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Автор: Петр Drysdale, Редактор, Восточная Азия форум

The boom in resource prices, подпитывается Бушующие индустриализации Китая и спроса на сталь за последние несколько десятилетий, has lifted Australia’s terms of trade to a 100-year high.

Resource exporters around the world have been enjoying good times.

Australia’s terms of trade are 65 per cent above the average twentieth-century level and 85 per cent above the trend seen in the twentieth century, had that continued. В результате, Australian gross domestic product in nominal terms is about 13 per cent higher than it would have been without these relative price changes.

What goes up, конечно, must also come down. A gigantic global supply response to booming resource prices is already under way.

Take the case of iron ore, Australia’s largest export commodity, the price of which leapt from just over $12.68 per tonne in 2001 к $187.18 per tonne in February 2011. Forecasts for growth of Chinese iron ore demand (and India’s attempt to switch from exporting iron ore to supplying growing domestic demand from its own steel industry) have led to a scramble to expand and capitalise on current high prices. Suppliers all around the world are trying to cash in on these high ore prices. The established suppliers in Australia and Brazil have big expansion plans just to keep up with continuing growth in the demand from China’s steel mills, and new suppliers are now scrambling to enter the market.

The big new entrant in global iron ore supply is Africa. Africa has reserves of high-quality iron ore that are estimated to match those in Australia. О 200 iron ore projects are being contemplated across the African continent.

In the past Africa has not been a significant competitor in the iron ore market. African projects typically require huge infrastructure investments to bring them to market. Western banks have been reluctant to finance these project because of high political and economic risks in most African countries. That, it seems, is all about to change significantly. For one thing, much of Africa has been doing better in economic terms over the past decade. For another, Chinese capital is willing to take the risks in Africa.

In this week’s lead essay Luke Hurst reviews 17 key iron projects across West and Central Africa and provides new estimates of additional iron ore export capacity that are likely to come on stream by 2018.

По 2018, Hurst calculates, China is expected to increase its demand at a steady but slowing rate as its growth becomes less resource intensive. Australia’s Bureau of Resources and Energy Economics (BREE) forecasts that Chinese iron ore demand will grow 2.8 per cent per annum through to 2018. Other estimates, from the Raw Materials Group, put growth at 3.8 per cent per annum, a percentage point higher than BREE’s projection. Hurst compares global import demand on the higher Chinese demand forecasts with projected global export capacity, including new African capacity five years out, to assess what the impact of new supplies might be on iron ore prices over this period.

Hurst examines projects according to the risk of their falling over — identifying capacity that is very likely to come on stream according to schedule, capacity that has a fair chance, and capacity that is less likely to be operational in the next five years. Hurst’s analysis suggests that Africa will begin to put pressure on prices in the next three to five years. He reckons that iron ore prices are likely to fall back to around $80 per tonne quickly. If more of the planned African capacity comes on stream prices could tumble to $60 per tonne in the next five years.

A price fall of this magnitude, Hurst points out, would still provide intra-marginal producers with healthy profits but it would have serious knock-on effects for the iron ore exporters and their investments in countries such as Australia and Brazil. For one thing it would dry up internally generated investment capital in the major iron ore firms. Iron ore is expected to represent 2.6 per cent of Australia’s GDP in 2011-12, and a drop in iron prices would affect Australia’s terms of trade, exchange rate and income. The falling price would especially constrain the development of Australia’s budding magnetite industry.

In short, any fall in the price of iron ore such as Hurst foreshadows would have significant knock-on effects for the iron ore-centric economies of Australia and Brazil.

Despite the expectation of strong Chinese demand for iron and other resources for some years, the exceptionally tight commodity markets and high resource prices in the past decade seem very likely to ease over the next half decade as supply responds in global markets to the investment opportunities that high prices have generated.

These outcomes are the result of the response in incredibly tight global markets to bringing on stream new sources of international iron ore supply to service the boom in Chinese demand. They take no account of an unanticipated dip in Chinese demand, which in this analysis is assumed to continue to grow steadily.

