Indonesia%20Natural%20Resources%20and%20Law%20Enforcement.pdf.

[2] See also Samuel Spiegel, “Governance Institutions, Resource Rights Regimes, and the Informal Mining Sector: Regulatory Complexities in Indonesia,” World Development, 40(1), 2012: 189-205; and Gavin Hilson, “What Is Wrong with the Global Support Facility for Small-scale Mining?” Progress in Development Studies, (7)3, 2007: 235-249.

[3] For how decentralization has become excessive and distortive, see International Crisis Group, “Indonesia: Defying the State,” August 30, 2012, http://www.crisisgroup.org/~/media/Files/asia/south-east-asia/indonesia/b138-indonesia-defying-the-state.pdf.

[4] For examples of such compensation policies and their shortcoming in particularly institutional and regulatory settings in China, see, for example, Forest Trends (2006): 20. For an effective, but expensive compensation scheme that increased the amount of land protected from certain kinds of environmentally-damaging land in Colorado, the United States, from just under 350,000 acres in 2000 to almost one million in 2005, see “Mountains for the Centuries,” The Economist, 382(8514): 35.

[5] For other challenges for effectively implementing REDD+, see Vanda Felbab-Brown, “Not as Easy as Falling off a Log: The Illegal Timber Trade in the Asia-Pacific Region and Possible Mitigation Strategies,” Brookings Foreign Policy Working Paper No. 5, Brookings Institution, March 2011, http://www.brookings.edu/~/media/research/files/papers/2011/3/illegal%20logging%20felbabbrown/03_illegal_logging_felbabbrown.

[6] See, for example, Raymond Gullison, Peter Frumhoff, Joseph G. Canadell, Christopher B. Field, Daniel C. Nepstad, Katharine Hayhoe, Roni Avissar, Lisa M. Curran, Pierre Friedlingstein, Chris D. Jones, and Carlos Nobres “Tropical Forests and Climate Policy,” Science, 316, 2007: 985-986; and William Laurence, “Can Carbon Trading Save Vanishing Forests?” Bioscience, 58, 2008: 286-287.

[7] For how carbon offsets support such undesirable behavior in Papua New Guinea, for example, see Colin Filer, Rodney J. Keenan, Bryant J. Allen and John R. Mcalpine, “Deforestation and forest degradation in Papua New Guinea,” Annals of Forest Science, 66 (8), December 2009: 813-25.

[8] Pervaze A. Sheikh, Illegal Logging: Background and Issues, Congressional Research Service, June 9, 2008: 5. Even the FSC is not infallible, as was revealed with respect to illegal and unsustainable timber from Laos the FSC nonetheless certified. See, for example, World Rainforest Movement, “Laos: FSC Certified Timber Is Illegal,” http://www.illegal-logging.info/item_single.php?it_id=1683&it=news; and Wright and Carlton.

[9] The Economist, September 25, 2010: 13.

[10] Sam Lawson and Larry McFaul, “Illegal Logging and Related Trade: Indicators of Global Response,” Chatham House, July 2010: 77.

[11] See, for example, Environmental Investigative Agency, Behind the Veneer: How Indonesia’s Last Rainforests Are Being Felled for Flooring, 2006, http://www.eia-international.org/cgi/reports/reports.cgi?t=template&a=117.

[12] Lawson and MacFaul: 75-76.

Authors

Vanda Felbab-Brown

Image Source: © Stringer Indonesia / Reuters

Governance, Rule of Law and Natural Resources in Indonesia and Lessons for Burma’s Transformation

Thu, 07 Feb 2013 10:00:00 -0500

Event Information

February 7, 2013
10:00 AM - 11:30 AM EST

Falk Auditorium
Brookings Institution
1775 Massachusetts Avenue NW
Washington, DC 20036

An authoritarian state merely a decade ago, Indonesia is now an open, pluralist democracy characterized by consistently high levels of economic growth, a growing middle class and booming foreign investment. Not only is Indonesia geostrategically important in the development of U.S. policy toward Asia, it is also a model for the coexistence of Islam and democracy and a key player in efforts to tackle global deforestation, biodiversity loss and climate change.

On February 7, Brookings hosted a discussion on Indonesia’s natural resources management in the context of the country’s political, economic and rule of law reform efforts, as well as its battle against terrorist groups. The panel also drew lessons for Burma’s political and economic transformation and its management of natural resources.

Brookings Senior Fellow Vanda Felbab-Brown provided insights from her recent fieldwork in Indonesia on illicit economies and organized crime; School of Advanced International Studies Associate Director William M. Wise analyzed the rise of terrorist activity in Indonesia; and Brookings Nonresident Senior Fellow Lex Rieffel discussed how Burma can learn from Indonesia’s economic reforms and management of foreign aid and foreign investment. Senior Fellow Richard Bush, director of the Center for Northeast Asian Policy Studies, provided introductory remarks and moderated the discussion.

Indonesia Field Report II – Bali High, Rainforest Low: The Illicit Drug Trade in Indonesia

Vanda Felbab-Brown — Wed, 06 Feb 2013 14:00:00 -0500

Yet another Western tourist – this time a 56- year-old grandmother from Britain – has become the face of drug trafficking in Indonesia. Her death sentence for smuggling 10 pounds of cocaine worth of $2.5 million in her suitcase has riveted international media. Her story – that she was coerced to smuggle the drugs in order to protect her children and grandchildren whose safety was at stake – vaguely resembles the misfortunes of Bridget Jones from the movie Bridget Jones: The Edge of Reason. But so far, no miraculous Mark Darcy has landed to liberate her from prison and death row. Rather, human rights groups have criticized the British government for not doing enough to provide an adequate legal defense for Ms. Lindsay Sandiford. But as unfortunate as her story is, and even as it is but one in a long line of Western tourists dramatically apprehended and punished for drug trafficking in Southeast Asia, it is to a great extent a distraction from the drug trafficking problems and trends that Indonesia faces.

Like other countries in Southeast Asia, Indonesia has for decades applied extremely harsh penalties for drug trafficking and drug use. Like in Ms. Sandiford’s case, Indonesian law punishes drug smuggling with the death penalty, or at least a decades-long imprisonment. Merely getting caught smoking a joint can land one in jail for several years. As with elsewhere in Southeast Asia, such harsh penalties have done little to decrease drug trafficking in Indonesia.

In fact, both drug use and drug trafficking appear to have increased in the country. In 2011, Indonesia’s user population was estimated to be approximately 4.1 million, or 1.6 percent of Indonesia’s total population. In 2009, that user population was believed to be only 500,000.[1] If the estimates are equally correct – or more precisely make the same (under)estimation mistakes for both years – that would be an astounding eight-fold increase in three years. The expansion of Indonesia’s middle class, its growing purchasing power underpinned by the country’s economic boom fueled by its primary commodity exploitation and resulting GDP growth rates of over six percent, the stress of increasing inequality, and the democratization and political opening of the post-1998 era are all the kinds of triggers that can increase illicit drug consumption. Just like in China, Indonesians have been developing a taste for methamphetamines, ecstasy, heroin, and ketamine.

