The world is trying to figure out Asia--pronto!

FILM: "Demand surges for Asian docus," by Clifford Coonan, Variety, 12-18 April 2010.

Big local driver:

... the birth of an independent television production industry and the creation of regional, national fully dedicated documentary channels in Malaysia, China, India and Thailand.

Big external driver is the rest of the world wanting to simply know more about this rising influence in our collective lives.

China a big player, despite its tendencies toward censorship. They want their Upton Sinclair helmers (Variety term for directors); they just don't want any blame directed at the Party.

A security strategy with no security

ARTICLE: "The Economic Underpinnings of China's Regional Security Strategy in Afghanistan," by Roman Muzalevsky, Eurasia Daily Monitor, 19 April 2010

.

Gist:

Afghanistan increasingly relies on Chinese investments to promote its economic development. China, in turn, views Afghanistan as a source for raw materials and an important energy, transportation, and trade link that can enhance Beijing's regional security interests.

China is now the biggest foreign investor in Afghanistan, thanks to the billions plopped down on the Aynak copper reserve. But there's more, as I've noted here before:

Afghanistan has an estimated 1.6 billion barrels of oil and 440 billion cubic meters (bcm) of gas, deposits of ferrous and non-ferrous metals, iron ore and gold. The Chinese were so interested and active in the country's extractive sector that Bamian province officials noted the frequency of visits by Chinese delegations to the area. A western diplomat in Afghanistan was further prompted to state that "...only China can be the single most serious investor in the country..." (Kommersant, March 26).

And China is our natural SysAdmin partner in a more direct sense too:

Chinese contractor companies have additionally been involved in infrastructure work funded by Western sources throughout Afghanistan (www.fergana.ru, March 26).

The key part, referencing what I've been saying for a while:

Beijing is clearly focusing on economic, rather than military, engagement to bolster long-term security in Afghanistan and the region. It has trained 1,000 Afghan specialists in various fields, provided training and equipment to the Afghan army, and assisted with counterterrorism and counternarcotics activities (www.fmprc.gov, March 27, 2009).

Nonetheless, China has not set up regional military bases or deployed forces in Afghanistan despite its extensive peacekeeping experience. Nor has it chosen to work closely with NATO, the activities of which it treats with caution (China Daily, March 25). Beijing's related disinterest stems from its concerns about instability in its Muslim and restive Xinjiang Province that could result from expanded military involvement in Afghanistan. China also concentrates on building up its regional and global economic capabilities, choosing not to entangle itself in potentially exhausting military missions. It can thus "pick up the fruits" while others "are doing the heavy lifting" in Afghanistan, and also lay the foundation for long-term security in the region through economic development (Interfax, December 30, 2009).

Our blood, their oil, copper--whatever.

Works for them so long as we don't demand anything better.

Of course, our withdrawal will change things (another point I like to make in talks):

China feels no imperative at this stage to promote regional security by substantially expanding its military presence in Afghanistan. Its growing economic capabilities in the context of NATO's military involvement currently enables it to promote regional economic and security interests without committing itself militarily. However, the planned withdrawal of the coalition forces from Afghanistan by 2011, and Beijing's own rising regional influence might soon translate into a more pronounced military-based regional security strategy.

So don't kid yourself on China's "non-interference" and "soft power." You network and you get connected and you will end up having to defend.

Some learning curves are in the offing, to the benefit of all but the involved locals--at least in the short run.

Great piece.

[thanks to WPR's Media Roundup]

An educated Asia

OP-ED: "The Rise of Asia's Universities," by Richard C. Levin, New York Times, 20 April 2010.

Key bit:

The results of Beijing's investment have been staggering. Over the past decade, the number of institutions of higher education in China more than doubled, from 1,022 to 2,263. Meanwhile, the number of Chinese who enroll in a university each year has quintupled.

India's achievement to date has not been nearly as impressive, but its aspirations are no less ambitious. To fuel the country's economic growth, India aims to increase its gross enrollment ratio in post-secondary education from 12 percent to 30 percent by 2020. This goal translates to an increase of 40 million students in Indian universities over the next decade.

Oh, the shifting balance of global POW-WAH!

