For renewable energy, Cambodia risks ‘final frontier’ Virachey forest

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As monsoonal rains rusted the charred skeleton of a logging truck, vines wrapped around the blackened vehicle seemed to drag it deeper into the wilderness.

Not far from the truck down an old logging trail, rangers in Cambodia’s Virachey National Park conducted a biodiversity survey within the protected area, much of which is unexplored. The dense forest is one of the last relatively untouched landscapes in the fast-developing Mekong region.

“Logging and poaching is an issue but the park has a way of protecting itself,” said Thon Soukhoun, who has been a ranger since the forest became a national park in 1993. “Nowhere in the country is like Virachey, it is Cambodia’s gem.”

Nestled in the Kingdom’s northeastern corner on the borders of Laos and Vietnam, Virachey was among the first Cambodian forests declared a protected area 30 years ago. At more than 3,300 square kilometres – nearly five times the size of the capital, Phnom Penh – it was the largest national park in the country at the time.

But as Southeast Asia races to cut reliance on fossil fuels, partly through climate finance schemes, Cambodia is risking this regional biodiversity hot spot for renewable energy.

Confidential documents and maps leaked to Southeast Asia Globe from meetings between developers and government officials this year indicate at least two hydropower projects within the park are quietly underway. These files show initial assessment work has begun at the dam sites in the core of Virachey, which is also a heartland for the indigenous communities along Cambodia’s borders.

The sun sets on Virachey National Park’s Veal Thom grasslands. Virachey is one of just two ASEAN Heritage Parks within Cambodia. Photo by Anton L. Delgado for Southeast Asia Globe.

To counter the thirst for development, researchers are monetising the national park in a different way by putting a dollar sign on Virachey’s value as a potential carbon credit project. This in an attempt to prove the protected area may be worth more standing then if felled.

The stakes of this trade-off are high. Dam construction will threaten endangered species by altering river flow and clear-cutting old-growth trees, according to environmentalists. The same leaked papers also indicate one of the dams will create a 215-hectare reservoir, flooding that section of forest.

Conservationists also fear hydropower dams in Virachey may jeopardise hundreds of thousands of dollars’ worth of conservation funding from the U.K. for the sake of “clean” energy, the very definition of which they challenge.

“To build a dam within this valuable area within the national park, you would have to create access roads, cut down trees and disturb wildlife,” said Pablo Sinovas, country director for the international conservation nonprofit Fauna & Flora. “I would not call any energy coming out of that ‘clean’.”

Pablo Sinovas, country director for Fauna & Flora in Cambodia, sets a camera trap in Virachey National Park with Ministry of Environment ranger Churt Thom. Photo by Anton L. Delgado for Southeast Asia Globe.

In the three decades since Virachey was made a national park, Cambodia has lost more than 30% of its forest cover. Protected areas, often only safeguarded on paper, have been deeply affected by this large-scale logging.

While Virachey hasn’t gone unscathed, the park’s ruggedness protected it from the brunt of this deforestation. The forest is now known by Sinovas and other wildlife experts as a “final frontier” for biodiversity in the Mekong region, due largely to its transboundary habitat for animals migrating across the triple border.

As development discussions continue behind closed doors, Chou Phanith, an associate professor at the Royal University of Phnom Penh specialised in environmental economics, is calculating how many tonnes of carbon dioxide Virachey can absorb and potentially sell as carbon credits.

In Phanith’s words, “money talks”.

If the forest is monetised before dam construction breaks ground, it could lead to a debate about whether or not Virachey is worth more standing than if toppled for hydropower, Phanith said. He pointed out the dams are being proposed in one of the areas with the highest potential for carbon storage.

A green tree viper, a species endemic to Asia, curls around a branch in the jungles of Cambodia’s Ratanakiri province. Photo by Anton L. Delgado for Southeast Asia Globe.

“If forest ecosystems do not have any economic value, policymakers and the private sector will always regard forest ecosystems as less important than development,” Phanith said. “We calculate the economic value of a functioning forest ecosystem as part of a win-win strategy, where we don’t always block development but force sustainable and responsible development.”

The dam proposals in Virachey aren’t entirely new. The first published document on energy production in the park dates back to a 2009 master plan for hydropower development in Cambodia, backed by the state-run Japan International Cooperation Agency (JICA).

Miyoshi Asagi, counsellor for the Japanese embassy in Cambodia, said JICA’s involvement with these dam developments ended when the masterplan was published.

In August, JICA announced it is developing a new road map to clean energy for Cambodia. Asagi said she is “aware hydropower plants have lots of debate” and that “there are no projects in the pipeline for hydropower.”

An October report by WWF, released before the World Hydropower Congress this month, found that the ecological toll of dams in the Lower Mekong Basin outweighed the rewards of renewable energy.

The report stated “as hydropower development grows, the cascading nature of its impacts could be wider and more significant than understood today.”

Community forest rangers carry across a jungle-rigged Honda Dream through a fast-flowing river in Virachey National Park. Photo by Anton L. Delgado for Southeast Asia Globe.

The potential dams in Virachey are located on and named after the Prek Liang River. This waterway is a tributary to the Sesan River, which is part of Cambodia’s “3S River Basin”, itself a major tributary to the Mekong River. 

The Mekong is reeling from compounding hydropower pressures, with additional dam developments threatening to further choke off the once-mighty river.

In Cambodia, the government typically provides little transparency for major infrastructure projects. Basic documents such as environmental and social impact assessments are not often made public.

