World

Our dynamic duo in Washington; mine shakedown claims rock Jakarta; Japan-China rail battle gains speed. By Hamish McDonald.

Terrorism helps France’s National Front leader Marine Le Pen

French National Front president Marine Le Pen acknowledges supporters at a rally last month.
Credit: GETTY IMAGES

Terrorism works, if you look at the politics of France and the United States after the Paris and San Bernardino attacks. Xenophobic politicians such as Donald Trump and Marine Le Pen are riding high, and moderate leaders such as Barack Obama and François Hollande who refuse to take the bait are derided as wimps.

In the first round of France’s regional elections on Sunday, Marine Le Pen’s National Front emerged with the largest vote at 28 per cent, ahead of Hollande’s Socialists and former president Nicolas Sarkozy Republicans. Ahead of Sunday’s runoff, it leads in six of the 13 regions in metropolitan France. On this trend, Le Pen could win the presidential election in 2017. Combined with populist economics appealing to ethnic mainstream voters in working-middle-class regions hit by structural shifts (Le Pen wants to bring back the French franc and make 60 the retirement age), it’s a potent mix. 

Back in the US, Donald Trump has made the astonishing call to close US borders to Muslims, until the threat of Islamist extremism is better understood. His rival for the Republican presidential nomination, Senator Ted Cruz, doesn’t endorse that but commends Trump for “standing up and focusing America’s attention on the need to secure our borders”. Several Republican contenders are pressing for a ground invasion of Daesh territory in Iraq and Syria. The US and its allies should “carpet-bomb them [Daesh] into oblivion,” Cruz declared. “I don’t know if sand can glow in the dark, but we are going to find out.”

Here in Australia, Daesh is giving oxygen to Tony Abbott’s delusions that he was somehow on a winning path before his removal. There are still serious voices arguing that he needs to be brought back into government.

Jewish state push

In Israel, leaders think the Syrian conflict is giving them more time to get the Palestinians to recognise Israel as a Jewish state and accept a demilitarised state for themselves. 

At a Brookings Institution forum in Washington at the weekend, the Israeli prime minister, Benjamin Netanyahu, said recent events disproved claims the Israeli–Palestinian conflict was at the heart of regional turmoil. “That was never true, but now it’s demonstrably false,” he said in a video address, adding: “We will not allow any one of these violent mediaeval forces to threaten our country and threaten our people.” 

This came after US Secretary of State John Kerry said the current impasse with the Palestinians might leave Israel with a “binational” single state that could not be both Jewish and democratic, and his predecessor and Democrat presidential hopeful, Hillary Clinton, warned that without Israeli concessions the current moderate leadership of the Palestinian Authority could be replaced by Daesh.

Our dynamic duo in Washington 

Thank heavens we will have Joe Hockey as our ambassador in Washington from next month, giving wise inputs to our great ally and reporting back on the presidential election. The two most visible Australians in the US will now be the former Channel Seven Sunrise duo of Hockey and Kevin Rudd, who is installed at Harvard while promoting himself as Ban Ki-moon’s successor at the United Nations.

The Washington posting has more often than not gone to a political appointee, while the Americans have used Canberra as a reward for presidential cronies and campaign donors, so the relationship can cope, with deputy mission heads doing the heavy lifting. In Washington this role falls to Caroline Millar, a career diplomat with an impressive policymaking background and earlier US-watching roles at the embassy and the Office of National Assessments. She’s been at the embassy for nearly two years and should be around for at least another year to guide Hockey.

Mine shakedown claims rock Jakarta

When the big guys from Jakarta and New Orleans haggle over the world’s biggest goldmine you can be sure it’ll get rough and colourful. And so it
has been all through this year as US mining and energy giant Freeport-McMoRan tries to negotiate a contract extension for its vast Grasberg mine in remote Papua.

Freeport, originally from the steamy Louisiana city but now domiciled in Phoenix, Arizona, was quick on the scene after General Suharto took charge in Jakarta in 1965-66, having got hold of Dutch colonial geological data showing a rich copper-gold deposit high in the mountains. Helping out the inexperienced new military regime, it drafted its own contract of work and then opened up the mountain top, sending gold and copper concentrates to the outside world.

That 50-year contract expires in 2021 and, with the mountain reduced to a gaping hole, Freeport is keen to get an early 20-year extension to justify a $US18 billion investment in switching to underground mining. But the Indonesian government, keen to wring more revenue, has been slow to agree. It’s been giving many tense moments to Freeport’s chairman James Robert “Jim Bob” Moffett, whose party trick is a convincing Elvis impersonation.

Freeport is already conceding a higher royalty rate and is preparing to hand over another 10.64 per cent of its local equity, on top of the 9.36 per cent Jakarta already holds, when the government can find the money. It’s reluctantly building a smelter near the mine to process the copper ore. Now it has exposed what it alleges is the biggest and wildest shakedown ever.

In June, the head of Freeport’s Indonesian subsidiary, Maroef Sjamsoeddin, got invited to a meeting at a Jakarta hotel with the speaker of Indonesia’s house of representatives, Setya Novanto, and oil industry figure Riza Chalid. A retired air force marshal who was until last year deputy chief of BIN, the state intelligence agency, Maroef found his spooky instincts aroused and switched on the recording function of his mobile phone. He reported to Jim Bob Moffett and the government that Setya had claimed to be acting for President Joko Widodo and Vice-President Jusuf Kalla, seeking stakes of 11 per cent and 9 per cent respectively as the price of a contract extension.

However preposterous the alleged demand (such a share transfer, worth $US4 billion, could hardly go unnoticed), it’s now the talk of Jakarta. Maroef has confirmed his charge to the parliament’s ethics committee, where Setya says he misheard and the recording was illegal anyway. 

As Setya belongs to Golkar, part of the coalition opposed to the president, it’s all very puzzling. Setya distinguished himself earlier this year by turning up with Donald Trump at a campaign event in the US, alongside Fadli Zon, a political lieutenant of Prabowo Subianto, the former special forces general beaten by Joko Widodo for the presidency last year. While in uniform, Prabowo was a friend of Jim Bob’s and was helpful in putting down Papuan unrest around the mine.

Japan-China rail battle gains speed

High-speed rail is the ammunition in the worldwide battle for influence between China and Japan, it seems. Smarting from having a long-prepared rail scheme in Indonesia snatched away by the Chinese, Japan is offering India the technology and a ¥1 trillion soft loan to build a 505-kilometre line between Mumbai and Ahmedabad. It’s likely to be announced by prime ministers Shinzō Abe and Narendra Modi in India today.

Makes you wonder why we’re still holding back from thinking big about fast rail between Australia’s south-east cities − even planning a new airport on the fringes of Sydney with no rail connection at all. We’d hardly qualify for concessional aid from Japan, but with Japanese interest rates near zero, and if RBA governor Glenn Stevens is able to collapse the Australian dollar to reduce the currency risk, this could be the infrastructure opportunity of the century that we’re ignoring.

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This article was first published in the print edition of The Saturday Paper on Dec 12, 2015 as "Terror helps Marine steer strong course". Subscribe here.

Hamish McDonald
is The Saturday Paper’s world editor.  

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