Or maybe it's just a good thing that more people are being educated, because then it's not just their stomachs but their brains that are being added to the mix. It may just cut down on the number of Earths we are "forced" (forced, I tell you!) to consume.

But hey! Be careful with that stuff, China!

It takes more than research capacity alone for a nation to develop economically, however. It takes well-educated citizens of broad perspective and dynamic entrepreneurs capable of independent and original thinking. The leaders of China, in particular, have been very explicit in recognizing that two elements are missing from their universities: multidisciplinary breadth and the cultivation of critical thinking.

Because critical thinking doesn't go hand-in-hand with single-party rule.

The larger problem:

The traditional Asian approaches to curriculum and pedagogy may work well for training line engineers and midlevel government officials, but they are less suited to fostering leadership and innovation.

And here's where India beats China:

The egalitarian politics of India make it difficult to focus on developing a small number of world-class research universities.

In one respect, however, India has a powerful advantage over China, at least for now. It affords faculty members the freedom to pursue their intellectual interests wherever they may lead and allows students and faculty alike to express, and thus test, their most heretical and unconventional theories -- freedoms that are an indispensable feature of any great university.

This is why state or authoritarian capitalism has built-in limits.

[thanks to WPR's Media Roundup]

Another piece on the slow-but-steady pace of reforms in the Saudi kingdom

COMMENT: "Saudi reform is on agenda at last: Despite opposition from clerics, the hear of Saudi Arabia's religious police is steering the kingdom in the right direction," by Fahad Faruqui, The Guardian, 20 April 2010.

The lay of the bad land:

Prior to the days of Bluetooth, men and women thievishly exchanged contact information on a piece of paper or just whispered their phone number to each other.

Technology has given the cat-and-mouse game between the religious police and testosterone-driven locals a new twist. Despite the ban on gender mixing, most men and women in Saudi Arabia connect via Bluetooth, while maintaining proper distance.

But the religious police have no qualms about snatching someone's mobile phone to check for any sly activity, which can result in the phone being confiscated.

A naturalised Saudi woman expressed her dismay about strict segregation laws, saying that it does more harm than good. Nearly 95% of her free time is spent on Facebook, chatting or surfing the internet - which is the only window to the outer world for many Saudi women. When I asked this unmarried Saudi from Jeddah, who does not wish to be named, about sexual harassment in the kingdom, she bluntly replied: "We have a lot of sexual harassment here [in Saudi Arabia], but it's just never mentioned in the newspapers."

Known facets of sexual harassment in the kingdom are intentionally brushing against women and lustfully eyeing them - common in other countries where social interaction with the opposite sex is restricted (as Khaled Diab discussed recently in connection with Egypt).

In Saudi, though, there is another tier to sexual harassment that can cause physical and emotional injury to a woman.

In a society where there have been cases of honour killings, a woman can be entrapped into performing sexual favours. The woman from Jeddah said: "Due to frustration here of no activities, girls and guys tend to meet online, or in the mall or through friends.

Then [they] find a place to have sex either willingly or are forced to have sex; otherwise the guy threats [sic] them that he will tell her parents."

Rape cases are rarely filed in Saudi Arabia.

Now the good news:

Last December, Sheikh Ahmed al-Ghamdi, the head of religious police of Mecca, approved co-education in Saudi Arabia. This is unheard of in the realm of Saudi hardline thinking.

Had to be done to cover the activities of the King Abdullah University for Science and Technology, which is coeducational.

Even better is the ending of the piece:

Ghamdi has recently made another bold declaration, that Islam does not forbid gender mixing and that it's only natural for opposite sexes to mingle. Until now, it was hard to imagine that lifting the ban on gender mixing would even be possible. But Ghamdi's views are gaining support from prominent Muslim scholars who can steer the kingdom in the opposite direction. And the good news is that it seems to be in line with King Abdullah's vision.

Slow but steady, because the only way this works is on a generational scale.

[thanks to WPR's Media Roundup]

The counter-intuitive take on Russia's near abroad

Click map to enlarge

COMMENT: "Former Soviet states aren't just Russian pawns: Countries such as Kyrgyzstan have shaped politics, triggering events to which Russia and the west can only react," by Stefanie Ortmann and Vadim Kononenko, The Guardian, 20 April 2010.

