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East Asia Forum

PNG’s new prime minister: Peter O’Neill

Author: Bill Standish, ANU The opposition’s nomination of Works Minister Peter O’Neill as Papua New Guinea’s new prime minister on 2 August came as a shock to many. There had been clues in some earlier press comments. Last year, O’Neill and the opposition agreed he would become the next prime minister if he crossed the floor before the mid-year challenge. He didn’t.  Although Deputy Prime Minister Sam Abal was acting prime minister during Grand Chief Sir Michael Somare’s continuing absence in Singapore following heart surgery in April, the opposition succeeded in declaring the prime ministership vacant without following constitutional procedures. The National Alliance led government’s collapse arose in three phases. First was Somare’s coalition’s gradual loss of public support over the last few years on the back of failing government services across most the country and allegations of corruption over the dispersal of development funds. Second was the increasing frustration among opposition members with Somare’s compliant speaker, Jeffrey Nape, who for five years refused to hear the opposition’s procedural points or allow votes of no confidence. Prolonged and unconstitutional adjournments of Parliament also meant that even government members could not monitor (and only rarely question) the ministers. And third was the pernicious rivalry within the coalition and the National Alliance Party itself. The Supreme Court’s 2010 ruling on the political party ‘integrity law’, known as OLIPPAC, allowed MPs to not only to leave their parties but even to vote against their own party . In the current sitting, the Speaker accepted the opposition’s claim that the prime ministership was vacant. Refusing to hear the angry protests of key government ministers, the Speaker allowed a vote to fill the vacancy. Some 48 members of the coalition, including the majority of the National Alliance, crossed the floor, giving O’Neill a vote of 70 to 24. While the (former) government challenged the constitutionality of this ‘parliamentary coup’, on 5 August the National Court accepted the fait accompli , and implied the old government had also accepted it by voting in Parliament . Abal will challenge this ruling in the Supreme Court. The media had focused on the divisions triggered since Somare promoted Abal to Deputy Prime Minister in December 2010, replacing Don Polye, who held aspirations to succeed Somare. Although a respected and honest politician, Abal made fierce enemies. He sacked William Duma, whose management of licensing under the Petroleum portfolio and the Liquefied Natural Gas (LNG) project had been under serious questioning. He also sacked the man now PM, Peter O’Neill, from the Treasury and Finance portfolios. Tensions grew among government ministers. Public attention was focused on the Polye–Abal feud within Somare’s party, and it became clear there would be some form of challenge to government. Under the Constitution, a vote of no confidence had to be initiated within days of parliament sitting on 2 August, but who would be the new PM? The issue came to a head at an Opposition meeting on 1 August, and it seemed that Polye had majority support among the alternate government camp for the top job. However, he reportedly baulked at the position — perhaps to avoid in-fighting with Abal, from his own province. O’Neill seized the moment, positioning himself for his formal nomination as Prime Minister. Polye is now his treasurer. Although Peter O’Neill has not escaped controversy, he has gained a reputation among Treasury officials as a highly competent and professional minister. As treasurer between June 2010 and June 2011 he arranged overdue pay rises for public servants, proclaiming there was no place for ‘commissions’ to release funds, arguing: ‘If we don’t say no to corruption the country will be destroyed’. O’Neill holds an honours degree in accountancy and worked for an Australian firm before making his fortune in real estate. Former PM Bill Skate made him head of Pacific Finance, which managed the state-owned enterprises: the Motor Vehicle Insurance Corporation, the PNG Banking Corporation and the National Provident Fund (NPF superannuation), all of which nearly collapsed a few years later. The Commission of Inquiry into the NPF failure reported that, in 2002, O’Neill had benefitted from suspect transactions, and should be investigated for perjury. He appeared at the Waigani Committal Court in 2005 charged with misappropriation. The case was dismissed for lack of evidence. Elected to Parliament for Ialibu in 2002, O’Neill was appointed Public Service Minister, but then became opposition leader in May 2004. From 2003 O’Neill proposed, to the dismay of many public administrators, that District Authorities be created, effectively giving MPs control over government activities in their electorates, including the public servants . O’Neill is also said to be preparing detailed policies for his People’s National Congress Party in 2012. As Prime Minister, O’Neill must manage major constitutional issues in the next 8 months, including setting the number of electorates for the 2012 House, creating two new provinces and confirming the existence of seats for provincial governors, and deciding whether to support provincial seats reserved for women candidates only. Peter O’Neill is a strong supporter of mining and the LNG project, but also shows clear signs of economic nationalism. While Treasurer, he argued that sovereign wealth funds to handle revenues from the LNG projects should be established overseas but controlled onshore. Since his election to Prime Minister, O’Neill has hit the right buttons. He stated that he will not tolerate ‘arrogance’ in government (a dig at PM Somare’s son Arthur?) and he will deal with the ‘massive corruption’ in PNG. O’Neill also wants to promote transparency in government. But his interim ministry comprises several key Somare ministers alongside the Somare government’s strongest critics. Many have asked how governance will change, implying — as was said when Morauta replaced then Prime Minister Skate in 1999 — that: ‘This will be a new game of cards, but with many of the same players’. Bill Standish is Visiting Fellow at the School of Culture, History and Languages in the College of Asia & the Pacific at The Australian National University. Sir Michael Somare and PNG politics When the Grand Chief is away: Papua New Guinea’s big-man politics Japan’s lame duck prime minister

