COEs mostly fall in latest bidding exercise; premium for smaller cars rises
SINGAPORE: Certificate of Entitlement (COE) premiums closed mixed in the latest bidding exercise on Wednesday (Jul 5). For Category A cars, or those 1,600cc and below with horsepower not exceeding 130bhp, premiums closed at S$97,000 (US$71,750), up from S$96,206 in the last exercise. Premiums for larger and more powerful cars in CategoryContinue Reading
Torrential rains kill at least 15 in southwest China
Scientists say that rising global temperatures – caused largely by burning fossil fuels – increase the likelihood of extreme weather events such as the flash floods and heatwaves experienced in many Asian countries in recent weeks. The floods coincided with record heatwaves in other parts of China, with the country’sContinue Reading
Singapore urges all parties to de-escalate tensions amid violence in Israel and West Bank
SINGAPORE: Singapore “remains deeply concerned” over the recent escalation of violence in Israel and the West Bank, the Ministry of Foreign Affairs (MFA) said in a statement on Tuesday (Jul 5). “We are saddened by the loss of civilian lives and urge all parties to de-escalate tensions and take theContinue Reading
Indonesiaâs mineral export bans face hot global fire
JAKARTA – Indonesia is under rising fire at the World Trade Organization and by the International Monetary Fund (IMF) for the government’s seemingly haphazard policy of banning mineral ore exports, a market intervention Jakarta insists is just and necessary to maximize its economic and industrial growth.
In a sharply worded statement accompanying its 2022 country report, the IMF called for Indonesia to phase out the restrictions and not extend them to other commodities. “The increasing use of trade measures and industrial policies may destabilize the multilateral trade system,” the IMF said.
The Joko Widodo administration has so far been unyielding, insisting that Indonesia is well within its rights to add value to its minerals, specifically nickel, bauxite, copper and tin, to become a newly industrialized state.
Nickel exports were banned in January 2022 and bauxite shipments followed on June 10. Tin and copper bans are scheduled to come next. “We have to dare to take these steps,” Widodo, a fervent advocate of the value-added policy, said last year.
Economic Coordinating Minister Airlangga Hartarto has described efforts by developed nations and international organizations to push for controls on other countries’ export policies as a form of modern-day colonialism that will inhibit Indonesia’s economic growth and development.
The WTO ruled last November that Indonesia’s restriction on mineral exports violated Article XI of the 1994 General Agreement on Tariffs and Trade, but US opposition means there is no mechanism to enforce the decision through the organization’s dispute resolution panel.
The European Union (EU), which brought the complaint to the WTO, said the nickel ban had unduly and illegally restricted EU access to raw materials needed for stainless steel production and, in doing so, had distorted the world market production of mineral ores.
The WTO panel has argued that Indonesia’s measures didn’t fall under the exemption for prohibitions or restrictions temporarily applied to prevent or relieve critical shortages of products essential to Indonesia. What happens next isn’t clear, but Indonesia has made it clear it isn’t backing down.
Despite Indonesia’s large volume of mineral exports, the mining sector contributed only 5% to gross domestic product (GDP) in 2019. After the government introduced the nickel ban, the mineral’s value-added increased from US$1.1 billion to $20.8 billion in 2021 alone.
Predicting that figure would rise to more than $30 billion, Widodo said: “That is just one commodity. The government will continue to consistently carry out down-streaming so that added value is enjoyed domestically for the advancement and welfare of the people.”
He estimates the industrialization of bauxite, mainly found in West Kalimantan, will see revenues increase from $1.3 billion to $4.1 billion due to the value-added impact of the ban. Eight bauxite smelters currently under construction will boost existing production from 4.3 to 9.1 million tonnes.
But progress has been painfully slow and the government’s loss of patience in imposing the export ban may be because bauxite ore exports earned only $500 million in the first nine months of 2022, or 20% of the value of copper concentrate exports, which are already 95% refined metal.
Progress on copper giant Freeport Indonesia’s (PTFI’s) new $3 billion copper smelter at Gresik in East Java has been equally slow and is now due to be commissioned in May next year, the deadline for the export ban to go into force.