Love this one:

It is often assumed that a Kyrgyz turn away from the west would be a more than symbolic victory for Russia. And after all, did Bakiyev not come to power in a democratic revolution in 2005? Russia has been openly unhappy with the "colour revolutions" in the former Soviet space and removal of the democratic revolutionaries from power, be it in Ukraine, Georgia or Kyrgyzstan is part of Moscow's strategy of "imperial comeback". Or is it?

This kind of interpretation depicts the smaller states of the former Soviet Union as little more than pawns in the hands of more powerful actors. The Kremlin does openly pursue a strategy of asserting its influence in the former Soviet space, and so do the US and the EU. But these states are not objects of a geopolitical game over which they have no control. The image of a "new great game" underestimates the extent to which the smaller former republics have been actively shaping regional politics in recent years, triggering events to which Russia - and the west - could only react.

Examples of small states triggering Russian actions follow (Georgia, Ukraine, Kyrgyzstan), and yeah, when Russia intervenes, it seeks to advance it perceived interests, but again, this is reactive more than proactive.

In short, ditch the chessboard metaphor BS, along with that "great game" crap, which is moldy beyond belief.

[thanks to WPR's Media Roundup]

Just connect, and then watch the uppitiness ensue

INTERNATIONAL: "Debate on Internet's Limits Grows in Indonesia," by Norimitsu Onishi, New York Times, 19 April 2010.

Love this one (with no bias against Obama):

Displeased that a statue of a 10-year-old Barack Obama was installed in a park here, Indonesians took their protest not to this capital's most famous traffic circle but to Facebook. More than 56,000 online protesters later, city officials gave in to arguments that the park should be reserved to honor an Indonesian.

This example of high-tech grass-roots organizing was the direct result of the explosion of social networking in Indonesia. But the boom is prompting a fierce debate over the limits of free expression in a newly democratic Indonesia, with the government trying to regulate content on the Internet and a recently emboldened news media pushing back.

Ah, but the Internet hasn't erased all borders! So it does NOTHING for democracy and pluralism in general!

Proponents of greater freedom view social networking as a vital tool to further democratize this country's often corrupt political system. Skeptics, especially among politicians and religious leaders, worry about mob rule and the loss of traditional values.

In its latest move, the government recently proposed a bill that would require Internet service providers to filter online content but was forced to shelve it after vociferous protest online and in the mainstream media.

Thanks to relatively cheap cellphones that offer Internet access, Facebook, Twitter and local social networking media have rapidly spread from cities to villages throughout Southeast Asia, especially in Indonesia and the Philippines.

The usual, legitimate fears of mobocracy are described, but you know what? Those fears are only legitimate where governments underperform or overbear.

A prominent blogger, Enda Nasution, also said the laws could smother Indonesia's flourishing blogosphere. When Mr. Nasution, 34, began blogging early in the past decade, he said he could count the country's bloggers on two hands. Today, according to Virtual Consulting, there are more than one million Indonesian bloggers.

In Singapore, Malaysia and other countries in the region with controlled news media, blogs often tend to be sites for information that cannot be reported in the mainstream media, Mr. Nasution said. In Indonesia, because the news media are free, "bloggers also act as watchdogs or commentators," he added.

The recent online movements, he said, are a watershed in the evolving role of social media here.

"We don't know where this is going to lead us," he said, adding that supporters of regulations "are standing in the way of an online tsunami."

"You can't stop it," he said. "It's not only about technology. It's about Indonesia redefining its values."

But such talk unsettles many in what remains a culturally conservative society.

My point? Declarations of obituaries are useless. The struggle is ongoing and will always be ongoing.

But connectivity will always--in the end--win out.

WPR's The New Rules: Don't Count Out Free Markets Just Yet

The recent global financial crisis has birthed a slew of books proclaiming the superiority of state capitalism -- or, alternatively, authoritarian capitalism -- over free markets. China, we are led to believe, will not merely own this century, but will also likely win the bulk of the world over to its "unique" and "unprecedented" model of development. Stunningly, even though no serious thinker still believes in the efficacy of command economies, we are now encouraged to quake before state-directed economies, as if a bunch of power-fixated politicos sitting around a table will somehow manage to outsmart, out-predict, and outperform the "wisdom of crowds" and the market's "invisible hand" -- all while easily maintaining their dictatorship over just-emerging middle classes.

