Russian President Vladimir Putin said Saturday Japan and Russia could reach a compromise over a territorial dispute involving Russian-administered islands off Japan's northernmost main island of Hokkaido if they follow the spirit of "hikiwake," a judo term for a draw. Putin said he was surprised that Japan has imposed sanctions, together with the United States and the European Union, on Russia over its annexation of Crimea, southern Ukraine, indicating his dissatisfaction with Japan's move. While Japan has suspended the negotiations process over a territorial dispute involving the islands, Russia stands ready to resume the talks, Putin said during a meeting in St. Petersburg with representatives of news agencies from major economies, including Japan's Kyodo News. While Putin has shown a willingness to visit Japan as early as fall at the invitation of Japan's Prime Minister Shinzo Abe, the plan may be affected by strains over Crimea. The disputed islands -- Etorofu, Kunashiri, Shikotan and the Habomai islet group -- were seized by the Soviet Union following Japan's surrender in World War II on Aug. 15, 1945, and the territorial row has prevented the two countries from signing a peace treaty. Putin said the sovereignty of Shikotan and the Habomai islet group is on the agenda of the bilateral talks as the 1956 Japan-Soviet Joint Declaration does not address the issue. The disputed islands are known as the Northern Territories in Japan and the Southern Kurils in Russia. ==Kyodo Copyright 2014 Kyodo News International. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Monday, May 26, 2014
Sunday, May 25, 2014
Russia-China Natural Gas Pipeline to Create New Global Price Benchmark
Russia’s landmark deal to supply China with natural gas via pipeline over 30 years will have profound impacts globally and create a new price benchmark that may pressure other producers, as consumers choose from a variety of supply sources, according to analysts. OAO Gazprom on Wednesday clinched a contract with China National Petroleum Corp. (CNPC) to sell an estimated $400 billion worth of gas over 30 years beginning in 2018 (see Daily GPI, May 21). By the end of this decade, Russia could be supplying almost 10% of China’s gas supplies. The deal to supply 38 billion cubic meters (bcm) a year via pipeline is priced at around US$10.00/Mcf, versus a current price of $14.00-15.00 for Asia Pacific imports, close to what most European utilities have agreed to pay over the past two years under discounted long-term contracts. “We, Russia and Gazprom, have discovered the Asian gas market for ourselves,” said Gazprom CEO Alexey Miller on Thursday at a forum. The transaction “will influence the whole gas market,” pressuring LNG projects in North America, Australia and Africa. Several analysts agreed that the partnership is a landmark for the global gas market. The compact “sets a new benchmark for what China is willing to pay for natural gas over longer-term contracts,” said Fitch Ratings. Asia liquefied natural gas (LNG) spot prices today are about $13.70/MMBtu, versus U.S. prices of about $4.50 (Henry Hub). “The deal changes the level playing field,” Societe Generale analyst Thierry Bros wrote. “China has now secured some new gas at a competitive price,” which means LNG shipped after the pipeline is completed “would need to be competitive.” China “now has a powerful stick with which to beat down LNG prices…They can tell their LNG suppliers ‘either you bring your price below Russian piped costs, or we will install a second line from Russia and cut you out.’” Russia “has thrown down the gauntlet to LNG producers courting Chinese buyers,” said London-based Timera Energy Director David Stokes. “Russian pipeline exports, which look to be competitively priced versus LNG, are set to have a material impact in eroding Chinese LNG demand. There is likely to be an important knock-on impact on the global LNG supply and demand balance, given the central role China plays in growth projections.” Expanding Gazprom’s Reach For Gazprom, the deal also gives it a brand-new market that’s roughly the size of Europe, said Wood Mackenzie Ltd.’s Stephen O’Rourke. Russia now supplies about one-third of Europe’s gas supplies, but more important, about 80% of Gazprom’s revenues are from Europe. “With European gas demand growth uncertain and the Ukraine crisis leading to calls for Europe to reduce its reliance on Russian gas, Gazprom now needs a ‘new Europe’ — enter China,” said O’Rourke. Gazprom could increase export volumes to China without affecting its ability to deliver to existing European customers, by developing untapped reserves in eastern Russia, said Fitch Managing Director Alex Griffiths, who heads natural resources and commodities. “Some have portrayed the deal as Russia turning away from Europe, in light of the ongoing situation in Ukraine. While it certainly begins to give Gazprom options in where to export, the company’s challenge historically has been to find ways to monetize its 23 trillion cubic meters of reserves at acceptable prices — and the best scenario for the company is an increase in production. “The deal is therefore positive for Gazprom’s medium- to long-term prospects, especially if it opens the door for a further deal to sell gas from its developed western fields to China in due course…” The price Russia fetched may be comparable to that of Gazprom contracts with Western Europe customers, but it’s “far above the prices at which gas can be sold in Russia,” said Griffiths. “A key difference is that gas to be sent to China will come from largely undeveloped fields, implying a significant upfront investment, which President Putin announced as US$55 billion. The 38 bcm announced is equal to about a quarter of Gazprom’s annual deliveries to Europe.” Russia also has announced it may abolish the mineral extraction tax for gas fields that deliver gas to China, potentially adding even more to Gazprom’s bottom line, he said. Russia likely is looking well beyond China for customers. Rumors are circulating that a transaction similar to the one with China is being negotiated with India. Russia is building new facilities and expanding other LNG export plants on its Pacific coast, near Sakhalin Island, where ExxonMobil Corp. and others are partnering. ExxonMobil struck an alliance with Russia’s OAO Rosneft in 2011 (see Daily GPI, Aug. 31, 2011). The pipeline to China would position Gazprom with leading Asia Pacific gas buyers, putting it at an advantage geographically over exports from North America and elsewhere. China Gas Demand Expected to Quadruple by 2035 However, the Asia Pacific region will need a lot of gas to keep up with demand. The International Energy Agency has predicted that China’s gas demand will quadruple by 2035. Russia exports will be a “drop in the bucket” as far as Asia Pacific’s thirst for gas, said Ziff Energy’s Ed Kallio, who directs gas consulting. “It doesn’t even come close. This doesn’t even scratch the surface.” And China hasn’t placed all of its bets on Russia, with large investments in gas schemes around the world, including British Columbia (BC), where a dozen-plus LNG export terminals are on the table. It’s also a big investor in Australia export projects. As well, China is planning to build at least 15 gas import terminals, which would make it the biggest gas importer after Japan. BC Premier Christy Clark said she didn’t think the Russia agreement would satisfy China’s thirst, nor its need to diversify supply. “I don’t think there’s a country in the world that today wants to depend on Russia as their sole supplier of natural gas,” said Clark. “Providing the assurance that we are not going to play politics with energy — I think that’s worth a lot to our potential partners out there, I think, especially China…We’ve certainly seen the way that Russia likes to do business these days, and we certainly know that the Chinese want a dependability of supply. We can supply that.” Calgary-based Talisman Energy Inc. CEO Hal Kvisle isn’t overly concerned about the deal pressuring Canada LNG. The former chief of TransCanada Corp. discussed the tie-up during a conference call during Talisman’s annual investor day. The quantity of gas directed to China isn’t enough “to swamp the market…It