China’s government has reportedly started enforcing a new law that it passed in December this week. The law bans the government from purchasing PCs with Intel and AMD chips inside, along with software products from Microsoft, including its Windows operating system.

According to The Financial Times (via PC World), the new rules on purchasing products for China’s government PCs were set in place in December by the country’s Information Technology Security Evaluation Center. They include all governments and agencies above what is considered to be the country’s township level.

China previously ordered its government offices and agencies to no longer use Microsoft’s Windows OS in 2022, in favor of a homegrown Linux-based OS. As a result, these new guidelines are not expected to affect Microsoft. However, the ban on Intel and AMD chips could result in a noticeable hit in the revenue numbers for both companies.

On the other hand, the ban on these products on China’s government PCs does not include their use in private businesses or by regular consumers in that country.

China previously banned the use of Apple’s iPhone products in its government buildings. It has also banned the use of products from Micron Technology for its infrastructure projects, citing security concerns.

These new moves come sometime after the United States government banned China’s Semiconductor Manufacturing International Corporation (SMIC) from exporting fabrication equipment to make certain chips in that country.

Late in 2023, the US government banned the export of some of Nvidia’s AI GPUs to China. Nvidia has instead developed AI chips, the H20, that were specifically made to conform to the restrictions of the US government’s export rules. The company started taking preorders for the H20 chips in early 2024, and are expected to begin large scale shipments of those China-specific AI GPUs sometime in the second quarter of 2024.

Source: Neowin

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The U.S. and British governments on Monday announced sanctions against a company and two people linked to the Chinese government over a string of malicious cyberactivity targeting the U.K.’s election watchdog and lawmakers in both countries.

Officials said those sanctioned are responsible for a hack that may have gained access to information on tens of millions of U.K. voters held by the Electoral Commission, as well as for cyberespionage targeting lawmakers who have been outspoken about the China threat.

The Foreign Office said the hack of the election registers “has not had an impact on electoral processes, has not affected the rights or access to the democratic process of any individual, nor has it affected electoral registration.”

The Electoral Commission said in August that it identified a breach of its system in October 2022, though it added that “hostile actors” had first been able to access its servers since 2021.

At the time, the watchdog said the data included the names and addresses of registered voters. But it said that much of the information was already in the public domain.

In Washington, the Treasury Department said it sanctioned Wuhan Xiaoruizhi Science and Technology Company Ltd., which it calls a Chinese Ministry of State Security front company that has “served as cover for multiple malicious cyberoperations.”

It named two Chinese nationals, Zhao Guangzong and Ni Gaobin, affiliated with the Wuhan company, for cyberoperations that targeted U.S. critical infrastructure sectors, “directly endangering U.S. national security.”

Zhao, Ni and five other Chinese nationals were hit with federal charges Monday. An indictment brought by federal prosecutors in Brooklyn alleges that the seven men were Chinese intelligence officers who engaged in a yearslong campaign targeting top White House officials, U.S. senators and the spouses of high-ranking members of the Justice Department, among others. 

The suspects are accused of sending tracking emails purported to be from prominent U.S. journalists, which contained legitimate news articles from publications like CNN and VOX. The emails also contained embedded hyperlinks that, when opened, would transmit information about the recipients to a server controlled by the suspects, the indictment says.

One of the group’s alleged campaigns took place from June to September 2018 when they sent more than 10,000 messages to a wide range of targets including Democratic and Republican senators from more than 10 states and the spouses of various government administrators including a high-ranking Department of Justice official, high-ranking White House officials and multiple United States senators.

“These allegations pull back the curtain on China’s vast illegal hacking operation that targeted sensitive data from U.S. elected and government officials, journalists and academics; valuable information from American companies; and political dissidents in America and abroad,” U.S. Attorney Breon Peace said in a statement.

Chinese Embassy spokesperson Liu Pengyu said her government “firmly opposes and cracks down on all forms of cyberattacks in accordance with law.”

“Without valid evidence, the U.S. jumped to an unwarranted conclusion and made groundless accusations against China,” Liu added. “It is extremely irresponsible and is a complete distortion of facts.”

Separately, British cybersecurity officials said that Chinese government-affiliated hackers “conducted reconnaissance activity” against British parliamentarians who are critical of Beijing in 2021. They said no parliamentary accounts were successfully compromised.

Three lawmakers, including former Conservative Party leader Iain Duncan Smith, told reporters Monday they have been “subjected to harassment, impersonation and attempted hacking from China for some time.” Duncan Smith said in one example, hackers impersonating him used fake email addresses to write to his contacts.

The politicians are members of the Inter-Parliamentary Alliance on China, an international pressure group focused on countering Beijing’s growing influence and calling out alleged rights abuses by the Chinese government.

Ahead of that announcement, Prime Minister Rishi Sunak reiterated that China is “behaving in an increasingly assertive way abroad” and is “the greatest state-based threat to our economic security.”

“It’s right that we take measures to protect ourselves, which is what we are doing,” he said, without providing details.

China critics including Duncan Smith have long called for Sunak to take a tougher stance on China and label the country a threat — rather than a “challenge” — to the U.K., but the government has refrained from using such critical language.

Responding to the reports, China’s Ministry of Foreign Affairs said countries should base their claims on evidence rather than “smear” others without factual basis.

“Cybersecurity issues should not be politicized,” ministry spokesperson Lin Jian said. “We hope all parties will stop spreading false information, take a responsible attitude, and work together to maintain peace and security in cyberspace.”

Source: NBC News

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The Monetary Authority of Singapore (MAS) said it will maintain the prevailing rate of appreciation of its exchange rate-based policy band known as the Nominal Effective Exchange Rate, or S$NEER.

The width and the level at which the band is centred did not change.

“Barring any further global shocks, the Singapore economy is expected to strengthen in 2024, with growth becoming more broad-based. MAS core inflation is likely to remain elevated in the earlier part of the year, but should decline gradually and step down by Q4, before falling further next year,” MAS said in a statement.

Maybank economist Chua Hak Bin said the central bank is maintaining the current tightening bias as both core and headline inflation gauges are above 3% and historical comfort zones.

