Missing the boat to the South China Seas

November 5, 2016

Q: Some people are saying Duterte is playing both sides to get the best deal out of China and America. What is your point of view?

A: Sure. Duterte is certainly playing one superpower against the other. Only understand – this is not a new chess game – not at all. That was really how it was when the world was once ideologically bipolar and divided between communism and capitalism. Only this time round – it’s not so much an ideological war. If anything it is simply a case of how much can I get if I stand with you?

By cold shouldering the US, Duterte will certainly be able to exert pressure on Beijing to offer infrastructure projects such as a railway in the south along with fishery concessions in the disputed region of the SCS. That’s already in his bag when he stepped on the plane.

However I need to emphasize very forcefully – Duterte and Najib are both securing a loan. This needs to be ultra clear – all the goodies Duterte has managed to secure is certainly not an ex gratia gift. It’s a loan. A big loan. A loan just like what they would probably get from the IMF which usually comes with truck loads of one sided terms and conditions that not only have to be obligated, but most importantly can be enforced with penalties. But since the sums involve are so mind boggling huge it even has the effect of modulating the domestic and foreign policies of those countries taking those loans. Again this is not new. This is exactly the same mechanism that the US and their allies have been using for the last fifty years to perpetuate their primacy via their covert proxy the IMF.

That’s one reason why no country ever wants to knock on the door of the IMF unless they happen to have two tic tacs and a packet of economy beehon in their haversack. As the default position is they will have to not only compromise their independence, but the lender will also be able modulate the directional and in certain cases the instructional policies of those countries.

China is essentially using the same thing. Again it is not new. They have been doing this thru out Africa to secure mining and plantation concessions. Every superpower uses loans as means of exerting command and control over a nation.

This is not new. So don’t think this is Father Christmas handing out presents – anyone who tells you different just has a very poor understanding of the mechanics of how a loan works and what sort of obligations it can theoretically impose on the debtor.

So I don’t believe Duterte can go back to the US and ask them can you better the deal? Neither can successive leaders who may come after Duterte do so either. As many of these loans have very long pay back horizons. We are talking about ten years and more.

Will Duterte go back to the US and ask – can you better the deal?

Of course he will. But the problem is the US are broke. So what can they really offer him except maybe a couple of ROD bone yard military jets or spare parts – that sort of thing – what many people don’t seem to comprehend is when people say power has shifted from West to East – that’s just a polite way of saying the Americans cannot possibly be as generous or for that matter offer as many possibilities as the Chinese. To put it crudely, the US now is like a bag man standing next to a billionaire. Period.

Q: What about Najib? Is he also getting a similar sort of loan as Duterte? It seems in the case of Malaysia there might be a military dimension in the agreement to purchase patrol boats.

A: As I said these are serious loans. Yes, they may come with friendship interest rates and very long term repayment schedules that don’t stress these countries in the short term. But nonetheless they are still loans from very very serious people.

As for the military dimension – again this is not new to Malaysia. Malaysia has Russian Sukhoi in their inventory. Just as they have US made stuff. It’s not new. Don’t blow it up to something that it’s not.

Q: I have asked you this question before. And if you don’t mind me saying – you have been quite evasive and careful in your past reply. However, this question comes directly from the Guilds. They want to know could Singapore have secured similar goodies from China like Duterte and Najib?

A: I am not evasive. I am succinct and economical in my reply – Singapore doesn’t need to take a loan. She has a near first class balance sheet. On paper at least.

The challenge for Singapore is how do they continue to fuel economic growth and still keep the natives happy – that is the one common question that occupies every political leadership.

The challenge for Singapore and other countries is like Tolstoy’s aphorism – Happy families are all alike; every unhappy family is unhappy in its own way. What this means is for a marriage to be happy, it must succeed in several key aspects.

In the case of Singapore. I believe the planners have calculated there is more benefit to ally themselves with the US. Their position is similar to Australia, Japan and to a limited degree South Korea.

The question is how sound is that strategy? It is very sound. Because say what you will of the US – but in terms of patents per capita, they have tremendous reserves of intellectual capital that will allow them to create value in the form of new services and products that they can continue to sell to the world.

So the question for Singapore is how do they insert themselves in this global supply chain?

The second aspect is no one can deny US primacy in the Pacific has been key to creating a very conducive business environment for trade and commerce to prosper.

But in the case of Singapore. Because she is small. And it’s essentially a service orientated economy – there is very limited scope to benefit from China. In the case of the Philippines they see the southern rail line as trade bridge that will network the Visayas. That’s a lot of steel and concrete on the ground. A lot of opportunities for job creation and profit sharing. Same goes for Malaysia. High speed rail is not just confined to trains – there is always a synergistic knock on effect like more buildings hubs that can create opportunities and jobs. But in the case of Singapore how much can be gained even if the Chinese lay tracks all the way from Simei to Woodlands?

I am not evasive. I am just saying Singapore has made the decision they can go further by allying themselves with the US rather than the Chinese. And that simple rationale is a key determinant that shapes their foreign policy along with worldview.