certainly doesn’t shut the door on LNG exports from Canada.” Woodside Petroleum Ltd. CEO Peter Coleman, whose company is Australia’s biggest gas exporter by volume, agreed that China would need a lot of gas from a lot of sources. Australia export facilities, including those backed by Chevron Corp., Anadarko Petroleum Corp. and ConocoPhillips, have faced huge cost overruns and labor shortages, but the backers haven’t signaled a slowdown. “China’s growth is coming off such a small base at the moment…It’s got a lot of headroom in it,” Coleman said. Wood Mackenzie’s Gavin Thompson, who heads Asia gas research, said the “comparisons with the development of Gazprom’s export business into Europe are clear, with almost identical population sizes between Northeast China and Western Europe. Gazprom’s exports to Western Europe first reached 38 bcm by the mid-1980s and have since increased to over 150 bcm into the whole of Europe. “We anticipate overall gas demand from China over the next two decades will grow more rapidly than that witnessed in Europe from the mid-1980s.” He said eight provinces in Northeast China would receive the East Siberian gas; the area has a population of around 360 million, roughly equal to that in Western Europe. The region also experiences “extremely cold winters and suffers from a shortage of indigenous supply options.” By 2025, Wood Mackenzie estimates that total gas demand from the eight provinces alone will reach 125 bcm; the Power of Siberia gas pipeline system would meet “over a quarter of regional gas demand by this time.” Without that eastern Russian supply, the region was facing increased reliance on imported LNG, Thompson said. Qatar, the world’s largest LNG producer, already is negotiating with CNPC and state-owned PetroChina Co. to supply 7 million metric tons/year (mmty); China now has long-term contracts for around 5 mmty. Major gas fields offshore Mozambique and Tanzania also hold promise. Too Much Gas? With gas reserves increasingly growing worldwide as unconventional drilling techniques improve, will there be enough buyers? “There will be more gas than needed, so those who get to the market first and cheapest will win,” said Sasol Petroleum International’s Ebbie Haan, managing director. There’s also the political strength that China and Russia gain through the gas alliance. “From the perspective of international relations,” said Thompson, “this deal also signals a deepening of energy ties between Russia and China. They now cooperate across a range of different commodities and have established a broad base for further increases in trade in oil, gas, LNG, coal and electricity.” The crisis in Ukraine, which has strained Russia relations with Europe and the United States gave “new urgency to the Russian desire to branch out to new markets,” said Credit Suisse analysts. “The implied price comes out at just under $10.00/MMBtu, but more importantly, provides China with something of a lever to cap ‘expensive’ LNG.”
OPINION: Asians cannot count on "magic bullets" from U.S. for their problems
By Hiroki Sugita TOKYO, May 1, Kyodo Every time the U.S. president visits Asia, there are agreements, such as the "Global Alliance" or the "Strategic Partnership," which are well received in Asian countries but very modest in terms of concrete actions and effectiveness. In his late April visit to Asia, President Barack Obama was gracious enough to tell the people in the countries he visited exactly what they wanted to hear. Of course, Asians are happy right now, but we cannot ignore deeper doubts about whether he will follow through on what he said. In Tokyo, the first stop of President Obama's Asian trip, he said that the Senkaku Islands fall under the Japan-U.S. security treaty, in a show of U.S. commitment to defending the Japanese-administered islands against any attempt by China to seize them. Prime Minister Shinzo Abe of Japan praised Obama's statement, which no previous U.S. president has voiced, as "epoch-making." Japanese security experts say that the statement is the best way to deter China from starting any military operations against the islands in the East China Sea. Then, in Seoul, Obama rebuked Japan and pleased South Korea. At a press conference with President Park Geun Hye he described "comfort women" as a "terrible and egregious" violation of human rights and for the first time urged Mr. Abe to address the issue with the South Korean government. Many of the comfort women who were forced to work at Japanese military brothels during World War II were from the Korean Peninsula. President Park followed Obama by saying delightedly, "I really look forward to efforts made by the Japanese side." In Manila, Obama announced a defense pact that would give American forces greater access to Philippine military bases and facilities, including airfields and seaports. The main purpose of the pact is to fend off China's military expansion in the South China Sea. Asians except Chinese welcome all of Obama's words and policies. Many Japanese even support the "comfort women" statement. Although Obama's comfort women comment clearly puts Abe in an awkward position, it may act as a catalyst to end the bickering between Japan and South Korea over this issue. According to U.S. National Security Adviser Susan Rice, the remark was in line with the purpose of Obama's trip, namely to cement ties with Japan and South Korea and to encourage improved dialogue between these nations. However, the question is: to what extent can Obama oversee the implementation of these words and agreements? Asians were joyful when Obama announced the U.S. pivot to Asia three years ago after its long and enduring Middle East military ventures. But, we soon found in dismay the policy (later called "rebalancing") more rhetorical than real, as it lacked follow-up measures. Since the pivot announcement, Obama has cancelled two trips to Asia to deal with domestic political affairs, and last year he gave silent approval to China's Air Defense Identification Zone, over protests from Japan. One of the pillars of the pivot is the Trans-Pacific Partnership, or TPP, which was intended to create an Asia-Pacific free trade zone. During this trip to Asia, Obama made it clear that the United States would not make meaningful concessions to Japan and other TPP countries on trade negotiations for fear of angering some U.S. industries. Again, it is clear that Obama places domestic politics above Asia rebalancing. Even the Senkaku statement is not so assuring. At the Tokyo press conference, Obama avoided answering a question about the use of U.S. military force if China were to make a military incursion into the Senkakus. He explained that what he had said about the U.S. commitment to the islands was nothing new; it just repeated the U.S.'s historical interpretation of the U.S.-Japan security treaty. This response gave the impression that he would be very hesitant to use any kind of force. Given Obama's weak reaction to his declared redline regarding the use of chemical weapons in Syria and his ineffective response to the crisis in Ukraine, some Japanese naturally wonder whether the Senkaku statement is another Obama redline that would be easily ignored. Considering China's substantial economic and military strength, it is highly unlikely that the United States would get involved in a confrontation with China over a group of small and inhabited islands. Because of strict budget cuts, the U.S. military cannot meaningfully strengthen its presence. Yoko Iwama, a professor at the National Institute for Policy Studies in Tokyo, noted, "The Ukraine crisis shows the U.S. still has to put a great deal of efforts into Europe to counter Russia. It is too much to ask the U.S. to show strong presence both in Asia and Europe." Although security ties with the United States are the foundation for stability in the region, Asian countries would be wise not to expect much from the United States in the events of conflicts. It is equally important that Asian countries strengthen their own individual defense capabilities and build better relations with China. Obama has a unique capability to please host countries, as we saw in his April trip to Asia. In November, he will go to Beijing to attend the annual Asia-Pacific leaders' meeting. He most likely will reiterate strategic relationships with China for global and regional agendas, which the Japanese and Filipinos will not be happy to hear. In Tokyo he called on Japan to have talks to de-escalate the tension over the Senkakus saying, "I've said directly to the prime minister that it would be a profound mistake to continue to see escalation around this issue rather than dialogue and confidence building measures between Japan and China." If the issue is not resolved by November, then Obama in China may blame Abe for not doing enough. Asians should not be happy or disappointed each time the U.S. president makes a statement on the region. We can't expect magic bullets from the United States for Asian problems because they do not have quick solutions. Therefore, we Asians must find our own solutions to the Senkakus, comfort women, China, and any other issues we face. (Hiroki Sugita is managing feature writer of Kyodo News.) ==Kyodo