If the number of drug seizures, which can be signs of both greater drug flows and greater law enforcement effectiveness, are any indication, trafficking too seems to be increasing. Drug shipments intercepted at the Soekarno Hatta International Airport in Jakarta, arguably the most patrolled and monitored port of entry into the country, have risen from 16 in 2008 to 63 in 2010 and 52 in 2011.[2] With over 18,000 islands and a coastline of over 54 thousand kilometers, the Indonesian archipelago offers the perfect geography for smuggling, never mind how under-resourced and notoriously corrupt the Indonesian law enforcement apparatus is, and how weak and bribery-susceptible the justice system. Even with much less corruption in Indonesia – as critical and pivotal an achievement as that would be – and far greater resources devoted to counternarcotics enforcement, Indonesia would still be the trafficker’s paradise. Particularly since for several years now, prices of illicit drugs in Indonesia are believed to have remained higher than elsewhere in Southeast Asia.[3]

With the poor rule of law and the pervasive and deeply-ingrained corruption that exists in the country, Indonesia’s law enforcement and military officials, even more so than their counterparts elsewhere in the world, are perfectly positioned to dominate Indonesia’s drug trade. The dramatic court showcases of Western tourists smuggling drugs aside, examples of military and law enforcement complicity in drug trafficking abound. Rather laughably, officials at one of Indonesia’s high-security prisons, for example, have been caught cooking meth and supplying both the prison and the nearby city.[4] According to U.S. diplomatic cables released by Wikileaks, Indonesian military commanders in West Papua have participated in all manner of smuggling, including drug and timber trafficking across the border with Papua New Guinea.[5]

Importantly, however, Indonesia is no longer just a transit country for illicit drugs heading to Australia, China, and Japan, but is also increasingly a destination country. It is also a hot and rapidly expanding meth production center. Since cold medications containing pseudoephedrine are sold in Indonesia without prescription or any registration required, as they used to be in the United States until the early 2000s, cooking meth is easy. A major producer of methamphetamines itself, China supplies the pseudoephedrine both to Indonesia’s pharmaceutical industry and illicit market in a rather unregulated and unmonitored manner.

Ever more, the meth cooks in Indonesia are native, instead of the Dutch who would arrive in their former colony to produce the methamphetamines. Indeed, one of the most important developments in the Indonesian drug market is the growth of Indonesia’s domestic production capacity. The expansion of the synthetic drugs market and the domestication of production have potentially large transformative effects on Indonesia’s landscape of organized crime. Western tourists may well be those most visibly apprehended in Indonesia, but the formation of powerful Indonesian drug-trafficking groups can radically transform the structure and characteristics of the Indonesian criminal market. The emergence of far more powerful and vertically-integrated drug-trafficking groups could alter the market’s proclivity toward violence. So far, it has been a rather peaceful market. It could also change the relationship between the Indonesian state, military and law enforcement officials, and politicians on the one hand and Indonesia’s criminal gangs on the other – a complex web described in Indonesia Field Report I on urban gangs. With far greater profits at stake than in the previous drugs-for-tourists deals, a large meth market is also bound to attract the attention of powerful organized crime groups from other Southeast Asian countries and China, potentially triggering turf wars over the market and once again fundamentally altering the relationship between state and crime in Indonesia. Already, members of Malaysian drug syndicates attempting to smuggle drugs are caught with increasing frequency at Jakarta’s airport.[6]

Although the growing meth market is potentially radically transformative of Indonesia’s criminal market and is certainly highly lucrative, Indonesia is hardly a newcomer to the drug trade. Along with Cambodia, the Philippines, and India, Indonesia has long been a significant producer of cannabis. The Aceh region in Sumatra has been one of the primary cultivation areas, with the pot profits funding Acehnese secessionists and Indonesian jihadists as well as poor farmers.

Historically, various foreign as well as domestic political actors profited from the illicit and licit drug trade in Indonesia. Opium poppy used to be cultivated in Borneo and other islands of the archipelago during the 19^th century. At the turn of the 20^th century, the Dutch imported opium from British India, Persia, and Turkey and sold it in legal government-sponsored shops and smoking outfits as well as to pharmaceutical companies. The Japanese occupation forces taxed the opium-processing factories as did Sukarno’s pro-independence forces who took over the factories from the Japanese. After the end of World War II, the pro-independence parallel government smuggled out large quantities of illegal opium to Singapore to generate revenues to fight the Dutch.[7]

More surprisingly, coca, the quintessential Latin American drug-producing plant, also used to be cultivated in Indonesia. During the 1870s, a Javanese coca cultivar was developed with leaves containing about 1.5 percent cocaine, a much higher potency than the South American coca varieties had at that time. Foreign sales of coca leaves subsequently boomed, with over 1,000 tons of leaves exported to Amsterdam for processing into cocaine in 1912. By 1920, coca exports had increased to 1,600 tons, equivalent to 25 tons of cocaine and surpassing the level of cultivation in Peru and Bolivia during that period.[8] As attitudes toward cocaine use began to change during the 1930s and the European market shrank, Indonesia’s coca cultivation and exports dwindled. By 1935, coca leaf exports from Java fell to less than 10 percent of peak production, and after a few years coca cultivation in Indonesia rather precipitously stopped. The expansion of the global illicit trade in cocaine after the 1970s fueled a massive coca cultivation expansion in the Andes, yet Indonesia’s cultivation has not returned. But now, the illicit market in synthetic drugs has robustly taken off.

Of the various smugglers I was able to interview in Indonesia during my research there in the fall of 2012, none were as reticent as the drug smugglers. Those who organized illegal mining and logging bragged with pride about their capacity to bribe Indonesian authorities – see Indonesia Field Trip Report III on illegal logging and mining. Wildlife poachers and traffickers exhibited with glee, and without any remorse, the animals they slaughtered – see Indonesia Field Trip Report IV on wildlife trafficking. But those who supposedly could talk about local drug peddling and trafficking were tight-lipped, nervously looking over their shoulders and denying any knowledge. The differential penalties – very harsh for drug trafficking and minimal for illegal logging, mining, and wildlife trafficking – may not have reduced the intensity of illicit drug flows in Indonesia, but they have silenced the participants in the illegal drug trade. And yet one needs to wonder not only about the readiness of Indonesia’s law enforcement to cope with the potential growth and power of Indonesia drug trafficking groups, but also about its priorities. The illicit drug trade often generates the most international opprobrium; yet it is the illicit as well as licit destruction of Indonesia’s biodiversity that is most pressing and requires urgent attention from the Indonesian government and law enforcement. After all, the drug trade is in renewable, nondepletable resources -- unlike Indonesia’s forests and unique species that are being overexploited and are disappearing at breakneck speed. Once they are gone, there is no way of bringing them back. Meth will be cooked and consumed decades from now. The only question is who will control the meth market and what kind of political power the market will generate.

[1] United States Department of State Bureau for International Narcotics and Law Enforcement Affairs, International Narcotics Control strategy Report, March 2012, http://www.state.gov/documents/organization/187109.pdf: 262-266.

[2] Multa Fidus, “Malaysian Syndicates Dominate Drug Smuggling in RI,” Jakarta Post, 26 April 2012, http://www.thejakartapost.com/news/2012/04/26/malaysian-syndicates-dominate-drug-smuggling-country.html.

[3] Interview with counternarcotics officials, Jakarta, October 2012. Given Indonesia’s rather limited and varied efforts to collect systematic drug data as well as frequent short-term fluctuations in drug prices, such assessments need to be taken with a grain of salt.

[4] Wahyudi Soeriaatmadja, “Indonesian Drug Trafficking Busts Doubled in 4 Years,” Jakarta Globe, 4 April 2011, http://www.thejakartaglobe.com/home/indonesian-drug-trafficking-busts-doubled-in-4-years/433371.

[5] Philip Dorling and Nick McKenzie, ‘Indonesian Army Linked to Drugs,” Sydney Morning Herald, 23 December 2010, http://www.smh.com.au/technology/technology-news/indonesian-army-linked-to-drugs-20101222-195kx.html.

[6] Fidus.

[7] Bertil Lintner, Blood Brothers (New York: Palgrave Macmillan, 2002): 290.

[8] David Musto, “International Traffic in Coca through the Early 20th Century, Drug and Alcohol Dependence, 49(2), January 1, 1998: 145-156.