Core inflation in December was 3.3% year-on-year, slowing from its peak of 5.5% early last year.

MAS said core inflation is projected to ease to an average of 2.5–3.5% for 2024 after rising in the current quarter because of a 1 percentage point sales tax hike from January that MAS said will have a “transitory impact”.

Gross domestic product (GDP) was up 2.8% on a yearly basis in the fourth quarter of last year, according to advance estimates published by the trade ministry in early January.

GDP for the full year of 2023 was 1.2%, and the trade ministry projects GDP to grow by 1-3% in 2024.

“Prospects for the Singapore economy should continue to improve in 2024,” said the MAS, although both upside and downside risks to the inflation outlook remain.

OCBC economist Selena Ling said that suggests the MAS is on an extended policy pause for now.

“April monetary policy is likely another hold and the earliest window for an easing could only come later in the year when core inflation eases more convincingly,” she said.

The MAS policy decision on Monday was the first under its new review schedule, in which the central bank will make policy announcements every quarter instead of semi-annually.

The central bank left monetary policy unchanged in April and October last year, reflecting growth concerns, having tightened policy at five consecutive reviews prior to that.

As a heavily trade-reliant economy, Singapore uses a unique method of managing monetary policy, tweaking the exchange rate of its dollar against a basket of currencies instead of domestic interest rates like most other countries.

Source: Reuters

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Indonesia’s Presidential Election (PE) 2024 is just around the corner. On Valentine’s Day, the first round of voting will take place. A second round – which will happen if no candidate pair wins at least 50 per cent of the national vote plus one and at least 20 per cent in half of Indonesia’s 38 provinces – will be on 26 June.

From a national development perspective, the three pairs: Anies Baswedan and Muhaimin Iskandar (Team AMIN), Prabowo Subianto and Gibran Rakabuming Raka, and Ganjar Pranowo and Mahfud MD, each have their ways to shape the future of Indonesia. What would the policy possibilities post-PE2024 look like? What are the potential impacts on Indonesia’s development trajectory?

As policy (content) cannot be separated from politics (process) and polity (culture), it is important to start answering the question by examining what the presidential nominees’ campaigns reveal about the state of the Indonesian political elite.

In terms of coalition building, there have been shifting alliances and power dynamics among the elite. The coalition that supported President Joko Widodo (Jokowi) in his 2014 and 2019 campaigns has now split. Most have gone to Prabowo-Gibran, who have a more populist agenda, some to Ganjar-Mahfud, seen as representing the nationalists, and the remainder to Team AMIN, who claim to be reformist. Thus, their campaign narratives: Team AMIN offer “change”, Prabowo-Gibran “continuity”, and Ganjar-Mahfud “improvement”. These keywords also capture their main policy approaches for key issues in development.

Despite their promise to bring about significant change, Team AMIN surprisingly set quite a conservative target of annual economic growth between 5.5 to 6.5 per cent until 2029. They aim to reach it through shared prosperity, wealth distribution, and social justice. Prabowo-Gibran’s target is 6-7 per cent with a vague, jargonistic strategy: “Jokowinomics”, interpreted as a version of a “Pancasila economy”. This is basically a system with a controlled market economy as a counterbalance against neoclassical economic tenets like individualism and free markets. Ganjar-Mahfud has set an ambitious 7 per cent growth target with a “we have all” (semua ada di kita) strategy.

From the three teams’ vision and mission documents and campaigns, there are a few similarities in their policy platforms. On promoting growth, all candidates aim to accelerate it to improve living standards and reduce poverty. On enhancing industrial development, all candidates recognise the importance of strengthening the country’s industrial base to reduce reliance on imports and strengthen export competitiveness. Last, they all agree to improve physical infrastructure to support economic activity and facilitate trade and investment.

However, the teams differ in the following ways. First, on the role of government, Team AMIN advocate limited government and greater reliance on private sector initiatives. This is likely due to the influence of their campaign advisor, former finance minister Tom Lembong, who also headed Indonesia’s national investment agency. This is in contrast to Prabowo-Gibran, who favour a more active state role in directing economic policy despite big businesses’ support. Ganjar-Mahfud takes the middle ground: in their platform, the government is the regulator and facilitator in guiding development, not an active player.

Second, on trade and liberalisation, Prabowo-Gibran’s focus on protectionism contrasts with Team AMIN’s emphasis on liberalisation and market-based solutions. Again, taking the middle stance, Ganjar-Mahfud seeks to balance the protection of domestic industries with fostering foreign direct investment-based innovation.

On social equity and environmental sustainability, Team AMIN and Ganjar-Mahfud emphasise tackling social inequality and environmental concerns, while Prabowo-Gibran’s primary focus is on growth and national self-sufficiency.

Many investors are waiting to see if Jokowi’s signature policies – including downstreaming, the proposed shift of Indonesia’s capital to Nusantara (IKN), East Kalimantan, and infrastructural development – will continue.

The answer is clearly yes. The signature policies can be grouped into three broad types, the first of which is infrastructure, particularly for connectivity, like ports, roads, and industrial complexes. All the candidates recognise that infrastructural development is crucial and have pledged to continue upholding this policy.

Second, Jokowi has emphasised social protection, particularly social assistance. All candidates understand that this is a populist vote-winner that they must continue, even if they differ on how it is delivered. Third, all candidates will continue downstreaming (hilirisasi) as they know how important it is for Indonesia to move up the value chain. This is not limited to the mining/extractive sectors but extends to agriculture, fisheries, and even digital downstreaming. Team AMIN and Ganjar-Mahfud have declared that they will not stop at this but work towards “re-industrialisation”.

On the planned relocation of the new capital city, Prabowo-Gibran and Ganjar-Mahfud will continue this part of Jokowi’s legacy. The former pair strongly support IKN. Echoing Jokowi’s rhetoric and notwithstanding criticism from academia and civil society, Prabowo-Gibran emphasise the need to develop areas outside Java and has pledged to uphold sustainability and environmental responsibility in the IKN’s execution.