Saturday, May 24, 2014
Do the European Parliamentary Elections Matter?
Citation by Easybib Save this citation Do the European Parliamentary Elections Matter? Interviewee: Judy Dempsey, Nonresident Senior Associate, Carnegie Europe Author: Jeanne Park, Deputy Director May 22, 2014 Millions of voters from twenty-eight member states will take part in the European Parliament elections this week, a process that, for the first time, will partly influence who becomes the next EU chief. Judy Dempsey, an expert on European politics at Carnegie, says that it's been roughly two decades since the EU had a formidable Commission president that could hold sway with the various member states. She says this seems unlikely to change: "At the end of the day, it will be the leaders of the big European countries that will do the backroom deals." Meanwhile, Dempsey says that significant victories for far right or far left parties, which many are anticipating, could install a parliament with "a shrilled anti-American tone, more scepticism regarding the Transatlantic Trade and Investment Partnership (TTIP), and a more restrictive policy with regard to immigrant and human rights." Election posters of Socialist candidate for European Commission president Martin Schulz (R) of the Social Democratic Party (SPD) and German chancellor and head of the Christian Democratic Union Angela Merkel, in Hamburg, Germany. (Photo: Fabian Bimmer/Courtesy Reuters)Why do these European Parliament elections matter? For the first time since the Lisbon Treaty came into force in 2009, the European Parliament will play a part in choosing the president of the European Commission. Who are the front-runners to replace outgoing president José Manuel Barroso? The two main front-runners are Jean-Claude Juncker, the former prime minister of Luxembourg, who is supported by the conservative grouping of the European People's Party, and Martin Schulz, a German politician and the current president of the European Parliament, supported by the European Parliament's Socialist grouping. A caveat: Even if either candidate's party manages to get the most votes, there will be a lot of horse-trading between the member states as to who will become Commission president. Much depends on the composition of the next European Parliament. It may be a hung parliament, or it may be a parliament consisting of very different alliances. At the end of the day, it will be the leaders of the big European countries that will do the backroom deals. How important is this job if so much power continues to reside with national leaders? The leaders of the EU countries have immense power, particularly German chancellor Angela Merkel. That being said, so much depends on the personality and confidence of the president of the Commission. It has been a long time since the EU had a president that could hold sway over the member states. The last was Jacques Delors (EC president 1985–1994). Since then, the Commission presidents have been generally weak and often beholden to the member states. There is a consensus that the outgoing president, José Manuel Barroso, has been very disappointing. But then it was Germany and France who supported his candidacy; neither Berlin nor Paris wanted a very strong Commission president who could challenge their own national interests. By the way, don't forget you can have very strong commissioners. The trade and competition commissioners have immense executive powers. Those two have been crucial in giving Europe a big influence when it comes to defending trade and competition policies. And they have worked hard in trying to negotiate TTIP. The general mood regarding the elections, across the twenty-eight member countries, seems to be one of apathy. What's behind this? "The recent economic crisis has fed into this sense of disillusionment with Europe and boosted eurosceptic parties across the continent." The turnout continues to decline. This time around, the recent economic crisis has fed into this sense of disillusionment with Europe and boosted eurosceptic parties across the continent. The two most prominent are Britain's UK Independence Party (UKIP) and France's Front National. But it must be said too that the mainstream parties standing for the European Parliament have not done the kind of grassroots campaigning necessary to defend Europe. In contrast, the nationalist/populist and fringe parties are exploiting this weakness with their own high-profile campaigning. They are well organized and highly motivated, and they are able to sell a very clear message. Does this apathy reveal a larger disconnect between Europeans and EU institutions? There is a huge disconnect, even though European Parliament deputies keep vowing to bridge this gap even through basic electioneering. This has not happened. Many observers are anticipating big gains for anti-EU parties in the upcoming European Parliament elections. How would victories for fringe parties (on the left and right) impact EU policymaking? "If the fringe parties do well, it could lead to paralysis in the European Parliament." If the fringe parties do well, it could lead to paralysis in the European Parliament. It could also lead to shifting alliances. If—and it's a big if—these fringe parties, left or right, could establish a united front in the parliament, then we could expect a shrilled anti-American tone, more scepticism over agreeing to TTIP, and a more restrictive policy with regard to immigrant and human rights. It is said that the European Parliament still lacks legitimacy in the eyes of many voters. What further steps can be taken to bridge the oft-referenced "democratic deficit"? Indeed, the European Parliament still lacks legitimacy. Voters across Europe cannot vote for Juncker or Schulz. Pan-European candidates do not exist. Voters can only vote for their own national list; or if they are living and registered in another EU country, they have to choose whether they will vote for the candidates in that country or their own country. Clearly, the gap between European citizens would narrow if there were genuine, pan-European political parties, and if the European Commission president was directly elected. In light of the crisis in Ukraine, there is a renewed interest in a common defense and security policy. How can the incoming European Parliament boost European foreign policy in the coming months and years? The Ukraine crisis has in fact exposed deep divisions in the EU over security and foreign policy. A real discussion about Europe's security and foreign policy has yet to begin. The outgoing European Parliament did some excellent analyses on the weaknesses of European foreign policy. But it relies on the member states to make that essential difference when it comes to giving the EU a serious foreign, security, and defense dimension. NATO in fact has been setting the agenda on security issues. Even then, the western European members of NATO cannot agree about deploying troops on a permanent basis to the eastern European members of NATO. Why have so many fringe parties and politicians aligned with Russian president Vladimir Putin? For many of these fringe parties, they find Putin's conservatism, his opposition to the so-called decadent West, and his anti-Americanism and anti-NATO stance appealing.