While officials from both the ministries of environment, as well as mines and energy, did not respond to multiple requests for comment, Minister of Environment Eang Sophalleth attended the Cambodia Climate Change Summit in November.

During a question and answer session at the summit, Sophalleth responded to Globe’s inquiry about energy plans in national parks, such as Virachey, by broadly talking about balance and the need to address developments in a “scientific matter”. He then said national security through energy security is a priority.

Sophalleth continued that the ministry “not do things because we feel like doing it”, he said that environmental studies and impact assessments are done “properly… before we decide to do all of this.”

When asked if these documents will be made accessible, he said: “When the public is receptive enough to accept it, to read, to think and to see what we are trying to achieve, yes.”

Ministry of Environment Sophalleth Eang gives the keynote address at the Cambodia Climate Change Summit in Siem Reap. Photo by Anton L. Delgado for Southeast Asia Globe.

The leaked files reviewed by Globe, which span several years, indicate an opaque web of four potential companies that were at some point involved in the hydropower plans for Virachey.

Three are developers from South Korea – KTC Company, Kyung An Cable and Korean South-East Power – while the fourth is a Phnom Penh-based electrical equipment supplier called Rich-Grid Technologies. None replied to requests for comment and it is unclear which, if any, are now involved with the project.

“These are very sensitive documents,” said Bunleap Leang, director of the local environmental organisation, 3S Rivers Protection Network (3SPN). He said that involved groups prefer to keep potentially controversial plans under wraps. “If the dam is good from the perspective of the government and the developer then, to them, no one else needs to know.”

A ranger uses his uniform to protect the muzzle of his rifle as he makes camp within Cambodia’s Virachey National Park. Photo by Anton L. Delgado for Southeast Asia Globe.

Plans may be further along than simple discussions. Bunleap said he confirmed through the 3SPN network that hiring at Tabok village, near one of the proposed dam sites, has already begun.

Virachey tumbles from Cambodia’s lowlands up into the biodiversity hotspot that is the Annamite Mountains, explained the conservationist Sinovas, comparing it to “two worlds converging in the park.”

At the time the sites were studied for potential hydropower, little to nothing was known about the effect these developments would have on biodiversity and forest health, Sinovas noted. But that’s changed in the 15 years since.

“As we started to understand more and more about what was in the park we are realizing its conservation is critical for Cambodian and regional biodiversity,” said Sinovas.

Fauna & Flora has set up roughly 140 camera traps within Virachey, documenting the critically endangered sunda pangolin, northern yellow-cheeked gibbon and a half-dozen other threatened species.

Camera trap images courtesy of Fauna & Flora in Cambodia.

The national park is also the first place large-antlered muntjacs were recorded in Cambodia and is the last possible refuge for kouprey, the Kingdom’s national mammal, which has not been seen in decades.

“Virachey is one of those areas where deforestation levels have been much lower. That is partly why we have all of this wildlife,” Sinovas said. “Doing anything to damage that would not be in the national interest of Cambodia.”

He added the immediate impacts of construction are backed with longer-term threats such as poaching, illegal logging and other forest crimes common in Cambodia’s more accessible protected areas.

Earlier this year, the U.K. embassy in Phnom Penh confirmed about $730,000 is earmarked for Virachey as part of Britain’s global Biodiversity Landscape Fund.

Marc Thayre, deputy head of mission at the embassy, said the “vast majority of the funding” for the Mekong region is bound for Virachey.

“This is designed to increase the value of the park as a park itself,” said Thayre, who hoped the funds “realign the idea of what an asset is” by putting more value to the forest if left standing then if exploited.

Thayre shifted in his seat when asked about the proposed dams.

“If you want to tackle issues, like climate change and biodiversity, then you have to work in all places in the world with all governments,” he said. “We have to be honest with ourselves about the challenge and tradeoff between environment and development. There will always be some tension there.”

He also pointed to the conflict between “building things in national parks” and the “challenge of local communities not having power.”

“The world changes all the time,” he said. “There are always exit strategies written into any programs we do anywhere in the world. I hope that won’t be the case.”

Ministry of Environment ranger Phang Phorng drives past the remains of a burnt logging truck, while on a biodiversity survey in Cambodia’s Virachey National Park. Photo by Anton L. Delgado for Southeast Asia Globe.

Cambodia’s hunger for development has recently been joined with a craving for carbon credits.

Such credits are intended to limit emissions by preventing deforestation in places that might otherwise be vulnerable to development, such as Virachey. Major polluters then offset their fossil fuel emissions by essentially sponsoring the protection of these forests through carbon credit purchases.

In recent months, Cambodia’s carbon credits have come under scrutiny that goes beyond global questions over the effectiveness of credits as a whole.

The largest registered carbon credit zone is facing allegations of human rights abuses from the global advocacy group Human Rights Watch. In response, the world’s leading carbon credit registry service, Verra, suspended issuing new credits to the Southern Cardamoms REDD+ project.

Cambodia’s appetite to sell carbon credits, however, remains unsatisfied.

With the ASEAN Centre for Biodiversity, Phanith studied the feasibility of REDD+ sites in Cambodia and found about 40% of the Kingdom’s total landmass – about 79,200 square kilometres – could be considered for carbon credits.

Virachey stands as one of the top carbon credit prizes.

In research conducted for the centre and viewed by the Globe, Phanith identified three core areas within Virachey with an estimated total carbon storage capacity of 28 million tonnes.