Ganjar-Mahfud has stated that they will study the project further, expressing concern about its potential impact on the local environment and livelihoods of affected communities. In their campaign, they have offered “corrective measures” for what might have been neglected in the developmental process so far, like considering the impact on indigenous groups and the mitigation of environmental problems.

Whoever wins, what is clear is that Indonesia must be prepared to fulfil different, creative development policy priorities to meet its challenges.

Team AMIN are the most critical; they omitted discussion of the IKN in their vision and mission document. They question its feasibility and high cost, arguing that the government should focus on addressing other issues such as poverty and inequality. In the less likely scenario (given Prabowo-Gibran’s high poll ratings) that they will win PE2024, Team AMIN is unlikely to stop the project outright, even though there is growing resistance to the shift to Nusantara from the public and civil servants. At most, the relocation can be delayed, as the IKN’s status is already enshrined in a national law.

The new president and his administration will determine Indonesia’s development trajectory for the next five or ten years. Whether and to what extent the next administration can realise the vision for Indonesia’s “Golden 2045” (Indonesia Emas) centennial remains open to scrutiny.

Whoever wins, what is clear is that Indonesia must be prepared to fulfil different, creative development policy priorities to meet its challenges. All things considered, the PE2024 candidates’ proposed policies are not far-reaching enough to address the multifaceted challenges awaiting Indonesia, especially as it has aspirations to reach advanced development. Excellent technocratic capacity and strong political support must sustain and surpass what President Jokowi has achieved.

Source: Fulcrum

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AFTER years of political turmoil that saw rapid turnover at the prime minister’s office, Anwar Ibrahim’s first 12 months as Malaysia’s leader might feel like a success in itself.

Except a stalled reform agenda has meant the 76-year-old has been unable to boost the nation’s revenues and pare debt, as the rising cost of living hits the pockets of ordinary Malaysians.

The lack of promised reforms — undoing hefty subsidies and broadening the government’s revenue base — is weighing on Malaysian assets, adding to the pressure from a surge in US interest rates and sputtering growth in China, the nation’s biggest trading partner. 

The ringgit has lost almost 6 per cent against the dollar this year, making it the worst performer in emerging Asia. Kuala Lumpur’s benchmark stock index has been one of the biggest losers worldwide.

The political shocks that ushered in four administrations since 2018 have unnerved investors, as have the lack of of promised reforms, which have proved tricky to execute given the country’s fractious political environment. 

“Headlines on the Malaysian political situation don’t boost investor sentiment,” said Jian Shi Cortesi, a Zurich-based fund manager at GAM Investment Management, whose Asia equity strategy has no exposure to the country. “Malaysia doesn’t look particularly attractive.”

Here’s how Anwar’s government has fared and the potential pitfalls it faces:

Political stability

It’s been a striking comeback for Anwar, whose career has included a stint as deputy prime minister and two jail terms that he said were politically motivated.

His promise for reforms had fueled hopes that he would be able to repair Malaysia’s international standing, following the 1MDB investment-fund scandal that led to the jailing of former Malaysian Prime Minister Najib Razak.

Still, political stability hasn’t been a given for Anwar.

A member of his ruling alliance pulled out in September to protest a decision to drop corruption charges against Deputy Prime Minister Ahmad Zahid Hamidi — Anwar’s key ally. The premier has since managed to attract four opposition lawmakers to back him, giving him the support of 151 out of 222 members of parliament.

Voters though are getting impatient with the government’s handling of the economy. The premier’s approval rating dropped to 50 per cent from 68 per cent in December, according to a poll by Merdeka Centre for Opinion Research conducted last month. 

Anwar doesn’t know how to solve the nation’s problems, including a weakening ringgit and the rising cost of living, according to Mahathir Mohammad, a two-time former prime minister.

“A popular person is not necessarily a capable person,” Anwar’s 98-year-old arch rival said. “He does not know how to handle the government.”

Economic direction

Anwar’s administration has spent the year outlining the country’s ambitions, including plans to scale up the nation’s renewable energy mix, while looking at ways to export renewal energy. It wants to mine rare earth minerals and raise wages.

Malaysia still relies heavily on revenue from fossil fuels, with national oil company Petronas paying RM40 billion (S$354 million) in dividends to the government this year.

“The strategy is clear,” said Munirah Khairuddin, the chief executive officer of Principal Malaysia in Kuala Lumpur. “We are waiting to see how that translates into the real economy, the stock market.” 

Anwar has revealed that Malaysia’s debt and liabilities stood at RM1.5 trillion, or 82 per cent of gross domestic product. His administration has also acknowledged the need to find new sources of revenue, though it has resisted introducing a goods and services tax, opting instead to marginally increase service taxes and introduce taxes on luxury goods and capital gains. 

A hefty subsidy bill

A key component of Malaysia’s fiscal position is the hefty subsidy bill it foots every year.

All Malaysians enjoy subsidies on petrol, diesel, cooking oil and locally produced rice. Electricity is also subsidised with lower tariffs for most domestic users. The government’s subsidy bill, which has been growing due to rising global commodity prices since last year, will exceed RM81 billion this year.

“No country can survive” such a hefty subsidy bill, Anwar has said while hoping to shift to a system that targets lower-income groups.

However, a clear plan on how the subsidies will be reallocated has not been presented to the public, and anticipation of possible cuts are raising inflation risks in the country.

“The challenging domestic political landscape constrains the prospects for material revenue reform, subsidy rationalizstion and, ultimately the reversal of the deterioration in its fiscal metrics over the past few years,” said Moody’s Investors Service senior vice-president Christian de Guzman.

The reformist

Anwar has spent decades as the figurehead of the reform movement in Malaysia. His government, however, is still working on several promised pieces of legislation with wide political and social implications. 

A bill to introduce a two-term limit to the office of prime minister and policies to provide equal funding for opposition lawmakers — both of which his coalition advocated — have yet to materialise. Nor has a promise to separate the powers of the attorney general and chief public prosecutor.

A pledge to prohibit smoking appears to be on the back burner, while an attempt to rationalise citizenship laws, especially those concerning children born overseas, has proved to be controversial.

