Thursday, August 31, 2017
Indonesia, China, Gold and ISIS
Indonesia, China, Gold and ISIS
At first glance it’s a strange title for an article. What does Indonesia, China, Gold and the Islamic State or ISIS have to do with one another? That might begin to become clearer when we look more closely at the foreign economic policy actions of the Indonesian government of President Joko Widodo.
On January 14, an Indonesian terrorist group connected with ISIS in Syria claimed responsibility for a series of suicide bombings and terror attacks in Jakarta, killing two civilians and ending in the death by police of five terrorists. The attackers apparently were not the most professional. The first was a suicide bomber who entered a Starbucks café, detonated the device killing only himself, along perhaps with a few thousand calories worth of Starbucks muffins and cups of Latte. The terror attacks were the first in Indonesia since 2009.
Now, if we take the basic fact that all major international terrorist organizations must have at least one or more state sponsors to remain in existence, and that the blood from ISIS atrocities lies on the hands of the CIA, the Turkish government of Recep Erdogan, and on Saudi King Salman and his princeling Salman, with some drops finding their way to the hands of Israel’s Netanyahu, we must ask what it is that suddenly, after a calm of almost seven years, makes Indonesia a terror target?
China and Jokowi
Joko “Jokowi” Widodo, Indonesia’s president, who was voted in October 2014 for his appeal as a clean, new face in the traditionally corrupt Indonesian politics, has followed a mixed course, seemingly trying to be friends with all, at least in foreign relations.
To please Washington he agreed to the disastrous Trans-Pacific Partnership trade swindle. He backed Obama’s agenda on the fraudulent Global Warming. But he also has taken very concrete steps to improve relations with China, and here is where it becomes interesting.
Since a CIA-backed military coup in the late 1960’s, Indonesia has had a mixed relationship with Beijing. The CIA backed a military coup in 1967 to oust the nationalist leader of the revolution that overthrew Dutch rule, Sukarno, placing in power General Suharto, whose army launched mass slaughters of hundreds of thousands of pro-Chinese communists. With the US-backed coup regime of Suharto, diplomatic ties to Beijing were cut, a state of affairs lasting until 1990. The Suharto coup had a lot to do with controlling Indonesia’s oil and locking her into America’s Asian sphere of influence.
Today Indonesia, under the populist Jokowi as he is called, is concerned with developing the nation economically. That, in today’s Asia, inevitably means working with China. And this is precisely what Jokowi has been also doing.
Financing Major Infrastructure
Over the past decade, Indonesia trade with China has assumed growing importance. In November, 2014, newly elected President Joko Widodo paid his first official overseas visit. It was to China where he met with China President Xi Jinping and Prime Minister Li Keqiang. Then in April 2015, President Xi Jinping met in Bandung with Jokowi at the commemoration of the 60th anniversary of the Asian-African Conference.
By 2010, China had overtaken the US as Indonesia’s second-largest export destination after Japan. China has also become Indonesia’s most important source of imports. Now, under Jokowi, Indonesia has recently turned to China to finance major domestic infrastructure projects to link the most important of the country’s thousands of islands.
Last October, Jokowi’s government announced that it had decided to accept China’s revised offer to construct a major high-speed rail linking Jakarta to Indonesia’s third-largest city, Bandung. China beat a rival Japanese bid for the project, to cost an estimated $5-6 billion. The railway will be completed by 2018.
The Jakarta-Bandung rail project is a part of President Xi’s economic diversification strategy of focusing high-tech China companies on developing export markets and also of developing the needed infrastructure along China’s One Belt, One Road routes across Asia and Eurasia. Good relations with Indonesia is also important for China in developing stronger ties with the ASEAN countries of southeast Asia, where Washington is hard at work trying to stir friction against China’s presence in the islands of the South China Sea.
For the Jokowi government it’s clear that they see China as the essential partner in helping meet the goal of a vast infrastructure investment plan. Japan is de facto bankrupt.