Japan may set 2-stage approval by Cabinet over collective self-defense
Japan may set a two-stage approval process for the Cabinet before lifting the self-imposed ban on exercising the right to collective self-defense, ruling party sources said Thursday, as the outlook remains uncertain for the ruling bloc to reach an early agreement over the controversial issue. The New Komeito party has proposed to the Liberal Democratic Party of Prime Minister Shinzo Abe that the Cabinet first approve a roadmap of legal challenges that need to be tackled, and then what steps Japan will take, including reinterpreting the Constitution to allow the exercise of the right to collective self-defense, the sources added. The two-stage process would enable the government to make necessary preparations to draft legislation after the first stage, while New Komeito can buy time and put off what could be the most contentious issue of deciding whether Japan should defend allies under armed attack in collective self-defense. The plan has been floated as a compromise for the ruling parties to avoid a rift and some LDP lawmakers have expressed their support, although the government has yet to give the nod, according to the sources. Tokyo is seeking early approval in time for the planned revision to Japan-U.S. defense cooperation guidelines by the end of the year, and hopes to revise relevant laws from an extraordinary Diet session in the fall. In the first round of approval, the Cabinet would recognize a set of domestic legal challenges in three major areas -- how to handle "gray zone" incidents that are not considered full-fledged military attacks on Japan, U.N. peacekeeping and collective security operations, and whether to exercise the right to collective self-defense, the sources said. The LDP and the junior coalition partner New Komeito started their debate earlier this week on reworking Japan's legal framework amid security threats from an assertive China and North Korea's nuclear and missile development programs. The parties have already decided to focus on "gray zone" incidents first, rather than tackling the controversial issue of collective self-defense from the start. Some New Komeito lawmakers have suggested the ruling bloc should not wait until they can agree on all of the three areas to start drafting legislation, but the LDP has insisted that the three should be a package. Prime Minister Abe is seeking to secure the support of the ruling parties for lifting the self-imposed ban by a Cabinet decision, but New Komeito remains cautious about reinterpreting the war-renouncing Article 9 of the Constitution that has never been amended since 1947. Japan has maintained it has the right to collective self-defense but cannot exercise it due to the constraints of Article 9. In a report submitted to Abe last week, a panel of security experts argued that collective self-defense falls under "the minimum" level of defense allowed under the supreme law and called for changing the current interpretation. ==Kyodo Copyright 2014 Kyodo News International. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. http://www.globalpost.com/dispatch/news/kyodo-news-international/140522/japan-may-set-2-stage-approval-cabinet-over-collective
Putin’s Singapore Dream Costs Crimea Banks and Burgers
“Putin brought us back home without firing a shot,” Pivnenko said. “He’s like family now.” http://www.businessweek.com/news/2014-05-22/putin-s-singapore-dream-costs-crimeans-their-banks-and-burgers Bloomberg News Putin’s Singapore Dream Costs Crimea Banks and Burgers By Evgenia Pismennaya May 22, 2014 -------------------------------------------------------------------------------- Men stand at the entrance of a closed McDonald's restaurant in Sevastopol on April 5, 2014. Photographer: Vasiliy Batanov/AFP via Getty Images President Vladimir Putin is trying to transform Crimea into the Singapore of the Black Sea. That effort so far has cost Russia’s newest republic its entire banking system and all three of its McDonald’s. After Putin annexed Crimea in March, the government in Kiev banned all lenders operating under Ukrainian law from the region. Now almost every bank on the peninsula, from billionaire Igor Kolomoisky’s Privatbank, Ukraine’s largest, to Italy’s UniCredit SpA (UCG) has been shuttered. Unlike UniCredit, which is refunding deposits, Privatbank simply pocketed the cash, leaving its clients to seek compensation from Russia. “Thank God they decided to return my money,” said Alla Anisomova, a retiree in her 60s who gets by on less than $300 a month. Anisomova is among the thousands of people who have flocked to the former Privatbank branch on Lenin Street in Kerch, a city on the eastern edge of Crimea, to apply for redress from Russia’s Deposit Insurance Agency. The agency, which now controls the building, has pledged to return deposits of as much as 700,000 rubles ($20,000). Related: Ukraine Forces Suffer Worst Losses of Crisis Amid UnrestDeath Threats Haunt Eastern Ukraine as Gunmen Target Vote For Anisomova and Crimea’s other 600,000 or so pensioners, the headaches of navigating the new bureaucracy have an upside. Putin has increased their monthly stipends 50 percent and by July will raise them to double what Ukraine paid. Those payments are made through local post offices, in cash. Albania, Barbados The pension increases, deposit compensations and pay raises for 140,000 public workers are part of the $48 billion Russia may spend by the end of the decade to transform Crimea into a commercial hub similar to Singapore, according to Oleg Savelyev, head of the new Crimea Affairs Ministry. That’s about 10 times the annual output of the region of 2 million people. “I blew the dust off the book, ‘Singapore: From Third World to First’ by Lee Kuan Yew to have another read when I became minister,” Savelyev said in an interview in his office in the Economy Ministry in Moscow, where he was deputy minister before his promotion. “We will pursue Singapore’s model in Crimea, we’ll ensure a comfortable business environment there.” Lee, who ruled Singapore from 1959 to 1990, turned the former impoverished British colony into one of the wealthiest countries in the world. The World Bank ranks Singapore No. 1 on its annual ease of doing business survey. Russia is 92nd, just behind Albania and Barbados. New Russia “Regulatory principles in Crimea will be much better, simpler than in the rest of Russia,” said Savelyev, 48, who was added to the European Union’s sanctions list last month. “The region will not have the stifling bureaucratic system that Russia is notorious for. Our task is not to replicate the Russian model, but to create a much better one.” It’s not just banks that Russia has in mind for Crimea, there’s also gambling, tourism and wine. The peninsula will be designated a special economic zone, unique among the 84 regions of the world’s largest country. The casinos will probably be located in Yalta, acting Prime Minister Sergey Aksyonov said. “Casinos won’t be scattered around Crimea,” Aksyonov said in an interview in Simferopol, the regional capital. “The zone will be confined to an area of 50 to 100 hectares.” Yalta, a resort city where Leo Tolstoy and Anton Chekhov did some of their writing and czars Alexander III and Nicholas II built palaces, became the main holiday destination for Soviet workers under communism. Now the real estate along Yalta’s picturesque embankment is the most expensive in Crimea. Roosevelt, Churchill The main attraction is the Livadia Palace, where wax statues of Soviet dictator Josef