Authors

Vanda Felbab-Brown

Image Source: © Supri Supri / Reuters

Indonesia Field Report I - Crime as a Mirror of Politics: Urban Gangs in Indonesia

Vanda Felbab-Brown — Wed, 06 Feb 2013 13:00:00 -0500

Gang Truce in Indonesia … and El Salvador

Following a wave of violent confrontations and tit-for-tat killings, the leaders of five mass organizations-cum-urban gangs in Greater Jakarta – Pemuda Pancasila (PP), Pemuda Panca Marga (PPM), the Betawi Brotherhood Forum (FBR), the Betawi People’s Forum (Forkabi), and Badan Pembina Provinsi Keluarga Banten (BPPKB) – agreed to a ceasefire in June 2012. The violence to be shut down had erupted in the late winter and early spring of 2012, escalating and taking on ethnic overtones in March 2012 when the leader of another gang John Refra, a.k.a. John Kei, was arrested on murder charges. Fronting as a debt-collecting business, Kei’s Key Youth Force (Amkei) was centered on Moluccan migrants in Jakarta and had been clashing with rival gangs from Flores. The June gang truce, facilitated by police negotiations and mediation,[1] for a moment seemed to turn the violence off. The gang truce paralleled a ceasefire announced by two large gangs in El Salvador – an ocean away.

In El Salvador, the Mara Salvatrucha (MS-13) and Calle 18, two large transnational gangs whose notoriety and proclivity to violence greatly surpasses the Jakarta toughs, declared a ceasefire in March 2012. In exchange for various privileges for imprisoned gangs leaders and members, the two maras promised the El Salvadorian government that they would turn off the violence that has significantly contributed to El Salvador’s extraordinarily murder rate of over 60 per 100,000 which for years plagued El Salvador’s citizens. Endorsed and facilitated by the government and the Catholic church, the truce was celebrated as a major breakout from the high urban criminal violence. Indeed, the truce appears to have reduced murders and other visible violence in El Salvador during the past year.[2] Even as extortion and less visible forms of violence have continued since the deal and even though there were signs in the fall of 2012 that the truce was becoming shakier and less stable, the truce has held so far and has been declared (rather controversially) by the government to be a model of dealing with urban gangs.

By contrast, in Jakarta the truce did not hold; and several weeks later, turf contestations among its gangs were back on. Of course, with 8 homicides per 100,000, Indonesia’s murder rate is nowhere close to El Salvador’s. In fact, despite occasional dramatic killings by the gangs that draw sensationalist media attention, Indonesia’s urban gangs come across as rather docile compared to their Central American brethren. Jakarta’s smog may be deadly and its traffic murderous and the inability of Jakarta’s cabbies to locate any address may well push one’s self-control to the threshold of violence; but with respect to crime, Jakarta is a remarkably safe city. Even in the vast slums where, as in San Salvador, the state is absent and the gangs rule, the atmosphere of violence is palpably lower than in many of Latin America’s cities. That does not mean that the Jakarta gangs do not exercise a great deal of power and authority over both slum areas and some business parts of the city. Just like in Rio de Janeiro, some gangs may at times have a virtual stranglehold on a neighborhood, complete with checkpoints and controlled entry into the slum.[3]

The State and the Street Rough

Yet the violence is indeed much lower in Jakarta – one reason being that the influence that official authority, such as the law enforcement, exercises over the gangs is great. Indeed, Indonesian gangs have a decades-old history of thick and complex relations with the Indonesia government, primarily its military, intelligence, and police forces, and also with Indonesian political parties that goes back to Indonesia’s independence. That basic set-up of the gangs doing the bidding of the formal powers has weathered dramatic changes in the country’s fundamental political arrangements and forms of rule over the decades. The faces and names of the gangs have changed, but the essential arrangement of official power remaining the true master and overlord of the criminal underground and employing the gangs for the purposes of the state and political bosses – as shady and illicit as these purposes may often be – has persisted.

In Latin America too, the state has often used criminal groups to advance its goals: In Mexico, deals and arrangements between the Institutional Revolutionary Party (Partido Revolucionario Institucional [PRI] that ruled Mexico for 71 years plus Mexican law enforcement agencies on the one hand, and drug-trafficking groups on the other hand, moderated crime until the 1980s.[4] In Rio de Janeiro and Jamaica, politicians have long used the urban gang bosses to deliver votes and collect donations for their political parties in exchange for patronage.[5] In Central America, the military and intelligences services employed criminal groups to fight insurgents during the civil wars of the 1980s; and in the 1990s, organized crime groups there evolved from the military-crime nexus of the civil wars. However, Latin American urban gangs have frequently broken away from their subservient relationship vis-à-vis the official power elite and have become rather disobedient, and at times very violent.

In Indonesia, and throughout much of South and Southeast Asia, the state and major formal political parties have been better able to hold the rein on the criminal gangs. That is not to say that the urban gangs, and their facades and manifestations as youth wings of political parties, are totally under the thumb of the politicians or military and police forces. They are agents in of themselves, with their own political and coercive power, at times fiercely asserting their own identity and agency. They negotiate and push back against their political-military overlords even as they take orders from them. Still, in contrast to Latin America, the relationship between the gangs and official political power in South and Southeast Asia has overall remained far smoother and less confrontational. By and large, the gangs have remained tightly integrated into the formal political processes and often closely linked with particular political parties.

Whether taking over unregulated spaces through force due to the absence of other regulators or being de facto granted concessions from the state, the Indonesian gangs have collected rents from various informal and illegal enterprises. They will organize, direct, and tax informal parking on Indonesia’s city streets; the fees are minimal and a refusal to pay may well result in slashed tires or a scratched car, but unlike in parts of Rio, it is unlikely to land one in a hospital. Gangs will also tax nightclubs and street vendors for protection. Often, this informal tax collection can be pure extortion; at other times, the gangs may actually provide protection against rivals, often from different ethnic groups, not merely against themselves. The nightclub protection racket tends to be highly lucrative: The Association of Indonesian Entertainment and Recreation Center Entrepreneurs claimed that over 400 nightclubs, bars, massage parlors, and discos in Jakarta generate revenues of around $200 million annually, with owners spending about 20% on formal and informal fees.[6]

At times, the protection racket can become quite formalized, with gang members hired off the street by “formal” security or debt-collection services.[7] In fact, Jakarta’s business operators have increasingly moved to these formal, legal firms, instead of hiring the informal gangs straight off the street to pay for protection and debt-collection services. The membership between these two types of protection outfits often highly overlaps, but the bosses of the former tend to sport ties rather than tattoos. Like their brethren around the world, gangs in Indonesia also have taxed, or run, gambling, prostitution networks, and local drug distribution operations. At times, the gangs provide informal microcredit, but that service tends to be rather abusive and frequently slips into loan-sharking.

The Many Facets of Preman

There are many types of gangs in Indonesia and they vary in their savviness of how to accumulate power, cultivate political connections, and acquire political capital.[8] Rather surprisingly, many Indonesian gangs frequently do not appear to provide extensive socio-economic services to the communities where they operate or deliver otherwise absent public goods, beyond providing protection and security. Many of the street vendors I interviewed throughout Java and in Sumatra, for example, complained about the gang taxes and claimed that the gangs were of little use to them and appeared to welcome when the state acted to suppress the gangs.[9]

Some are informal organizations of soldiers and sailors out for fun after dark, and one would not expect them to have political ambitions or organize services parallel to or in the absence of the state. Neither would one expect such behavior from the motorcycle gangs, such as the Moonraker, Grab on Road (GBR), and Exalt to Coitus (XTC), that operate in Indonesia.[10] But since Indonesia moves on mopeds and motorcycles, distinguishing a motorcycle gang of the Hells Angels-type from a gang that employs the typical Asian means of transportation may be tricky.