Phanith calculated credits for the park could be worth more than $200 million in total if left as is, depending on the market rate for carbon. He stressed this didn’t even begin to factor in the benefits of healthy hydrology, biodiversity and other ecosystem services.

Ministry of Environment ranger Phang Phorng crosses a fast-flowing river in Virachey National Park. Photo by Anton Delgado for Southeast Asia Globe.

If the proposed dams are built, they’d be in one of the three core areas identified by Phanith.

“If you want to develop Virachey into hydropower dams, or whatever, make sure the economic value is more than [the cost of carbon]. If it is, go ahead,” he said. “But be willing to pay [that] anyways to offset.”

But dollar signs can’t account for everything.

Forty seven rangers are assigned to Virachey, many are from the indigenous groups who live in the park.

Several are from the approximately 60,000-strong Brau ethnic minority group from Cambodia, Laos and Vietnam. To them, Virachey is more than a carbon sink or a potential energy source.

While on patrol, indigenous rangers laughed as they encouraged Globe reporters not to kill the leeches sucking on their arms, legs, neck and right ear. They called it a “forest tax” owed to Virachey. Instead of killing the leaches, rangers smoked tobacco-leaf cigarettes to ward off the blood-suckers.

As the patrol ended for the day, a shivering breeze swept in as the sunset painted the Veal Thom grasslands gold.

Sra Er, who is Brau and leads Virachey’s Taveng Ranger Station, said to set alarms for 2 a.m. for star-gazing.

Sra Er, head of the Taveng Ranger Station, speaks about the Brau connection to Cambodia’s Virachey National Park. Photo by Anton L. Delgado for Southeast Asia Globe.

When the time rolled around, Er was embarrassed.

The night sky was shielded by overcast clouds and the moon’s glare. To make up for the miserably early morning, Er unscrewed a gasoline canister filled with homemade rice wine.

Under the red glow of a headlamp as he sipped the spirit, Er spoke about the Brau peoples’ connection to Virachey, which he said was the reason he became a ranger.

When asked about potential dams in the park, he grew silent and shook his head.

“We care about Virachey and we protect the park from what we can,” he said.

This article was produced by a collaboration between The Japan Times and Southeast Asia Globe, with support from The Pulitzer Center’s Rainforest Investigations Network.

A Khmer-language version of this story can be found here, with translations by Sophanna Lay and Nasa Dip.

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Athletes welcome plans to bring more major international sporting events to Singapore

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TRUST IN SINGAPORE’S CAPABILITIES

Mr Chay said Singapore’s selection shows the trust international organisations have in the country’s ability to host large-scale events, even with a short turnaround time.

Next year’s edition of the championships was originally awarded in 2019 to the Russian city of Kazan. Last February, World Aquatics relocated the event to Singapore in response to Russia’s invasion of Ukraine.

This gives the city state just two years to organise the sport’s largest event. Over 2,500 athletes from 200 countries are expected to descend upon Singapore’s shores next year to compete across the six aquatic disciplines of swimming, diving, high diving, open water swimming, artistic swimming, and water polo.

Mr Chay added that hosting such events will expose Singaporeans to less common disciplines and encourage more people to pick them up.

“For example, artistic swimming and water polo are arguably not the popular sports in Southeast Asia. But if we bring the world’s best to Singapore, future generations of athletes would know that this is the standard, and this is what they should be striving for,” he said. 

MORE EVENTS IN THE WORKS

Aside from aquatics, there could soon be more opportunities for other national sports associations to host international meets.

DPM Wong said in his Budget speech that many Singaporeans want to support national athletes, and the government will provide them with more platforms to do so.

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Never Too Old: This musician and former girls’ band singer began modelling at age 70

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Her first destination – Hong Kong – was an eye-opener. She was fascinated with everything, even the cockroaches crawling around food centres. 

She and her band members were on the receiving end of fascination as well, given that girls’ groups were not common at the time.

“It was really interesting … We played at the Playboy Club and all those waitresses, they were naked, that kind of thing,” Mdm Choi recounted with a laugh. 

“We worked there and a lot of rich handsome boys, after we finished our performance, they’re waiting for us. Almost every morning, I get up and I see there are a lot of flowers in my room.”

The entire tour took about three years and also spanned Southeast Asia, including countries like Thailand and Laos. 

One experience in Indonesia is still clear as day to Mdm Choi – an actor who “wanted to have a scandal” got her to take a photograph with him, then alleged to a newspaper that something was going on between them.

The band’s manager eventually settled the matter and they continued performing in other countries, though their plans to tour Europe fell apart after other members “grew wild” and one girl became pregnant.

Mdm Choi also got to know her boyfriend, who later became her husband, through Gigi Girls. He had been a fan and approached her after their performance at the now-defunct Imperial Hotel at River Valley.

While she was initially shy, they exchanged letters and became a couple. In 1975, after Gigi Girls had disbanded, she moved to Singapore to be with him and they got married the following year.

SETTLING DOWN IN SINGAPORE

Mdm Choi began leading a new life away from the spotlight upon settling down in Singapore and gaining citizenship.

In 1977, she gave birth to her only son. She then worked in the civil service for about 13 years before joining the passenger relations department of Singapore Airlines, where she made announcements and helped Korean passengers.

She quit this job when she was 52 and it grew too dangerous for her liking. Her shifts could last until 2am if there were flight delays, which meant she occasionally had to drive home late in a sleepy state.

It was then that she found religion and enrolled in Bible college. She began singing every week in church, even recording several gospel CDs under the name Deborah Mae, and honed her musical skills by taking guitar lessons.