Nobody has long-term monopoly in resource markets, neither sellers nor buyers. Discouraged from investment in Australia, there’s no question that Chinese and other investment (including by the majors) has gone to Africa and elsewhere to fill the gap, as the Japanese went to Brazil to fill the Australian gap more than thirty years ago.

Peter Drysdale is Editor of the East Asia Forum.

1. Вещь, Africa and the contestability of the global iron ore market
2. Iron ore and the market power myth
3. China’s impact on iron ore markets

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The election success of Burma’s opposition has led to the easing of some sanctions imposed by the United States and pressure from neighboring countries to drop them entirely. Although there is a surge in interest in Burma’s economy from foreign investors, analysts warn there remain major economic and political challenges.

This week, the United States dropped travel bans against some senior Burmese officials and eased restrictions on some U.S. investment and financial services.

Positive reaction

The moves were welcomed by the chief executive of the investment house Leopard Capital, Douglas Clayton.

“We’re very bullish on the development and we believe that this is the beginning of Myanmar’s [Burma's] transformation into a modern economy and that there will be a role for foreign investors to play in that. Sanctions in the past should be unwound because the reasons for sanctions have been largely met,” сказал он.

Although the United States has said it is preparing to nominate an ambassador to the country, Secretary of State Hillary Clinton says the reform process still has a long way to go.

ASEAN divided

That position remains at odds with Burma’s neighbors in the Association of Southeast Asia Nations, who has called for an end to all sanctions.

Despite that show of support from ASEAN, not all members are in agreement.

ASEAN politicians within the ASEAN Inter-parliamentary Myanmar Caucus say the lifting of all sanctions could be premature, inviting instability within the country.

Kraisak Choonhavan, Thailand representative within the Caucus, says ending fighting in ethnic minority regions should be the priority before sanctions are fully lifted.

“These pressures [to ease sanctions] are strong and much stronger still, as it is represented by the ASEAN call for the lifting of sanctions to please the regime – which remains very much a vicious and undaunting regime on the maintenance of its absolute power over Shan State, Karen State, Kachin State [и] Mon State,” said Kraisak Choonhavan.

Права человека

The Burmese government has been holding ceasefire talks with the Kachin and Karen in recent days. Rights organizations say on-going military operations have led to human rights abuses and attacks on civilians in Kachin state in recent months.

Kraisak fears the NLD, Burma’s main opposition party, having secured seats in the national parliament in the by-election, may turn its back on ethnic minority communities’ concerns.

Other pro-democracy groups say sanctions should be lifted only after all political detainees are released. The Thailand based Assistance Association for Political Prisoners (AAPP) says there are still 900 political prisoners in jail.

Human Rights Watch, in a release, called for caution in any easing of sanctions, saying while positive steps by Burma’s government should be matched by the European Union, there should be no “wholesale withdrawal of sanctions”.

The rights group says a further easing on visa bans and increases in humanitarian and development assistance should be considered by European Union foreign ministers.

While the sanctions may remain for now, there already has been a surge in tourism from foreigners eager for a first hand look at the country.

Sean Turnell, an associate professor of economics at Australia’s Macquarie University, says Asian investors are already trying to capitalize on the foreign interest.

“Asian investors have always been there of course. But some of them are getting excited about potential Western interest in the sense that if they see a great advance of Western tourists into the country then I think there’s a lot of Asian investors interested in hotels and tourist infrastructure,” said Turnell.

Burma’s economy in recent years has grown up with the sanctions, which has led to pain for some industries but benefits for others.

Uneven benefits

Academics and rights workers have argued the trade and financial sanctions hit workers in export-oriented industries such as textiles, forcing many who would prefer factory jobs into informal sectors such as entertainment or the sex industry.

