Lowy Institute

In recent days both Bob Carr and Gareth Evans have publicly argued that Australia has a 'moral obligation' to bomb Syria. Of the two, Evans' position is clearly the more thought through, pointing to ample 'grey areas' in the legal justification, and providing sober reflections about the efficacy of airstrikes in protecting civilians in Syria.

Yet, in this case, the 'moral obligation' argument is dangerously misguided, and reflects a failed lesson offered by recent history.

Four years ago I warned that the Libya intervention would prove a major strategic error; a view shouted down by three foreign policy heavy weights within the Australian Labor Party: Kevin Rudd, Bob Carr and Gareth Evans – and the personal regard I have for these individuals cannot be overstated.

However, the Libya intervention proved an unmitigated disaster. Libya is now a failed state. Some 'rebels' we supported proved to be Sunni extremists who helped destabilise the state, culminating in the murder of US Ambassador Chris Stevens in Benghazi in 2012. A second civil war is now raging across Libya to the advantage of ISIS, with atrocities perpetrated on a horrendous scale.

On almost everything that is important to Rudd, Carr and Evans – human rights, nuclear non-proliferation, R2P, NATO-Russia engagement, legitimacy of multilateral institutions and the rule of law – the Libyan adventure was a disaster.

For example, during the intervention in 2011, members of the regime lamented giving up Libya's WMD program in 2003. Commentators have speculated that this 'mistake' spurred North Korea and Iran to further develop their own programs. The Responsibility to Protect doctrine was also gravely discredited, and the West's abuse of the UN resolution authorising force betrayed Russia's trust, leading to the diplomatic impasse we face over Syria today.

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Now, in claiming Australia has a 'moral obligation' to commit to airstrikes in Syria, both Carr and Evans are readopting an extremely narrow strategic perspective with regard to the reasons for, and consequences of, employing military force: prescribing violent means without credible ends.

Carr and Evans have a noble aim: to strengthen R2P through its practice to deter and prevent acts of genocide and ethnic cleansing such as those we saw in Rwanda during the 1990s. But what strengthens R2P is not waving it around whenever we want to bomb someone – as Carr and Evans aptly pointed out during the Iraq war – but rather to remain clear-sighted about where R2P is effective and relevant, and sober about it being misapplied.

A good first step is being clear about the nature of the violence. If, for example, we are witnessing one-way violence being perpetrated against unarmed civilians by organised groups, such as in Srebrenica, Rwanda or East Timor, then R2P is relevant and would, where effective, override state sovereignty with regard to the use of armed force. 

In contrast, Syria, like Libya, is a civil war. Multiple armed groups are locked in conflict in pursuit of ideological and political objectives. Of course, civilians suffer enormously in civil wars. But to expect foreign airstrikes to protect civilians caught in one is fantasy. Moreover, there has been no suggestion of protecting Syrian civilians from the atrocities of the Assad regime – the proposition before us is to take sides.

Australia's obligation as a good international citizen is to do what we can to assist Syrian civilians suffering as a result of the conflict. If that is the objective, then what is the means by which it is best achieved? Bombing the place is surely way down that list. 

So what will be achieved by Australian airstrikes in Syria? Australia is not proposing to commit significant additional resources to the fight, and the Americans are already there. From a strategic point of view, the prospective benefit is vanishingly small. It's clear that airstrikes alone will not stop the ISIS advance, yet with Iranians fighting in Iraq and Russia propping up Assad, Western airstrikes may help extend the conflict to the point where a new Sunni-Shia strategic equilibrium emerges in the post-Iraq War era. None of that has anything to do with humanitarian intervention. If anything, the short-term human misery will be increased in pursuit of this higher strategic aim.

And there is a price to be paid by Australian bombing in Syria. Australia's current military campaign in Iraq has the solid legal foundation of being undertaken at the request of the duly-elected Iraqi Government. Bombing Syria is illegal without a UN Security Council resolution authorising it (notwithstanding dubious contentions to the contrary). This is problematic for us, because promoting rigorous adherence to international rules regarding the use of force accords with our own long-term security interests. It would be unfortunate if, for example, one were to call the South China Sea 'ungoverned space' for the purpose of employing military force.

None of this is to say categorically that Australia must not bomb Syria under any circumstances. But the arguments put forth are weak, the cost and risks are real, and the strategy is somewhere between unclear and nonexistent.

Humanitarian intervention is a weak argument for bombing Syria, even while protecting civilians remains a noble and worthy aim. Doing so with military means should not be shirked where it is both necessary and effective, but neither is true in this case.

Photo courtesy of Flickr user Freedom House.