Stalin, U.S. President Franklin D. Roosevelt and U.K. Prime Minister Winston Churchill commemorate their meeting in 1945 to discuss the reorganization of Europe after the defeat of Nazi Germany in World War II. “Crimea’s economic potential is incredible,” Aksyonov said. “We’ll only need Russian aid during the transitional period. We’ll return the funds with interest.” Vladimir Gubanov, who runs a division of Massandra, the winemaker founded by Nicholas II before Russia’s last czar and his family were murdered by the Bolsheviks, said he couldn’t agree more. Orders for Massandra’s wines from Russian retailers have doubled and even tripled since annexation, Gubanov said. “Taxes in Russia are lower than in Ukraine and the number of potential investors is many times higher,” Gubanov said. Lawmakers in Moscow are working on a draft bill that will offer tax and other incentives to stimulate exports, according to Savelyev, the minister for Crimea. Businesses there will operate under English commercial law rather than Russian legislation to attract foreign investment, he said. ‘Boldest Dreams’ “We will try to put our boldest dreams into practice,” Savelyev said. Those dreams sound promising, but they aren’t helping business owners now, said Natlia Kochurina, who owns a 10-room hotel in Kerch, where ancient Greeks established a colony about 2,600 years ago. Tourism is one of the mainstays of the economy of Crimea, which National Geographic magazine named one of the world’s top travel destinations last year, calling it “a diamond suspended from the south coast of Ukraine.” Colonized by ancient Romans as well as Greeks, Crimea was part of the Ottoman Empire until Catherine the Great’s lover Grigory Potemkin engineered Russia’s peaceful acquisition of the peninsula in 1783, writing “Russia needs its paradise.” Soviet leader Nikita Krushchev gave Crimea to Ukraine in 1954, a move Putin called a mistake that needed to be rectified. Presidential Election The peninsula attracted 6 million visitors last year, about 70 percent of whom were Ukrainian and 25 percent Russian. Kochurina said those numbers have plummeted since annexation as the government in Kiev urges people to boycott the region and skirmishes continue between federal forces and seperatist rebels in eastern Ukraine. Elections to replace Kremlin-backed President Viktor Yanukovych, who fled to Russia amid bloody protests in February, are slated to be held May 25 in Ukraine. Add to that the fact that all transactions are cash only because credit and debit cards no longer work and Kochurina said she’s starting to wonder how long she can stay in business. “Our future looks very vague,” Kochurina said. Another economic pillar, shipping, is also foundering, according to Leonid Orlov, deputy head of Krym, one of Crimea’s five main ports. The wharves are empty and the loading cranes are idle, Orlov said in an interview in Kerch, which is separated from Russia’s southern Krasnodar region by the Kerch Strait. ‘Political Blockade’ “An economic and political blockade is in place,” said Valery Belyakov, the deputy head of the Temryuk port on the Russian side of the watery divide. “Crimea’s main ports are in a state of legal limbo.” The local government plans to close two ports, in Fedosia and Yevpatoria, as part of a massive overhaul of the peninsula’s infrastructure, Crimea’s Deputy Prime Minister Rustam Temirgaliev said on his Facebook page. Authorities plan to construct a new terminal at Crimea’s only international airport, in Simferopol, and build ring roads around Simferopol and Sevastopol, home to Russia’s Black Sea Fleet. They also plan to connect Sevastopol and Kerch, on opposite sides of the peninsula, by rail. The most ambitious project is the 5-kilometer bridge that Russia plans to erect across the Kerch Strait, a project that may cost as much as $5.8 billion, according to the Regional Development Ministry in Moscow. Build, Putin! The government plans to start accepting bids for the bridge, which will have a four-lane highway and two railway tracks, later this year, according to Sergei Kelbakh, chairman of Russian Highways, the state-run company overseeing the project. Companies from China, Turkey and South Korea have already expressed interest, Kelbakh said in an interview, declining to be more specific. Currently there are just two ways to reach Crimea directly from Russia, either on a two-hour flight from Moscow or a 30-minute ferry ride across the strait. “Build the bridge, Putin!” a passenger on the Nikolai Aksenenko ferry wrote in the ship’s comment log, identifying himself as Ustinov from Moscow and Sochi. “The ferry’s slow!” Aksyonov, the acting premier, acknowledged that any hope Putin has of replicating the commercial success of Singapore hinges on his ability to root out corruption. The practice is deeply entrenched in both Russia and Ukraine, which are ranked by Transparency International as the most corrupt major economy and the most corrupt country in Europe, respectively. ‘Like Family’ “I summoned the ministers and warned them against taking bribes,” Aksyonov said. “Those caught taking or giving bribes will be sent to work in Magadan,” Aksyonov said, referring to the region of northeast Russia that became a forced-labor hub during the Stalin era. Aksyonov said Crimeans are prepared for the “temporary economic difficulties ” that come with reuniting with Russia after six decades apart. That position was seconded by Yury Pivnenko, a retired fireman who supplements his pension by driving a taxi in Alushta, about 50 kilometers south of Simferopol. “Putin brought us back home without firing a shot,” Pivnenko said. “He’s like family now.” To contact the reporter on this story: Evgenia Pismennaya in Moscow at epismennaya@bloomberg.net To contact the editors responsible for this story: Hellmuth Tromm at htromm@bloomberg.net Brad Cook
Thai Military Consolidates Coup
Deposed prime minister Yingluck Shinawatra appeared before Thailand's governing junta council on Friday, one day after the military announced it had taken power in a coup. She is among the 155 political figures summoned by the National Peace and Order Maintaining Council who have been prohibited from leaving the country without permission (Bangkok Post). Army chief General Prayuth Chan-ocha addressed the civil service, calling on their help in implementing reforms before "return[ing] power to the people." Meanwhile, a nationwide curfew was in force as protestors were dispersed, though some dissent was seen in Bangkok, and television stations have had their programming replaced by the military's (Reuters). The United States declared the takeover a coup, which could prompt curtailed aid and military relations (WSJ). Analysis "In the nation's capital, troops and police officers appear to be exercising restraint. Let us hope this continues, for there is a long history of rights violations under martial law in Thailand. In some 30 of Thailand's 76 provinces, martial law was already in place before Tuesday, in some cases for years. Extrajudicial executions, deaths in custody, enforced disappearances and torture have been documented under military jurisdiction. There has been almost no accountability for these violations," writes Sam Zarifi in the New York Times. "Whatever appointed government is put into place by the military likely will launch reforms that, in theory, could help cleanse Thailand's political system of graft and vote buying but that, in reality, will be designed to try to ensure the Shinawatras and their political base are disempowered once and for all. This will not be an easy task; in fact, it is probably impossible. The supporters of Puea Thai include both the majority of Thais and a small, hardened minority of activists who will be willing to fight the Thai military in Bangkok or in upcountry towns," writes CFR's Joshua Kurlantzick. "If the coup results in the military's unilateral appointment of a new prime minister who is unacceptable to the Thaksin side a further escalation is bound to occur. Yet such bleak predictions belie the potential for progressive change that lies at the heart of all crises. Rather than seeing Thailand's troubles as a decline one might equally interpret them as a negotiation of a new social contract ahead of a sea change in the structure of the Thai state," writes Serhat Ünaldi in the Diplomat.