Ministry to Set Up Thai Fruit Market Network

The Commerce Ministry plans to proceed with creating a domestic market network as well as an export market for Thai fruit. Commerce Ministry Permanent Secretary Yanyong Puangrat said after presiding over the third Northern Provinces Fruit Fair at the Century Department Store that he is confident the next government will help the Thai fruit trade develop further.

‘Green’ China needs to rethink its energy and carbon policies

Author: Yuhan Zhang, Columbia University While many Chinese pundits and scholars are applauding for China’s Twelfth Five-Year Plan (2011-2015) as a milestone for China’s green revolution, the country’s march to low energy consumption and low carbon economy is not going to be a smooth or straight one. China’s five-year plans, albeit strategically sound, are not likely to change the short- and medium-term energy and climate landscapes. Challenges will remain. In the last decade China’s economic growth has skyrocketed, expanding at around 10 per cent annually in real terms. But China’s soaring appetite for energy and increasing greenhouse gas emissions, incurred by its rapid development, suggests China’s growth is unsustainable from these perspectives. In the foreseeable future, much more oil will not only be used in industry and agriculture but also by the phenomenal expansions in passenger vehicles. Increasing world oil prices will also add to already elevated inflation in China, which worries China’s leadership. China is also expected to continue its coal-dominated energy portfolio since coal is the cheapest and most readily available bulk energy source in the country. Although China has shut down a large number of small-sized old coal-fired plants, and built some new ones using the best coal technologies available, many of China’s power stations still burn coal with inefficient, outdated technologies, which might result in energy consumption surge and carbon emissions. Moreover, China’s energy consumption and carbon emissions are influenced by its gross domestic growth. If China could limit its economic growth rate to 7 per cent over the next five years, then energy consumption and carbon emissions would be controlled significantly. Still, China’s actual economic growth rates have always exceeded targeted ones, so energy consumption and carbon emissions will likely increase more than expected. Worse yet, China still does not perform very well in collecting and reporting energy and carbon emissions data, despite attempts to improve their monitoring of energy use and emissions. There are two major reasons behind such problems. At the national level, official data records suffer from periodic revisions from a variety of agencies in China, leading to inconsistency and uncertainty. At the local level, Chinese local officials sometimes misreport data or inhibit transparency so as to please higher-ups or make for more favourable employment evaluations. Notably, among all of China’s energy use data, coal is well known as the least accurate, partly because China has more than 1,100 counties with operating coal mines. Take coal data in 2002: after two revisions,  the final consensus increased coal consumption by more than 9.2 per cent from the original estimate. Over the long term, China’s best bet is to scale up clean technology development and deployment — particularly solar, wind, electric vehicles, carbon capture and storage, and biofuels. Increasing non-fossil energy to 11.4 per cent of China’s total energy mix by 2015 and to 15 per cent by 2020 is plausible yet insufficient to decrease overall energy consumption and carbon emissions in the next two decades. Notably, China’s current non-fossil energy development strategies rely too much on nuclear power, a troublesome reliance particularly in the aftermath of the Fukushima. In addition, China cannot control or decrease energy consumption and carbon emissions growth without accelerated structural reform. It is best for China to reach the peak of its energy use and carbon emissions in the 2020s rather than 2030s under the business-as-usual scenario. Energy-intensive industry, including steel, cement, chemical, power, transport and manufacturing sectors, is expected to decline significantly as share of gross domestic growth. But the current phase of industrialisation and urbanisation make such changes very difficult unless China’s service sector booms quickly. Finally, China needs to continue to enhance its capacity to collect, verify and report energy use and emissions. China does poorly in monitoring energy data and even worse for carbon data. On the one hand, China should look for a wide array of national and international organisations to collect and report a range of complementary information on China to cross-check the data. On the other hand, China should collaborate with foreign government agencies to obtain know-hows and other relevant skills. If China is to adopt a smart and comprehensive policy portfolio, then only by looking beyond the initiatives of the current Five-Year Plan will it find meaningful solutions. Yuhan Zhang is an International Fellow at Columbia University and a former research fellow at the Carnegie Endowment for International Peace. An assessment of China’s energy conservation and carbon intensity Indonesia climate green paper: towards carbon pricing, geothermal power and regional incentives China’s energy intensity target: On-track or off?