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There's a rule in economics called Goodhart's law: when a measure becomes a target, it ceases to be a useful measure. If a government chases a particular economic variable, then it becomes influenced by policy, and so loses its meaningfulness as an input. 'Information value' is lost in the interference. Because managing economies is hard and good information is scarce, that's a big problem.

The last few tumultuous weeks of action in Chinese financial markets shows Beijing struggling with Goodhart's law. 

First, state institutions are actively supporting equities, reportedly on Chairman Xi’s personal order to push prices up. Second, after long controlling the exchange rate, policy-makers briefly let it go, only to rush back in days later to fix it again. These panicked interventions have cost Beijing dearly in both money and credibility and jeopardise its entire reform process.

About a year ago, it became apparent that policymakers were aiming to boost the stock market, presumably to raise consumer confidence and hopefully some new equity along the way. It's understandable that leaders viewed share prices as a signal of their good stewardship. But by manipulating those prices – either through boosterism or direct intervention – they distorted the rationality of the market.

That bubble then popped, wiping out US$4-5 trillion, triggering a 'national team rescue fund' and a witch-hunt. Some academics think that until the politicians started tampering with it, China's equity market was doing okay interpreting information from the real economy (inputs) and converting those signals to sensible prices (outputs). They recommend the control freaks step away and let the market do its magic.

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That is easier said than done. The market is a capricious master. When Beijing devalued its currency two weeks ago, ostensibly in response to supply and demand, the reaction was so violent that the central bank was forced back in to support it. They've opened Pandora's box. As FT's Asia bureau chief David Pilling marvels: 'In order to convince markets the bank was seeking a market-friendly exchange rate regime it has been obliged to intervene on a massive scale. How perverse is that?' The reason Beijing is 'tied in knots' is because it is vainly trying to defy Goodhart's law: targeting prices while trying to persuade market agents that those prices are right. According to Pilling, that's what China's leadership means by 'a decisive role' for markets alongside a 'dominant role' for the state.

These recent episodes tell us a lot about the reform challenges ahead for China's policy-making elites. They want the discipline of capitalism, to avoid the imbalances that systematic targeting causes: huge piles of wasted or misallocated money. There's nothing inherently wrong with targeting outcomes. Many governments target inflation using (inter alia) inflation itself as a signal. That's just a simple feedback mechanism: inflation as both an input and an output. Yet even something as straightforward as inflation is actually hard to measure.

It's telling that China's national statistics bureau keeps the exact constituents of its inflation basket a state secret. So we have to take the bureau at its word. Likewise, it confidently churns out curiously smooth GDP data which never fall short. China's aggregate output must be a bogglingly complex thing, embedding a vast amount of private information. Yet the bureau knows it for certain just days after the quarter's end. How can this be? Essentially, Beijing can 'target' these CPI and GDP results because they are unchallenged: they are whatever Beijing says they are. Others don't get a vote.

But others do get to vote in the contested space of financial markets, where no single actor has a monopoly over information and the clearing price is continuously reached by consensus. Social systems like markets have to incorporate the perceptions, expectations and actions of millions of 'voters.' In the case of the foreign exchange market, they might be literally voting with their feet. Financial markets are a popularity contest, like elections are. Ruling elites may dislike the result. But compulsion (a.k.a. 'financial repression') is a resentful substitute. 

China's not collapsing. Most people on the street care about more mundane matters than the markets, and domestic press coverage has been silenced. Xinhua blames the West for the market turmoil, and the yuan devaluation probably was forced by external events like oil, Fed signaling and competitor devaluations.  Foreign commentators criticise Chinese actions as non-transparent or 'clueless'. But all the complaining overlooks one simple reality: a market-driven model will mean a huge decline in Beijing's control over its own economy.

China reached middle income status with the central authorities determining the most critical variables in the economy while letting private markets prosper in the gaps. Now on the brink of liberalising the big stuff like interest rates and currency – possibly even relinquishing controls over cross-border money flows – they are flinching.

Previously they possessed almighty powers to establish economic facts without heed for others' opinions. They commanded the public media narrative and always had the casting vote. It's said that the first casualty of war is the truth. Their 'war on the market' will destroy precious sources of independent economic information. Their latest financial smash-up highlights Goodhart's paradox: by 'saving' the market they risk burning it down.

Photo courtesy of Flickr user epSos .de.