Read the rest here at World Politics Review.

As for the book I review in the piece:

Find it here

Wind energy: size will matter

FRONT PAGE: "Green Energy Rush Hit by Headwinds," by Guy Chazan, Wall Street Journal, 21 April 2010.

First off, I was just struck by the chart (above) and the projections of huge increases over this decade.

The trick?

The projections assume new technologies that allow for turbines to be placed in waters much deeper (further offshore) and to be of skyscraper size.

No choice: simply isn't the land to put them on.

Again with the Tang!

The original Tang market hundreds of years ago!

COMPANIES & INDUSTRIES: "Global Marketing: Tang Gets a Second Rocket Ride; The Space Age drink soars in China and developing markets," by Duane Stanford, Bloomberg BusinessWeek, 26 April -2 May 2010.

Apparently, Tang is taking off like a rocket in China: "Tang makes water more exciting."

Kraft has seen Tang sales in emerging markets rise 30% last year, as part of its "power brands" strategy of introducing its staple items to rising economies.

Pirates of the East, beware!

COMPANIES | INTERNATIONAL: "Microsoft to collect damages for piracy in China: Insurer told to pay over illegal copies; Warning to users of counterfeit products," by Kathrin Hille, Financial Times, 23 April 2010.

MS wins a court case on piracy in China. Small bucks ($318k), but big precedent, because it's the first time MS has ever taking a large Chinese firm to court in China and won. It's also the largest award to date in China on this sort of thing.

Basic case of using pirate copies.

Good sign.

Iran knows why it wants nukes

CAPITAL JOURNAL: "U.S. Needs to Buy Time for Its Iran Plan to Work," by Gerald F. Seib, Wall Street Journal, 23 April 2010.

Seib makes the case for the US strategy of drawing out the time it takes for Iran to achieve a nuclear capacity, the main target being the bank accounts of the Revolutionary Guards.

Our big lever with the Chinese is described as being our description of the crazy Israelis ready to do something dangerous.

The big dream: getting Iran to re-accept the nuclear-swap deal that we thought was in place months ago. In that scenario, a trusted Core state would handle the enrichment. That's seen as buying a solid year.

Whoa dog!

Then, allegedly, we search for the next great delay tactic.

Seib sees this all as crucially worthwhile, because the time buys us space to bolster local defense of allies and wrap them all up in a joint-response scheme.

Then the dream extends further: convinced that they cannot intimidate their neighbors, Iran recalculates because of the economic pain and decides not to go nuclear.

This would be brilliant if any of it was relevant to their calculations, but none of it actually is.

Iran wants the bomb to stop a potential US invasion--plain and simple. It also knows that, by having the bomb, it enters an exclusive club that--for now--only Israel occupies in the region.

The leadership isn't stupid. They know that nukes will give them zero leverage locally in any operational sense. This is all about getting even with the U.S. and its nuclear ally in the region and guaranteeing a seat at any future table that explores the region's security.

But yes, I do expect the Iranians to continue dangling a seeming willingness to deal in the months ahead--anything to buy time and our further inaction (which is a pretty cheap deal right now, because we have little-to-no belief in the efficacy of any strike scenario).

Steering by our WMD rearview mirror

U.S. NEWS: "White House Focus on Nuclear Terrorism Gets Scrutiny: Some Proliferation Experts Warn Chemical or Biological Attack Is More Likely--And Threat Doesn't Get Enough Attention," by Keith Johnson, Wall Street Journal, 23 April 2010.

My point for years now: nukes are so 20th century, while this one will turn out so biological in orientation. So instead of focusing on nuclear terror and energy nets, I see us shifting inevitably to biological terror and food nets--especially as global warming unfolds.

Biological is just the biggest bang for the buck in terms of impacting the economy. Also the easiest to pull off.

But our historical obsession with nukes is a hard thing to break.

The Korengal retreat works, so long as Pakistan stays on our side

OPINION: "The Meaning of the Korengal Retreat," by Bing West, Wall Street Journal, 23 April 2010.