“Despite his clear majority in parliament, the administration does not have the political will to push for much-needed institutional and fiscal reforms,” said Asrul Hadi Abdullah Sani, a former deputy managing director for Bower Group Asia, who is now an independent analyst.

The outlook

Anwar’s ability to execute his economic and fiscal plans within the next two years will key. A series of state elections starting in 2025 will heighten political considerations before federal polls in 2027. 

If Anwar manages the short-term pain of reforming the local economy, Malaysia is poised to benefit from supply-chain realignments and increasingly positive relations with its more developed neighbour, Singapore, said Mark Mobius, the veteran emerging-markets investor, who is considering buying Malaysian stocks.

Concerns about “what reforms are possible” are partly why Malaysia’s ringgit is one of the cheapest among developing currencies that make up MSCI Inc.’s widely followed indexes, said Charlie Robertson, the London-based head of macro strategy at FIM Partners UK.

“Anwar is a smart individual who might be taken as a positive by markets,” Robertson said. “Not a negative.” BLOOMBERG

Source : Business Times

The post Malaysia’s Anwar Faces Hard Policy Decisions as Popularity Dips appeared first on Policy Print.

At this point in its term of office, the Biden Administration had hoped for a markedly different Middle East.

Under American tutelage, the Trump-era Abraham Accords would have ideally widened the circle of peace among Arab states and Israel, effectively ending the Arab-Israeli conflict and purportedly bringing stability and prosperity to a region sorely in need of it. As regional rivals reconciled their differences, Washington could refocus its attention on the Indo-Pacific region, shifting military and diplomatic assets to counter China.

In this new, more united Middle East, the threat of Iran would be contained by a formidable array of Arab and Israeli military power, and the Palestinian issue (regrettably resistant to any lasting solution, in the jaded view of government officials and pundits alike) would be safely contained. The Palestinians themselves would be mollified by new aid and investments from the wealthy Arab countries, an ample consolation prize in place of their own state. The threat of terrorism and conflict would have been reduced to manageable terms.

The war in Gaza has changed the entire diplomatic and military landscape into the one that Washington had hoped to avoid. Current conditions present daunting new challenges for the Biden administration, including the fearsome threat of wider regional confrontation.

Of course, the reality today is depressingly different. The war in Gaza has changed the entire diplomatic and military landscape into the one that Washington had hoped to avoid. Current conditions present daunting new challenges for the Biden administration, including the fearsome threat of wider regional confrontation.

As they say in the Pentagon, “No plan ever survived first contact with the enemy,” a wise maxim the Biden administration is currently relearning.

Things Fall Apart; the Center Cannot Hold

In the immediate aftermath of the Hamas attack in southern Israel on October 7, President Joe Biden took a safe, traditional position, completely within a longstanding Washington consensus —full support of Israel’s “right to defend itself,’ bolstered by pledges of substantial military aid, and backed in this instance by the dispatch of two aircraft carrier strike groups, the USS Gerald R. Ford and the USS Dwight D. Eisenhower, to positions off Israel’s Mediterranean coast and in the Red Sea, respectively. But this supposedly safe position rapidly deteriorated into domestic and international political controversy as Biden discovered that fully backing Israel came with substantial political costs he hadn’t, apparently, anticipated.

With Biden’s poll standing eroding, due in no small part to his stance on the conflict, Washington’s diplomatic position has been evolving rapidly. During his tour of the region in early November, Secretary of State Antony Blinken called for “humanitarian pauses”—not to be confused with a “ceasefire”—to allow humanitarian aid shipments to arrive in Gaza. In Tokyo a few days later for a meeting of G-7 foreign ministers, Blinken went significantly further, specifying American terms for an immediate post-war future. He said that there must be “no forcible displacement of Palestinians from Gaza. Not now, not after the war…No use of Gaza as a platform for terrorism or other violent attacks. No reoccupation of Gaza after the conflict ends. No attempt to blockade or besiege Gaza. No reduction in the territory of Gaza…It is imperative that the Palestinian people be central to governance in Gaza and in the West Bank as well, and that, again, we don’t see a reoccupation.”

With Biden’s poll standing eroding, due in no small part to his stance on the conflict, Washington’s diplomatic position has been evolving rapidly.

This is not only aimed at discouraging Israel’s possible imposition of a security zone in Gaza such as that enforced by Tel Aviv in southern Lebanon for 15 years, but also to suggest a new political horizon going forward. In Tokyo, Blinken hinted at that horizon, albeit in vague terms, saying that “it’s vitally important that Palestinian aspirations for governing themselves, for being the ones to decide their own futures, are realized.” This may fall short of a commitment to doing the long, hard work of bringing about a two-state solution, but it may be a start.

US Politics and Rising Pressure on Israel

Meanwhile, domestic political pressures almost unheard of in Washington are continuing to build: popular opinion in the United States, particularly among Democrats, is breaking sharply against Israel. On November 8, 26 Senate Democrats and Independents signed a letter to President Biden asking pointedly whether his administration can ensure that Israeli military operations in Gaza are being “carried out in accordance with international humanitarian law.” While the pro-Israel foundation in Congress remains generally solid, it seems cracks have begun to appear.

The administration is also faced with almost unprecedented dissent in the ranks of the federal bureaucracy. Foreign Service officers have in recent days signed onto three different dissent channel cables, a mechanism established during the Vietnam War to enable the rank-and-file to speak their minds without going messily public. The cables proposed some form of ceasefire to end the Israeli onslaught. Blinken himself felt compelled to meet with at least some of the signatories. And just this week, around 500 career officials and political appointees from about 40 government agencies signed a letter to President Biden also endorsing a ceasefire, citing polling data showing about two-thirds of Americans in favor of it and a de-escalation of violence.

The increasingly desperate situation in Gaza, including 1.5 million internally displaced persons as well as a death toll now exceeding 11,000, has fueled this rising controversy. Former Israeli Prime Minister Ehud Barak, for one, has taken notice, worrying that Israel has limited time to achieve its stated objective of eliminating Hamas in the Gaza Strip before it is forced to bow to pressure, primarily from the United States, to halt its military operations. It is a message that has been re-enforced this month by senior administration officials in contacts with their Israeli counterparts.