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  • Despite many misstatements by government and criticism from many quarters, there have been some developments in the investigation of the Bangkok blast. Police arrested one man (and gave themselves the reward money) and have released photos of several other suspects. Two of the suspects, including the yellow-shirted man seen in CCTV footage, are believed to have fled to Cambodia.
  • Anthony Davis, analyst with Jane’s Intelligence, provided his convincing theory of events and motives of the attack. 
  • ISEAS’ Le Hong Hiep explored the new dynamics of the Vietnam-US-China Triangle.
  • Vietnam will release over 18,000 prisoners in amnesty but no activists.
  • China’s Haiyang Shiyou 981 oil rig will continue drilling near the Vietnamese coast until October, according to officials.  
  • The Cambodian government has begun relocating thousands of villagers to make way for the unpopular and little discussed Lower Sesan 2  dam (Thanks, Milton). And there’s also this excellent account by Brian Eyler on the 990MW Wunonglong dam on the Upper Mekong, which could impact heavily downstream.
  • The NYT's Thomas Fuller questioned whether the tide is turning on Daw Aung San Suu Kyi as a democracy icon.
  • Myanmar set its highly disputed minimum wage at 3,600 kyat (US$2.80). 
  • Over at New Mandala, Gerhard Hoffstaedter offered an excellent photo essay from inside the weekend’s huge Bersih 4.0 (‘clean’ in Malay) rally which shut down Kuala Lumpur and called for the resignation of Prime Minister Najib.
  • Tens of thousands turned out for the Bersih 4.0 rally:

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By Jenny Hayward-Jones, Director of the Lowy Institute's Melanesia Program, and Jonathan Pryke, Research Fellow.

While it's managing its response to serious economic challenges brought about by a budget deficit and drought, Papua New Guinea is preparing to host the Pacific Islands Forum leaders’ summit and celebrate 40 years of independence from Australia this month.

These events are meant to be a high point in an important year for Papua New Guinea, entrenching its status as regional leader among Pacific island states and a confident emerging economy. Relations with Australia, an important backer of Papua New Guinea’s regional leadership ambitions and economic growth, should also be at a high point.

Papua New Guinea’s Prime Minister Peter O’Neill is well disposed towards Australia. He visits frequently, and this year he has given speeches in Brisbane and Sydney. O'Neill was the only foreign leader to attend the funeral of former Prime Minister Malcolm Fraser in March. His children are educated in Australia and he has an impressive range of connections here. Many other Papua New Guinean members of parliament also have ties with Australia.

For Australia’s part, Foreign Minister Julie Bishop has close connections with Papua New Guinea. She puts a high priority on all aspects of Australia’s relations with Papua New Guinea, has a genuine love for the country and she has a family member working there, reinforcing her personal connection with Australia’s nearest neighbour. A number of Australian ministers, including Trade Minister Andrew Robb, Environment Minister Greg Hunt, Indigenous Affairs Minister Nigel Scullion, the Prime Minister's Parliamentary Secretary Christian Porter and two parliamentary delegations have visited Papua New Guinea this year alone, adding depth to political connections between the two countries. With the key decision-makers both committed to growing and improving it, the Canberra–Port Moresby relationship should be in good shape.

But Australia–Papua New Guinea relations seem to be troubled in 2015.

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This year we’ve seen a diplomatic fracas over DFAT’s decision to establish a consular post in Bougainville; the early departure  of Australia’s High Commissioner Deborah Stokes; Prime Minister O’Neill’s declaration that all foreign advisers working for the Government (the vast majority of whom are Australian) should depart Papua New Guinea by the end of the year; harsh ad hominem attacks on former Treasury official Paul Flanagan and journalist John Garnaut for writing about the budget crisis; the controversy about Australian-employed security officers at the Manus Regional Processing Centre avoiding investigation for an alleged rape by departing for Australia; and a ban on Australian poultry imports and a range of vegetables (mostly sourced from Australian suppliers).

Taken together, these incidents could appear to be a rolling calamity for the bilateral relationship. Indeed, given DFAT Secretary Peter Varghese’s remark at the Lowy Institute last week that 'more than any other single relationship, the state of our relationship with Papua New Guinea is seen as a barometer of Australian foreign policy success', Australian diplomats have reason to worry.

We've had a number of conversations with young Papua New Guineans and with Australians interested in Papua New Guinea in recent months who are worried that bilateral relations are poor and are having a negative impact on the country. We tell them that it's worth remembering that things have been worse, both for Papua New Guinea and for the bilateral relationship. The macro-economic and governance crises of the 1990s created a number of frictions in relations with Australia. The infamous 2005 shoes incident involving Prime Minister Michael Somare at Brisbane airport had long-lasting repercussions for the bilateral relationship that were much more serious than any of the current discord in diplomatic, aid and trade relations.

There will likely always be bumps in the Australia–Papua New Guinea relationship. Even with the best of political stewardship on both sides, there will be unpredictable elements (and individuals) creating problems that are not easily solved and give rise to wider discontent. The Australian Government’s dependence on Papua New Guinea to run the Manus Regional Processing Centre as a key plank of its asylum seeker policy acts as a further constraint on foreign policy options.