PTFI is alsomajority owned by the government, which in 2018 took a controlling interest from US mining giant Freeport McMoRan Copper & Gold, still the operator of the hugely profitable Grasberg mine in Papua’s Central Highlands.
Indonesian-owned Amman Mineral Nusa Tenggara is about halfway through building a third copper smelter at the site of the Batu Hijau copper and gold mine on the island of Sumbawa.
Critics of the policy point out, however, that one mineral ban won’t necessarily work for another. While it welcomed Indonesia’s value-added efforts, the IMF said they should be accompanied by comprehensive cost-benefit analysis and designed to minimize cross-border spillovers.
Brazil, Canada, China, Japan, South Korea, India, Russia, Saudi Arabia, Singapore, Turkey, Ukraine, United Arab Emirates and the US have all joined as third parties in the EU’s nickel dispute at the WTO.
America’s 2022 Inflation Reduction Act, marking the most significant action Congress has taken on clean energy and climate change, provides up to $7,500 in subsidies for electric vehicles (EVs) that contain a certain percentage of critical minerals processed in the US.
EU President Ursula von der Leyen has also recently proposed passage of a Critical Raw Materials Act aimed at addressing the 27-nation organization’s dependence on imports of critical raw materials.
Home to 22% of the world’s nickel reserves, concentrated in Sulawesi and Maluku, Indonesia’s ban has caused major shifts in the supply chains of EVs and on other strategic products such as rocket engines.
More than 75% of nickel is processed into stainless steel, but it is also critical to the manufacture of EV battery cathodes, which currently consume only 7% of global production.
It is for that reason that car companies are seeking to secure nickel supplies from Indonesia and other suppliers like the Philippines, New Caledonia, Russia, Canada and Australia.
The world’s two largest economies, the United States and China, have only limited reserves of nickel and rely heavily on the import of nickel ore or refined nickel.
China remains the world’s largest nickel importer, but over the past decade, Chinese companies have poured $14.2 billion into three major Indonesian processing complexes aimed at locking up supplies for the foreseeable future.
While Indonesia may have the world’s largest reserves, they mainly comprise class 2 nickel, which is not suitable for EV batteries. Recent efforts have been made to develop ways to convert class 2 to class 1.
The most effective process involves high-pressure acid leaching (HPAL) of the class 2 ore to produce mixed hydroxide precipitate (MHP), which is then further refined to where it can be used for battery cathodes.
The operation is costly, however, requiring large volumes of water and considerable energy – equivalent in this case to about a sixth of the capacity of Indonesia’s main Java-Bali power grid. It also produces toxic tailings.
The two main production facilities at Morawali, Central Sulawesi, and Weda Bay, Maluku, will eventually rely on 5,400 megawatts of coal-fired power, leaving potential customers questioning whether the process meets environment, social and corporate governance (ESG) standards.
Another major ESG issue is the environmental degradation arising from nickel mining in eastern Indonesia, which has turned the sea red in some areas and destroyed coastlines.
Meanwhile, Indonesia persists in its efforts to create a global nickel cartel, similar to that of the Organization of Petroleum Exporting Countries (OPEC), which seeks to coordinate the petroleum policies and outputs of member states to keep oil market prices high and stable.
Investment Minister Bahlil Lahadalia says Indonesian trade officials are in “intense talks” with three other unidentified nickel suppliers, following up on Widodo’s attempt to pitch the plan to the G7 summit in Hiroshima, Japan, where he was an invited participant.
“I hope G7 countries can become a partner in these industrial downstream policies,” he was quoted as saying on the Presidential Secretariat website. “It is time to establish an OPEC-like group for other products such as nickel and palm oil.”
Bahlil first proposed the idea of a nickel cartel to Canadian International Trade Minister Mary Ng on the sidelines of their G20 summit in Bali; Canada has two million tonnes of nickel reserves, with mine production reaching 134,000 tonnes in 2021.