Confucianism and political dissent in China

Author: Ho-fung Hung, The Johns Hopkins University China recently experienced a spate of violent protests in the North and South. Impressed by the scale and intensity of these incidents, some foreign media have portrayed them as preludes to a bigger wave of grassroots resistance that could crack open the authoritarian state. We cannot rule out this possibility, only time will tell; but we should not forget that similar waves of confrontational protests were far from rare throughout the two decades after 1989. In the 1990s and 2000s, the media took a similar line on the plentiful rural tax riots, militant protests of laid-off workers, and confrontations triggered by other sources. They cast them as precursors to a larger-scale movement that could radically change the status quo. But these waves of unrest came and went, and the party-state remained venerated. Accompanying the recent surges of violent resistance — which mostly target local authorities — is the rise of humble petitions in which disgruntled citizens from all over China travel to Beijing to file complaints at the central government office against local governments. These petitioners are usually non-confrontational, and frequently weep and kneel before government offices to seek sympathy from authorities. Explanations for the stability of the authoritarian state, despite escalating social tensions, abound. Many are founded on short-term factors like the extended economic boom and organisational capacity of the Chinese Communist Party. If we look at Chinese history, we find many similar periods in which rising corruption on the part of the state and exploding popular grievances did not generate social upheavals disruptive enough to threaten the existing political order. What they did do was precipitate petitions at the imperial court in conjunction with violent resistance against local officials. In these instances the unrest never spilled over to higher level authorities. In my new book ( Chinese with Chinese Characteristics: Demonstrations, Riots, and Petitions in the Mid Qing Dynasty ) I surveyed thousands of cases of confrontational and non-confrontational protests and their contexts from the mid eighteenth to the mid nineteenth century. I found that similar waves of violent resistance against local governments coupled with humble petitions to the power centre in Beijing, such as the wave in the early nineteenth century, cannot be explained simply by contingent political-economic factors, but had much to do with a deep-rooted Confucianist conception of authority and justice. Under this conception, abused subjects have all right to fight corrupt officials by any means necessary, but they should also count on the emperor as the loving grand patriarch to redress the injustice, just like children abused by their parents should look to their grandparents or lineage elders for paternalist protection. Time and again this attitude brought petitions to the emperor — known as capital appeals or jingkong in imperial times — that shielded the imperial centre from popular unrest, helping the rulers survive major social crises. It should be noted though that this ‘safety valve’ for the central authorities only worked when the subjects generally trusted that their rulers were legitimate and morally righteous. Such trust could disappear easily, sometimes because of rumours about the emperor’s promiscuity, or sometimes because of the emperor’s perceived failure in performing certain critical functions (such as defending the empire against foreign aggressors). Once this trust disappeared, the process of humble petition to the imperial centre could suddenly recede and rebellion spring up in its place. The escalating popular violence against local authorities and humble petition to the central government in the last two decades should be understood in light of this longstanding Confucianist conception of authority. This conception persists despite all the ideological and political revolutions of the twentieth century, and is constantly reproduced in popular legends, local historical dramas and TV series about the imperial past. The perception of the central government is one of a loving grand patriarch who can do justice to downtrodden people and sanction his abusive officials. (It is not an accident that Premier Wen Jiabao once called himself ‘grandpa Wen’ — Wen yeye — in front of the people.) The Party’s actions and circumstances mirror the way a similar perception helped the Jiaqing and Daoguang emperors hold the empire together. This was despite deepening social and political crises in the 1810s through the 1840s, when the Qing defeat in the Opium War finally dispelled all popular trust in the imperial centre. Given all this, we should not expect the growing social unrest today to necessarily destabilise the authoritarian status quo. But we should not be surprised if an unexpected singular event — such as a major economic blunder, a scandal involving  the highest leaders or defeat in a geopolitical conflict — abruptly displaces the popular trust in the central government and precipitates a breakdown of the party-state. Ho-fung Hung is Associate Professor in the Department of Sociology at The Johns Hopkins University. Economic and political transition in China and Indonesia A change in Egypt’s political weather filters through to China Political reform in China: Wen will it happen and Hu will lead it?