I first met and got to know Bing West in the early 1990s, when I was starting out at the Center for Naval Analyses and he was on the board. He was one of the first guys I interviewed for my review of naval arms control study that I described at the start of PNM ("Playing Jack Ryan").

It has been fascinating, to say the least, to watch his evolution as a writer on military affairs. I think he got bored being a wise-man "former" (assistant secretary of defense) and truly found himself in a follow-on career sense by being more on-the-spot with his analysis. Not for everybody, but Bing obviously loves it.

A lot of pieces have been written on the US decision to pull out of the Korengal Valley (dubbed the "valley of death" by Time, with the usual hyperbole of a magazine).

Bing starts out by pointing out that there's been only one US death there over the past ten months. I think the cumulative total is somewhere in the 40s, so not exactly the Battle of the Bulge.

The isolation of the place meant it was supremely hard to supply (all by helo), plus, as is often the case with such isolated spots, the locals pretty much hate any outsiders who come in, so the sense was, little gain for a lot of effort that had the sum effect of pissing off the locals.

Larger point from Bing: if we can't control the mountainous border with Pakistan, there's no hope Karzai can when we go.

So two possible futures: First is that the lowland, richer Pashtun tribes accept Afghan troops (Tajiks mostly) and resist the local insurgents still willing to fight on. If that works, then Korengal is just a weird little spot better ignored.

Second scenario: Taliban re-penetrate the areas and once again threaten the central regions and capital.

Big sign: does the main road to the provincial capital stay open or is it owned by the Taliban.

Bottom line: If Taliban can commit enough resources (presumably a function of how hard the Pakistanis crack down on them vice go back to supporting them), there's no question they can "checkmate" our COIN efforts as we draw down.

My overall sense: Pakistan does enough to crack down on all relevant local bad actors so as to facilitate our drawdown WRT a perceived stabilization of Afghanistan. Once we go, Pakistan then goes back to supporting/operating the Taliban and we're right back to 10 September 2001.

That's why I consistently say, we should choose India over Pakistan and see where that takes us instead, even if it means getting into bed with all sorts of other regional players (e.g., Russia, Turkey, Iran--but probably less so Pakistan's old friend China).

I just don't see how we win relying on Pakistan. I only see how we get out--and then let the Taliban/Al Qaeda combo sked our return on their timetable.

The decision, I believe, has already been made inside the administration. We chose Pakistan. Pakistan chooses the Taliban. Karzai knows all of this, and so he prepares.

New Delhi knows it all too, and so it prepares vis-à-vis Moscow and Tehran--as well it should.

In the end, I don't think any of us Americans will enjoy this path in retrospect, despite the obvious temptations of today. But Obama is in full wind-down mode on foreign policy--save on Iran (the truly pointless struggle) and his nuclear dreams.

In the end, the focus on the economy and healthcare may be enough to squeak him through in 2012. The breather on foreign policy was inevitable (as I wrote in GP, the lean years after the seven "fat" ones of high-tempo use), but if pursued too vigorously, Obama risks becoming an interregnum presidency like Carter's--full of moral greatness but devoid of any serious structural accomplishments.

Naturally, I always want more.

Nuke-free world: China's not signing up

WORLD NEWS: "Beijing Defends Buildup Of Its Nuclear Arsenal," by Gordon Fairclough, Wall Street Journal, 23 April 2010.

Beijing continues to modernize is nuclear arsenal, saying it needs weapons capable of retaliating against any level of nuclear attack.

Sounds reasonable to me.

The latest official word from the military side of the house there reiterates a no-first-use policy.

As second-strike arsenals go, China's is tiny compared to ours or Russia's, so--again--the argument offered is more than reasonable.

Asia is no longer the great source of deflationary pressure

MONEY & INVESTING: "High Cost of Raw Materials: Surging Prices Fueled by Emerging-Market Demand, Hits Profits and Consumers," by Liam Pleven, Wall Street Journal, 23 April 2010.

The basic commodities all face significant upward future price pressure. This article is mostly about lumber, rubber and palladium (car exhaust systems).

The rising demand is mostly from the East, where expanding economies can handle the price rise more easily than in the West.