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Carousell suspends sale of Taylor Swift concert tickets to combat potential scams

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SINGAPORE: Consumer marketplace Carousell is moving to suspend the sale of Taylor Swift concert tickets ahead of her shows in Singapore, noting that ticket scams rise in the lead-up to her shows globally. 

Ticket sales for her concerts will be suspended from Friday (Feb 23) to Mar 9. Existing listings will be removed by Feb 26, said Carousell. 

The move affects Carousell’s platforms in Singapore, Hong Kong, Indonesia, Malaysia, the Philippines and Taiwan.

The US pop sensation has six sold-out shows in Singapore from Mar 2 to Mar 9 – her only stop in Southeast Asia.

“While a vast majority of ticket listings are from genuine sellers, given the unique case of Taylor Swift’s Eras tour, Carousell has made the one-off exception to adopt this approach, and apologises for the inconvenience caused,” said the e-commerce company. 

Although the sale of concert tickets is not prohibited on the platform, Carousell’s chief of staff Su Lin Tan said Swift’s concert is “unique in that we expect many overseas concertgoers who may not know how to adequately protect themselves from local scam tactics”.

“Additionally, we realise that the two weeks leading up to the Eras tour shows are prime for scammers taking advantage of last-minute panic buying of concert tickets,” she added.

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Analysis: Why big tech’s pushback against Jokowi’s new media regulation could be bad news for Indonesian people

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JAKARTA/SINGAPORE: Online platforms, news publishers, and the government must collaborate and reach agreements that are for the good of the Indonesia public, say analysts, following the introduction of a regulation on mandating digital platforms to pay media companies in Indonesia that provide them with content.

The regulation was signed by Indonesian president Joko Widodo on Tuesday (Feb 20) in a move to level the playing field between media and big tech companies. It will take effect six months after its date of issue.

“The spirit of the regulation is to … provide (a) clearer cooperation framework between them,” said Mr Widodo.

However, the regulation has already received pushback from Meta, the parent company of platforms such as Facebook and Instagram. The tech company has insisted that it does not need to pay for the news content circulating on its platforms. 

Analysts and industry players tell CNA that any divisions will be at the expense of the Indonesian people, especially as the news has a role to play in improving the country’s digital literacy, democracy and public safety. 

According to the chairperson of the Digital Literacy National Movement – also known as SIBERKREASI – Donny Bu, Indonesia has more than 221.5 million internet users who use social media as the primary channel to access information and digital content.

REVITALISING MEDIA WITH NEW REVENUE STREAMS

The secretary-general of the Indonesian Cyber Media Association (AMSI) praised the regulation as a source of income for the media.

“(This is) at a time when the media is experiencing a decline in income (through the loss of advertising revenue) due to the presence of global platforms such as Google,” Mr Maryadi – who like many Indonesians goes by one name – told CNA. 

Mr Suwarjono, the editor-in-chief of news site suara.com, shared that the news industry is now not in good condition, especially after the pandemic and due to the artificial intelligence (AI) era. 

“Disruption not only changes reader behaviour, but also changes the media business model which is no longer centered on news media. (It) moves a lot of … influencers and key opinion leaders to digital platforms,” he told CNA. 

He observed that in addition to introducing a new revenue potential for news sites, the regulation will also serve the public interest so that the digital space is not flooded with “junk information”. 

“The dominance of media business models (that rely on achieving pageviews) has contributed to the emergence of a lot of sensational content, clickbait, and content that relies too much on speed at the expense of accuracy and completeness of facts,” said Mr Suwarjono. 

BIG TECH PUSHES BACK  

A committee must be formed to ensure that digital platforms fulfil their obligations, according to the regulation. 

Chairman of the Press Council, Ms Ninik Rahayu, said that such obligations include aiding professional commercialisation, ensuring that news shared is produced only by press companies, and not facilitating the dissemination of inappropriate news content. 

She noted, however, that the regulation cannot accommodate all requests, and that it is necessary to find a common ground.

“We still have a lot to prepare in the next six months (when the regulation comes into force),” she told CNA.

A day after the regulation was introduced, technology giant Meta’s Director of Public Policy for Southeast Asia Mr Rafael Frankel, said that despite the new regulation, the firm is not obliged to pay for news content posted by publishers voluntarily.

According to CNN Indonesia, Meta claimed that its users do not go to its platforms to look for news content, and that news publishers have instead voluntarily decided to share its content on their various platforms and not the other way around.

Mr Noudhy Valdrino, the former head of Indonesia Public Policy at Meta, told CNA that Meta platforms do not actually benefit from spreading news content. 

He stressed that the government must take a balanced approach to the issue and consider both the interest of press companies as well as the importance of credible news information. 

This is especially since it is in the interest of the Indonesian people to have access to news reports, especially from widely used Meta platforms, said Mr Noudhy. 

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US should wade carefully into the Indian Ocean – Asia Times

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The strategic significance of the Indian Ocean region is considerable and growing.

Consisting of vast and diverse maritime geography of several subregions, including the Indian subcontinent, parts of Australia and Southeast Asia, West Asia, and Eastern and Southern Africa; it is home to 2.7 billion people — over a third of the global population — with an average age of 30 years old; it is resource-rich; and it is comprised of some of the fastest growing countries.

The region also connects peoples and economies worldwide via sealines and telecommunication fiber optic submarine cables; significantly, 80% of global maritime oil shipments traverse Indian Ocean waters.