But if Australian foreign policy success is to be measured by the state of our relationship with Papua New Guinea, it would seem a deeper and more strategic approach to managing it is required.

Photo courtesy of Julie Bishop MP.

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By Jenny Hayward-Jones, Director of the Lowy Institute's Melanesia Program, and Jonathan Pryke, Research Fellow.

Papua New Guinea has been in the international spotlight a lot in the last month and it has been almost all bad news. Revelations of a record budget deficit, the emerging worrying impact of a serious drought, the suspension of Ok Tedi's mining operations, more evidence of horrific sorcery-related violence against women and the reported police shooting of student protesters at the University of Goroka last week are threatening to ruin Papua New Guinea's 2015 success story.

The country should have been enjoying the reflected glory of being the fastest growing economy in the world in 2015, realising the benefits of its first shipment of LNG from Exxon Mobil's landmark project, revelling in a successful hosting of the Pacific Games and preparing to celebrate 40 years of independence from Australia.

Our own conversations in Port Moresby a couple of weeks ago did not give us significant cause for optimism.

Senior corporate figures are for the most part positive about Papua New Guinea's long-term potential but our contacts among the younger generation of Papua New Guineans in both the private and public sectors were nervous about the Government's capacity to manage the immediate challenges facing the country.

Papua New Guinea is renowned for muddling through crises and avoiding the worst-case scenarios that economic forecasters and political analysts predict for the country. This history influences a seemingly unhurried approach to crisis-management – based in part on traditional Melanesian coping mechanisms and negotiation skills, and in part on an Australian-like 'she'll be right, mate' attitude – that can both alarm and reassure.

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Prime Minister O'Neill has stepped up his rhetoric on both the economic challenges and the drought this week. He visited the parts of the country hardest hit by the drought and frosts and announced a further 25 million kina in assistance.

In a speech in Brisbane on 27 August, he outlined his strategy to address the budget deficit by 'deferring non-essential spending'. The details of these deferrals will only be unveiled in a supplementary budget to be released in October, a month before the 2016 budget is due to be handed down. With a substantial MYEFO-forecast deficit of 9.4% of GDP, a large amount of expenditure already accounted for in preparation of the Pacific Games and protection of O'Neil's 'core policy areas – of free education, the provision of universal healthcare, improving law and order, and investing in key economic infrastructure' – tough decisions must be made, all while preparing next year's budget. A tall order for any nation.

It's of course not the first time Papua New Guinea has faced serious challenges. The macro-economic and governance crises of the 1990s in Papua New Guinea and the Bougainville conflict were very troubling times for the country.

It would be wrong to assume though, that because the current crises may not yet be as serious as previous ones, Papua New Guinea has the capacity to keep muddling through. It's by no means clear how the Papua New Guinea Government plans to manage the more serious medium and longer-term challenges the current crisis points present. It needs to engage in debate with the public and with international partners, including Australia, about how it responds to the current crises and how it should manage the challenges these crises signal for the future of the country.

Papua New Guinea is fortunate to have significant endowment of natural resources but its governments have not been successful in delivering the benefits to the wider population. Signalling that the bounty from the next major resources investment will solve the problems of today is a familiar promise from Papua New Guinea's governments. Young Papua New Guineans, concerned about their future, are demanding a more sophisticated approach from their leaders.

Photo courtesy of Flickr user BYU–Hawaii.

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Over the weekend an Egypt court found Al-Jazeera journalists Peter Greste, Mohammed Fahmy and Baher Mohamed guilty on charges of operating in Egypt without a press licence and of ‘spreading false news’. Greste and Fahmy were given sentences of three years in prison; Mohamed was given three years and six months. While Fahmy and Mohamed have been returned to prison, the consequences for Greste, deported from Egypt last February, are also serious.

Greste won’t be able to travel to any country that has an extradition treaty with Egypt, a fatal impediment to his career as a foreign correspondent. He also now has a criminal record.

It had been hoped that the re-trial would find all three innocent of the charges, after their earlier trial had found them guilty and sentenced Greste and Fahmy to seven years in prison and Mohamed to ten years. Greste has called on Egypt’s president Abdel Fattah al-Sisi to grant all three a pardon. The prospects seem slim.

It may well be the case that this was part of the plan all along: that the court would find the three guilty to save the blushes of the Egyptian judiciary, and then Sisi would show his magnanimity by pardoning them.

But because Greste, the only Westerner of the three, is no longer in an Egyptian jail, Sisi will feel less pressure to act; he is hardly likely to spare much thought for Greste’s career.