Indeed, the labeling of groups and individuals as preman (with the term encompassing everything from a criminal, street tough, to an outright organized crime group) has often been used and misused for political purposes. As much as the formal state institutions and political parties have used the gangs for their purposes, they have also often found it convenient to make the gangs and, more broadly, the urban poor their scapegoats. Many underprivileged urban young, or homeless people and beggars have been labeled preman merely because they are poor and live in a slum. Similarly, the Indonesian police have a tendency to call even peaceable groups of young kids just hanging around on the streets preman.

Some gangs, such as the aforementioned of John Kei’s Key Youth Force, are ethnically based. The transmigrasi policy encouraged population movements throughout the archipelago – mostly Javanese and southern Sulawesi natives moving to other islands; and, inevitably, quite apart from the transmigrasi policy, Jakarta’s economic growth and opportunities attracted migrants from elsewhere. With poor skills and lacking access to established patronage networks, they would often languish in Jakarta’s slums, with particular ethnic groups settling down in particular areas. The young unemployed become easy recruiting targets for ethnically-based gangs. The wider ethnic-minority community would depend on the gang for access to formal and informal jobs and other patronage, with other ethnic enclaves and their gangs remaining closed to outsiders. Some of the prominent ethnically-based gangs have included groups from Ambon, the Moluccas, Timor, and southern Sulawesi, particularly Makassar.

Violence between the ethnically-based gangs has occasionally not only triggered violent confrontations in the criminal market, but also set off wider ethnic violence in Indonesia. The November 1998 Ketapang riot in West Jakarta between gangs from Ambon and Flores, provoked by clashes over the control of parking lots and a gambling den, was believed to be the last spark igniting the ethnic and sectarian violence in Ambon during the late 1990s and early 2000s. But that narrative may have merely provided a convenient excuse for the police and military forces to be supporting Betawi (Jakarta native) gangs since then. Of course, ethnic tensions over access to land and state resources in Ambon had been growing for a number of years and were intensified by the Islamist salafi global mobilization of the 1990s. (The ethnic violence itself, despite its terrible human toll, provided Indonesia’s military and law enforcement forces with a plausible justification to keep high budgets after the collapse of the Suharto regime.)

But the gangs that do provide socio-economic services and hobnob with the politicians can accumulate a great deal of political power. Indeed, it is often very difficult to draw clear distinctions between some gangs and formal political youth organizations in Indonesia. The two entities may strongly overlap in leadership and membership, with each being unique and separate only at the margins. The gangs with the most explicit and thickest connections to formal political parties provide – rather naturally – the most extensive socio-economic and social services beyond protection, such as street cleaning, electricity, water distribution and sewage, flood assistance, and blood donations. They also resolve disputes, whether over land in slum areas without formal justice institutions and rule of law, or even among businessmen who choose to risk going through Indonesia’s corrupt and increasingly unpredictably bribable courts. Importantly, they also deliver votes for their political sponsors, put on mass rallies to demonstrate the particular political party’s street power, intimidate opponents, and break up the opponents’ rallies or labor strikes. Both the gangs and youth organizations help local party bosses to win public goods tenders and are themselves rewarded with such tenders by their political overlords.

From Nationalism to Ethnicity and Islam: The Evolution of Urban Gangs in Indonesia

One of the most powerful gangs and most visibly used as a tool of the political order and highest formal political power is Pemuda Pancasilla. A criminal gang with large membership on the one hand, it also managed to present itself as the ultimate defender of Indonesian nationalism and the New Order of President Suharto. Established in the early 1980s in Sumatra, it grew under the leadership of Yapto Soerjosoemarno to claim a pan-ethnic membership of 10 million throughout the archipelago in the late 1990s.[11] Often doing the bidding of Indonesia’s military and intelligence services or Suharto’s political party (Golkar) it coerced support for Suharto’s regime, beat up opponents and extorted the Chinese business community for private rents and political donations, as well as partook in charitable activities and the provision of socio-economic goods to local communities. It also provided privileged access to jobs. Unlike the gangs that the Indonesian state employed after the creation of Indonesia and those that had been used by Indonesian political actors even during the colonial, pre-independence days, PP succeeded in sufficiently covering its origins and connections to the criminal underworld so as to portray itself as the ultimate voice and carrier of the official ideology and values of the Suharto’s regime.

Given how tight with the Suharto regime PP was, it is not surprising that it did not weather well the end of the Suharto regime. After the end of Suharto’s reign, Pemuda Pancasilla tried to transform itself into an official political party, and twice, under different names, it did very poorly in national elections. It still exists as a youth group and a street gang, but it now needs to share power in the criminal market and in the political space far more than ever before with other gangs-cum-political-organizations.

The criminal gangs that emerged in the wake of the collapse of the Suharto regime have reflected the diversification of political cleavages in Indonesia. Many have remained ethnically-based.[12] Not surprisingly, some of most successful urban gangs have been those that have received the most support from the post-Suharto state and law enforcement – namely, Jakarta’s Betawi gangs, such as the Betawi Brotherhood Forum (FBR) and the Betawi People’s Forum (Forkabi), based on ethnic groups “native”[13] to Jakarta. By supporting them, the security services believe they have a better capacity to control outbreaks of ethnic violence beyond the criminal market.[14] By the late 2000s, the Betawi groups displaced other ethnically-based groups from large areas of Jakarta, such as Tanah Abang area.

Reflecting the new era of Indonesia’s Islamization during the 2000 decade, the Betawi gangs have also embraced Islamist narratives. Donning Islamic regalia, they have at times taken it upon themselves to enforce sharia and harass the Christian and Ahmadyyia minorities in West Java – both because of genuine ideological drive and because such actions would make them politically useful to politicians mobilizing on the basis of Islamization as well as generate various resources, including access to land, and other economic rents for the gangs. This coating with Islam too made them appealing to Indonesia’s military and law enforcement agencies, which since the early 1990s have also become increasingly Islamized.

The (Non)Evolving State’s Response: Beyond Cooptation and Selective Repression?

The selective embrace of some of the preman and targeted repression of other gangs is nothing new in Indonesia. The most brutal campaign of such selective weeding out of the gangs who were most troubling for the regime and cooptation of those most useful to the regime took place in the early 1980s. Suharto’s so-called Petrus campaign (short for mysterious killings) viciously and rather indiscriminately targeted all manner of “inconvenients” – unemployed youth, disobedient criminal gangs, or those supporting Suharto’s rival General Ali Moertopo, and sometimes even just street children. At the end of the campaign, between 5,000 and 10,000 people were killed.[15]

Although far less violent than during the Suharto era, the anti-preman repression waves during the 2000 decade have continued to target political criminal enemies as well as to cater to the growing middle-class fears of criminality and distract the broader body politic from other problems, such as the country’s socio-economic difficulties, and also away from having to fundamentally redesign the tight relationship between the state and political parties and criminals. Like the mano dura policies in El Salvador and Central America, the suppression campaigns would target vulnerable marginalized individuals merely because they sported a tattoo, and would flood the jails with low-level offenders or members of targeted criminals simply on the basis of their membership, rather than any evidence of actual criminal behavior.[16] But this seemingly indiscriminate repression has consciously coincided with highly-selected nurturing of some cultivated “friendly” gangs.

Indonesia’s politicians continue to be deeply complicit in the perpetuation of the state-crime/cooptation-repression pattern, for fundamentally breaking with the system would require their sacrificing the various advantages they get from employing the criminal gangs. It is far easier and more convenient to occasionally give in to periodic public outrcries for anti-crime campaigns and to round up the most vulnerable people.