The Jakarta government needs to invest an estimated $740 billion in the coming five years for infrastructure development projects to achieve the targeted 7%-a-year growth in its economy. The government expects 5.8% growth this year, lower than the 6.3% target. Jokowi has also requested Chinese president Xi Jinping increase involvement of Chinese state companies in developing Indonesia’s infrastructure. He also proposed a bigger role for Indonesia in the China-led Asian Infrastructure Investment Bank (AIIB).
The golden hills of Papua
The Jokowi government needs to get Chinese financing, a lot of it to reach its significant infrastructure targets, seen as bringing the huge economic potential of the country of some 255 million. Now things get interesting. To collateralize infrastructure borrowing from China, Jokowi’s government is looking more closely at a project high in the mountains of Papua. There, inside Indonesia, lies the world’s largest gold mine. It also happens to have the world’s largest reserves of copper. One beautiful collateral to use to borrow the estimated $85 billion needed from China to get the further infrastructure moving. Only problem is that the gold is controlled by an American multinational, not Indonesia.
The Papua gold mine known as Grasberg, is situated some 14,000 feet high in the Sudiman Mountain Range, in the Indonesian part of the New Guinea island. It is not only the world’s largest gold mine. It is also the world’s most profitable gold mine. Since 1989 the mine has been mined by a very well-connected corporation now based in Phoenix, Arizona called Freeport McMoRan.
Freeport McMoRan’s Grasberg gold mine is the world’s largest and the most profitable gold mine
Freeport McMoRan, a firm that in the past has had Rockefellers, Whitneys Stillmans, Goodrichs and Lovetts on its board, is one of the most influential of global US corporations. It got control of the mining rights for Grasberg in the usual way for such giant US mining multinationals—by hook and crook, fraud and bribery. A 2005 New York Times investigation revealed documents showing that from 1998 through 2004, Freeport gave Indonesian military and police generals, colonels, majors and captains, and military units, nearly $20 million to insure “security” at the huge Grasberg mine. The military and police were used to put down protests and riots by locals and workers protesting the unchecked environmental toxins resulting from Grasberg. To get mining rights at the start Freeport chairman James R. Moffett reportedly made Indonesian President Suharto bribes that made him rich. Freeport has become one of the largest sources of revenue for the government.
Freeport has a brutal record at Grasberg. On October 17, 2011 the company halted operations in Papua amid a strike that led to a deteriorating security situation and intensified calls for Papuan independence. Seventy percent of Grasberg workers joined the strike, appealing for higher pay, blocking roads, clashing with police and cutting the pipeline in several places.
Now, the new Jokowi government has looked more closely at the terms of Freeport McMoRan’s lease on Grasberg, a lease expiring in 2021. The government is demanding that Freeport give it a share double as large as the 10% it holds today, up to 20%, to be finally raised to 30% in 2019. As well it demands more revenue from the mining proceeds and wants the mining company to comply with a new Mining Law, which limits concession areas for miners, in addition to the greater government ownership. The company valued the Grasberg asset at a total of $16.2 billion. That is amusing to say the least. The company admits in another filing that it will invest $18 billion to turn the Grasberg complex from open pit to underground mining in late 2017. Invest $18 billion in a property only worth $16.2 billion?
According to Indonesian sources, geological estimates are that Grasberg holds a total gold of possible 16,000 tons. That would be fully half of all world official central bank gold holdings in that one mine. At today’s price of gold at $1,107 a troy ounce, that translates into a gold mountain worth of some $516,000,000,000, or more than half a trillion dollars. That’s money some would say worth killing for.
Now this all is hardly proof that Freeport McMoRan went and hired some “ISIS” suicide bombers to wreak chaos and death in Indonesia’s Jakarta capital as a warning. It is worth noting, nonetheless, that the very same day Freeport published its offer for the settlement of the 2021 Grasberg mine lease renewal, bombs went off in Jakarta.