Friday, May 23, 2014
China's Xi Warns Asian Countries on Military Alliances
May 21, 2014 2:54 AM Chinese President Xi Jinping warned Asian countries against building what he sees as unhelpful military alliances, in what is seen as a swipe at nations that have developed closer defense ties with the United States. The comments came Wednesday in Shanghai at the Conference on Interaction and Confidence-building Measures in Asia (CICA), a regional grouping China hopes to use to offset U.S. influence. "We should stick to the basic norms in international relations such as the respect for the independence of sovereignty and integrity of territory, mutual non-interference into internal affairs. We should respect the political systems and development methods different countries choose willingly. We should respect and look after the reasonable security concerns of every country. It is disadvantageous to the common security of the region if military alliances with third parties are strengthened,” said Xi. Many of China's neighbors have boosted their military cooperation with the U.S. in response to what they see as China's increasing use of force and intimidation in its many territorial disputes. In particular, Beijing's maritime spats with Vietnam and the Philippines in the South China Sea and Japan in the East China Sea have worsened in recent months. During a visit to Asia last month, President Barack Obama sought to reassure allies such as Japan and the Philippines that his long-promised strategic shift towards Asia and the Pacific, widely seen as aimed at countering China's rising influence, was real. The CICA grouping includes Vietnam, while the Philippines and Japan are not members but had representatives at the meeting. The group also excludes the U.S., while including nations such as Iran and Russia. Anti-Chinese violence flared in Vietnam last week after Chinese state oil company CNOOC deployed an oil rig 150 miles off the coast of Vietnam in waters also claimed by Hanoi. The rig was towed there just days after Obama left the region. The move was the latest in a series of confrontations between China and some of its neighbors over the potentially oil-and-gas rich South China Sea. Washington has responded with sharpened rhetoric toward Beijing, describing a pattern of “provocative” actions by China. The CICA is relatively obscure in comparison to other Asian regional groupings, such as the Asia-Pacific Economic Cooperation (APEC) or the Association of Southeast Asian Nations (ASEAN), but Beijing, which took over as chair of the CICA from Turkey this week, hopes to use the group and others like it to help expand Chinese influence across the region. President Xi said the grouping should help create a "new regional security cooperation architecture." Although he provided few details, he said this could include a "defense consultation mechanism" and a "security response center" in case of regional emergencies. Addressing China's territorial feuds, he said Beijing is "committed to seeking peaceful settlement of disputes with other countries over territorial sovereignty, and maritime rights and interests." State broadcaster China Central Television aired the arrival of various leaders for the meeting live, but, underscoring the sensitivity of China's territorial disputes, it cut away from images of Xi shaking hands with the representatives from Vietnam, the Philippines and Japan. Chinese President Xi Jinping warned Asian countries against building what he sees as unhelpful military alliances, in what is seen as a swipe at nations that have developed closer defense ties with the United States. The comments came Wednesday in Shanghai at the Conference on Interaction and Confidence-building Measures in Asia (CICA), a regional grouping China hopes to use to offset U.S. influence. "We should stick to the basic norms in international relations such as the respect for the independence of sovereignty and integrity of territory, mutual non-interference into internal affairs. We should respect the political systems and development methods different countries choose willingly. We should respect and look after the reasonable security concerns of every country. It is disadvantageous to the common security of the region if military alliances with third parties are strengthened,” said Xi. Many of China's neighbors have boosted their military cooperation with the U.S. in response to what they see as China's increasing use of force and intimidation in its many territorial disputes. In particular, Beijing's maritime spats with Vietnam and the Philippines in the South China Sea and Japan in the East China Sea have worsened in recent months. During a visit to Asia last month, President Barack Obama sought to reassure allies such as Japan and the Philippines that his long-promised strategic shift towards Asia and the Pacific, widely seen as aimed at countering China's rising influence, was real. The CICA grouping includes Vietnam, while the Philippines and Japan are not members but had representatives at the meeting. The group also excludes the U.S., while including nations such as Iran and Russia. Anti-Chinese violence flared in Vietnam last week after Chinese state oil company CNOOC deployed an oil rig 150 miles off the coast of Vietnam in waters also claimed by Hanoi. The rig was towed there just days after Obama left the region. The move was the latest in a series of confrontations between China and some of its neighbors over the potentially oil-and-gas rich South China Sea. Washington has responded with sharpened rhetoric toward Beijing, describing a pattern of “provocative” actions by China. The CICA is relatively obscure in comparison to other Asian regional groupings, such as the Asia-Pacific Economic Cooperation (APEC) or the Association of Southeast Asian Nations (ASEAN), but Beijing, which took over as chair of the CICA from Turkey this week, hopes to use the group and others like it to help expand Chinese influence across the region. President Xi said the grouping should help create a "new regional security cooperation architecture." Although he provided few details, he said this could include a "defense consultation mechanism" and a "security response center" in case of regional emergencies. Addressing China's territorial feuds, he said Beijing is "committed to seeking peaceful settlement of disputes with other countries over territorial sovereignty, and maritime rights and interests." State broadcaster China Central Television aired the arrival of various leaders for the meeting live, but, underscoring the sensitivity of China's territorial disputes, it cut away from images of Xi shaking hands with the representatives from Vietnam, the Philippines and Japan. Some information in this report was contributed by Reuters.