Aung Zaw, editor of the newsmagazine The Irrawaddy says there are many businessmen and state-owned enterprises that have benefited from the restricted economic competition resulting from the foreign sanctions.

“There are some tycoons, those ministers, whose [business] is not competitive; particular those billionaires inside the country,” сказал он. “They are not competitive enough and they don’t want to see sanctions being lifted because they are enjoying so much with the monopoly – they monopolize everything.”

But all analysts agree Burma faces major challenges and opportunities as it tries to rebuild an economy long mismanaged after five decades of military rule.

Timeline of major political events in Burma

Первоначально опубликовано здесь:
As Sanctions Begin Easing, Burma’s Economy Under Scrutiny

By Russell Leigh Moses

Is Premier Wen Jiabao taking a run at reform again?

That’s the question that has been rattling around in China-watching circles ever since Wen’s final press conference at the National People’s Congress last month, during which he warned in sharp terms about the dangers of nostalgia over mass movements and insisted that without political reforms “it is impossible to continue economic reform, and the gains we have made may be lost.”

One view is that Wen is not being genuine in his efforts at reform—in other words, that’s he’s Beijing’s consummate actor, wheeling out the rhetoric to burnish his legacy for the history books. Other analyses have portrayed Wen as a lone champion of restructuring, fighting a solitary battle against the dark forces of oppression and hardline gunslingers.

But Wen’s no performer. Nor is he some sort of cowboy. Вместо, he is the sharp and public end of a larger reform-minded posse within the Communist Party – a group of cadres who believe short-term stability may have been largely achieved but the long-term legitimacy of the Party remains unsecured.

That legitimacy, in their view, can only be achieved by loosening up the current system–and by preventing the political Left from taking to the streets to force social change.

Thus far, the reformers have been frustrated from moving forward with political experiments. They’ve been thwarted by the hardline emphasis on change в пределах the Party—those pushing for more morality and better training for cadres, instead of transparency and accountability. “Purity” is the new watchword, with political restructuring pushed aside.

But now Wen and his colleagues have started shoving back. During a recent inspection tour in southern China, Wen was especially blunt about setbacks in China’s economic situation. He noted the hardships caused by “insufficient domestic demand, rising costs of exports, and the downward pressure on businesses generally”. Wen also blasted the monopoly enjoyed by State banks, right on the heels of his sponsorship of an initiative to let Wenzhou experiment with a new type of financing scheme.

China’s number two also took a further step away from State companies, emphasizing the crucial role played by small firms and entrepreneurship.

On one level, Wen’s focus on these issues appears to be in keeping with the current Party line, which calls for an emphasis economic questions over other concerns.

But there’s also ample reason to see Wen’s latest moves in a larger light: as an effort to get his comrades to start reorganizing the economy, in the hope that political reform might then follow. Populist policies that rebalance the economy could then evolve into political restructuring.

By focusing on economic restructuring, reformers pledge loyalty to the Center’s new approach—talk about economics, not about politics—while bringing to light what ails the system: State cartels and other vested interests controlling finances and natural resources, stifling innovation and suffocating reorganization. There’s agreement in many circles for the need to weaken State economic control somehow; but previous efforts to do so have miscarried. Wen and his camp seem to be moving to take another shot.

Why is Wen saddling up to move now? To figure out the answer, one can turn editorials and commentaries in the official press, which increasingly are calling for “unity” and “stability” — indications that neither is necessarily in abundance right now.

The purpose of these essays in mainline Party media is clearly to rally support in the ranks. Evidently, some cadres have been slow in responding.

And then there’s the fast-disappearing article about the meaning of a Communist Party General Secretary in China. The essay appeared with little fanfare some days ago, while President (and Party General Secretary) Hu Jintao was still abroad. Ostensibly a historical review about the origin and evolution about the position and role of a Party leader, the piece spoke of the restricted role of the General Secretary, noting that the “the Party forbids any form of personal worship” and that Party also “ensures that the activities of the party’s leaders fall under the supervision of the party and the people.”