The region, of course, faces major challenges, including actions by nefarious non-state actors such as pirates, smugglers, and terrorists. The ongoing attacks by Iran-backed Houthi rebels in the Red and Arabian Seas that are wreaking havoc on global maritime trade exemplify this problem.

Other challenges include the impact of climate change, which affects the region disproportionately, and growing naval competition, notably as China is increasingly flexing its muscles in the region.

How should the United States approach the Indian Ocean region?

Ambitions and realities

The United States recognizes the importance of maintaining a peaceful, secure and prosperous Indian Ocean region.

In recent years, Washington has embraced the terminology “Indo-Pacific,” as opposed to “Asia-Pacific,” and in 2018 it renamed the US Pacific Command the US Indo-Pacific Command. Even if US strategy documents say little about the Indian Ocean region, several US officials have recently stressed that Washington is committed to elevating its engagement there, notably through new partnerships.

Admiral Eileen Laubacher, special assistant to US President Joe Biden and senior director for South Asia at the US National Security Council, reiterated this commitment at the recently concluded 2024 Indian Ocean Conference.

Admiral Eileen Laubacher. Photo: US Navy

The annual event is spearheaded by the India Foundation and this year was hosted by the Perth USAsia Center in Australia and supported by the Indian Ministry of External Affairs and the Australian Department of Foreign Affairs and Trade.

There are problems, however. The US bureaucracy is not structured to engage the Indian Ocean region.

The US Department of State approaches it through four different bureaus: African Affairs, East Asian and Pacific Affairs, Near Eastern Affairs, and South and Central Asian Affairs. The US Department of Defense, for its part, separates it into three combatant commands: the Indo-Pacific Command, Central Command, and Africa Command.

These divisions make it difficult for the United States to appreciate and address dynamics of the region as a whole, especially maritime developments.

Another problem is that the United States – unlike India, Australia, Japan, and a few others – does not include the Western Indian Ocean or the eastern coast of Africa in its conceptualization of the Indo-Pacific.

The US framing of the Indo-Pacific coincides with the Indo-Pacific Command’s area of responsibility, which ends with India. That further complicates the United States’ ability to craft a unified strategy for the Indian Ocean region.

Perhaps partly due to these bureaucratic and conceptual issues, US engagement of the region has been limited.

US military planes parked at Diego Garcia military base, December 2017. Photo: Facebook

Recognizing it as a priority route and theater for US military power projection, the United States has of late improved its technology and facilities, notably its joint naval base (with the United Kingdom) at Diego Garcia, and increased logistics and supply cooperation with India, with which it wants to strengthen relations, notably as both countries worry about China’s rising power.

But the United States has been slow to roll out non-military programs and engage smaller regional countries. It only has one “ship-rider” agreement in the region (with Seychelles), constraining its ability to promote security cooperation, and only three embassies and two defense attaches to cover seven countries.

The United States also participates as a dialogue partner in one of the two primary regional multilateral bodies, the Indian Ocean Rim Association. But it’s not part of the other, the Indian Ocean Naval Symposium. More worryingly, in terms of assistance for the development of small regional countries the United States is falling behind China, which is investing massively in ports, fiber optic cables, and other maritime infrastructure.

The United States, therefore, should take immediate steps to adapt its approach to the Indian Ocean region. It should do so by embracing the region as a whole and ramping up engagement, notably by acting as a problem-solver and committed partner.

Embrace the region as a whole

The United States should begin by clearly defining its interests, goals, and priorities in the region as a whole and developing a strategy for it. That work, as mentioned, has not been done.

Broadening the US Indo-Pacific construct to include the Western Indian Ocean and eastern coast of Africa would be a good start. Not only would it bring the United States in line with many of its key partners, notably India, Australia, and Japan, but it would also help identify ways to implement the US Indo-Pacific Strategy in the region.

Meanwhile, the United States should probably steer clear of undertaking a major bureaucratic restructuring to better grasp, and act on, dynamics in the Indian Ocean region because it is too labor-intensive and time-consuming. Yet the appointment of nodal points or coordinators for the region in the US State and Defense Departments would be a good, easy fix to address the problems associated with the current US bureaucratic structure.

Act as problem-solver

The United States could be tempted to engage the region primarily — even only – with an eye to countering China because, after all, that goal is driving much of its foreign policy. Some have made that case, advocating that Washington focus its competition with Beijing in the Indian Ocean region because it has a bigger advantage there than closer to China’s coastline.

A blockade in the region, the argument goes, could help deter Chinese adventurism in the Pacific because it would force Beijing to devote resources to a distant area where it has disadvantages and trigger greater balancing by regional countries, notably India, which would feel threatened by a larger Chinese presence in the theater. The idea is that horizontal escalation in the region could replace vertical escalation in the Pacific.

It is unclear that this approach would work, however, either at the required speed or at all. Balancing by regional countries would also not be given because many have a favorable view of China, and even those that do not, are not prepared to go “all in” against China.

S Jaishankar, Indian minister of external affairs. Photo: Sputnik

Of note, virtually no one participating in the Indian Ocean Conference in Perth this month uttered the words “China” or “deterrence,” let alone in the same sentence. Even S Jaishankar, India’s minister of external affairs, only took oblique swipes at China in his keynote address, never mentioning it explicitly. Besides, many Indian Ocean regional states are suspicious about, and some even opposed to, cooperation with the United States, and there is a deep tradition of non-alignment in the region.