In labeling the sponsorship of favorite proxies and ethnic-kin vigilantism as “community policing,” politicians and law enforcement agencies in Indonesia put a new face over the past decade on old practices. Often underwritten with a lot of money, such “community” initiatives and “community partners” would receive official blessing to cleanse areas, such as Tanah Abang in Jakarta, of ethnic and business rivals. At the same time, in a classic Mansur Olson fashion,[17] the repression waves have made membership in a gang all the more valuable: those without membership and sponsorship would be more vulnerable to arrest and have more difficulties obtaining patronage. Within certain bounds, gang membership would materially, politically, and psychologically empower marginalized individuals, while, paradoxically, by reinforcing the pressures toward gang membership within the slums, gang leaders and politicians as well as police and military officials would profit from the repressive anti-gang campaings.

Such a policy of incomplete, selective repression is also much cheaper than addressing the basic socio-economic and public safety deficiencies that trouble Indonesia’s sprawling slums. Rather than bringing the state into the slum in a comprehensive, multifaceted, and accountable manner,[18] periodic selective repression allows the powers that be to get away with murder (literally and figuratively) while minimizing the resources necessary to suppress crime and manipulate it for one’s purposes. In the long term, the outcome is a profound marginalization of vast segments of society and perpetuation of political and socio-economic conditions that give rise to alienation and that sever bonds between citizens and the state, but in the short term, such an approach is cheap and delivers benefits to adroit politicians and law enforcement agents.

Nonetheless, the concept and language of “alternative livelihoods” for the preman have seeped into political discourse and policies in Indonesia. Formally organizing the gang members in official security or debt-collection companies has been described as one form of “alternative livelihoods.” This approach has several limitations: One is that the amount of jobs these companies generate is still vastly fewer than the amount of jobs provided by the gangs. Second, the “services” that the gang members obtain from belonging to a gang go beyond employment and regular services and are not matched by the formal security companies. And fundamentally, as long as the formal security or debt-collection companies behave no less thuggishly than the informal gangs, they are merely a cover for the same old nexus of political-power-formal-business-and-crime that has characterized the Indonesian scene.

What may perhaps be changing in that nexus is its increasing interaction with terrorism in Indonesia. While still much less violent and virulent than in South Asia or the Middle East, Indonesia’s salafi terrorist groups have been experiencing a certain revival over the past several years – reinvigorated by the influx of refugees from the Middle East, funded by Saudi Wahhabi money for two decades, and at least indirectly fostered by the apathy and meekness of Indonesia’s government and politicians over the past several years when it comes to speaking up against the kind of Islamization that oppresses ethnic minorities and undermines individual human rights. One of Indonesia’s counterterrorism policies of the early 2000s (which have been widely heralded as very effective) has been to throw arrested terrorist group members into the same poorly-controlled general population prison facilities that are used to incarcerate the preman and other criminals. The consequence has been that the criminals and terrorists have been fraternizing and establishing conspiratorial relations.[19] During several recent terrorist attacks in Indonesia, the various terrorist groups have used ex-criminals and criminal gangs both for logistical support and conduct of actual terrorist operations – though the recent terrorist attacks have been highly unsuccessful from the perspective of the terrorist groups and generated minimal casualties and damage.

Overall, these crime-terror connections in Indonesia remain very low level and not very frequent: the salafi terrorist groups, organized crime, urban gangs, and the preman continue to be distinct nonstate actors, very differently connected to and differently antagonistic toward the Indonesian state. The big question is whether eventually, perhaps as a result of their interactions with the terrorist groups, the Indonesian criminal gangs will throw off the reins of their political overlords and strike out far more on their own, and perhaps far more violently, as the gangs do in Latin America, or whether the formal political system in Indonesia will manage to maintain the delicate balancing act of using the urban gangs and criminal groups for its own purposes, while keeping their power in check.

[1] “Gang Leaders Vow to Bury the Hatchet,” Jakarta Post, June 30, 2012.

[2] For details on the truce in El Salvador, see, for example, Linda Pressly, El Salvador Gang truce: Can MS-13 and 18th Street Keep the Peace? BBC News Magazine, November 21, 2012, http://www.bbc.co.uk/news/magazine-20402216.

[3] For the atmosphere in Rio, see, for example, Vanda Felbab-Brown, “President Obama's Visit to a Favela in Rio: Below the Surface Calm,” The Huffington Post, March 17, 2011, http://www.huffingtonpost.com/vanda-felbabbrown/obama-brazil-favela_b_837371.html; and Vanda Felbab-Brown, “President Obama to Visit a Rio Favela: Surfing on Sewage,” Brookings Institution, March 17, 2011, http://www.brookings.edu/research/opinions/2011/03/17-obama-favelas-felbabbrown.

[4] See, for example, Luis Astorga, “El Tráfico de Fármacos Ilícitos en México: Organizaciones de traficantes, corrupción y violencia,” paper presented at a WOLA conference on Drogas y Democracia en Mexico: El Impacto de Narcotráfico y de las Políticas Antidrogas, Mexico City, June 21, 2005, cited in Laurie Freeman, “State of Siege: Drug-Related Violence and Corruption in Mexico: Unintended Consequences of the War on Drugs,” WOLA Special Report, June 2006; Peter Reuter and David Ronfeldt, “Quest for Integrity: The Mexican-US Drug Issues in the 1980s,” Journal of Interamerican Studies and World Affairs, 34(3), Autumn 1992:102-103; and Vanda Felbab-Brown, “The Violent Drug Market in Mexico and Lessons from Colombia,” Foreign Policy at Brookings, Policy Paper No. 12, March 2009,

http://www.brookings.edu/~/media/Files/rc/papers/2009/03_mexico_drug_market_felbabbrown/03_mexico_drug_market_felbabbrown.pdf.

[5] See, for example, Enrique Desmond Arias, Drugs and Democracy in Rio de Janeiro: Trafficking, Social Networks, and Public Security (Chapel Hill: University of North Carolina Press, 2006); Enrique Desmond Arias, ‘The structure of criminal organizations in Kingston, Jamaica and Rio de Janeiro, Brazil.’ Presentation delivered at the conference on “Drug Trafficking, Violence, and Instability in Mexico, Colombia, and the Caribbean: Implications for US National Security,” at the Matthew B. Ridgeway Center for International Security Studies, University of Pittsburgh, October 30, 2009; and Enrique Desmond Arias and Corinne Davis Rodrigues, “The Myth of Personal Security: Criminal Gangs, Dispute Resolution, and Identity in Rio de Janeiro’s Favelas,” Latin American Politics and Society, 48(4), 2006: 53-81.

[6] Hasyim Widhiarto, “Former Street Thugs Revamp Jakarta’s Protection Racket,” Jakarta Post, November 1, 2010.

[7] Ibid.

[8] On how frequently nonstate actors, including criminal groups, provide such services in both Asia and Latin America and how they use the provision of such services to acquire political capital and legitimacy, see, for example, Vanda Felbab-Brown, “Human Security and Crime in Latin America: The Political Capital and Political Impact of Criminal Groups and Belligerents Involved in Illicit Economies,” FIU/WHEMSAC, September 2011; and Vanda Felbab-Brown, Shooting Up: Counterinsurgency and the War on Drugs (Washington, DC: Brookings Institution Press, December 2009).

[9] Interviews with street vendors throughout Java and in western Sumatra, fall 2012.

[10] See, for example, Bayu Marhaenjati, Zaky Pawas, and Ardi Mandiri, “Gang Warfare in Jakarta’s Streets,” Jakarta Globe, April 14, 2012; A’an Suryan, “Concerted Efforts to Tame Motorcycle Gangs,” Jakarta Post, April 23, 2012.

[11] For a detailed study of Pemuda Pancasilla, see Loren Ryter, Youth, Gangs, and the State in Indonesia, Ph.D. thesis, University of Washington, 2002.