Is Collective Self-Defense in Japan's Future?
The environment in which Japan exists is changing. Tokyo must change along with it, or live at the mercy of others. Michael Mazza, May 20, 2014 inShare.1On Thursday, May 15, Japanese Prime Minister Shinzo Abe announced that his government was officially launching discussions on revising the constitution’s interpretation to allow for collective self-defense. That it was clear this was coming does not make the announcement any less momentous. For sure, Abe does not have a smooth path to updating the government’s interpretation of the Japanese constitution. The Liberal Democratic Party’s coalition partners are not keen on the change, there is resistance within the LDP itself, and Japanese voters remain skeptical. At the end of the day, however, the arguments for allowing collective self-defense are persuasive, and if Abe can continue delivering on his promise to revitalize the economy—first quarter GDP growth reached 5.9 percent, and a major fiscal stimulus is planned for the second quarter—he just may get his way. A primary argument from the opposition is that permitting collective self-defense will inevitably lead to Japanese involvement in overseas conflicts in which the country has little at stake. The argument is both alarmist and assumes an exceedingly narrow definition of the national interest. It has become clear that a broadened interpretation of the constitution would put well-defined limits on when Japanese forces could act to defend others. Opening the door to collective self-defense does not constitute a blank check for armed intervention abroad. According to the Japan Times, a government panel that studied the issue concluded that Japan should aid another under attack “if such an attack could lead to a direct attack to Japan, critically damage the Japan-U.S. military alliance, considerably affect the international order, or remarkably damage the life and rights of the Japanese people.” None of these is a peripheral interest. Rather, Abe and his advisers see the right to exercise collective self-defense as necessary to ensure the security and prosperity of Japan as well as regional peace. Regional peace, meanwhile, increasingly appears to hang in the balance. China is antagonizing its neighbors and testing the United States at a troubling clip. Pyongyang is testing missiles and threatening to detonate a nuclear device while the two Koreas exchange artillery fire in the Yellow Sea. Tens of thousands of Taiwan’s citizens recently took to the streets to protest closer ties to mainland China. And right now, ships are firing water cannons at and ramming each other off the Vietnamese coast, while Chinese vessels attempt to starve out Philippine marines on Second Thomas Shoal. An incident leading to escalation—either unwanted or intentional—is no distant possibility. Japan’s current leadership knows that Japanese interests extend far beyond the southern Ryukyu islands. That Abe should want tools to defend Japanese interests further afield—whether it be to ensure continued freedom of navigation or protect an Asian order in which states do not resort to aggression to achieve their ends—should come as little surprise. Still, although pursuing a revised interpretation of the constitution is both natural and rational, it is also revolutionary. Even if applied in only a very narrow range of scenarios, exercising the right to collective self-defense will be a monumental change for a country that has more or less outsourced its own self-defense since the end of World War II. There are implications for defense spending and for the types of forces Japan fields—for how they train, how they operate, and how they interact with foreign militaries. There are implications for Japan’s foreign policy—for the types of relationships it pursues and the defense agreements it forges. Finally, there are even implications for Japan’s identity. Japan’s people have defined their country as a pacifist one for decades. But should the Maritime Self-Defense Forces one day lawfully come to the defense of a U.S. warship under attack or of a Korean freighter beset by Somali pirates, there will naturally be questions about just what it means for Japan to be “pacifist.” None of this is to say that Abe is acting rashly or impulsively. Rather, he has recognized that the environment in which Japan lives is changing. Japan must change along with it or live at the mercy of others less hesitant to shape the world to their own desires. Michael Mazza is a research fellow at the American Enterprise Institute. Follow him on Twitter: @Mike_Mazza.