In my humble opinion, were I Jokowi, I would look for links between Grasberg and the Jakarta bombings. Or better yet, find another reason to not renew the Freeport lease in 2021 on grounds of massive bribery, illegal environmental degradation and such that is already known and proven. That 16,000 tons of gold would collateralize the lion’s share of Indonesia’s planned infrastructure. And with China rapidly becoming the world gold trading hub, the Beijing-Jakarta economic friendship could have a golden future.
https://journal-neo.org/2016/02/14/indonesia-china-gold-and-isis/
https://journal-neo.org/2016/02/14/indonesia-china-gold-and-isis/
Monday, August 28, 2017
Chinese universities tighten ideological control of teaching staff
Chinese universities tighten ideological control of teaching staff
Seven top colleges set up departments to oversee the political thinking of teachers after government inspectors criticise institutions’ ideological ‘weakness’
PUBLISHED : Monday, 28 August, 2017, 2:46pm
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A group of China’s top universities have set up Communist Party departments to oversee the political thinking of their teaching staff after the colleges were criticised amid the government’s tightening ideological control on campuses.
The Central Commission for Discipline Inspection, the party’s powerful disciplinary watchdog, last week published “rectification reports” on eight top-tier universities it inspected this year.
Seven have set up a “teachers’ affairs department” under their Communist Party committees to improve “ideological and political work” among teaching staff.
The inspection teams toured 29 of the best universities across mainland China, including the prestigious Peking University and Tsinghua University in Beijing, for a “political check-up” earlier this year.
Some universities were criticised after the months-long inspections for their weakness in promoting ideology, while party committees were also chastised for weak leadership and failing to toe the party line.
Dalian University of Technology in Liaoning province has pledged to make annual training plans to improve the ideological and political education of teachers, according to its rectification report.
Beijing Normal University said the “virtues” of teachers, which include their ideological and political thinking, were included in their appraisals this year.
All universities and colleges in China are under the control of a party committee, which oversees party affairs on campus and the running of the schools.
Most committees already have two departments supervising undergraduate and graduate students to monitor their ideological and political thinking.
The inclusion of teaching staff for supervision under the party committee is the latest move by the authorities to tighten ideological control on campuses.
Universities were ordered four years ago to steer clear of seven topics while teaching, including universal values, press freedom and civil rights.
Outspoken professors who have openly criticised the communist authorities or its leaders have been punished or silenced.
Deng Xiangchao, a communications professor at Shandong Jianzhu University, was forced to retire in January after criticising Mao Zedong publicly on the eve of the anniversary of the late leader’s birth.
Some more liberal universities have already moved to tighten control of their teaching staff to toe the party line.
Many universities – as well as the seven inspected – have set up teachers’ affairs departments this year, including Shanghai Jiao Tong university and the Central University of Finance and Economics in Beijing.
Peking University was the first to set up a similar teachers department in 2015.
Twenty-one other universities inspected by the commission have yet to release their “rectification reports”.
Tsinghua University did not mention the party department in its report, but said it had set up a leading group on teachers’ ideological and political work headed by its party secretary.
The party’s ideological control of higher education has intensified since President Xi Jinping took power in late 2012.
Xi vowed at a high-level meeting last year to turn campuses into “strongholds of the party’s leadership” to ensure orthodox Marxism dominated the thinking of academics and students.
Here Is What China Wants to See Happen in Asia (and America May Not Like It)
Here Is What China Wants to See Happen in Asia (and America May Not Like It)
August 28, 2017
The fast development of China’s capacity to project power overseas has raised serious concerns and anxiety in Southeast Asia. Virtually all countries in the region were once in the hands of imperialist powers and went through brutal struggles for independence. It is only natural for them to fear a fast-growing China, a country for which the nature of state power remains undetermined despite Beijing’s ‘peaceful rise’ rhetoric.
Thus, Southeast Asian nations welcome, to varying degrees, US military presence in Asia. This is not just because the United States has been widely deemed a benign hegemon. Many in Southeast Asia also see US presence as an effective way to maintain regional strategic balance.