Indeed these days, Sisi is getting decidedly mixed messages from Western governments. The Al-Jazeera verdict is part of a much broader assault on press and other freedoms in Egypt being mounted by the Sisi regime. In the same week as Greste and his colleagues were found guilty, Sisi introduced new draconian anti-terrorism legislation. In addition to the establishment of special fast-track courts for terrorism offences, and new protections for military and police officers that use violence against terror suspects, the law also imposes fines of between US$25,000 and US$64,000 for journalists who contradict official accounts of militant attacks.

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One human rights activist, Jamal Eid, tweeted that the law marked the establishment of a 'republic of darkness'.

Foreign Minister Julie Bishop issued a statement over the weekend saying that she was ‘dismayed’ by the Greste verdict. But she has said nothing about the implication of the new anti-terror law for press and other freedoms in Egypt. The US State Department did at least express concern 'that some measures in Egypt's new anti-terrorism law could have a significant detrimental impact on human rights and fundamental freedoms.' But the general pattern of US relations with Egypt since the July 2013 coup that brought Sisi to power has been one of gradual warming. In March of this year, for example, the US resumed military aid to Egypt.

Prime Minister Tony Abbott has also praised Sisi on a number of occasions, including in his National Security Statement last February, when he singled out Sisi’s call for a ‘religious revolution’ in Islam.

The truth is, however, that Sisi’s heavy-handed policies in Egypt will create more radicalism and militancy than it defeats. Recently, Shadi Hamid did an excellent job at summarising in Foreign Policy how counter-productive Sisi’s policies have been. Hamid’s piece should be required reading for Western policymakers as they consider their approach to Egypt.

I know it's easy to be critical from the outside, and there are few good levers for influencing the Egyptian regime. But at the very least the US and other countries, including Australia, should be delivering a strong and consistent message to the Egyptian regime, and not just when one of our own gets caught up in the regime’s repressive net.

This is not just a moral issue for the West, it is also a practical one.  Western policymakers rightly condemned the former Maliki Government in Iraq for its repressive and discriminatory policies against the Sunni minority – policies that paved the way for ISIS to roll into Mosul and other Sunni towns and cities virtually unopposed.

Yet remove the sectarian dimension, and Sisi’s policies in Egypt don’t look all that different. Under Sisi, the jihadist insurgency in Sinai has already worsened and has seen partisans of ISIS raise the movement’s black flag on the peninsula. Meanwhile, Sisi’s crackdown on the Muslim Brotherhood is driving younger members toward militancy.

Some Western policymakers will argue that sometimes you need tough measures to defeat terrorism and militancy. This is true. But it is also true that an approach that is all stick rarely ever works. Even the former Mubarak regime came to understand that.

The Sisi regime may eventually come to that realisation too. But for the moment at least, this seems unlikely. As Hamid notes towards the end of his piece: ‘when all you have is a hammer, everything looks like a nail’.

Photo courtesy of Flickr user Mohamed Azazy.

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The Syrian Arab Armed Forces (SAAF) are fighting ISIS in eastern Syria. Australia is planning to bomb ISIS targets in eastern Syria. But Australia will not be involved in the broader conflict in Syria involving the Assad regime.

If this doesn't appear to make sense to you it's because the concept doesn't stand up to scrutiny. But according to the Defence Minister Kevin Andrews last week, Australia will somehow be able to bomb ISIS targets in eastern Syria without becoming involved in the broader Syrian conflict.

The Minister somehow believes this because the RAAF will not be operating over Assad-controlled western Syria or Damascus, and that Australia can somehow magically target those ISIS elements who exclusively operate in or support the conduct of operations in Iraq. The Foreign Minister and the rest of the Government trot out the line that ISIS doesn't recognise borders and that attacking the group in Syria is the same as attacking them in Iraq.

This is of course nonsense as ISIS has the ability to redeploy forces where it perceives the operational need to be. ISIS elements in Syria operate against the Syrian regime and may also support fighting in Iraq.

The Government would somehow have us believe that the Syrian military is absent in eastern Syria. But eastern Syria is still a battleground for the regime, and there are several Syrian regular, Republican Guard and Special Forces brigades operating there.

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The main stronghold of the Syrian Army is Deir az-Zour, a tactically-significant city between Raqqa and the Iraqi border. Deir az-Zur is heavily contested between ISIS and regime forces, with the regime holding several positions including the military airport. This recent report shows how intense the fighting can be. The Syrian government also controls (along with Kurds) the northeastern provincial capital of Hassakeh which ISIS has tried to capture without success.