Connectivity is a challenge to ASEAN integration – Singaporean minister
By DANESSA O. RIVERA, GMA NewsMay 22, 2014 6:40pm 22 23 0 69 Connectivity is key to equitable development under the ASEAN Economic Community (AEC) starting 2015, a Singaporean official told business and political leaders at the World Economic Forum in Makati City on Thursday. The region should not just focus on forming an single-market because it is only one pillar of the AEC, Josephine Teo, Senior Minister of State at the Ministry of Finance and Transport in Singapore, said during the discussions on "Connect on Trade: Lifting Barriers to Growth." To have equitable development across the region and to be competitive globally, "you need connectivity," which remains a challenge, she said. "We need connectivity to make sure there is free flow of goods and services, equitable development, and increased competitiveness," she said. By 2015, the AEC sets in motion the creation of single market for the 10-nation bloc which include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam. Air, cyrber, land connectivity ASEAN connectivity has three key areas: air, cyber space, and land and rail. Air travel is expected to grow significantly in the region due to a growing middle class, Teo said. "The demand for air travel in our part of the world will grow tremendously, because the growing middle class will exceed North America and Europe combined," she noted. The International Air Transport Association (IATA) expects air passengers to grow by 800 million this year, of which half would originate from the ASEAN region. The ASEAN open skies policy can be patterned after the European single aviation market, Teo said, noting the region can expect a multi-fold increase in number of flights, including direct city links, as well as reduced cost in air transport for passengers and freight. A challenge to regional connectivity is the capacity of airports. "There's a lot of need and opportunity to invest in airport capacity," Teo said. To unleash the full growth capacity of the region, the AEC should also sign air transport agreements with other big economies. Teo said the region currently has an air transport agreement with China and in the works are Japan, Korea and India. – VS, GMA News
burma May 23, 2014
Along Thai-Burma Border, Signs of Rising Drug Trade Voice of America On the Thai-Burma border, authorities are witnessing the rise firsthand. Along the Thai-Burmese border, regional trade has increased as countries ... Flag as irrelevant The Irrawaddy News Magazine Burma Census Data May Be Used Politically: Official The Irrawaddy News Magazine While individual data will be kept confidential, the Burmese government cannot control how the aggregate results are used, according to a spokesman ... Flag as irrelevant The Irrawaddy News Magazine Burma Gets $91M to Tackle HIV, TB and Malaria The Irrawaddy News Magazine RANGOON — The Three Millennium Development Goal Fund (3MDG) has committed US$91 million to help Burma deal with HIV, tuberculosis (TB) ... Flag as irrelevant Democratic Voice of Burma Burma govt says US sanctions 'not a big issue' Democratic Voice of Burma The renewal of some US sanctions on Burma will not harm economic relations between the two countries, according to the Union of Myanmar [Burma] ... Flag as irrelevant The Irrawaddy News Magazine Burmese Vice President Draws Ire With Cost of Living Comment The Irrawaddy News Magazine RANGOON — Burma's leaders are under fire for being out of touch after the country's vice president reportedly insisted that a little over US$2 was a ... Flag as irrelevant The Irrawaddy News Magazine Ditching Clunkers, Car Imports Drive Burmese Demand for Oil The Irrawaddy News Magazine A worker operates an engine to lower a drill into an oil well at Bandau Pen village in Thayet Township, Magway Division. Burma produces some oil of ... Flag as irrelevant Italian missionary, Burmese catechist to be beatified as martyrs Catholic Culture Father Mario Vergara (1910-1950), an Italian missionary, and Isidore Ngei Ko Lat, a Burmese lay catechist, will be beatified as martyrs at the cathedral ... Flag as irrelevant Democratic Voice of Burma World Bank to boost Burma's education system Democratic Voice of Burma The World Bank has announced it will provide US$100 million to expand the Burmese Ministry of Education's School Grants and School Stipends ... Flag as irrelevant The Irrawaddy News Magazine Nationwide Ceasefire to Include 'Federal System' Clause: Ethnic Leader The Irrawaddy News Magazine RANGOON — A representative of Burma's ethnic armed groups says military representatives have accepted that ongoing peace negotiations will be ... Flag as irrelevant Democratic Voice of Burma Review Committee supports overturning Article 436 Democratic Voice of Burma Burma's parliamentary Joint-Committee for Reviewing the Constitution (JCRC) is set to propose a constitutional amendment to Article 436 – the ...
BURMA AND THAILAND NEWS SUMMERY -May 22, 2014
NEWS Along Thai-Burma Border, Signs of Rising Drug Trade Voice of America CHIANG MAI, THAILAND — According to a new United Nations report, seizures of illegal methamphetamine drugs around the world last year reached ... Flag as irrelevant The Irrawaddy News Magazine Ditching Clunkers, Car Imports Drive Burmese Demand for Oil The Irrawaddy News Magazine Burma produces some oil of its own, but most is imported. ... But traders say undocumented fuel flows, particularly
News summary-2014-05-22
News World Bank Project Puts $100m Toward Education in Burma BruDirect.com - 11 hours World Bank Project Puts $100m Toward Education in Burma Kyaw Hsu Mon Rangoon — A US$100 million World Bank-backed project will improve the ... Military alternative Philippine Daily Inquirer - 20 hours We view the turn of events in Thailand with great concern. Thais are longtime allies and friends of the Philippines, and the declaration of ... Who Was Brigadier Zakariya Maimalari? Sahara Reporters - 19 hours By Haruna Y. Poloma Last week, Nigerians awoke to the horrifying news of an army mutiny at Maimalari Barracks in Maiduguri, Borno State, ... China: The Long-Term Prospects Are Good Strategy Page - 3 hours May 22, 2014: In the northwest (Xinjiang) Uighur terrorists are increasingly aggressive in attacking the growing Chinese presence among them. Russia Sees China Gas Contract as a Blow Against West VOA News - 16 hours China and Russia, who have been haggling for a decade over the price of Siberian gas, have suddenly reached an agreement. Facing Western ...
Tuesday, May 20, 2014
JAPAN-NEWS SUMMERY-3014-05-20
News Japan's trade deficit narrows on slower imports Associated Press via Yahoo! News - 3 hours TOKYO (AP) -- Japan's trade deficit narrowed in April after the yen strengthened and a sales tax hike dampened demand for imports of consumer ... Japan's Trade Deficit Narrows on Slower Imports ABC News - 8 hours Japan's trade deficit narrows in April as import growth slows following sales tax hike Japan's exports pick up steam in April CNBC - 9 hours Japan's exports rose 5.1 percent in April from a year earlier, above analyst forecasts in a Reuters poll for a 4.8 percent rise, data ... Japan should cut corporate tax, consider GPIF legal overhaul-LDP draft proposal Reuters via Yahoo! Finance - 22 hours TOKYO (Reuters) - Japan's ruling Liberal Democratic Party will urge cutting the corporate tax rate while expanding the tax base in a bid to ... Japan's Fukushima operator begins groundwater release to ocean Reuters via Yahoo! News - 4 hours TOKYO (Reuters) - The operator of Japan's destroyed Fukushima nuclear plant began releasing groundwater that it said is within legal ...
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