The average price of nickel rose to a record $25,83418 a tonne last year, an increase of $7,000 over 2021 on the back of demand for batteries. Previously, the price had been linked to stainless steel production, peaking at $20,390 in 2012.
Noting that EV-producing countries implement their own protectionist policies, Bahlil says that Indonesia and other raw material producers want to ensure they gain the optimum added value from their inputs to the fast-accelerating industry.
New Thai House Speaker could pave way for Move Forwardâs Pita Limjaroenrat to become prime minister, but challenges remain: Analysts
“The old guard in Thailand clearly doesn’t want him, and one way or another, they want to get rid of him,” said Prof Hewison.
He said the case is likely to be sent by the election commission to the constitutional court, which has in the past been “very outspoken on dealing with people it sees as opposing the notion of democracy with the king as head of state”, noted Prof Hewison.
That process could take anywhere from a few days to a few months, he added.
Prof Thitinan said Mr Pita faces “all kinds of roadblocks” in his efforts to become prime minister.
“We’ve seen this over the last two decades. We had a sitting prime minister who was disqualified for hosting a cooking show,” he said, referring to former leader Samak Sundaravej’s ousting in 2008.
“We’ve had party dissolutions and disqualifications of top leaders, party leaders, and so on … So Pita is the next one, basically,” said Prof Thitinan, who added that the establishment forces working against Move Forward and Mr Pita are “very powerful”.
ROLE OF THE MILITARY
One of the things that the coalition parties have agreed to is to continue pursuing military reform, something which will worry the military as they undergo a change of leadership in the next few months, said Prof Hewison.
The complicated truth about North Korea sanctions
On the surface, sanctions seem to have had little impact on North Korea’s behavior. At the time of writing, the world is waiting for the launch of a new North Korean military spy satellite that Supreme Leader Kim Jong Un announced on April 19, 2023.
North Korea is under one of the harshest multilateral sanctions regimes of any country in the world. But the country still circumvents sanctions regularly through complex smuggling operations at which it is by now very adept. This situation raises questions about whether sanctions on North Korea have failed.
It is true that sanctions have not reached the stated political goal of inducing North Korea to give up its nuclear weapons. The country has made impressive advances in missile technology and is evidently capable of acquiring the necessary technology despite sanctions.
The “spy satellite” launch would be one of around 30 missiles tested in 2023. Though North Korea has ways to evade sanctions, this does not mean sanctions have no impact.
Sanctions interplay with domestic governance and economic systems in ways that are complex and often hard to fully evaluate. The alternative to sanctions is not an open, liberal and free-trading North Korea, but likely a slightly more well-off version of its current state.
The issue of evasion illustrates why the impact of sanctions is so hard to evaluate. Sanctions-evading actions are not rare events but are institutionalized within North Korea’s economy.
Since the 1970s, North Korea has systematically smuggled alcohol, tobacco, drugs and other contraband through its diplomatic networks abroad. These activities continue today and with North Korean capabilities expanding into the cyber realm, sources of illicit income will likely continue to constitute an underestimated part of the regime’s hard-currency revenue flows.
But sanctions evasion and smuggling are very expensive activities. For Chinese, Taiwanese and Singaporean trading companies and entities to risk smuggling oil to North Korea, Pyongyang must pay a massive risk premium on its purchases. North Korea has to pay well above market prices to give sellers a reason to take the risk of arrest and prosecution for sanctions violations.
The same is true for illicit North Korean exports. Sanctions do not stop coal exports entirely, but they slash the prices that North Korea can charge. Any buyer — almost always China — will only risk importing from North Korea if prices are cheap enough to outweigh the risks.
Even prior to the harsher sanctions levied in 2016 and 2017, China, through its position as a virtual monopoly buyer, consistently paid below-market prices for North Korean coal. This dynamic is likely even stronger today, as Chinese imports of coal and other sanctioned North Korean goods continue but go mostly unrecorded.
Despite North Korea’s evasion tactics, sanctions are indisputably hurting the North Korean economy. The country’s exports are estimated to be worth only a few hundred million dollars per year – much smaller than its trade losses.