So targeting ISIS inside Syria may not actually impact ISIS's Iraq operations – the ISIS militants, equipment, HQ, or logistical facilities which the RAAF might target in Syria may actually have been directed against Hassakeh or Deir az-Zur rather than Iraq. And while the SAAF doesn't appear capable of mounting offensive operations in these areas, RAAF strikes could potentially aid SAAF defensive operations.

In other words the RAAF could be strengthening the hand of the SAAF in eastern Syria by bombing ISIS there. This is the law of unintended (or in the Government's case, unstated) consequences.

Now, if the proposal the Government is 'considering' is simply about allowing RAAF aircraft to engage ISIS convoys after they cross back into Syria from Iraq, or to engage ISIS weapons firing indirectly into Iraq from Syria, then RAAF targets could arguably be quarantined from the broader Syrian conflict. If the Government has another method by which it can ensure that only Iraq-bound ISIS fighters or equipment will be targeted, then they disclose this publicly.

Conversely, if the Government doesn't have the ability or intention to do this, then it should acknowledge that RAAF assets could, through their actions, be relieving some of the pressure on besieged Assad forces in eastern Syria. They could mount the argument that the threat from ISIS to Australian interests is greater than that from the SAAF in Deir az-Zour or Hassakeh, and they will therefore target ISIS regardless.

But what they shouldn't do is create the impression that an air campaign in Syria can be sanitised to such an extent that the RAAF will only be targeting ISIS fighters who will only operate in Iraq, and that the strikes will not have an impact on the broader conflict in Syria. The SAAF remain active in eastern Syria and are under attack from the very group that the Australian Government proposes we target. The Government needs to articulate very clearly how the RAAF will be able to target ISIS in eastern Syria, while avoiding involvement in the broader Syrian conflict. It's the least that the public deserves.

Photo courtesy of Australian Defence Image Library.

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Over the last few weeks, global financial markets have once again demonstrated their predilection for over-reacting to ephemeral news. For their part, the media are always happy to pad out the 24-hour news cycle with a breaking crisis. If it's transient, so much the better: you can report a fresh crisis tomorrow. Together, the drama-queens of the markets and the media might confuse us about the prospect of the global economy.

And recently China has been hogging the headlines. As Leon Berkelmans noted, we should keep calm and wait to see what develops. It's certainly true that China now has such heft in the global economy (both through the size of its GDP and its importance in international trade, particularly commodities) that its prospects matter to the rest of us. But the recent news has focused on two rather minor short-term issues: a reversal of the unsustainable equity euphoria and a minor adjustment to the exchange rate. The important underlying issues are much the same as they were a month or a year ago:

  1. The economy's rate of expansion. Is China still growing at somewhere around 7%? Scepticism about official data is an old story among China watchers, and in the past the sceptics have been confounded. Will this time be different? Maybe, but some of the best commentators remain to be convinced that China is far off its normal growth track.
  2. Can China make a smooth transition from investment-led growth to consumption-led? This path is tricky and probably not without some bumps, but the same data which gives rise to growth concerns also suggest that this transition is underway. The recent rapid growth of the service sector (larger than manufacturing and construction taken together) suggests a shift to consumption. Services expansion doesn't require big capital expenditures, but it does employ a lot of people, so this fits apparent anomalies in the current data.
  3. The 2010 stimulus not only boosted GDP growth, it also boosted debt levels. Thus, China's growth of debt remains a concern. It's an established norm that countries going through financial deregulation routinely suffer a financial crisis. Again, expect bumps along the path, but there is not much new to add to these old stories.
  4. Did the Chinese market intervention demonstrate that policymakers have lost their sure touch or that their policy approach is no longer appropriate? Not really. They are, by nature, policy activists. Free-market commentators will disparage such intervention, but the ongoing consequences of this misstep are minor. It says little about underlying policy competence.

So much for China. But closer to home, commentators can't resist drawing parallels between current events in Southeast Asia and the 1997 Asian financial crisis.

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Most egregious of these stretched comparisons is the observations that the Indonesian rupiah is now not far from its disastrous nadir during the worst days of 1998, with the implication that a repeat of the crisis is imminent.

True, the exchange rate is now 14,000 rupiah to the US dollar, compared with 16,000 on several occasions in 1998. But in 1998 this represented a drop of 80% within a few months. Those who had a loan denominated in dollars suddenly found their debt had gone up seven-fold in terms of rupiah. The current rate is down less than 10% so far this year and is around 25% below the average of recent years. This is not much different from the fall of the Australian dollar against the US dollar. The exchange rate of the rupiah against the Aussie remains around 10,000 – where it has been for the past few years. This is an unhappy outcome if you happened to have borrowed in US dollars, but it is not a national disaster.

It might even stir the authorities to focus more on economic policy, where there is much that could be done to demonstrate to financial markets that this is a routine commodity cycle, not a crisis.