How did such an article get to appear in the first place? Was this a blast by Leftists still irate over the sacking of Bo Xilai? Or did reformers who want to limit Hu’s authority to freeze conversations about political reform sponsor its appearance?

Whatever the case, by yesterday, the essay was getting more difficult to find, with a number of official websites reporting its removal. Тем временем, local media in South China praised Wen’s visit and advised cadres to study it carefully — a possible precursor to wider favorable coverage.

Despite some of the rumors floating around in recent weeks, there’s no reason to think that the party is so riven by dissension that it’s ready to implode. На самом деле, there continue to be brave and healthy debates throughout the state media about everything from spawning “social trust” to different responses to rumor-mongering.

Еще, this recent political uncertainty does provide the opportunity for those pushing restructuring to make their case again. Perhaps Wen thinks he might still know the way: to use economic distress to show that political reform is still the solution.

Рассел Ли Моисей Пекин-аналитик и профессор, который пишет о китайской политике. He is writing a book on the changing role of power in the Chinese political system.

В последние годы, В Китае снова активизировались о своей поддержке ведущих государственных предприятий в секторах, он считает важным, чтобы “экономическая безопасность,” явно ищет для содействия глобальной конкурентоспособности национальных чемпионов.

Китайское правительство стремится увеличить мощность производства энергии из других источников, помимо угля и нефти, и уделяет особое внимание ядерным и другим развития альтернативной энергетики.

Китай также является вторым по величине торговой страной в мире и крупнейшим экспортером и вторым по величине импортером товаров.
Решение правительства КНР, чтобы позволить Китаю, который будет использоваться транснациональными корпорациями в качестве экспортной платформы сделало страну основным конкурентом других азиатских экспортно-ориентированной экономики, таких как Южная Корея, Сингапур, и Малайзии.

Доступные энергии недостаточно, чтобы работать на полностью установлен промышленный потенциал, и транспортной системы является недостаточным, чтобы переместить достаточное количество таких критических элементов, как уголь.

Различий между этими двумя секторами в совокупности привели к форме экономико-культурно-социального разрыва между сельскими и городскими районами, которая является одним из основных разделение в китайском обществе.

Китай приобрел некоторые весьма сложные производственные мощности за счет торговли, а также имеет встроенный ряд передовых машиностроительных заводов способна производить более широкого спектра современного оборудования, в том числе ядерного оружия и спутников, но большая часть промышленного производства по-прежнему исходит от относительно плохо оснащенные заводы.

К началу 1990-х годах эти субсидии начали быть устранены, в значительной степени из-за вступление Китая во Всемирную торговую организацию (ВТО) в 2001, которая несет в себе требования для дальнейшего экономической либерализации и дерегулирования.

Оба форума начнется во вторник.

“Темп роста (для ODI) В ближайшие несколько лет будет значительно выше, чем в предыдущие годы,” Шен сказал, не вдаваясь в подробности.

Ожидается, что Китай есть 200 млн. автомобилей на дороге 2020, рост давления на энергетическую безопасность и окружающую среду, правительственных чиновников сказал вчера.

Хотя Китай остается развивающейся страной с относительно низким доходом на душу населения, он пережил огромный экономический рост с конца 1970-х.

Сельское хозяйство на сегодняшний день является ведущим оккупации, с участием более 50% населения, Хотя обширные грубые, высокой местности и больших засушливых районах – особенно на западе и севере – предел культивации для всего около 10% от поверхности земли.

За исключением сельского хозяйства оазис в Синьцзяне и Цинхай, некоторые орошаемых земель во Внутренней Монголии и провинции Ганьсу, и защищенных долинах в Тибете, сельскохозяйственное производство ограничено на востоке.

Лошади, ослы, и мулы являются рабочих животных на севере, в то время как быки и буйволы используются для вспашки главным образом на юге страны.