Israel’s Reaction

To complicate matters, the Israeli government does not necessarily seem to share the same playbook from which the United States is currently working. On November 7, Prime Minister Benjamin Netanyahu announced  that Israel will maintain “overall security responsibility” in Gaza for an indefinite period, with no apparent plans for a transition to a diplomatic process to follow. While this falls a bit short of reoccupation, and certainly of the re-establishment of settlements of which some on the far Israeli right dream, it nevertheless opens the door to an untenable political situation that Washington clearly finds undesirable.

Meanwhile, the situation in Gaza continues to deteriorate. November 10 brought news that Israel has besieged several hospitals in Gaza, alleging that they are being used as storage facilities by Hamas, and demanding they be evacuated. A particular focus of Israel’s ire is Gaza’s largest medical complex, Al-Shifa Hospital, under which Israel claims Hamas maintains a system of military bunkers. Early on November 15, Israeli troops entered the complex and alleged that weapons were found inside; but Hamas denied the claim. The increasing number of casualties, ongoing military strikes, and lack of fuel has brought the medical system in Gaza to the point of total collapse.

Israel has agreed to White House demands for short operational pauses in northern Gaza to permit humanitarian aid to enter, but these will not substantially alleviate the suffering of Palestinians throughout the Gaza Strip, and do not necessarily betoken any willingness to consider a broader ceasefire.

Israel has agreed to White House demands for short operational pauses in northern Gaza to permit humanitarian aid to enter, but these will not substantially alleviate the suffering of Palestinians throughout the Gaza Strip, and do not necessarily betoken any willingness to consider a broader ceasefire. Netanyahu has in fact resisted American requests for a longer pause, even to facilitate the release of hostages. Intensive US diplomacy to persuade Israel to commit to more on the humanitarian front continues.

For the future, Netanyahu has steadfastly refused to consider a meaningful peace process after the conflict ends. Indeed, violent West Bank settlers seemingly backed by the Israeli Army have embarked on what can only be described as a campaign of ethnic cleansing in the occupied West Bank, a development that may prove even more incendiary than the ongoing violence in Gaza.

Regional Context Evolving

The Biden administration is now reduced to trying to stave off a slow-motion wreck of a once hopeful Middle East policy. A formal diplomatic rapprochement between Israel and Saudi Arabia may still take place—despite the Gaza war, both countries have an interest it making it happen—but it is by no means certain and in any case has suffered a real setback. Saudi Arabia has increased its criticism of Israel and reportedly paused any consideration of a deal to normalize relations. Instead, Riyadh hosted an Arab-Islamic summit meeting that included President Ibrahim Raisi of Iran, a diplomatic breakthrough of a very different kind that may not have been possible absent the Gaza crisis. The assembled leaders called for UN Security Council action to adopt a resolution under its binding Chapter 7 authority to halt Israel’s “aggression,” essentially a call for an indefinite ceasefire, cutting against American policy and adding to the international pressure on Washington.

Other Arab states are likewise backing away from Israel. Egypt, which has only ever enjoyed a cold peace with Israel, has made clear that it will not accept a mass transfer of refugees from Gaza to northern Sinai, for fear that they will not be allowed to return, a worry that is by no means unfounded. Cairo has also indicated that it will not participate in defeating Hamas, as it needs the group to help enforce border security. Jordan has declared Israel’s ambassador persona non grata and announced that “all options are on the table” in terms of a response. The United Arab Emirates has adopted a somewhat more measured response, favoring a ceasefire and warning that the United States will lose influence if a solution is not reached soon. Worried about their own domestic politics, several Arab states have individually importuned Washington to do more to pressure Israel to end its military campaign.

The one regional power that seems comfortable with Biden’s policy so far is Iran, apparently seeing it as an opportunity to rally popular and regional leadership opinion to its anti-US and Israel stance.

The one regional power that seems comfortable with Biden’s policy so far is Iran, apparently seeing it as an opportunity to rally popular and regional leadership opinion to its anti-US and Israel stance. The immediate danger of a broader conflict involving Iran and its allies versus the United States and Israel seems not to be imminent, but that does not mean it has gone away. Fighting between Israel and Hezbollah has escalated significantly in recent days, and the party’s Secretary-General Hassan Nasrallah warned in separate speeches earlier this month that while the group did not intend to enter the war as a full combatant, it would respond in kind to Israeli attacks on Gaza or Lebanon.

For an administration that staked its regional policy on an expansion of the Abraham Accords, these developments are concerning. They do not necessarily mean an end to the administration’s hopes for further regional integration once the Gaza conflict ends, but they do illustrate the many difficulties and fresh complications ahead—probably quite a few more than US officials anticipated just a few weeks ago. And if a broader conflict should erupt, possibly with the direct involvement of US forces, all bets are off.

Is There an Endgame?

As with any crisis in the Middle East, there is an undeniable but limited opportunity to effect fundamental change in the region’s dynamics. Previous conflagrations have led to major, if incomplete, peacemaking efforts spearheaded by Washington. This moment may be no different. Blinken spoke in Tokyo of “setting the conditions for durable peace and security and to frame our diplomatic efforts now with that in mind.” To be sure, there is, reportedly, discussion of the details of a future peace process at lower levels in the State Department.

But still, at the moment there is little obvious appetite in the White House for either a ceasefire, a peace process, or the political heavy lifting involved in bringing about either. Biden himself has talked in general terms about the need for a two-state solution “when this crisis is over,” but if he’s serious, much more needs to be done, and now.

The Biden administration must act quickly and offer specific plans and timelines to shape post-conflict expectations and establish its priorities with the parties. If it doesn’t, the most radical elements on all sides will set the agenda. Above all, Biden himself has to be willing to recommit his presidency to a major diplomatic push, probably one that will involve both pressure and inducements to raise the stakes for all parties if they fail to cooperate. This seems unlikely at the moment, but intense crises have made potent peacemakers of presidents before.

Source : Arab Center Washington DC

The post Gaza, the Ruin of US Policy, and a Transformed Middle East appeared first on Policy Print.

