US offers a tight belt and a short road
As the Chinese saying goes, every journey of a thousand miles starts with a single step. But taking on a Chinese spending splurge of a trillion dollars with just $US113 million is not yet staking very much.
That was the amount United States Secretary of State Mike Pompeo plonked on the table of Asian infrastructure spending on Monday in what is widely seen as the start of a counter to Xi Jinping’s Belt and Road Initiative, though Pompeo is not explicitly saying that.
The closest he came was a statement that the US “will never seek domination in the Indo-Pacific, and we will oppose any country that does” and a challenge that “We seek to work with anyone to promote a free and open Indo-Pacific, so long as that cooperation adheres to the highest standards that our citizens demand.”
Japan and Australia have pledged to join in, with yet unspecified amounts. “This trilateral partnership is in recognition that more support is needed to enhance peace and prosperity in the Indo-Pacific region,” Foreign Affairs Minister Julie Bishop said later.
Many analysts wonder how it would work, as the US agency involved normally provides export finance for US companies, the Japanese aid agency is experienced in concessional finance, and Australia’s nominated partner, the Department of Foreign Affairs and Trade doles out its aid budget as grants, and normally for human development in health and education rather than infrastructure projects.
Then there’s the question of the financial firepower. “Without significant resources behind it, the initiative runs the risk of looking like an attempt to challenge China and falling well short in the process,” observed Lowy Institute expert on aid and the South Pacific Jonathan Pryke. So far, it’s small change, mostly directed at helping US business, with $US25 million of the amount targeted at improving the recipient’s digital connectivity to help US tech exports, $US50 million for managing energy resources, and only $US30 million for infrastructure.
Having proclaimed a “new era” in Washington’s commitment to the Indo-Pacific region, Pompeo headed for Malaysia, Singapore and Indonesia, where he’ll probably hear again that the best way for the US to boost its regional influence is to rejoin the Trans-Pacific Partnership trade and investment pact, abandoned by Donald Trump in his first week of office. The first two countries remain TPP members and the third wants to join.
Elections have just been held in three important countries along the belt and road, where Chinese money is already a big counter to Western influence.
Pakistan voted last week, the count putting former cricket captain Imran Khan and his Pakistan Tehreek-e-Insaf party in a position to form government nationally and in important states such as Punjab.
It was a dramatic return from 22 years in the outfield since he entered politics, but helped by the corruption conviction against former prime minister Nawaz Sharif, who recently got 10 years’ jail for unexplained overseas properties exposed by the Panama Papers. Nawaz nobly returned from exile to help his party, going straight to jail, but it wasn’t enough.
A Pashtun, Imran breaks the Tweedledum and Tweedledee pattern of electoral contest between the Nawaz bunch of Punjab-based “feudals” and the Bhutto bunch from Sindh. Since his younger days as a cricketer-playboy, Imran has projected himself as a pious Muslim and critic of US drone strikes, though one of his two ex-wives, Reham Khan, has unhelpfully just published a book portraying him as an unstable political opportunist and a libertarian who, she alleges, bats for both sides.
His style has brought him some unsavoury friends among Taliban-linked Islamists, and aligned him with those using blasphemy laws against minorities and secular figures. He’s also favoured by Pakistan’s military, which sent soldiers out to supervise ballots. The generals will expect him to keep up hostilities with India, and pursue “strategic depth” in country areas of Afghanistan steadily falling back under Taliban control.
With Pakistan heading into a balance-of-payments crisis, the new government will have to seek a bailout. In the past, it’s been a regular customer of the Washington-based International Monetary Fund, which normally demands tough financial reforms. But China, which has already promised up to $US62 billion for a branch of the belt and road down to the Indian Ocean, is reported to have offered $US2 billion already to help external finances, with no conditions mentioned.
Zimbabwe was another Chinese client under the long rule of Robert Mugabe. On Monday it went to its first elections since he was deposed by his generals last year.
The large turnout suggested Zimbabweans are hoping for more than a change of president, such as reforms to lift them out of the poverty and shortened life-expectancy created by Mugabe’s misrule.
Incumbency and a perhaps compliant electoral commission favoured Emmerson Mnangagwa, 75, the former security chief installed to replace Mugabe as interim president and head of the ruling Zanu-PF party. The party gained about two thirds of the parliamentary seats.
Yet Nelson Chamisa, 40, the lawyer and pastor heading the opposition Movement for Democratic Change, seemed to be mounting a close challenge to Mnangagwa for the presidency – not necessarily helped by an odd endorsement from the forcibly retired Mugabe. With the count delayed, tempers ran high. Fierce protests broke out in Harare, countered by tear gas, rubber bullets and live fire that killed three people on Wednesday.
Chinese influence has meanwhile grown in Cambodia. Hun Sen was installed in government by the Vietnamese army in 1979 when it invaded to oust the Khmer Rouge regime. At that time he and the Vietnamese communists were regarded as Soviet puppets by Beijing. But times have changed over the past 39 years.
On Sunday, he gained another five years as prime minister when his ruling party swept elections after the main opposition party had been banned and Hun Sen’s most effective critics either assassinated or scared into exile.
His regime has been kept afloat by floods of Chinese investment into buildings, resorts and casinos. In return, Hun Sen has acted as a faithful Chinese dummy in the Association of South-East Asian Nations, thwarting attempts to oppose Chinese encroachments in the South China Sea.
Consequently, there’s been no criticism about the elections from Beijing, only congratulations. Hun Sen has made up for lack of respectable endorsements by employing some of the “zombie” groups, often with names close to those of respected election monitors, who do the rounds of fake elections held by dodgy regimes.
Griffith University’s Lee Morgenbesser informs us that one Anton Caragea, said to be a professor at a Bucharest “diploma mill” university and author of 20 books no one can find, was at hand in Phnom Penh this week. He signed off on the elections for his “European Council on International Relations”, which is not to be confused with the European Council on Foreign Relations. Caragea has previously helped out in Djibouti, Ethiopia, Tajikistan, Turkmenistan, Zimbabwe and Kazakhstan.
Only a short summary of Donald Trump activity this week, but there’s plenty of it.
In foreign affairs, Trump now says he’s willing to meet Iran’s President Hassan Rouhani without preconditions. Tehran’s initial reaction was rejection unless the US rejoined the nuclear agreement. But with new US economic sanctions due to start on Tuesday, and the Iranian rial falling to 20 per cent of its value a year ago, Trump’s hardliners are hoping that will change.
Back in DC, Trump’s former campaign chief Paul Manafort stood trial over hidden payments from Ukraine’s previous pro-Russian leaders. A leaked tape had Trump and his lawyer Michael Cohen discussing a payoff to stop former Playboy model Karen McDougal revealing her affair with Trump. Cohen was also reported to have told special counsel Robert Mueller that Trump knew in advance about the June 2016 meeting with Russians offering dirt on Hillary Clinton.
This article was first published in the print edition of The Saturday Paper on Aug 4, 2018 as "US offers a tight belt and a short road". Subscribe here.