US bases in Australia: A step too far

Author: Peter Drysdale, Editor, EAF There is a palpable nervousness in the security communities in countries around the region about China’s rise and what it means strategically. To those who have lived through the early phases of the Cold War, the mood is frankly a mite scary , and without substantial rational base. It is a nervousness based not so much on ignorance of China’s strategic potential in the long term, although there is undoubtedly some of that too, but on ignorance of the interaction between economic, social and political development and, simply, just what is going on in China. This is not, of course, entirely the fault of outside observers, but there is no doubt that they are hugely under-invested in readily available and accessible knowledge of what is actually going on in China, and without excuse. One of the more hairy ideas that have been put on the table in recent years is that the United States should enhance its defence capacities already in Australia, by deploying forward marine and other forces there. This week’s lead essay by Ron Huisken provides a critique of the latest salvo that urges this course. The suggestion is that the US should opt for a string of bases and facilities in the East Asian littoral beyond the range of current and prospective future Chinese conventional military capabilities. This is what makes Australia strategically attractive. Moreover, bases and facilities in Australia would have a sense of permanence or strategic depth that is lacking with alternative, or rather supplementary, locations like Guam and Diego Garcia. The argument acknowledges that Australia’s attractiveness is qualified by its distance from the regions of primary strategic interest. Surges in US military interest in Australia in the past have foundered on the question of costs and the poor response time given the distances to places of probable interest. The contention, however, is that the China factor has changed the balance of costs and benefits. As Huisken suggests, what’s wrong with this idea is really beyond the scope of conventional military analysis. Specifically, this choice would risk ‘conveying what at this time would be precisely the wrong political signals. If Washington conveys the impression that it is circling the wagons and building a fall-back perimeter beyond the reach of projected Chinese military power it will set off reassessments by allies and friends within the perimeter that will prove very difficult to contain. The H W Bush and Clinton administrations discovered this when the US simultaneously left its bases in the Philippines in 1992 and announced major reductions in its forward-deployed forces as a post-Cold War peace dividend’. The idea of US force bases in Australia is absolutely unnecessary at the present time. China’s power and influence appears to be surging relentlessly and that is no illusion. But there are many constraints upon how it may morph into and be deployed as military power any time soon. As Huisken says, ‘the US, China and the other regional states have scarcely begun to test the opportunities to adjust the rules of the game in East Asia to suit the interests of all’. The US has a fistful of friends in the broader Asian region that want it to remain comprehensively engaged. China does not have such partners. There are conflicting signs of whether it wants ‘to nurture international relationships characterised by genuine and broad rapport’. ‘The key point’, Huisken argues, ‘is that we still have the opportunity to try to establish the peace and stability of East Asia securely on a new and broader power structure. An enhanced US presence is essentially more of the same and at this point is likely to exacerbate not ameliorate security costs and concerns. Instead, conveying a sense of something qualitatively new — like a watershed in US thinking about its posture toward Asia — could be sensible’. China may be learning that it cannot separate its international persona from the shadow of its arrangements for internal governance. And it should be encouraged in that direction, not locked out of the process. It is in Australia’s deep national strategic interests to take this opportunity to forge a new strategic environment, together with China, the US and or regional partners, in East Asia. That was the substance behind former Prime Minister Rudd’s Asia Pacific Community idea . The US and Russia joining the East Asia Summit process is one small step towards its fruition. It could still go seriously awry. But it is worth every effort building on this initiative as one element in setting a new strategic course in East Asia. Peter Drysdale US military bases in Australia: Don’t circle the wagons yet Australia has a valuable role in the “great balancing act” Gillard-Obama meeting gets into alliance management