In contrast, China is often seen as a revisionist power that intends to reshape the regional order and security arrangements. Its assertive behaviour in the South and East China Seas seems to confirm Southeast Asian perceptions that China is trying to reinvent the regional order on its own terms.
What kind of Southeast Asia, then, is desirable for China, given its national aspirations and interests?
First and foremost, it does not want to see an anti-China coalition in the region, especially one led by the United States. Second, China does not want a politically divided and unstable Southeast Asia. That would provide convenient justifications for an outside power — like the United States — to intervene in Southeast Asian affairs.
From China’s perspective, any substantial involvement of a ‘foreign power’ in its neighbourhood would be seen as a potential threat. As history has shown, political turmoil in Southeast Asia can provoke waves of anti-Chinese activity, where overseas Chinese become scapegoats for internal socioeconomic conflicts. Not only would this pose a diplomatic challenge to Beijing, but anti-Chinese activity overseas could also stir up nationalistic resentment in China, undermining political stability at home.
An economically underdeveloped and fragmented Southeast Asia is not desirable for China, the largest trading nation on earth. As a beneficiary and leading promoter of economic globalisation, China can gain enormously from a prosperous Southeast Asia. That’s why China offered tremendous help to the Southeast Asian countries during the Asian financial crisis of 1997–98. As regional economic development revitalised, China’s trade with ASEAN surged, increasing by over 880 per cent between 2000 and 2015.
Obviously it is unrealistic to expect China to ‘win over’ Southeast Asia entirely. Instead, Beijing’s top priority is to prevent the region as a whole from siding with the United States and its ally Japan.
The United States simply could not sustain a massive confrontation with China in the region without a Southeast Asian country willing to provide a solid base for military operations. Provided Southeast Asia remains neutral in the US–China contest, China can eventually prevail in the region, given its rapidly growing economic and political weight and geopolitical proximity. A politically united and neutral Southeast Asia therefore serves China’s interests.
Meanwhile, China has endeavoured to promote economic integration with Southeast Asia, a focal area in China’s Belt and Road Initiative (BRI). As President Xi Jinping has pointed out, joint economic development through the BRI can help to develop common ground between China and Southeast Asian countries, where everyone has a stake in maintaining regional peace and stability.
Yet Southeast Asian countries remain unconvinced that China’s approach would bring about peace and prosperity in the region.
Territorial disputes in the South China Sea have become the crux of the challenges to China’s approach towards Southeast Asia. Despite repeated statements that the United States does not take sides in these disputes, the Obama administration seized on opportunities created by emerging tensions and intervened, citing its interest in maintaining regional peace and freedom of navigation. Southeast Asian countries welcomed, to varying degrees, US involvement, enabling Washington to effectively take the strategic initiative and put China on the defensive in its own neighbourhood.
China’s leaders have keenly realised that a confrontation with the mighty United States would not serve China’s interests. While Beijing tends to be accommodating with Washington, it strives to increase its military capabilities in the South China Sea. The aim is not necessarily to prevail in a military confrontation, but to increase the costs the United States would have to bear in confronting China such that Washington would rather drive a bargain than go to war.
There is also the competition between China and the other claimant countries in the South China Sea. Like China, these countries have vital stakes of national security and sovereignty in these disputes. How the disputes are solved could substantially affect their economic development, as China aims to offer incentives to countries which cooperative and put pressure on those which are defiant. Here the asymmetry of force is overwhelmingly in China’s favour and time is on China’s side.
China wants to keep these two games separate and is firmly against ‘internationalisation’ of the South China Sea disputes. Instead, it has adopted a two-track strategy, taking a multilateral approach to manage tensions and promote joint development of contested territories, while insisting on a bilateral approach to resolving the disputes.Meanwhile, Beijing has skilfully manipulated the ‘friendly countries’ in Southeast Asia to prevent a unified ASEAN position on the issue. The Sino-Philippines rapprochement and improving relationship with Malaysia and Vietnam suggest this strategy is already working.