Рост внутреннего спроса в начале 1990-х годов, Однако, заставил народ импортировать большее и большее количество нефти.

Есть также месторождения ванадия, магнетит, медь, флюорит, никель, асбест, фосфориты, пирит, и серы.

Уголь является единственным наиболее важным источником энергии в Китае; угольных тепловых электрических генераторов обеспечивают более 70% электроэнергии в стране.

Экономики Китая, хотя усилены более либеральной экономической политики 1980-х и 90-х годов, продолжает страдать от недостаточного транспорт, связь, и энергетических ресурсов.

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Wen Jiabao’s Reform Push More Than Just Political Theater

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Your compensation structure may not be motivating your sales team the way it should be. Here’s how to tell whether you need a change.The idea that commissions drive more sales is a foundational belief about selling. It is as elemental as supply and demand is to economics.But it’s often wrong. (I know, I hear you already: Sacrilege! Blasphemy! Hear me out.)The idea of commissions is based upon the pain/pleasure principles of behavior change. By giving rewards, we get people to change their behavior. The same goes for taking away things: Penalties also lead to behavior change.But in complex sales–indeed, in some very common sales situations–the research shows that these principles don’t hold up. Because of this research, you may want

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Increase Sales: Time to Kill Your Commissions?

Авторы: Мэтью Дорнан и Фрэнк Jotzo, ANU

High oil prices are disproportionately affecting Small Island Developing States (Малые островные развивающиеся государства) в Тихом океане, while renewable energy could replace oil used for power generation and help reduce the risk of cost blowouts.

In Fiji, импорт нефти составил около 14 per cent of GDP in 2010 and is likely to be higher this year, with oil prices again remaining above US$100 a barrel. One in every seven dollars of national income is spent on oil — in a country where one-third of households live below the poverty line.

The comparative impact of high oil prices in Australia has been minimal. This is due to Australia’s low oil intensity of GDP, which measures 0.08 — meaning 0.08 tonnes of oil is consumed for every US$1000 of GDP. Oil intensity of GDP is higher in China and India, measuring 0.23 и 0.20, соответственно. But these figures are still considerably lower than in Fiji, where the oil intensity of GDP is 0.31.

All oil in Fiji and other Pacific island countries is imported. This exposes Pacific island economies to oil price increases, which affect the terms of trade and balance of payments, and lead to inflation and reductions in real household income. В результате, the Asian Development Bank in 2009 estimated that Pacific island economies were among the most vulnerable in the Asia Pacific to oil price volatility; из 10 most vulnerable economies in the Asia Pacific, seven were Pacific island countries.

High oil prices raise the cost of electricity and ‘staple’ fuels such as kerosene, thus compromising access to energy. Power costs rise because of a reliance on diesel and oil-based generators, which produce the majority of power in all Pacific island countries with the exception of Papua New Guinea and Fiji. These two countries are able to generate significant amounts of power from renewable technologies. High oil prices also affect the national budget in countries where cost increases are absorbed by state-owned utilities. In the extreme case of the Marshall Islands in 2008, например, this had major fiscal, economic and social impacts, forcing the government to declare a state of national emergency and requiring a major bailout of the electric utility.

Investments in renewable energy technologies are widely advocated among SIDS in the Pacific and elsewhere as a response to high oil prices. But there has, until now, been no analysis of the risk-mitigation benefits of renewable technologies for SIDS. Many cost-benefit analyses in the electricity sector do not consider financial risk — a significant oversight in the Pacific, considering the widely cited ‘risk-mitigation’ or ‘energy-security’ benefits of renewable technologies.

A recently released discussion paper, Renewable Technologies and Risk Mitigation in Small Island Developing States: Fiji’s Electricity Sector, addresses this gap in knowledge by incorporating financial risk into the economic assessment of electricity sector investments. This provides a measure of both the cost and risk-mitigation impact of investments in renewable technologies in Fiji. These impacts are considered from a system-wide perspective, addressing issues of intermittent power supply from renewable technologies. Например, wind turbines do not produce electricity when there is no wind, and so back-up capacity is needed to prevent shortfalls in power supply.