The UN Panel of Experts estimated, for example, that North Korea earned around US$370 million from sanctions-violating coal exports in 2019. This is only a fraction of the $1.19 billion it earned from such exports in 2016, before the harsher sanctions.
The civilian impact of sanctions is unclear. On one hand, sanctions have likely dealt a harsh blow to labor-intensive industries like textiles, where a high proportion of workers are women, resulting in increased unemployment and lower wages.
The falling incomes of North Koreans working in sanctioned industries substantially dampen the wider economy. On the other hand, there is no evidence that sanctions have driven up the price of food or other essential goods.
Sanctions have undoubtedly worsened North Korea’s food shortage by hindering imports of fertilizer and spare parts for agricultural equipment. North Korea’s own border closure, though, likely also provided an obstacle to foreign trade.
But the impact of sanctions on North Korea’s food system is minimal compared with the regime’s refusal to undertake basic reforms in agriculture. The government bristles at dismantling collective farms or letting farmers sell their products on open markets.
Trade by evasion should logically become easier and cheaper. For sanctions to be effective against North Korea, China – which constitutes more than 90% of North Korea’s foreign trade – would have to implement them. As US-China tensions continue to grow, reasons for China to implement sanctions on North Korea are diminishing.
Reports of North Korean trade deals in weapons and labor with Russia in the wake of Russia’s invasion of Ukraine are already circulating. Very little is confirmed about these transactions, but there is evidence to support increased economic exchange between the countries.
Earlier this year, satellite imagery from the border area indicated that Russia was increasing oil exports to North Korea while exporting unknown goods that could be arms destined for the Wagner Group.
But this does not change North Korea’s situation. Combined with its poor global reputation, sanctions will continue to make North Korea dependent on a very small number of trade partners – mainly China and Russia – who can charge highly unfavorable prices.
None of this is to say that the current thinking on North Korea sanctions is without serious flaws. The demand that denuclearisation should come before any relief on sanctions, for example, is unrealistic.
But many also exaggerate the possible gains of abolishing sanctions. A common misperception is that, were sanctions to be lifted, North Korea would open its doors to foreign investors who would flock to the country for its strategic geographic location and cheap labor.
Removing sanctions would not change the basics of North Korea’s economic system. Despite a permissive attitude towards markets during former Supreme leader Kim Jong Il’s reign and the first few years of Kim Jong Un’s, harsh state control over the economy best serves the regime’s political and social goals by allowing it to control the distribution of resources.
Sanctions hurt, but removing them is no silver bullet for political or economic progress.
Benjamin Katzeff Silberstein is Associate Fellow at the Swedish Institute for Foreign Affairs and a Postdoctoral Fellow at the Safra Center for Ethics at Tel Aviv University.
This article was originally published by East Asia Forum and is republished under a Creative Commons license.
STB ‘exploring other possibilities’ for tourism in Jurong Lake District
SINGAPORE: The Singapore Tourism Board (STB) is exploring other possibilities for tourism in Jurong Lake District, said Minister of State for Trade and Industry Low Yen Ling on Wednesday (Jul 5).
She was responding to a parliamentary question from Member of Parliament (MP) Ang Wei Neng (People’s Action Party-Jurong) asking for an update on a proposed new tourism development in the area, located in the western region of Singapore.
A request for proposal to develop the site in Jurong Lake District was launched in March 2022, and closed in October that year with no submissions.
Ms Low said the war in Ukraine, coupled with the overall slowdown in the global economy, had created an uncertain economic environment during that period, especially for the tourism sector.
“However, STB remains confident in the tourism potential of the site as it is adjacent to the new Science Centre and Jurong Lake Gardens,” she said.
“We are monitoring market sentiments and exploring other possibilities to harness this potential.”
Mr Ang further asked about the implications for developing tourism there after the cancellation of the High Speed Rail project with Malaysia – which would have run from Kuala Lumpur to Jurong East – and the recent release of a white site near the Jurong East interchange.