Rather than “countering China,” then, the organizing principle for US engagement in the region should be “fixing problems.” The United States should present itself as a problem-solver, a country that can help address issues of direct concern to IOR countries.

Although regional countries have different goals and priorities, by and large, that means helping respond to non-traditional security threats, including, but not limited to, nefarious non-state actors; illicit trafficking of all sorts; illegal, unregulated, unreported fishing; or climate change.

The recent US commitment to do just that is a good first step, but words should quickly turn into deeds so that regional countries can “see” more concrete deliverables, more regularly.

In this regard, the United States should bear in mind that building partner capacity to respond to non-traditional security threats can have multiple purposes, and therefore multiple payoffs. Enhancing a partner’s ability to combat maritime crime, for instance, simultaneously provides tools useful vis-à-vis China’s maritime developments.

Be a committed partner

Doing more in the Indian Ocean region does not mean that the United States will have to divert resources away from other theaters or the Pacific. The United States can – and should – ramp up engagement of the region while remaining focused on the Pacific.

In addition to repurposing some of its in-theater resources from continental to maritime challenges and maximizing its diplomatic and military visits to regional countries as it transits in the region, as some have recommended, the United States can do more by building on its existing relationships with regional countries and, more importantly, supporting regional leaders.

So, the United States should present itself not just as a problem-solver, but also as a committed partner.

Partnering with India, the predominant regional power, should be priority number one. The United States should build upon the recent flurry of cooperation agreements it has concluded with India and work out ways it can best support Indian activities in the region, be it through

In so doing, the United States should let India be in the driver’s seat, both because Washington should focus on the Pacific and because of possible backyard anxieties from New Delhi about an overly active US presence in the Indian Ocean region.

Ram Madhav. Photo: Wikipedia

Such an approach could benefit the United States in other ways. For instance, Ram Madhav, the President of the India Foundation, has argued that US appreciation and upholding of India’s primacy in the region would encourage New Delhi to “get involved in the imperatives of the Pacific region.”

In other words, US support for Indian leadership in the Indian Ocean region will trigger Indian support for US leadership in the Pacific, a clear upside from a US perspective.

Of course, the United States should work with other regional leaders as well. A staunch US ally often described as the United States’ “southern anchor” in the Indo-Pacific, Australia immediately comes to mind. So do other non-Indian Ocean regional countries, such as Japan, France or the United Kingdom, all of which play important roles in the region.

The United States should seek to leverage their roles to do more in the region, including to resolve longstanding issues such as the Diego Garcia stalemate; some have proposed innovative approaches to the problem.

Alfred Thayer Mahan. Photo: Naval History and Heritage Command

The United States also should urge mini-lateral arrangements such as the Quad, a security arrangement that includes Australia, India, Japan, and the United States, to pivot to the Indian Ocean region and perhaps even to develop ties with the “I2U2 group,” a new cooperative partnership between India, Israel, the United Arab Emirates, and the United States.

Alfred Thayer Mahan, the now famous US naval strategist, reportedly prophesied in the late 1890s shortly before he became admiral that “The destiny of the world will be decided” on Indian Ocean waters. These words continue to ring true today, and it is thus high time the United States gave the Indo side of the Indo-Pacific the attention it deserves, even as it remains focused on the Pacific.

David Santoro ([email protected]) is president of the Pacific Forum. He specializes in strategic deterrence, arms control, and nonproliferation. Santoro’s current interests focus on great-power dynamics and US alliances, particularly the role of China in an era of nuclear multipolarity.

This article, originally published by Pacific Forum, is republished with permission.

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Maxis, Huawei showcase first 5.5G technology trial in Malaysia and Southeast Asia

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5.5G offers up to 10x speed, device connectivity & latency enhancements over 5G
Advancements can support digitalisation, automation & IoT across various sectors

Maxis and Huawei have successfully conducted the first 5G-Advanced technology trial in Malaysia and Southeast Asia. In a statement, Maxis said The ‘5G-Advanced Trial Showcase’ featured a live speed test…Continue Reading

Taylor Swift effect: Singapore hotels, airlines see up to 30% spike in regional demand for 6 sell-out shows

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Historically, Swift’s concerts have been big sources of revenue.

According to Mitsumasa Etou, a representative of research site Economic Effects NET, and a part-time lecturer at Tokyo City University, her four days of shows in Tokyo, Japan earlier this year are expected to generate up to 34.1 billion yen (US$226.8 million).

Swift’s tour in Australia could generate A$1.2 billion in economic value in Melbourne alone where she had three shows earlier this month, according to the city’s Lord Mayor Sally Capp.

Mr Khoo said that the amount of revenue generated in Singapore could be in the ballpark of Melbourne’s figures or possibly more.

“I’m sure STB internally would measure this and be able to come up with a more accurate figure but I think this would be a good figure to work with,” he added.

“Estimating the potential revenue from Taylor Swift concerts in Singapore would involve considering various factors such as venue capacity, ticket prices, merchandise sales, sponsorship deals, and other ancillary revenue streams,” said Dr Elhajjar.

“Without specific details on these factors, it’s challenging to provide an accurate estimate.”

However, he added that given Swift’s stature, her concerts in Singapore could generate “substantial revenue”, potentially in the “millions of dollars”.

About 96,000 fans packed the Melbourne Cricket Ground each night for three shows, while about 55,000 fans per show are expected at Singapore’s National Stadium. 

There have also been questions surrounding a performance deal after Thai Prime Minister Srettha Thavisin said last week that the Singapore government offered US$2 million to US$3 million per show in exchange for exclusivity in Southeast Asia.