The analysis shows that there are significant cost-reduction and risk-mitigation benefits associated with investments in renewable technologies in Fiji. Investments that have lower expected average costs generally also have lower cost risks — and these benefits tend to increase in accordance with the extent of renewable energy in the overall portfolio.

But not all investments are equal. The most beneficial investments from a risk/cost perspective are those in low-cost renewable technologies, including geothermal, energy efficient, biomass and bagasse technologies. High-cost renewable technologies such as wind and solar power reduce financial risk but increase generation costs. And investment in hydropower, the Fijian government’s flagship renewable energy program, decreases financial risk but has a minimal impact on generation costs.

The analysis suggests that further investment in low-cost, low-risk renewable technologies in Fiji should be encouraged on energy security grounds and with the goal of lowering generation costs in the electricity grid. Such investments should be prioritised over investment in hydropower generation capacity, according to the study, meaning that the Fijian government’s focus on hydropower projects is mistaken when considered from a system-wide perspective.

More broadly, it is imperative to consider financial risk as well as generation costs when planning investments in electricity generation capacity in Pacific island countries and SIDS. Oil-based power generation currently dominates the electricity sector in the majority of these countries. В результате, this sector is vulnerable to oil price increases and oil price volatility, both of which are predicted in the coming decades by the International Energy Agency. Renewable technologies can reduce financial risk in Fiji and other SIDS where oil-based power generation plays a big role in power supply. These technologies should therefore remain a focus for future development projects in the region.

Matthew Dornan is Postdoctoral Research Fellow at the Development Policy Centre, Crawford School of Economics and Government, the Australian National University.

Frank Jotzo is Senior Lecturer at the Crawford School of Economics and Government, and is Director at the Centre for Climate Economics and Policy, the Australian National University.

Matthew Dornan and Frank Jotzo recently published a discussion paper, Renewable Technologies and Risk Mitigation in Small Island Developing States (Малые островные развивающиеся государства): Fiji’s Electricity Sector, at the Crawford School of Economics and Government, the Australian National University.

1. Carbon emission targets and investment in clean technologies
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Автор: John West, MrGlobalization

How does a Cold War organisation like the OECD respond to the end of the Cold War? Does it try to hang on to its former identity? Or does it embrace the new ‘age of globalisation’?

The end of the Cold War in 1989 represented a victory of values and ideology — the triumph of pluralistic democracy, respect for human rights and the market economy — for the OECD and its member countries. В то время, Asian economies were also emerging rapidly, based on a complex cocktail of export promotion, strong state intervention and non-democratic politics. Before the fall of the Berlin Wall, a number of these Asian economies were ‘economically qualified’ for OECD membership in terms of GDP per capita. But politically, there was never any suggestion that they might join.

Politics has always trumped economics at the OECD, even though economics is its core business. In the 1990s, например, four central European countries were rushed in as members (following Mexico’s 1994 membership), while they were still fledgling market economies and democracies. They were the lost sheep of the North Atlantic community, having been occupied by the Soviets, and Western Europe and the US strongly supported their membership ambitions.

But Korea’s membership was very much a different case in point. It was economically better qualified, with a GDP per capita more than 60 per cent higher than the other five new members. It was perhaps even more qualified politically. Тем не менее, it is widely recognised that the OECD went soft on Mexico and the central European countries during the membership process, and went much tougher on Korea.

По 2007 when it came to inviting other countries to join the OECD, none of the most interesting possible members — Brazil, Китай, Индия, Indonesia and South Africa — had expressed interest in joining. They were offered and accepted a program of ‘Enhanced Engagement’, which was designed to prepare them for possible future membership.