Aspirant PM Pita’s wealth has dropped B41m
Aspiring prime minister Pita Limjaroenrat’s net worth has fallen 41 million baht since his assets declaration when he entered parliament four years ago.
The National Anti-Corruption Commission (NACC) on Wednesday published the declared assets and liabilities of 40 of the MPs whose terms ended on March 20. They included Mr Pita, whose declaration also mentioned his controversial shareholding in iTV Plc.
The Move Forward Party leader declared he was single and had 85 million baht in assets including 1.8 million baht in cash, 286,045.70 baht in deposits in 27 bank accounts, 15 million baht in loans to his younger brother, 14 rai of land in Pran Buri district of Prachuap Khiri Khan worth 18 million, a condominium worth 15 million baht in Wattana district and 19 million baht in insurance-related assets and relevant privileges.
Mr Pita also declared 12 million baht worth of ornaments and devices, including three mobile phones worth 166,700 baht, a 2.3 million baht van, 28 shirts worth 188,000 baht, 16 suits worth 1.2 million baht, 76 neckties worth 228,000 baht, 21 pairs of shoes worth 150,000 baht, 10 watches worth 5.71 million baht and eight Buddha amulets worth 2 million baht.
Mr Pita declared 20.74 million baht in liabilities – bank loans totalling 19.93 million baht and 807,414 baht of credit card debt.
The Move Forward Party leader informed the NACC he held 42,000 shares worth 44,100 baht in iTV Plc on behalf of other relatives because he was executor of his late father’s estate.
The Bangkok South Civil Court had ordered him to hold the shares in his capacity as executor and he had already transferred the shares, he told the anti-corruption commission.
The iTV shareholding led to complaints questioning his eligibility to hold a political position because the constitution prohibits a shareholder in a media company from running in a general election.
When compared with the 126 million baht in assets declared when he entered parliament in 2019, Mr Pita’s wealth fell about 41 million baht during his four-year term as an MP.
NACC assistant secretary-general Watanachai Sommee said the commission had ordered Mr Pita to file documents relating to his role as his father’s executor, and Mr Pita had until July 23 to supply the papers.
The NACC would examine the documents thoroughly and would also check on Mr Pita’s sale of a block of land in Pran Buri district of Prachuap Khiri Khan, as the sale price was not reported, Mr Watanachai said.
Thai parliament to vote for prime minister on Jul 13
BANGKOK: Thailand’s parliament will vote for a new prime minister on Jul 13, house speaker Wan Muhamad Noor Matha said on Wednesday (Jul 5). The announcement comes a day after Wan Noor was endorsed as house speaker, a role in which he is able to call for a joint sittingContinue Reading
China simulates âZ-dayâ total sea war with the US
China has just simulated a total war scenario at sea with the United States, an exercise that highlighted the People’s Liberation Army-Navy’s formidable challenges in a potential high-intensity conflict with an advanced, determined and highly-capable adversary.
South China Morning Post (SCMP) reported that researchers from the PLA’s Unit 91404 recently added a “total war” scenario when testing and evaluating the performance of new weapons. Unit 91404 is responsible for the sea tests of some of China’s latest and most potent naval weapons.
The SCMP report notes that the researchers published their “Z-day” total war scenario in the peer-reviewed Chinese Journal of Ship Research last month. The report mentions that the researchers assumed that the Chinese military was under all-out attack by a hypothetical “blue alliance” with Arleigh Burke-class destroyers.
In the simulation, the PLA-N had nearly 50 destroyers, with each attacked with 11 missiles and more than three torpedoes coming from multiple directions.
The report also mentions the blue alliance generated jamming noises 30 times stronger than the signal PLA-N warships use for communication and that the detection range of Chinese radar was reduced to 60% below normal.
Those conditions destroyed almost a third of the Chinese destroyer’s air defense capabilities, with only half of their surface-to-air (SAM) missiles hitting their targets. Chinese naval experts who independently assessed the simulation results were quoted as saying the figures are “realistic.”