According to Mr Srettha, concert promoter AEG had informed him of the arrangement.

STB and MCCY stopped short of confirming if an exclusive deal was struck preventing the US pop sensation from holding her Eras world tour elsewhere in Southeast Asia.

Mr Kevin Wee, senior lecturer at Nanyang Polytechnic’s School of Business Management, said that exclusivity is critical from the branding perspective as it helps to cement Singapore as the true “events capital” in the region.

“Hosting exclusive events offers invaluable branding opportunities whose impact can persist long after the concerts are over, significantly boosting Singapore’s image as a vibrant, culturally rich destination,” he said.

“However, it’s important to note that we don’t have concrete information regarding claims about any exclusivity clause for Taylor Swift’s concert.”

Mr Januel Koh, a digital marketing and branding lecturer at Singapore Polytechnic’s School of Business, said securing exclusivity for a global icon like Swift is “paramount” from the business perspective.

“It monopolises the market share within the region and compels billions of fans from across the globe to visit the exclusive host country for the concert,” said Mr Koh.

“With over 300,000 tickets sold and a substantial number of fans travelling from other countries, the demand speaks volumes about the allure of exclusivity surrounding Taylor Swift’s performances.”

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Rockwell Automation promotes Mariya Prempeh to oversee operations in Singapore, Malaysia and Brunei

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The promotion underscores Rockwell’s commitment to regional growth
Prempeh will oversee business operations and direct sales in the three countries

Rockwell Automation, the company dedicated to industrial automation and digital transformation, has announced the promotion of Mariya Prempeh (pic) as country manager, Singapore, Malaysia and Brunei, expanding her current role from Singapore. 
In her…Continue Reading

China bond outperformance tells a bigger story – Asia Times

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China’s stock investors could be excused for feeling like President Xi Jinping is disinterested in their plight as market valuation losses mount.

Bond punters seem ascendant, though, as Beijing officialdom makes clear it has their backs in the way few international funds saw coming.

The hyper-targeted nature of policy rescue efforts by the People’s Bank of China (PBOC) and other arms of the state explain why yuan-denominated corporate bonds were among the globe’s best-performing asset classes last year.

The dollar bonds of local government financing vehicles (LGFV) were also big winners in 2023. Unlikely, too, given all the hand-wringing about the US$9 trillion LGFV debt mountain.

The borrowing binge has credit rating companies worried that municipal debt will be China’s next crisis, one that could dwarf today’s huge property troubles.

The reason bonds are winning: Xi’s team understands that a vibrant sovereign bond market is needed to defuse the property crisis and head off a local government debt meltdown. The same goes for achieving Xi’s bigger goal of replacing the dollar as the linchpin of trade and finance.

That’s not to say Xi’s team has given up on putting a floor under China’s stock markets or gross domestic product (GDP). In 2023, inflation-adjusted GDP beat Beijing’s target to grow at 5.2%. But nominal GDP slipped to 4.6% from 4.8% a year earlier as deflationary pressures mount.

To economist Zhang Zhiwei at Pinpoint Asset Management, nominal GDP trailing real output “suggests China is likely growing below its potential growth. More supportive fiscal and monetary policies would help China to restore its growth potential.”

Economist Duncan Wrigley at Pantheon Macroeconomics says news that domestic loan growth only expanded by 10.4% year-on-year in January, the slowest pace since 2003, suggests more stimulus is coming.

The downshift indicates “still-relatively sluggish credit demand, despite net new social financing and net new loans beating market expectations.”

But the longer-term goal of increasing China’s financial footprint is the bigger priority. Beijing has made significant inroads into making the yuan a major reserve currency.

The endeavor shifted into higher gear in 2016 when China secured a place in the International Monetary Fund’s “special drawing-rights” program. It was then that Xi won the yuan entry into the globe’s most exclusive currency club along with the dollar, euro, yen and the pound.

In 2023, the yuan topped the yen as the currency with the fourth-largest share in international payments, according to financial messaging service Swift. It overtook the dollar as China’s most used cross-border monetary unit, marking a first.

The yuan is supplanting the dollar in certain spaces. Photo: Facebook Screengrab

Also last year, Chinese government bonds performed better than US Treasuries in terms of total returns. Adding in the outperformance by corporate bonds, 2023 was a milestone year for China’s emergence as a debt-market superpower.

Yet the dollar continues to dominate despite the US national debt topping $34 trillion and as extreme political polarization in Washington has Moody’s Investors Service threatening to yank away America’s last AAA credit rating.

Xi’s reform team is looking to borrow from Washington’s model for luring waves of capital into local assets. Doing so is vital to financing China’s development and sustaining the giant infrastructure projects driving economic growth.

At the moment, foreign investors hold about 30% of the $26 trillion of US public debt outstanding. In China, it’s 10% at most. Xi, in other words, hopes to get foreign governments and the globe’s top asset managers to fund his economy the same way they long have the US’s.

That means building more vibrant and transparent capital markets. Though the magnitude of China’s total debt liabilities isn’t in the same orbit of the US, China’s public IOUs also exceed GDP. In China’s case, the IMF estimates the burden to be about 116% of GDP when you add in local governments’ off-balance-sheet borrowings.

For China, municipal governments are vital to meeting Beijing’s ambitious annual growth targets. Yet following years of runaway investment in infrastructure, fallout from Covid-era downturns, fewer windfalls from land sales and soaring pandemic-related costs, local government debt is now a top financial risk.