Today the OECD finds itself with 34 members, with some 24 from Europe and only two from Asia. В отличие, the WTO’s list of the world’s 34 leading exporters includes 10 Asian economies. Many of these Asian countries are also internationally significant in areas such as investment, finance and carbon emissions — and school students from Shanghai now outperform all OECD countries in the organisation’s Programme for International Student Assessment, which measures literacy, numeracy and scientific ability. But while the Enhanced Engagement countries participate in a wide array of OECD activities, none of them are interested in membership. A very senior OECD official once described this program as a ‘one-way love affair’.

So the OECD, which has sometimes called itself a ‘hub of globalisation’, seems destined to have a membership which accounts for an ever-declining share of the world economy. It stands at a crossroads, bypassed by Asian-led globalisation at a time when the G20 has more member countries from Asia than Europe.

What are the main problems and solutions?

Even though it is essentially an economic organisation, the OECD has retained a strong North Atlantic political identity. This is partly because it is governed by foreign ministries and also because of the US’ dominant role. And as the recent UN vote on Libya showed, there are still vast political gulfs between the Enhanced Engagement and OECD countries.

New members are also forced to accept and align their policies with a now vast array of instruments and conditions they had no role in creating. From an OECD point of view, this means becoming a ‘responsible stakeholder’. From an emerging country point of view, it means being a ‘rule-taker’, that is, swallowing an OECD agenda now increasingly questioned in light of recent financial crises.  The OECD also has too many European members.  Something must be done about this ‘eurocentricity’, such as establishing constituencies, to improve the organisation’s effectiveness.

Общий, the OECD must adapt much more radically to the changed world and offer a more flexible and pragmatic approach to the application of its values and instruments through its membership. It must then launch a major campaign to recruit the Enhanced Engagement countries as members. The OECD Secretariat and its membership have not yet managed to convince emerging Asian economies of the organisation’s manifest benefits. But the OECD is still in many ways the best idea in town, with its excellent analysis and opportunities for policy dialogue. And emerging Asia has much to learn from the OECD experience in many areas, like developing social safety nets, economic upgrading, dealing with ageing populations, and public-sector reform.

As well as revitalising the OECD, this strategy could contribute to improving relations between the two major blocs which divide the world today — the OECD countries and the Enhanced Engagement countries.

John West is Editor-in-Chief at MrGlobalization.  This article is based on his paper ‘The OECD and Asia: Worlds Apart in Today’s Globalization’, published in Revista de Economia Mundial На. 28 (2011), 67–92.

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2. Engaging Central Asia: the EU-Shanghai Cooperation Organisation (SCO) axis
3. The South Asia Cold War ‘quadrilateral’ redux?

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The OECD and Asia: a Cold War organisation in the age of globalisation

The Khmer Rouge tribunal in Cambodia wrapped up its opening hearings this week.  Prosecutors laid out their case against three individuals accused of genocide, war crimes and crimes against humanity that were committed while serving in top leadership positions in the movement. 

It took the prosecution one and a half days to put its argument against the Khmer Rouge leaders to the court.

International co-prosecutor Andrew Cayley said the leaders of the Communist Party of Kampuchea – or CPK – believed they had discovered the secret to waging a successful communist revolution, a solution that other revolutions had failed to grasp.

“The accused believed that previous communist revolutions had failed because class enemies had infiltrated and corrupted those revolutions. The solution the accused seized upon was simply to liquidate all class enemies in their entirety,” Cayley stated.

Cayley went on to explain who those perceived enemies were, and how that drove the mass killings that have come to characterize the time. “The truth, Your Honors, is that the persons the accused considered to be enemies of the CPK were an ever evolving and ever expanding group,Сказал он.

In the days immediately following the Khmer Rouge’s victory in 1975, enemies were those people associated with the defeated Lon Nol regime, as well as students, teachers, doctors and lawyers, and the residents of urban areas.

By the time the movement was driven from power in 1979, its paranoia meant it saw those enemies everywhere, даже – and especially – deep within its own ranks.