[12] David Brown and Ian Wilson, “Ethnicized Violence in Indonesia: The Betawi Brotherhood Forum,” Working Paper No. 145, Murdoch University Asia Research Center, July 2007, http://wwwarc.murdoch.edu.au/publications/wp/wp145.pdf.

[13] Native is a relative term. The term Betawi is applied to people who have lived in Jakarta for several centuries, and, in fact, the name comes from an old colonial name for Jakarta – Batavia. But centuries ago, many of those people were migrants from various parts of Indonesia’s archipelago and Southeast Asia themselves, and ended up mixing with migrants from other parts of the world, including Arab, Chinese, Indian, Portuguese, and Dutch migrants.

[14] “Betawi Big Boys Rule Jakarta Underworld,” Jakarta Post, August 28, 2009.

[15] Ian Wilson, “‘War against Thugs’ or a War against the Poor?” Jakarta Post, April 7, 2012.

[16] “From Petty Theft to Rioting, Gangs Are a Jakarta Plague,” Jakarta Globe, March 4, 2012.

[17] For seminal conceptualization of collective actions problems and group formation, see Mansur Olson, The Logic of Collective Action: Public Goods and the Theory of Groups (Cambridge, MA: Harvard University Press, 1971).

[18] On how the design and implementation challenges of such comprehensive state approaches, see Vanda Felbab-Brown, “Conceptualizing Crime as Competition in State-Making and Designing an Effective Response,” NDU-ONDCP Conference on Illicit Trafficking Activities in the Western Hemisphere, Washington DC, May 21, 2010, http://www.brookings.edu/research/speeches/2010/05/21-illegal-economies-felbabbrown; and Vanda Felbab-Brown, “Bringing the State to the Slum: Confronting Organized Crime and Urban Violence in Latin America,” Brookings Latin America Initiative Paper Series, December 2011, http://www.brookings.edu/~/media/research/files/papers/2011/12/05%20latin%20america%20slums%20felbabbrown/1205_latin_america_slums_felbabbrown.

[19] International Crisis Group, “How Indonesian Extremists Regroup,” Asia Report No. 228, July 2012, http://www.crisisgroup.org/~/media/Files/asia/south-east-asia/indonesia/228-how-indonesian-extremists-regroup.pdf.

Authors

Vanda Felbab-Brown

A Time for Optimism for the U.S. and China?

Jeffrey A. Bader — Fri, 16 Nov 2012 00:00:00 -0500

With China’s new leadership selected during the 18th Party Congress of the Chinese Communist Party, and with President Obama about to embark on a second term, the U.S. and China must consider a path forward for their sometimes bumpy but critically important relationship. Moreover, the U.S. must understand that China has to sort through a host of domestic issues as well.

Senior Fellow Jeffrey Bader says that the U.S.-China relationship has never been an easy one, but both countries are clear on its paramount importance.

Video

A Time for Optimism for the U.S. and China?

Authors

Jeffrey A. Bader

President Obama's Message to Myanmar: "We're With You and We're Watching You."

Jeffrey A. Bader — Fri, 16 Nov 2012 00:00:00 -0500

President Obama travels to Southeast Asia this month on a three day trip with stops slated for Thailand, Cambodia and Myanmar. The president will use this opportunity to build trade ties and strengthen relations in the region. Notably, President Obama will be the first sitting president to visit Myanmar, an emerging democratic nation. The president’s visit to Myanmar sends a strong signal of support and encouragement to the government and the people of that country, notes Senior Fellow Jeffrey Bader.

Video

President Obama's Message to Myanmar: "We're With You and We're Watching You."

Authors

Jeffrey A. Bader

Myanmar’s Aung San Suu Kyi Visits the United States: What Next?

Lex Rieffel — Mon, 17 Sep 2012 12:15:00 -0400

Aung San Suu Kyi’s visit to the United States, beginning September 16, raises a host of interesting issues for U.S. foreign policy. Three in particular are: U.S. relations with China and the other Asian countries, the role of sanctions in promoting democracy and respect for human rights, and how to use foreign aid and foreign investment to advance U.S. interests.

Over the next two weeks, Aung San Suu Kyi will be received royally in in cities across the USA, including New York, Indiana, and California. During three days in Washington, her main appearances will be at the U.S. Institute of Peace on the 18th, the Capitol Rotunda to receive the Congressional Gold Medal on the 19th, and back to the Capitol on the 20th to receive an award from the National Endowment for Democracy.

One particularly delicate aspect of her visit is its impact on an overlapping visit by President Thein Sein who is coming at the end of September to address the U.N. General Assembly. He deserves considerable credit for his bold and forward-looking leadership over the past 18 months, but nothing can be done to prevent his trip being overshadowed by Suu Kyi’s visit. One can only hope that he will be received well enough so that his remarkable collaboration with Suu Kyi will actually be strengthened.

China was Myanmar’s best friend during the 23 years of military rule following the uprising in 1988 that catapulted Aung San Suu Kyi to worldwide fame as an icon of democracy. However, China seems not to have been prepared for the sharp course change since President Thein Sein took office in March 2011, and it has understandable concerns about seeing another thriving democracy on its borders. The U.S. State Department has worked hard to show that the United States wants China to continue having friendly relations with Myanmar, and now it will have to work harder to make this point. But this looks like a manageable issue. Myanmar’s other nine partners in the ASEAN community are generally pleased to see its transition to democracy, but mostly want its economy modernize rapidly.

Analysts and experts are divided over the utility of sanctions in the case of Myanmar and the implications for other governments committing gross human rights violations. Those who advocated tighter U.S. sanctions on Myanmar are convinced that these explain Myanmar’s sharp turn toward democracy. Those who supported the Obama administration’s policy of “principled engagement” (replacing the Bush administration’s hard line policy) are convinced that engagement helped or that the turn can be amply explained by internal factors unrelated to the sanctions. Aung San Suu Kyi’s visit is more likely to muddy the waters on this debate than to shed any light on it.

Responding to the favorable turn of events in Myamar last year, multilateral and bilateral donors, international NGOs and foreign investors are descending on the country in droves. It may not be an exaggeration to say that Myanmar is being smothered with love. The government is being overwhelmed with conflicting advice. Policy decisions essential to economic progress are being delayed by the chaos. Good decisions made are not being implemented effectively because of the limited capacity of the bureaucracy. It remains to be seen whether U.S. assistance will be part of the problem or part of the solution. Getting it right will not be easy because of the American tendency to “do it our way”.

Aung San Suu Kyi’s visit, scheduled during a recess in Myanmar’s House of Representatives where she was recently seated, comes at an awkward time for the United States. Although there is deep bipartisan support for her efforts to bring democracy to Myanmar, the visit could become politicized in the heat of our presidential election campaign. Another risk is that the adulation she will receive during her visit could make it harder for her to make the political compromises in Myanmar that will be required to keep the democratic transition on track.

Above all, Americans should listen carefully to what Aung San Suu Kyi says during her visit. Her suffering at the hands of a repressive regime has been great and her leadership of the fledgling democracy movement has been exceptional. She has ready access to leaders around the world, and she could become a force for resolving conflicts well beyond the borders of Myanmar.

Authors

Lex Rieffel

Russia’s Views of the Security Situation in East Asia

Vladimir N. Kolotov — Mon, 17 Sep 2012 00:00:00 -0400

Experts usually delineate two main regions in East Asia: Northeast Asia and Southeast Asia. Northeast Asian countries are generally more developed politically and economically, but they are very dependent on different kinds of resources from outside their territories. This feature exacerbates other factors in their bilateral relationships which often lead to tension. Southeast Asian countries are rich in resources, but the region’s great political and cultural complexity and diversity make it difficult for it to assert itself in international relations. Southeast Asian countries themselves are unable to build a regional security system without taking into consideration the political interests and positions of global actors and neighboring countries in Northeast Asia.