Economists agree that Xi and Premier Li Qiang should lean into increasing global demand for Chinese debt. The end of Federal Reserve tightening signals that interest rate differentials between the US and China have peaked. At the same time, China’s deflation trend means investors buying today could be looking at big returns as bond prices rise.

Already, Beijing has increased and widened the channels to welcome foreign investors, including benchmarks like FTSE Russell.

What’s needed now is a top-to-bottom revamp of market mechanisms from efficient pricing to hedging tools to allowing for capital to enter and leave markets easily. Beijing must make its national balance sheet more transparent and move its fiscal management practices more in line with global norms.

Xi also must resist the urge to weaken the yuan for short-term gain. As economic headwinds intensify, nothing would boost Chinese GDP faster than a weaker exchange rate to boost exports. That might turn off global investors who think in dollar terms.

Hence the Chinese central bank’s reluctance to ease policy. Earlier this month, the PBOC cut the amount of cash banks must keep in reserve by 0.5 percentage points. That pumped 1 trillion yuan ($140 billion) in long-term liquidity into markets.

It was enough to tame bond market dynamics but not stabilize Shanghai stocks. Equity investors have been waiting for Xi’s team to launch a giant new stock stabilization fund – so far, to no avail.

Part of the rationale seems to be that China can do the bare minimum to stabilize stocks and keep GDP as close to 5% as possible. The restrained nature of policy moves, though, appears positive for bond markets and negative for stocks.

“This pattern of new lows in bond yields and resumption of declines in equities highlights to us that the market is concerned that stimulus is not sufficient to address the current deflationary environment,” notes strategist Jonathan Garner at Morgan Stanley. “Our economists continue to argue that a major fiscal package targeting the consumer is needed.”

At the same time, it’s possible “policymakers may start shifting their focus from foreign exchange stability toward more monetary easing” as the need for a stable yuan “has become less necessary,” says Jingyang Chen, strategist at HSBC Holdings.

The overriding focus, though, must be fixing the cracks in China’s financial system. Trouble is, the “ongoing news flow” points to a property crisis that’s “still hot and not easy to resolve,” says analyst Kieran Calder at Union Bancaire Privee.

The bottom line, he adds, is that investor confidence “cannot return” until the property sector is finally fixed. Indeed, the longer the default troubles at China Evergrande Group and Country Garden make global headlines, the more challenging it will be for Asia’s biggest economy to attract enough capital.

At the moment, Xi and Li also are stepping up efforts to head off a local government debt reckoning. Moves include pulling some of the leverage built up by prefectures around the nation onto Beijing’s own balance sheet.

It’s a delicate process. Xi’s Ministry of Finance must maintain confidence among investors that they won’t sustain massive losses. This perception is vital to attracting healthy demand for new debt issues to finance cleaning up older ones.

Here, it’s vital to get right the mix of banks upping lending in the short run and address local government imbalances in the long run.

Beijing is indeed making some progress. As analysts at UBS argue in a note, “continued local government financing vehicle debt swaps using the previous issuance of special refinancing local government bonds in 2023 may have reduced some existing bank loans, corporate bonds and shadow credit.”

In the long run, the ends could justify the means of China prioritizing bond over stock markets. Yet in other ways, the challenges involved in buttressing confidence among global investors is growing.

This week, Xi’s regulators tightened curbs on China’s rapidly growing quant trading industry. Both the Shanghai and Shenzhen exchanges are increasing monitoring of such dealing, particularly in the leveraged products space, after freezing the account of a major fund for three days.

Such regulatory uncertainty has been a constant worry for global investors since Xi’s tech crackdowns beginning in 2020. Those moves, and myriad others since then, tarnished Xi’s 2013 pledge to let market forces play a “decisive” role in Beijing decision-making.

For all Xi’s promises, China today is fending off worries it’s a buyer-beware market.

In March, Xi entrusted the reform process to Premier Li, who has since promised to accelerate moves to diversify growth engines. One key priority is creating deeper and trusted capital markets so that households invest in stocks and bonds in addition to property.

Chinese President Xi Jinping and Premier Li Qiang in a file photo. Image: NTV / Screengrab

Such retooling is needed to change the narrative that Chinese markets. Too many foreign investors still fear that Chinese markets are underpinned by a developing economy with limited liquidity and hedging tools, a giant and opaque state sector, and an immature credit-rating system that obscures risk and enables the chronic misallocation of capital.

In recent years, foreign investors wondered whether China might be facing a Lehman Brothers-like reckoning. Or a crash akin to the 1997-98 Asian financial crisis. For some, the property-overhang dynamic plaguing China’s 2024 echoes Southeast Asia’s predicament 26 years ago.

As top-heavy economies from Bangkok to Jakarta to Seoul hit a wall, investors fled and crashed currencies in their wake. That made dollar-denominated debt impossible to manage as default rates exploded across the region.

China’s property crisis has caused unpredictable challenges for local governments as tax revenues dry up. To Logan Wright, director of China markets research at Rhodium Group, “a collapse in local government investment would be comparable to the economic impact of the crisis in the property market.”

He notes that the “most important variable impacting” the world’s second-biggest economy “will be the success or failure of local government debt restructuring.”

You can’t restructure much, though, if China’s debt capital markets aren’t up to the task. The good news is that Xi’s team is focused on raising China’s bond market game and at least some global investors appear to be getting the memo.

Follow William Pesek on X at @WilliamPesek

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