BEIJING – Since March 2023, when China started to issue tourist visas again, business has picked up for Beijing tour guide Vivie Pan, who organises small group tours for English-speaking visitors.

But the numbers are nowhere near the levels of 2018 and 2019, before the Covid-19 pandemic. Back then, she received up to three or four bookings a day, and had to rope in other guides to help.

“For this year, I have enough bookings only for myself. I was quite busy from June until November almost every day, with three or four rest days per month, but still there’s no comparison to 2019,” said Ms Pan, who drove part-time for private car-hire company Didi to make ends meet during the pandemic.

“The overseas tourists are coming back, but their main purpose is not sightseeing or leisure – it’s usually business or visiting friends.”

In the first half of 2023, travel agencies received 477,800 inbound tourists, compared with more than 8.56 million for the same period in 2019, according to statistics released by the Chinese Ministry of Culture and Tourism.

The sluggish recovery has been on the government’s radar – it has implemented a series of measures to ease potential pain points of visitors. For instance, in August, the authorities did away with the need for travellers to have a negative Covid-19 test to enter the country.

The latest move came on Nov 24, when China unilaterally announced a year-long visa-free policy for visitors from France, Italy, Germany, the Netherlands, Spain and Malaysia from Dec 1.

This saves them the hassle of filling up pages of forms that include planned itinerary and travel history.

On Dec 1, more than 2,000 people from these six countries entered China – an increase of 12.5 per cent over the previous day, said China’s immigration authorities.

Industry players have welcomed the move, but noted that difficulties remain in persuading tourists to come back. These include limited availability of flights and tightened purse strings, as well as geopolitical tensions that affect perceptions of China.

Veteran industry observer Oliver Sedlinger, who is chief executive of tourism consultancy Sedlinger & Associates, said a short-term challenge is flight availability, noting that China’s international flights have recovered to only about 57 per cent since the start of 2023.

“The recent new visa policies introduced by China are a very smart move and will make travelling there easier,” he said, adding that this would likely provide a strong boost to visitor numbers from these markets.

Dr Liu Simin, vice-president of the tourism branch of the China Society for Futures Studies research institute, likewise said the move would spur growth.

But he pointed out that the major source countries before the pandemic, such as the United States, Japan and South Korea, were not included in the visa-free policy.

“Although the pandemic is over, the negative effects of pandemic controls have yet to completely disappear. Foreigners may not yet be fully aware of the situation in China today,” he said.

Western countries have also, in general, experienced inflation after the pandemic and consequently a decrease in disposable incomes, with less to spend on travelling, he added.

Geopolitics is yet another factor.

Associate Professor Chong Ja Ian of the National University of Singapore said the squabbles China has with other countries are a dampener on tourist visits from there.

For one thing, China-Japan relations hit a rough patch after Beijing strongly criticised Tokyo for releasing treated radioactive water from the Fukushima nuclear plant, starting from August 2023.

Adding to the problem are China’s exit bans and detentions of individuals associated with particular states, as well as raids on business, said Prof Chong, who specialises in Chinese foreign policy.

For example, Chinese investigations into US-related firms earlier in 2023 spooked the business community.

The authorities had visited the offices of Capvision, Bain & Company and Mintz Group, in what was seen as a crackdown on consulting and due diligence firms.

Memories of the sudden closure of borders and the zero-Covid policy are also relatively fresh, said Prof Chong, and this is reinforced by recent reports of an outbreak of an unidentified disease with flu-like symptoms in China.

“For leisure travellers, the world is a big place with many attractive sites, many of which offer better value and comfort than the PRC,” he said, referring to China’s official name, the People’s Republic of China.

Still, some industry players are already looking forward to 2024.

A spokeswoman for Trip.com Group, a major travel service conglomerate headquartered in Shanghai, said demand for travel to China is expected to rise in the near future. She said Trip.com data showed that global search results for inbound travel to China increased in the third quarter by nearly 40 per cent compared with the previous quarter. 

Some believe that more publicity could be the answer to raising tourist numbers.

Mr Tang Gang, president of Chongqing-based Century Cruises, said “vigorous promotion and publicity” is needed to further stimulate demand, adding that his Yangtze river cruise firm served tourists mainly from Hong Kong, Macau, Singapore, Malaysia and Thailand in 2023.

Ms Pan, the tour guide, believes the outlook for 2024 will be better.

“I’ve already received a handful of clients for March, as well as a few inquiries. There are also a few coming from Malaysia and Singapore in December,” she said.

“But I’m sure it will not be as buoyant as before the end of 2019.” 

Source : The Straits Times

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When South Korea’s president, Yoon Suk-yeol, entered office last year, the odds rose that a frostier bilateral relationship with China might take hold. After all, Yoon on the campaign trail talked tough on China, and conservative South Korean politicians typically deepen the US alliance and are suspicious of Chinese support to the Democratic People’s Republic of Korea (DPRK or North Korea). Even despite the growing closeness of DPRK-China ties, Yoon has been able to effectively manage his government’s relationship with Beijing, potentially setting a template for how other small and medium-sized nations might do the same.