Chinese leadership: The challenge in 2012

Author: Kerry Brown, Chatham House One side-effect of the Dengist economic reforms which started to penetrate deeply in the 1980s was the transition from a ruling Chinese Communist Party that was focused on class struggle and revolutionary aspiration under Mao, to one in which a new technocratic elite were in control. In the words of Wang Hui, one of contemporary China’s foremost public intellectuals, that meant that the party started fulfilling a more ‘evaluative’ function and became the sort of ‘bureaucratic machine’ that Mao had tried to prevent. While the economy grew and prospered , the party looked at its own internal governance , at how it promoted key officials, how it dealt with its own accountability, and disciplined those in its fold who had become corrupt. In short, it tried to professionalise itself. Central to this task was the need to have a mechanism (mostly peer pressure) by which the top elite controlled themselves. There was no question of some entity, like the legal system or civil society, standing above the party and placing obligations and regulations upon it. But there was a sense that the party needed to tidy up its act, and that another messy leadership transition of the kind that had occurred between Mao and Deng (which had taken almost two years to achieve) was a luxury the party could no longer afford. Party congresses which had occurred sporadically before 1982 started to happen every five years. Time limits were set on those holding high office. By stealth rather than by stated aim, retirement ages were brought in. By 2002, when there was a transition from the third to the fourth generation of leadership (from Jiang Zemin to Hu Jintao), nervousness that this process would lead to infighting among factions in the party remained evident till some years into Hu’s era. Only in 2007 was Hu seen by commentators and experts of the party to become his own man with the party congress, meaning he could then elevate a number of people close to him, and gently ease out of positions of influence those seen as close to Jiang before. The imminent party congress in late 2012 is arousing all the speculation that the congress of 2002 did. There has been a decade more of the party being able to build its own internal governance, and trying to modernise its own structures. In the last few years it has practised what has been called ‘intra-party democracy’, attempting to make its processes more predictable and a little more transparent. In a strategy of careful management, the likeliest successor to Hu next year, Xi Jinping, looks like he is following exactly the same path to the crucial position of General Secretary of the CCP — elevation to the Standing Committee of the Politburo as Vice Premier (like Hu), and vice chairmanship of the Central Military Commission, in charge of army affairs (like Hu). A range of leaders around him are also being carefully groomed to slip into major leadership positions when the current incumbents on the all-important standing committee of nine see seven of their members retire. So far, so good. While the party has managed its affairs with great care and attention (Hu is known to almost religiously follow due process, and attempts to build broad consensus across all shades of party opinion for what he does), there is still a nagging sense that while this fourth generation leadership may well have got the internal issue of succession well sorted, it has done so by pushing aside the larger, and much more contentious and challenging issues of broader political reform that are now staring it in the face. Since its entry into the World Trade Organisation in 2001, China’s economy has rocketed ahead — as much to the surprise of its leaders as those outside. Good economic performance was predicted back in 2001, but not