Still, given the rapid, ongoing changes in strategic balance throughout the region, it remains to be seen whether China’s strategic diplomacy in Southeast Asia can really deliver what Beijing desires.
Huang Jing is Lee Foundation Professor on US–China Relations at the Lee Kuan Yew School of Public Policy, National University of Singapore.
This article originally appeared on East Asia Forum and is in the most recent edition of East Asia Forum Quarterly, ‘Strategic diplomacy in Asia’.
Snowy Hydro Scheme's SMEC snapped up by Singapore's Surbana Jurongvia Email
Snowy Hydro Scheme's SMEC snapped up by Singapore's Surbana Jurong
The Snowy Mountains Engineering Company expects to triple its Australian workforce and compete for more urban infrastructure projects after being acquired by Singaporean consultants Surbana Jurong for $S400 million ($393 million).
SMEC, which was established by the government in 1949 to build the Snowy Mountains Hydroelectric Scheme, was privatised in 1993 and has subsequently been owned by employees, meaning the sale will create a raft of new millionaires. The scheme was built to generate power by collecting water from melting rain and snow and took 25 years to build, attracting thousands of migrants to Australia to work on the project.
The company began sale talks with Surbana, which specialises in urban planning and design and is owned by Singapore's state investment group Temasek, in December.
"We have a fantastic global footprint and therefore we have been on many people's radar," said SMEC chief executive Andy Goodwin, who will remain with the company. "But we've been reasonably choosy in the partner we've looked for."
Surbana acquired SMEC to strengthen its capabilities in Asia, particularly Singapore and China, said Surbana CEO Wong Heang Fine.
"A lot of governments in Asia are pushing out infrastructure projects to improve the lives of every citizen, so there are tremendous opportunities," Mr Wong said, adding that the aquisition would enable the group to pursue $160 million of international projects over the next 18 months.
SMEC, which will be a subsidiary of Surbana and retain its management team and brand name, plans to use the Singaporean group's resources to bid for more urban renewal projects, such as the redevelopment of neighbourhoods around Sydney Harbour.
"With the skills that Surbana brings, we believe we would be well positioned to capitalise on that kind of work," Mr Goodwin said. "There are also new healthcare facilities, schools and high rises that we haven't been able to do in the past as it hasn't been in our sweet spot."
SMEC, which has 75 offices around the world, has traditionally specialised in transport, energy and water projects.
Only 1100 of SMEC's 5800-strong global workforce are based in Australia, but Mr Goodwin forecast the number of Australian employees would reach about 3000 over the next five years if it wins more projects, and that local employees would also have more international opportunities.
Mr Wong said the acquisition would not lead to any job cuts.
SMEC had 587 private individual shareholders when it transferred all its shares to Surbana in exchange for cash on July 25, with 99.96 per cent of shares held voted in favour of the sale.
Surbana, which has 4000 employees, has been expanding through acquisition, last year acquiring Singapore group KTP Consultants and China's Sino-Sun Architects & Engineers. It also took a 20 per cent equity stake in China's CITICC (Africa) Holding Limited, an investment group set up between the World Bank's International Financing Corporation and Chinese engineering group CITIC Construction Co.
Mr Wong said more acquisitions were likely. "We are constantly on the look out, and in another six months you will probably hear more news from us because there are so many things we are doing at this moment in time."
The backing of Temasek, which has some $S242 billion of investments globally, could also help the group secure financing for projects, he said.
"We are looking at the funding schemes that we can put in place to help some of our clients to fulfil their dreams and obviously we will help our shareholder Temasek to participate in those schemes," he said.
The takeover was approved by the Foreign Investment Review Board in June.
SMEC closed its Cooma office, which was established as a base for the Snowy Mountains scheme – Australia's largest engineering project – in April because it had only 11 staff left in the office, Mr Goodwin said.
SMEC plans to donate a research laboratory that was built in the 1970s to the community so it can be retained as a museum, he said.