Yoon’s Carrots and Sticks ApproachIndeed, as I have previously argued, Yoon and his government, to some extent, have taken a harder line on China. For example, Yoon became the first South Korean leader to attend the North Atlantic Treaty Organization (NATO) Summit, during which he criticized not only Russia, but China as well. In April, before his state visit to Washington for a summit at the White House with President Joe Biden, Yoon railed against any “attempt to change the status quo by force” in the Taiwan Strait. He further offered that South Korea would cooperate with the international community to prevent such an outcome. Yoon’s comments predictably angered China and sparked a monthslong diplomatic tit-for-tat that stretched into the summer.As part of that summit, Biden and Yoon jointly issued the “Washington Declaration,” which includes measures to enhance extended deterrence, such as the establishment of a nuclear consultative group, the exchange of nuclear-related information and visits by nuclear-powered military assets like the B-52 and submarines, which could be leveraged not only for a North Korea, but China-related contingency as well.But Yoon has simultaneously tried to keep an even hand in dealing with Beijing. For instance, when then-House Speaker Nancy Pelosi visited South Korea after her highly controversial visit to Taiwan to meet President Tsai Ing-wen, Yoon was nowhere to be found. The presidential office said he was on a five-day vacation and had no plans to meet with Pelosi, though he eventually did hold a last-minute phone call with her. His administration has also treaded softly in the country’s debut Indo-Pacific strategy statement in December, referring to China as a “key partner” with which Seoul “will nurture a sounder and more mature relationship as we pursue shared interests based on mutual respect and reciprocity, guided by international norms and rules.”Such moves have probably contributed to a gradually stabilizing and normalizing of the South Korea-China relationship. For example, this week, South Korea resumed trilateral talks with China and Japan, a mechanism that had been dormant since 2019. This foreign ministers-level meeting is paving the way for a trilateral summit soon. In a surprising new pact that goes into effect in May, Beijing relented to Seoul this month and will mandate that its fishing boat (and presumably fishing militia forces) keep their trackers on to help the South Korean coast guard combat illegal fishing within its exclusive economic zone.China’s Likely Considerations/CalculationsYoon’s foreign policy, however, is probably only one part of the story. Dismal Chinese economic numbers—including a collapse in exports, leveling off of inflation, rising unemployment, and slowing consumption, production, and investment—may be prompting Beijing to achieve a better partnership with Seoul. The same could be true for Chinese President Xi Jinping’s decision to meet with US President Joe Biden earlier this month at the Asia-Pacific Economic Cooperation (APEC) Summit in San Francisco.Another factor is probably Yoon’s push to open and strengthen ties with Japan, which has a strained relationship with China. Earlier this year, Yoon held a summit with his counterpart, Japanese Prime Minister Fumio Kishida—the first of its kind in over a decade. Since then, Seoul and Tokyo have agreed to resuscitate a military information-sharing agreement, and in August, Biden met with Yoon and Kishida at Camp David in the first-ever standalone trilateral summit between the three nations. Earlier this month, Secretary of Defense Lloyd Austin sat down in another unprecedented trilateral with South Korean and Japanese defense ministers to share information relevant to “severe security environments,” suggesting that North Korea isn’t the only target. Hence, Beijing probably seeks to undermine and ultimately end the strengthening South Korea-Japan partnership possibly aimed at it.Yet another factor may have more to do with China’s military modernization than anything South Korea is doing. When I visited Seoul earlier this month, I spoke with an interlocutor who believed that Beijing’s calculus is rapidly changing on the so-called “Three No’s” demanded of Seoul in 2017, including no new deployment of Terminal High Altitude Area Defense (THAAD) batteries, no South Korean integration into US regional missile defenses, and no trilateral military alliance with Japan and the United States. His theory was that Beijing’s rapid progress in developing a credible nuclear triad (capable of nuclear attacks from land, air, and sea) reduces the salience of pressuring Seoul to follow the Three Nos—a commitment Seoul denies actually exists anyhow.ConclusionAlthough South Korea is arguably inching closer to a trilateral military alliance with the US and Japan, now featuring, for example, joint military exercises, China can still rationalize that the partnership is still too new and possibly ephemeral, likely circumscribed and strained by lingering mistrust from World War II legacy issues, such as the comfort women.In the end, Yoon’s China policy has been unexpectedly successful thus far. He is also buoyed by the South Korean public’s increasingly negative views on China, with the nation now reportedly holding the most anti-China sentiment worldwide. Of course, Yoon is still a relatively new president—he is less than two years into his five-year term—and much could still go wrong, especially if he pursues the Taiwan issue more assertively. But for now, at least, Yoon and his government have successfully managed China, and perhaps offered a road map for how others can too.

Source : 38 North

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Heavy machinery and electronics manufacturers have seen a higher-than-expected surge in orders for defense equipment, such as missiles and radar systems, since the government shifted Japan’s security policy last year.

Under the plan of Prime Minister Fumio Kishida’s administration, Japan’s defense spending over the five years through fiscal 2027 will total 43 trillion yen ($290 billion), 1.5 times the previous level.

Some companies in the defense industry say the financial windfalls have already exceeded expectations.

“I had conservative prospects but, as it turned out, we received more orders than we ever imagined,” Seiji Izumisawa, president of Mitsubishi Heavy Industries Ltd., said Nov. 6 at a briefing on the company’s mid-term financial results.

Orders received by MHI’s aircraft, defense and space segment over the first half of fiscal 2023 reached a record 999.4 billion yen, a fivefold year-on-year increase.

The rise is due partly to MHI’s agreement signed with the Defense Ministry in April on development work related to long-range standoff missiles.

MHI raised its forecast for orders accepted by the segment by 800 billion yen for fiscal 2023, mainly because of growth in defense-related orders, company officials said.

Kawasaki Heavy Industries Ltd. expects about 460 billion yen in orders for the company’s defense arm in fiscal 2023, up 200 billion yen year on year.

The forecast for the defense arm’s revenue is slightly more than 280 billion yen, up about 40 billion yen from last fiscal year.

NEC Corp. saw a year-on-year rise of 40 percent in orders taken by its “aerospace and national security” department in the first half of this fiscal year.

“We are receiving orders with considerably large sums,” Osamu Fujikawa, an NEC board director, said.

Contractors are increasing personnel and capital investment with the rise in orders for defense equipment.

Mitsubishi Electric Corp. said in May it was assigning 1,000 additional workers to its defense and space business and investing 70 billion yen in plant and equipment there.

The company also released a plan in October to build eight new manufacturing buildings at its three plants for radar and other equipment.

MHI said on Nov. 23 that it will increase personnel by 20-30 percent at its design and other departments to deal with the surge in orders.

The profit margins for defense contractors have averaged only 8 percent in Japan, compared with more than 10 percent for some companies in overseas nations.

One study said the corresponding profitability level in Japan was only 2 to 3 percent in real terms.

Many companies in Japan, including major manufacturers, have reduced their defense operations or even withdrawn from the business in recent years.

To change the situation, the Defense Ministry in October started setting contractors’ profit margins at a maximum of 15 percent in the order-placement stage, up from the previous level of around 8 percent.