In the process the Khmer Rouge purged vast numbers of its own people too.

“And as the DK regime progressed and the paranoid leaders of the CPK convinced themselves that their failures must be due to the CIA, KGB or Vietnamese agents, the focus of their enemy witch hunt shifted from class enemies to internal enemies who had infiltrated the ranks of the party,” Cayley explained.

For their part the defendants and their lawyers described the prosecution’s case as untrue, a fairytale full of generalizations, and “like a novel by Alexandre Dumas”, the creator of the Three Musketeers.

Eighty-five-year-old Nuon Chea, who read for 90 minutes with surprising vigor, showed why he is considered the movement’s chief ideologue, with a lengthy diatribe against the Khmer Rouge’s perennial enemy Vietnam.

Cambodia’s eastern neighbor, he told the court, had long plotted against his nation and wished to exterminate its people.

Nuon Chea said he joined the revolution to defend Cambodia.

Patriotism was a theme taken up by former head of state Khieu Samphan as well. He told prosecutors he had became interested in communism while studying for his doctorate in economics in Paris.

“Today you may see it as a joke. However I shall remind you that at that time communism is the one movement that gave hope to millions (из) youths around the world,” Khieu said. “What I actually wanted at that time is the best experience for my country.”

Khieu Samphan also talked about the huge bombing campaign that the United States illegally unleashed on Cambodia in 1969.

The bombing is widely considered to have propelled support for the Khmer Rouge, but it falls outside the strict timeline that the politicians prescribed for the court.

“Could you imagine what my country faced after such a bloody killing? Regardless (of whether) you like or dislike it, the majority of Cambodian people gave their support to us for our opposition against the Lon Nol regime,” Khieu stated.

Former foreign minister Ieng Sary spoke only briefly to complain that the court would not take into account the royal pardon and amnesty he had been granted in 1996 in order to get him and thousands of followers to defect.

The three leaders are accused of genocide, war crimes and crimes against humanity; subsumed within that list are the crimes of murder, extermination, enslavement, imprisonment, torture, persecution and willful killing among others.

In essence they are on trial for devising the policies that led to the deaths of around two million people between 1975 и 1979.

They deny all charges.

The response from Cambodians watching proceedings varied from sympathy for the elderly defendants, to outrage that they continued to deny any responsibility for what took place on their watch.

Tribunal observer Clair Duffy, who monitors proceedings for the Open Society Justice Initiative, says the prosecution and the defense performed well.

And while Nuon Chea and Ieng Sary failed to address the essence of the allegations against them, Khieu Samphan did respond to the allegations the prosecution made, and attacked some of its evidence.

Duffy says the week has allowed a glimpse into the tactics the defendants will employ.

Nuon Chea’s statement focused on the broader political landscape of the time, and the bitter relations between the communist parties of Vietnam and Cambodia.

“For Khieu Samphan his line was: Even though I was in this role I wasn’t a member of the Standing Committee; I wasn’t an effective decision maker; there was chaos in this country at the time and we had no control over this,” Duffy explained.

The trial of the three leaders has been divided into a series of mini-trials, and this week saw the start of the first of those. It will largely examine alleged crimes against humanity in the context of the Khmer Rouge’s forced movement of people.

That charge refers to two events in 1975, when Pol Pot’s troops took control of Cambodia and forcibly evacuated every city and town. Later that year they forced vast numbers to move across the country into work camps.

The prosecution says tens of thousands died during those moves, which turned out to be the first in a series of horrific experiences. In his opening statement Cayley put the scale of what happened in context.

One in four Cambodians died, Cayley said. “A loss of life unknown to any nation since the slaughter of all adult men and the enslavement of the women and children of the island of Milos by the Athenian state 2,400 лет назад. When judged in relative terms by the proportion of a national population who died or were murdered, the scope of the human catastrophe unleashed by these accused on this country has no parallel in the modern era.”

The court is scheduled to start hearing evidence on December 5.

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