Then again, the situation sure as hell beats the alternative: the world waiting on the West to recover, so you stuff your complaints in a bag, mister!

Take that, Mr. Potter! No, really, please take it!

INTERNATIONAL FINANCE: "Foreign Firms Scoop Up Failed Banks: International Buyers Think the Worst Is Over for U.S. Banking; 'Cheaper Than Building Branches,'" by Robin Sidel, Phred Dvorak and Atsuko Fukase, Wall Street Journal, 23 April 2010.

Another one of those, tell-me-the-better-alternatives-given-the-situation stories: foreign firms buy up our failed banks. Would you prefer nobody want to buy them?

The movers are basically Canadian and Japanese, plus some Irish, Argentines, Spaniards and Portuguese. Some American banks like US Bancorp are also buying, but typically they focus on the bigger packages of branches.

Maybe this guy isn't the usual idiot son?

Wikipedia

WORLD NEWS: "Gaddafi's son takes role as defender of liberty: North Africa; Saif al-Islam has been cultivating his image as a champion of reform in autocratic Libya," by Heba Saleh, Financial Times, 23 April 2010.

The man is certainly getting out there--at least rhetorically.

Saif is the second eldest of the Colonel's seven male children (I myself am the 6th of 7, so I know from where he stands), but the only one getting himself a public profile in anticipation of the Old Man's passing. One older brother is considered his chief competition. That one heads the security service.

Hmm. Gotta like those odds.

So far, the external judgment is, the guy is real, as are his efforts. But so far his accomplishments are more cosmetic than structural, primarily because Gaddafi the Elder does not appear to back him whatsoever in his pursuits.

So we wait and wish him well.

Chinese carmakers: nowhere to go but up

Found here

CARS: "Chinese aim to be king of the road: Beijing motor show; The home market is massive and local carmakers want to dominate it," by Patti Waldmeir, Financial Times, 22 April 2010.

CARS: "China embraces freedom of the road: Cars are liberating the country as they did in the US in the 1950s," by Patti Waldmeir, Financial Times, 23 April 2010.

Stat I've long used: cars per 1,000 people in China stands at about 30. In the US, it's somewhere between 7-800.

Yes, most Chinese automakers stand way behind the Western ones in terms of technology, quality and service, but local brands dominate in the West and Japan, and they will eventually in China too.

Over 90% of the cars sold in Japan are Japanese. It's roughly half for Germany and the U.S. In India and China, it's only one-third.

The Chinese brands will come to dominate as the highly fractured industry consolidates, like it did in the US in the 1920s.

And then those new models will start showing up over here too.

Meanwhile, China's rapid-fire development of a US-style car culture continues apace. Their version of our interstate system is about a decade away from being realized. This is the first time in China's five millennia that ordinary people have had the freedom of individual mobility.

Of course, this will have no impact on the population's relationship with the government. Just look at how conservative America got after the 1950s.

Ah, the genius that is authoritarian capitalism!

COMMENT: "Bad loans could take their toll on China's growth," by Michael Pettis, Financial Times, 22 April 2010.

Beijing commited itself to a massive government stimulus, second only to our own. To some, that proves--yet again--the "superiority" of authoritarian capitalism.

To me, it proves the Chinese read Keynes.

Last time China faced a great wave of bad bank loans about a decade ago, it pursued a series of policies, detailed here, that essentially represented a transfer of wealth from unlucky depositors to the state, banks, and businesses. As a result, household income declined to alarming levels.

No question that China's got the bucks to fund any rescues. It's just that the average person will end up paying in the end--again. That means the quest for more domestic consumption will be thwarted.

Despite the current fads in thinking, there ain't no such thing as a free lunch--or a government smarter than markets.

Three makes a pressure group

FRONT PAGE: "Brazil and India join US in urging appreciation of renminbi: Central bank chiefs back US call for revaluation," by Geoff Dyer, Financial Times, 22 April 2010

.

These were words before the recent Group of 20 ministers meet in DC the week before last.

Sebastian Mallaby's quoted point:

If the rich and emerging economies are united in asking China to revalue, it would be harder to dismiss the request as an example of superpower arrogance.

See, America is already learning to work with new great-power allies!

[thanks to Michael Smith]