What about the other emerging economies? The importance of these in global economic growth is illustrated in the chart below: it's not just China that has kept the world economy growing over the past decade, other emerging economies were important as well.

Here the news is rather mixed, as usual. Brazil has flopped back into its traditional disappointing under-performance. On the other hand, India might grow as fast as China. Around the rest of Asia, China's reduced import demand will be a dampener on growth, but once again this is a matter of degree, not crisis.

The IMF's latest forecast was made in July, before the China excitement. In any case, bureaucratic constraints prevent the Fund from ever forecasting a crisis. That said, the Fund's outlook is for 'business as usual'. As I have noted before, the Fund's commentary over the past three years has emphasised slowing economic growth, but its figures – actual and forecast – have shown a steady expansion (measured in terms of purchasing power parity) over the long-term average: around 3.5% globally, with emerging economies growing around 4.5%.

It's hard to fill the headlines with routine news. It's hard to make profits from financial trading if the markets are stable. So expect more of this confected panic from the professional doomsayers.

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As Ross Burns said in the introduction to his piece on The Interpreter this week, the brutal execution of Syrian archaeologist Khaled al Asad and the destruction of the Temple of Baalshamin by ISIS seem to have caught the worlds attention. Ross runs a website, Monuments of Syria, that is documenting the damage of Syria's antiquities in the conflict. The site is regularly updated and worth a visit. Ross wrote this week on how ISIS is using Syria's ruins and monuments as weapons:

Having moved on from blowing up remote rural shrines, treasured for decades by local villagers, ISIS has advanced to bigger-picture stuff. And there is no bigger picture than Palmyra. This jewel of the desert was an elusive destination for seventeenth century European adventurers and for scholars tracing the cross-currents shifting across the poorly defined frontiers between Classical and Persian (even Chinese) worlds. Its temples, columned streets and tower tombs, stamped with a mixture of Greco-Roman, Mesopotamian and Semitic traditions, were largely left to slumber quietly over centuries.

ISIS sees them differently. The ruins are hostages in a war where savagery on all sides has redefined the unthinkable. We have seen how ISIS videographers contrive events such as the explosion of the Baalshamin Temple. They will continue their efforts to choreograph shock, to keep the world off guard and to use the ruins as weapons.

We had another great piece from new Research Fellow Jonathan Pryke on a story in The Australian about fraud in Australia's aid programs:

Clearly, fraud should never be tolerated, and the government should strive to take all reasonable attempts to minimise fraud. But is fraud as rampant in the aid program as The Australian implies? The answer is a resounding 'no'. In 2012-13 the Australian aid program (then AusAID) reported net losses of $865,730 to fraud, equating to about 0.017% of annual aid expenditure. The Independent Review of Aid Effectiveness found that fraud in AusAID over the 2004-10 period averaged 0.017%. So not only are levels of fraud extremely low, they are also consistently low.

Rodger Shanahan covered the news this week that the US has asked Australia to expand its military campaign in Iraq against ISIS into Syria:

But for Australia to take such a course, an announcement about our willingness to contribute to the Syria campaign would need to be accompanied by a diplomatic and media campaign urging regional states to do more. When the Government releases its its legal guidance about bombing targets in Syria, it should also advise Australians whether the Arab League is committed to meeting the ISIS threat, what assets regional states are contributing to the air campaign in Syria, and what pressure Australia will put on them to be an active participant against an enemy that has already attacked them, and attracted thousands of their countrymen to fight with them. The Australian Government may also want to urge Gulf states to sign up to the Refugees Convention rather than salve their consciences by simply providing funding.

What is being said about China in the 2016 US presidential campaign so far? Bonnie Glaser:

Sometimes, promises to 'get tough' with China during the campaign simply became irrelevant as presidents, once in power, confront the demands of real-world policy challenges. When George W Bush ran for president in 2000, he criticised his predecessor Bill Clinton for calling China a strategic partner, and instead said China should be viewed as a 'strategic competitor.' After becoming president, however, Bush dropped that label. When a Chinese jet collided with a US surveillance plane over the South China Sea, Bush worked hard to avert a US-China political crisis, and after the September 11 attacks, he welcomed Beijing's proposal to fight together against terrorism.

Leon Berkelmans threw some cold water on the belief that China is undergoing an economic crisis:

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Am I foolishly saying 'This time is different'? Ken Rogoff, a former Chief Economist at the IMF who wrote the book on financial crises, may suggest that I am. I could look silly in six months. What I am not saying, however, is that China is certain to grow steadily, without incident, for years. It would be remarkable if China did not encounter turbulence. I just think we are some way from a full blown crisis.