one in which, in less than ten years, China would become the world’s largest exporter, largest importer, largest holder of foreign reserves and second largest economy. Five years ahead of what had been expected, China is in a much more powerful position than it, or others, had believed possible. This has been a double-edged sword. While it has bought massive increases in GDP and prosperity, it has also created a society where there remain sharp divisions between the haves and the have-nots, and where social classes, from entrepreneurs, to the urban middle class , to the farmers — who, after all, still make up over half the population — are increasingly in conflict with each other over issues from property rights, the state of the environment, rights over pensions, and demands to have more of the wealth that the country has created. The increasing repression since June 2009 , where rights lawyers and activists have been victimised and frequently imprisoned, is symptomatic of a leadership that has been bold in its economic thinking but profoundly cautious in its political views. In the new leadership there are no signs, as yet, that anyone has a particularly strong idea about how, for instance, to deepen the rule of law in the country by allowing genuinely independent courts, or giving a proper legal status to civil society groups. In 2011 the fundamental contradiction of contemporary China is that it runs on a largely centralised system inherited from the Soviet Union in the mid 20 th century while its economy is one of the most modern in the world. As it becomes clearer who the fifth generation leaders will be, and how jobs will be allocated among them, scrutiny will be focussed on what clues they give about how they might approach this hugely challenging and sensitive issue of political reform. The 12 th Five Year Program which was passed in Beijing last March at the annual National People’s Congress, the Chinese parliament, gave some recognition to this in talking a little about the need to build social infrastructure and a more stable, equal society. For the next decade, therefore, the issue will not be about the first battle — to build GDP — but about the conflicts that have come after that, to deal with the issues China will face as it progresses towards a middle-income-status country (its stated aim by 2020). These are proving to be far trickier and more demanding than simply pumping out good growth rates, and it is on these, more and more, that the future leadership of China will need to show the same kind of strong vision that their predecessors did about the economy, back in the late 1970s. So far there is little sign that they have the vision, or the capacity, to do this. But like it or not, over the coming decade, this more than anything else will be their key task. Kerry Brown is head of the Asia Program at Chatham house, London, where he leads Europe-China Research. He is author of ‘Ballot Box China’ (Zed books, 2011) and a biography of Hu Jintao which will appear in early 2012. This article appeared in the most recent edition of the ‘East Asia Forum Quarterly’, ‘Governing China’ . Chinese dam diplomacy: Leadership and geopolitics in continental Asia The challenge of China and China’s challenge – Weekly editorial Chinese leadership and Tibet

Crackdown on IPR infringement is set to continue

As part of China's nine-month campaign to combat the infringement of intellectual property rights (IPR), the nation has implemented legalization of the software in its 135 central authorities, said the Ministry of Commerce on Friday. Wang Zhengang, deputy director-general of the Department of Market Supervision at the ministry, also said China has "made remarkable progress" in the campaign and "IPR protection efforts will be long-lasting". In October, the State Council announced the launch ...