The ministry adopted a new mechanism to increase profitability levels depending on the contractor’s business efforts, such as implementing quality control and meeting delivery deadlines.

“(Our profit margin levels) used to be low, but they are beginning to improve in our new projects,” NEC’s Fujikawa said. “I hope to ensure our company will win a near-maximum profitability level.”

Some Japanese contractors are beginning to engage in joint development work with overseas partners.

Mitsubishi Electric said in October that it will draw on its laser technology to jointly develop surveillance equipment with the Australian Department of Defense.

Source : The Asahi Shimbun

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A recent indictment from the United States Department of Justice has alleged an Indian security official was involved in attempting to assassinate a U.S. and Canadian citizen in New York. The alleged target, Gurpatwant Singh Pannun, is a leader in the Sikh separatist movement and has been involved in organizing referendums for the establishment of Khalistan, a proposed independent Sikh state in northern India.

The indictment also states that there is a link between the foiled attempt to kill Pannun and the murder of Canadian Khalistani leader Hardeep Singh Nijjar in Surrey, B.C. earlier this year.

The Indian government said it was investigating the allegations, and had established a committee to “address the security concerns highlighted by the US government.”

This announcement by the U.S. could have potential ramifications for Indian politics, both at home and abroad. However, it is unlikely to have any significant impact on next year’s general elections, when Prime Minister Narendra Modi will be seeking his third term in office.

Bolstering Modi’s strongman image

Canadian allegations against India had handed Modi an excellent political platform for the next general elections.

It sent a clear message that India’s government would, under no circumstances, tolerate any threats to the country.

India’s foreign policy has become more muscular under Modi; and that’s a strategy that resonates with his supporters.

His landslide victory in 2019 had a lot to do with support for India’s “surgical strikes” in Pakistan-controlled Kashmir in 2016 in response to an attack that killed 19 Indian soldiers.

Following Canada’s allegations of Indian involvement in Nijjar’s killing, the Modi government was once again able to successfully generate a narrative against Canada in general and the Liberal party in particular.

India’s narrative consists of four parts:

• Canada is a safe haven for terrorists, extremism and organized crime, and there is a nexus between Indo-Canadian gangsters and Sikh separatists working with Pakistan’s intelligence agency.
• The Canadian government has consistently ignored repeated requests from India to take actions against Khalistani “terrorists” operating on Canadian soil.
• Prime Minister Justin Trudeau’s government is pandering to the large Sikh diaspora in Canada.
• The Liberal minority government is dependent on support from the New Democratic Party leader, Jagmeet Singh, a Sikh supposedly sympathetic to the Khalistani cause.

Indian news media and politicians have repeated the official discourse constantly for weeks.

While India was quick to dismiss Canadian allegations, it has adopted a much more cautious approach to the U.S. indictment. India has much to lose by alienating the Biden administration as both countries have invested a great deal in enhancing Indo-U.S. relations and making India a central ally in America’s Indo-Pacific strategy.

Meanwhile, Indo-Canadian relations have been chilly since 2015, largely due to Khalistan activity in Canada. Moreover, annual trade between India and Canada is worth about $12 billion while trade with the U.S. is worth $192 billion. In short, India has much more to lose by alienating the U.S than it does by taking a hard line with Canada.

Furthering authoritarianism

On the surface it might appear that news of the U.S. indictment could fracture India’s muscular foreign policy. However, this episode is unlikely to have much impact on India’s domestic politics. Modi remains popular with an approval rating of 78 per cent.

He is credited, among other things, with India’s emergence as a global power, with his effective handling of border issues with China, for taking on Pakistan and with the success of the country’s space program.

The 26-party opposition coalition, Indian National Developmental Inclusive Alliance (INDIA), is unlikely to challenge Modi on this particular issue. The national defense narrative is a strong one, and India’s territorial integrity is a sacrosanct issue for all political parties.

However, among some minority communities, Muslims and Sikhs, both at home and abroad, revelations of assassination plots could raise serious concerns. The Modi government’s aggressive pursuit of a Hindu nationalist agenda, its repression of minorities and control over dissent have become more entrenched.

India’s parliament is in the process of amending its sedition laws. If the changes are passed, endangering the unity and integrity of the country could result in life-term imprisonment. These proposed changes to the already harsh and draconian penal code will only further criminalize dissent. The Modi government is ensuring that dissenting voices, particularly those of minority communities, completely disappear from Indian democracy.

Amplifying the Khalistan movement

India’s campaign of global repression of Sikh separatists could have the effect of unifying the Sikh diaspora. It was in 2018 that Pannun came up with the idea of holding a non-binding referendums to mobilize the global Sikh community.

That year, Sikh activists announced their campaign for holding referendums starting in 2021 across multiple cities. The first referendum took place in London on Oct. 31, 2021, followed by eight more referendums during 2022 and 2023 in the cities of Leeds and Luton (United Kingdom), Geneva (Switzerland), Brampton, Mississauga and Surrey (Canada), Melbourne (Australia), and Brescia (Italy).

Pannun announced plans for referendums in Punjab and the U.S, and for another round of voting in Canadian cities. In October, following Trudeau’s announcement of credible allegations against the Indian government, thousands of voters turned out to participate in a referendum in Surrey, B.C., some coming from as far as the cities of Edmonton and Calgary.

While only a small minority of the Sikh diaspora is thought to support creating a separate Sikh state, the majority were likely registering their disapproval of India and its repression of minorities. Memory of the 1984 anti-Sikh riots in the wake of Indira Gandhi’s assassination which left thousands dead remains very much alive within the entire Sikh community to this day.

But Khalistani referendum politics relies heavily on images depicting so-called “martyrs” (separatists killed by India) and Indian diplomats as the assassins of Sikh activists. The desecration of Hindu temples also has the potential to create division within the Indian Hindu and Sikh diasporas. Canadian Liberal MP Chandra Arya has accused Khalistan supporters of targetting Hindu temples.

As more information comes out, the Canadian government will need to carefully manage its relations with India and the relationship between diasporic communities here.

Source : The Conversation

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