The first attempt to build a common East Asian regional security system without division into Northeast and Southeast Asia was undertaken in the 13^th century by Mongolian khans. The Mongols managed to take control of all of Northeast Asia except for Japan, and also invaded other mainland and island Southeast Asian kingdoms. In the early 20^th century, Japan, the only Asian power that managed to preserve real independence during the era of European colonization, sought to dominate and expand its own sphere of influence, the so-called Greater East Asia Co-Prosperity Sphere (大東亜共栄圏), under the slogan “Asia for the Asians!” At its high point, Japan controlled the eastern sections of mainland Asia, and also the main parts of mainland and island Southeast Asia. Japan’s defeat in World War II ended its attempts to consolidate this regional security architecture.

Right after the end of the World War II, the United States started to build a regional security system in East Asia aimed at containing the Sino-Soviet bloc, establishing both bilateral alliances and multi-lateral alliances such as the Southeast Asian Treaty Organization (SEATO). The United States also considered leading the formation of a Northeast Asian Treaty Organization. It is important to note that an implicit anti-Soviet security structure made up of the United States, China, and Japan emerged, which supplemented the U.S. alliance structure. Although the Cold War ended 20 years ago, the contemporary security architecture in East Asia in general has not changed very much (with the exception of the U.S.-China-Japan axis). What are its main contemporary parameters?

The East Asian Arc of Instability

The most correct indicator of the established geopolitical balance of forces in the region is the East Asian Arc of Instability. This is a predominant geopolitical reality and is the basis of the regional security architecture. The East Asian Arc of Instability is a difficult system of blocks and counterbalances which goes through divided countries and disputed territories. Beginning in the Cold War, the East Asian Arc of Instability has gone from the so-called “Northern territories” (i.e. Kuril Islands), through the divided Korean peninsula and divided China (People’s Republic of China and Republic of China or Taiwan), and down to divided Vietnam (North Vietnam and South Vietnam). These are only the most important flash points; “small” disputes along this arc include Dokdo/Takeshima, the Senkaku/Diaoyu islands, and the Spratly and Paracel islands as well as numerous other small islands, reefs, and shoals in the South China Sea. During the Cold War only one considerable move took place in the Southern part of the East Asian Arc of Instability: in 1975 Vietnam was unified, but only on the continent. Before the end of the war, when the North Vietnamese army was stuck in South Vietnam, South Vietnamese troops were evacuated from the Paracel Islands by the U.S. Navy and these islands were almost immediately taken over by China in 1974. These events had far reaching consequences.

All the intricate curves of this Arc of Instability are stipulated by the geopolitical interests and strategies of main actors of global and regional policy as well as the established balance of power. Any change in this Arc of Instability, even if it seems insignificant at first sight, could be considered by competitors as a challenge or even as casus belli. From the southeast, the Arc of Instability is buttressed by U.S. military bases situated on the territory of U.S. security partners in East Asia. This system is based on bilateral security agreements. Because of the significant security dependence of Asian partners on the United States, and the virtually immeasurable military and economic dominance that it enjoys, Washington has a certain freedom of action. From the northwest, Russia and China are hanging over this East Asian Arc of Instability. They coordinate their activities mainly in Central Asia in the framework of the Shanghai Cooperation Organization (SCO). The SCO is the mechanism that in form looks most like a regional security system. But its impact is minimized because of its limited membership and limited functions, and because the parties concerned know that it reduces their freedom of action. The disputes along the East Asian Arc of Instability are so complex that actors require more maneuverability. At the same time that Russia and China coordinate in Central Asia, therefore, they pursue foreign policy in East Asia without visible cooperation.

The East Asian Arc of Instability reflects historically established fault lines, which are sources of friction in regional relations. When geopolitical players try to move these lines, it is usually a cause for immediate reaction by competitors of informational, diplomatic, economic, financial, and/or military character. These territorial disputes have huge destructive potential and can turn the whole region into an abyss of long range destabilization. Therefore the East Asian Arc of Instability plays a very important role in the contemporary Great Game in East Asia.

Russia’s interests

Among these potential hot-spots, Russia has been directly involved in a territorial dispute with Japan, has common land borders with China and North Korea (with whom border disputes have been settled), and have maintained traditionally close relations with China, both Korean states and Vietnam.

Russia rejects Japan’s demands to “return” the Kuril Islands; Japan’s claims to the islands are not accepted by any responsible political force in Russia. The Soviet Union established control over the Kuril Islands in 1945 according to Yalta agreements which were signed by Winston Churchill, Franklin Roosevelt and Joseph Stalin. Control over the Kuril Islands was the condition of Soviet participation in the war against Japan in 1945, but as soon as Japan’s Kwantung Army was defeated in Manchuria the United States unilaterally revised its position on this issue.

Dmitry Medvedev’s recent visits to the Kuril Islands, in 2012 and 2010, were described in Tokyo as “inexcusable rudeness.” However, Japan has territorial disputes with all its neighboring countries, legacies perhaps of its colonial expansion in the late 19^th and early 20^th centuries, and its defeat in World War II. These territorial claims, which would seem to have been settled by wars and treaties, create fundamental conditions for long-term instability in the region. Japan, as the regional actor most dependent on energy and overseas resource supplies, will be the party most affected by this instability.

Regardless of 20^th century wars, Russians generally consider Japan to be a great culture and there is great interest in it. Russia was a major donor to recovery efforts after the March 11, 2011 Tohoku disaster. Instead of confrontation, therefore, Moscow proposes to concentrate on mutually advantageous economic cooperation, to develop closer trade and humanitarian ties between Russia and Japan, including in the energy field. The most suitable solution of this problem is the common use of the Kuril Islands under Russian sovereignty. Moscow believes that reconciliation will be of great benefit to Japan and will also make a considerable contribution to peace and security in the region.

Since the resolution of its border disputes with China around the turn of the 21^st century, Moscow perceives that the general situation along the East Asian Arc of Instability can be described as “stably unstable.” It seems that the established status quo is more or less acceptable to interested parties and that in the foreseeable future we will see continued exchange of diplomatic notes between Russia and Japan, saber rattling on the Korean peninsula, and latent tensions in the Taiwan Strait. These are the remaining major flash points that were left unresolved after the Cold War. The more “minor” points of contention, in the East and South China Seas, deserve more attention as they represent an emerging challenge to the established status quo in the East Asian Arc of Instability. Antagonistic contradictions between first and second world powers close off potential avenues for compromise. Hidden and open struggles for a new regional order are inevitable.

The post-Cold War order that exists today is based on U.S. economic and military dominance and containment of the Soviet Union. East Asian countries now play a much stronger role in world affairs than during the Cold War and the Soviet Union has ceased to exist, but the East Asian security architecture is almost the same. During the last 30 years China has shown especially remarkable growth and is ready to build new regional order, one that corresponds more closely to the new state of affairs.

It is obvious that the strengthening of China’s economic and political role and the tendency of the United States to preserve its primacy in the region have created strong opposing pressures which now seriously deform the region. This intensification from both outside (the United States) and inside the region (China) is helping to activate previously “sleeping” territorial claims and regional conflicts.

China’s policy in the region is the most predictable and the recent warning in its official People’s Daily newspaper to American officials to “shut up” about territorial disputes in the South China Sea was forecasted by Samuel Huntington in long-ago 1996, in his book The Clash of Civilizations,[1] where he described the initial phase of the conflict over South China Sea: “The Chinese warn the United States to stay out.” Contemporary China-U.S. relations and the role of Vietnam factor in the Far East are developing in a way that is eerily similar, in some respects, to the model imagined by the famous American scholar.