It’s not necessarily wrong or bad decision making per se. It’s just another perspective of what they believe will take them further.

If I harbor any critical views concerning Singapore’s strategy in the Pacific, it is simply this – they have placed too much faith in America. They don’t seem to appreciate even the basic concept of what is organizational and personal success in the US is going thru an unprecedented revision – just look at the presidential elections this time round and scan thru previous elections in the US in Youtube and even you will be convinced the US today it’s not what it used to be any longer like maybe during the Reagan, Bill Clinton or even George Bush years.

There are many Americans who are disillusioned or at least two minded about many set pieces that used to make up the DNA of America. Globalization, immigration, homeland security, foreign policy etc etc.

It’s even conceivable in my opinion – we are witnessing a wave of irrationality that even US leaders may not have the capacity to control any longer and must simply learn to accept as a fact of life that requires them to work around.

Q: How will the Americans be able to influence Duterte to come over to their side?

A: They have their bag of dirty tricks. Regime change. Trade sanctions. Embargo. Blackmail. Fabricating evidence. Mind control of public opinion Diplomatic assassinations. Right down to simply labeling him a mad man. This is what the Americans and their allies excel in lah – their motto is if you are not with me, then you’re against me. To me the CIA is just like the mafia with pension plans.

I don’t want to elaborate too much because the last thing I need now is for men with no necks to rappel down Blackhawk helicopters and double tap me.

I don’t need a predator drone to circle my plantation when I am working in the field spying on me with FLIR.

Dowan lah!

But their covert methods of soliciting compliance from world leaders is a well documented history based on fact.

Q: I get the feeling this conversation is veering to the non serious domain. Could you share with me what is your main gripe about the TPP – why are you so against free trade?

A: TPP has got nothing whatsoever to do with ‘freedom’ and even less to do with trade. Whenever politicians use that term – it’s just parlance for we want to rewrite the rules of the game so that we can always win or to tilt the level playing field in their favor – that’s all it is.

If the TPP is really about promoting free trade like you said why was it conceived in a veil of secrecy? Why were only the vested interest of corporatist and globalist privy to the negotiations? Why do ordinary folk need to regularly find out details about the TPP from Wikileaks?

From a free trade standpoint it brings absolutely nothing new to the table – you tell me what intrinsic value or utility is created when the life span of patents and intellectual property for medication to genetically engineered seed is extended beyond the statutory agreed terms.

Tell me? What new or extra value to mankind is actually created?

The only beneficiary of the TPP is US multinationals and their mainstay allies.

What does the common Joe get in return?

Do you get more choice? No! How can you when everything goes up in price because of the TPP’s ultra emphasis on monetizing and commoditizing and rent seeking from everything from drugs to music.

I am not saying people who invent stuff or who happen to be creative don’t have an elemental right to enjoy the dignity of labor that should rightly accrue to them – but what possible justification is there to extend that right beyond the current agreed term?

In what way does that spur innovation and creativity to deliver more value and choice to ordinary consumers when big corporations have so much power to monetize and enforce along with monopolize products and services.

I think these are questions that ordinary people who need to think about deeply. As it is there is really a vacuum of intellectual views concerning the TPP – I mean if you stop people along Orchard Road and ask them what is the TPP? They will probably think it’s some new highway like the ECP.

As for me I know exactly what is the TPP. Because I get regular underground commentaries and reports – I am not saying it’s all bad. Only when it’s placed on the scale, there is more bad than good. As it’s really just an elaborate ploy to perpetuate US primacy in the Pacific on the cheap without having to break sweat on delivering increased value and choice to the ordinary man.

Q: You also seem to be against the TPP as it you see as a covert plan to contain China. Is that true?

A: Absolutely! From day one I have not wavered from this stand point – that is why the politicians refer to it as a pivot. It’s to counterbalance the economic emergence of China. I am of the opinion – if you want to compete. Then slug it out. But when the person goes down for the count, then kindly bow out gracefully. The problem as I see it is the Americans and their lackeys don’t seem to demonstrate this ethos for sportsmanship.

For over 150 years. Since the treaty of Spain when the Philippines was ceded to the US. The Americans have assumed the mantle of primacy in the Pacific. Has it brought peace, stability and prosperity to the region? Yes certainly, that cannot ever be denied. But their time is over – and my feel is if they want to occupy pole position then by all means go and better China. Beat they at their own game where possible and all the power to you lah!

But don’t come up with arm twisting ‘I put in a box’ trickery and try to insult the intelligence of thinking folk by attempting to pass it off as a free trade agreement.

If you cannot compete. Then go! From where I am standing this is what the Americans seem to be doing. The seem to be having great difficulty along with pain in coming to terms with the reality of the new order in the Pacific region.

Fortunately, many far sighted leaders such as Duterte, Najib and I believe others in the region will begin to see the wisdom of engaging rather than alienating China.

If this new reality takes hold I believe our lives can only improve and get better.

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