By highlighting weapon capabilities in doomsday scenarios, military forces can showcase readiness and deter potential adversaries from engaging in conflicts, researchers in the SCMP report said, with one saying that their paper is not intended to be viewed as a “horror movie.”
The Unit 91404 simulation follows on another conducted by a Chinese university wherein China had the upper hand over the US in a starkly different outcome.
In May 2023, Asia Times reported that researchers from the North University of China ran a war game simulating a Chinese hypersonic missile attack on a US carrier battlegroup, marking the first publicized simulation of its type.
The war game reportedly simulated a situation where the USS Gerald Ford supercarrier and its escorts continued approaching a China-held island in the South China Sea despite repeated warnings to turn back.
In that simulation, China used 24 hypersonic missiles in a three-wave attack to sink the USS Gerald Ford, the USS San Jacinto Ticonderoga-class cruiser, and four Arleigh Burke Flight IIA guided missile destroyers.
The first missile wave depleted the US fleet’s 264 interceptor missiles and sank the USS San Jacinto, while the second wave sank the USS Gerald Ford. The last wave finished off the surviving Arleigh Burke destroyers.
The North University of China simulation highlighted the importance of sea-based surveillance, patrol missions and lure tactics to identify targets, conserve limited missiles and reduce the number of interceptor missiles.
The US has also conducted simulations of a Taiwan Strait war with China, which unsurprisingly ended in its favor while projecting the potentially enormous costs of such a conflict.
In January 2023, Asia Times reported that Washington DC-based Center for Strategic and International Studies (CSIS) think tank had conducted a simulation of the US and its allies repelling a Chinese invasion of Taiwan, showing that while the US could potentially repel China a victory would come at a staggering cost.
Even in the most optimistic scenario, the US and Japan combined lost 449 combat aircraft and 43 ships, including two aircraft carriers, with the US losing 6,960 personnel and 3,200 killed in action. Taiwan lost half its air force, 22 ships, and 3,500 ground troops, with a third killed in action in the simulation.
China fared the worst in the simulation, losing 138 ships, 155 combat aircraft and 52,000 ground troops. China’s ground troop losses included 7,000 battle casualties with a third killed in action, 15,000 troops lost at sea with half assumed killed and 30,000 prisoners of war from Taiwan-landing force survivors.
The simulation mentions four critical assumptions for a US victory in Taiwan. First, as China’s logistics weaken, Taiwan must hold the line to contain China’s beachhead and counterattack in force.
Second, the US and its allies must accept that there is no “Ukraine model” for Taiwan since China can blockade the self-governing island for weeks or months to prevent resupply.
Third, the US must be able to use its bases in Japan, which would be the critical linchpin for US operations around Taiwan. Fourth, the US must be able to strike China’s warships from outside its anti-access/area denial (A2/AD) bubble.
Emerging technologies would likely play a decisive role in defending Taiwan, although they may not be enough to avert a Pyrrhic outcome for either side.
In May 2022, Asia Times reported that the US Air Force’s Warfighting Integration Capability (AFWIC) office and RAND think tank conducted a Taiwan conflict simulation that demonstrated the decisive effect drone swarms would have in such a contingency.
Using a line-of-sight laser “mesh” network to transmit and receive data, drone swarms deployed in the simulation were effectively autonomous, sharing flight and targeting data instantaneously and constantly between individual drones.
Drone swarms could form a decoy screen for manned US aircraft such as the F-22 and F-35, extending the latter’s onboard sensor range and enabling them to observe electronic silence.
They could also significantly increase the situational awareness and target acquisition capabilities of manned platforms while flooding enemy radar scopes with multiple targets, forcing the enemy to waste limited missiles and ammunition while manned platforms later move in for the kill.
Technologies such as machine learning and artificial intelligence would allow drone swarms to look at targets from multiple angles, cross-check various targeting data streams and suggest the best way to attack a target.
While revolutionary from a war-fighting perspective, drone swarms may not be enough to prevent a Pyrrhic outcome for the US and its allies in a potential Taiwan Strait conflict with China.