Recently military experts in China have worked out a concept of two “island chains” along China’s maritime perimeter. Areas within the First Island Chain include Taiwan, the Tonkin Gulf, South China Sea and the Ryukyu Islands; areas within the Second Island Chain include Japan and the Philippines and outward to Guam. The U.S. Department of Defense estimates that China’s navy “appears primarily focused on contingencies within” these two island chains.[2] It is interesting to note that China’s strategic calculations in this regard are to some extent similar to those behind Japan’s Greater East Asia Co-Prosperity Sphere.

From Beijing’s point of view, which stipulates that a regional power should have its own zone of dominance and secure vital sea lanes for hydrocarbon resources, such a strategic plan seems quite logical for long term security and supply of resources. The troubled situation in the Middle East motivates China to act more vigorously day by day. If China managed to establish control over hydrocarbon and mineral recourses in the South China Sea, its dependence on oil and gas imports would decrease and its influence on both smaller countries in Southeast Asia and the larger countries in Northeast Asia would increase. It seems that this China-centered transformation of the Cold War security structure is not acceptable to many countries in the region: some of them have tried to balance against Beijing by relying more on Washington.

For example, Vietnam traditionally claims sovereignty over the Paracel and Spratly Islands. In Vietnam, China’s concept of the “first island chain” is colloquially called the “bull’s tongue line” (đường lưỡi bò), and political cartoons depicting the removal of China’s “bull’s tongue” in the South China Sea are very popular. China’s rise and inevitable following expansion is viewed by Vietnamese as another chapter in a two thousand years history in which Chinese expansion proved to be threatening to Vietnam’s sovereignty. Chinese expansion is considered in terms of traditional Chinese culture as a “cán shí” or “silkworm eating” policy,[3] which could be translated literarily as “to eat the land of neighboring countries as silkworms eat mulberry leaves.” This perception is manifested today in Vietnamese objection to Chinese claims in the South China Sea, and the objections are not based only on pure nationalism. Control over oilfields on the continental shelf along Vietnam’s coast are also very important to Hanoi’s economic development plans, and is at odds with China’s plans for strategic expansion in the South China Sea. Such a situation activates in Hanoi a stratagem of “befriend a distant state while attacking a neighbor.”[4] In this context the United States is viewed in Hanoi as a natural alliance partner. At the same time, however, in order to maintain space to maneuver Hanoi has recently proposed to Moscow very favorable conditions for a return to the Cam Ranh Bay naval base. Each of these proposals deserves careful scrutiny.

At first glance, Russia would seem to be far removed from this dispute and should only “watch the fires burning across the river.”[5] But in fact, Moscow regards China and Vietnam as its closest strategic partners in East Asia, and has important interests in gas and oil exploration and output in East Asia in general and in the South China Sea in particular, so a possible conflict between China and Vietnam in this area is considered a worst-case scenario. Furthermore, in the 20^th century Russia spent a lot of time and resources helping to restore the real sovereignty of these countries. Because it is not directly involved in the current territorial disputes, Russia has the most space to maneuver in this environment.

During the last three years, Beijing has created very favorable conditions for the United States to strengthen its role in Southeast Asia. The more Beijing has pressed Vietnam and others, the more influence Washington has obtained along China’s southern “underbelly.” Washington recognized this long-awaited opportunity to draw these small countries―which are offended by big power and concerned about China’s rise―closer to it and has skillfully taken advantage. But Hanoi cannot fully rely on the United States, because Washington provides at least rhetorical support to dissidents, religious and ethnic minorities, and anti-communists inside and outside Vietnam. Hanoi considers these groups to be hostile forces and even as terrorists, involved in anti-state activities.

Despite the stakes for Russia, so far Moscow is not overly concerned about China’s increasing activities in the South China Sea. Instability here does not directly affect Russia’s interest, and Russia has more pressing security issues in other areas that demand its attention. Also, despite occasionally heated rhetoric, for now the general security situation is under control and Russia believes that all related parties are wise enough to avoid confrontation.

Moscow is much more concerned by Washington’s strategy to strengthen its military presence and expand anti-ballistic missile systems defenses in the Asia-Pacific. Leading Russian (and Chinese) policy-makers and experts do not believe that the American-led missile defense system in East Asia targets Pyongyang. These plans are considered mainly as a form of power projection vis-à-vis Moscow and Beijing.

The general security situation in East Asia has the potential to become more and destabilized. It is difficult to ignore that a lot of potential flash points in East, South and Central Asia are situated around China. Each of these flashpoints has huge destructive potential. It could be particularly dangerous if outside actors provide direct or indirect support to one side or another in these flashpoints, and keep them simmering. These flashpoints could be considered as a “ring of instability” around China, which directly or indirectly can also affect Russia. In this context it is important to note that the Russian-China border is the most peaceful part of China’s perimeter.

According to official declarations of high-ranking Russian officials, current relations between Moscow and Beijing are at an unprecedented high level. The two capitals coordinate their activities in Central Asia as well as in the Middle East, mainly within the frameworks of the United Nations and the SCO. Russia and China believe that their cooperation in the security field is a very important contribution to peace and stability in Eurasia.

So far Russia, which because of its physical size is the only Euro-Asian-Pacific country, has not yet fully utilized the benefits of its favorable geographical disposition. It is well known that Russia is one of the world’s biggest gas and oil exporters. East Asia has been a net hydrocarbon consumer for many years and on the whole is dependent on energy resources from the rather unstable Middle East; these resources must also travel through the critical chokepoint at the Strait of Malacca (not to mention the Strait of Hormuz). These fundamental features define a major opportunity for Russia and East Asian countries to collaborate in pursuit of mutual interests. Moscow proposes to its partners to develop such large scale trans-regional transport projects as a sea route in the Russian Arctic, a trans-Korean railway and pipeline, and a tunnel under the Bering Strait.

In one of his first acts after his reelection as president on May 7, 2012, Vladimir Putin signed “Executive Order on Measures to Implement the Russian Federation Foreign Policy.” According to this document: “Instructions pertaining to the Asia-Pacific region, in particular, concern broader participation in regional integration processes with the aim of promoting accelerated socio-economic development of Eastern Siberia and the Far East; deepening equal, trust-based partnership and strategic cooperation with China, strategic partnership with India and Vietnam, and developing mutually beneficial cooperation with Japan, South Korea, Australia, New Zealand and other key nations in the Asia-Pacific region.”[6]

In this context, one of the main goals of Russia’s foreign policy in East Asia is to preserve its own national interests, to develop large-scale cooperation with main global and regional actors and to avoid confrontation and an arms race.

Russia’s main task in East Asia is to find possibilities for integration into the existing system of economic growth in East Asia. Russia’s traditional fields of action are: energy policy, military-technical cooperation, and ability to alter the balance of forces in the region. The last factor is not yet fully used in Moscow’s foreign policy. Russia has a real opportunity to change the balance of forces in the region by delivering advanced weapon system to its partners, but this tool should be used very cautiously in order to preserve peace and stability.

[1] Huntington S. The Clash of Civilizations. New York. Simon and Schuster, 1996. P. 312-313.

[2] U.S. Department of Defense, “Annual Report to Congress: Military and Security Developments Involving the People’s Republic of China, 2011,” p. 23.

[3] In Vietnamese, “tằm thực”; in Chinese, “蚕食.”

[4] In Vietnamese, “viễn giao cận công”; in Chinese, “遠交近攻.”

[5] In Vietnamese, ”cách ngạn quan hỏa”; in Chinese, “隔岸觀火.”

[6] President of Russia, “Executive Order on measures to implement foreign policy,” May 7, 2012, 18:20. http://eng.kremlin.ru/acts/3764

Authors

Vladimir N. Kolotov

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