Are Taiwans's recent protests primarily to do with an emerging unique Taiwanese identity? Marie-Alice McLean Dreyfus thinks so:

Democracy is one of the key pillars of this contemporary sense of Taiwanese self. In the case of the protests around changes to the curriculum, a key concern (aside from the content) is that changes were being implemented without adequate consultation. According to protesters, in keeping with Taiwan's democratic system, any major decisions affecting the institutions or laws of Taiwan should be made transparently and with adequate consultation with Taiwan's population, and not decided solely by the executive.

Sebastian Strangio wrote an update on recent political maneuvering in Cambodia where an opposition senator was recently arrested:

The arrest of Hong Sok Hour, despite the immunity he technically enjoys as a member of the senate, formed the exclamation point on a crackdown which has unfolded over recent weeks in Cambodia. It follows the 21 July conviction and jailing of 11 members of the opposition Cambodia National Rescue Party (CNRP) on the charge of 'insurrection' resulting from a minor clash with security forces in July 2014. Hun Sen has since warned of further arrests of opposition lawmakers and described CNRP President and long-time nemesis Sam Rainsy as the leader of 'a gang of thieves destroying the stability of this country'.

Eve Warburton from ANU weighed into a string of responses on The Interpreter to a recent Lowy Analysis, Trade Protectionism in Indonesia: Bad Times and Bad Policy:

My experience of doing research in Indonesia on resources policy has driven home how economic nationalism is undergirded by a deeply-held developmentalist ideology that is pervasive among policy makers, elected officials, and civil society. Of course, statist economic thinking has a long history in Indonesia. But as Patunru and Rahardja explain in their paper, the post-crisis neoliberal reforms Indonesia undertook in the early twenty-first century were painful. Memories of that pain have hardened the dirigiste resolve of politicians and lawmakers, who already maintained a healthy suspicion of markets, foreign capital, and liberal models of economic development.

Have you ever flown out of an airport in China? Then you may relate to a piece this week by Julian Snelder:

Here is a typical day at a major terminal. Weather permitting, the first flights embark from 6am, with delays steadily building through the morning. An 8am flight may actually take off at 10 or 11am. With luck, the backlog subsides a little in the early afternoon, but starts building again from 4pm until 10pm, with the crescendo at dinner time. On a good day, factor in two hours extra. On a bad day, with delays accumulating over time and the cascade effects of late connections, passengers could be home eight hours late. By that time, at a Chinese airport far from town, taxi drivers are scarce, surly and extortionate.

Bernard Cole on China's growing fleet of naval replenishment ships:

The increasing number of RAS ships entering China's fleet will also allow greater employment of the PLAN's aircraft carriers, the first of which, Liaoning, will within the next decade be joined by at least the first indigenously built Chinese flattop. Carrier operations require the near-constant presence of RAS ships, primarily to replenish aircraft fuel and ordnance, as well as being on-hand to refuel escorting destroyers and frigates.

Massive protests may be in store for Kuala Lumpur and other Malaysian cities this weekend. Anneliese Mcauliffe:

On Thursday, in a worrying sign for freedom of speech, Malaysia's Communications and Multimedia Commission (MCMC) banned all websites 'that promote, spread information or encourage the public to join the Bersih 4.0 demonstration.' Public universities have also warned students not to attend the rallies, saying that students could be expelled or suspended if they attend. Also on Thursday, the Malaysian military warned it will intervene if a state of emergency is declared. While this appears to be a scare tactic aimed at persuading people to stay at home, the government nonetheless seems intent on doing everything it its power to prevent a mass demonstration.

Photo courtesy of Flickr user Ed Brambley.

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The Malaysian Government has blocked internet coverage of a large anti-government rally planned for the weekend and threatened to send in the army to restore order as it scrambles to contain what is likely to be a massive public show of disapproval in the government of Prime Minister Najib Razak.

Malaysia's biggest civil society group, Bersih, is hoping that hundreds of thousands of people will take to the streets of Malaysian cities this weekend to protest against the political and financial scandals that have rocked Malaysia.

Bershih 4.0 is shaping up to be a huge rally in Kuala Lumpur on August 29-30, with satellite rallies in Kuching, the capital of the state of Sarawak, and Kota Kinabalu, the capital of Sabah. Starting at 2pm local time on Saturday, the rally will run for 34 hours with the aim of shutting down the capital, Kuala Lumpur, ahead of Merdeka Day, Malaysia's national holiday marking independence from Britain.

Bersih, which means 'clean' in Malay and refers to the Coalition of Free and Fair Elections, is an umbrella group of 84 NGOs and civil society groups. They are calling for institutional reforms and for the resignation of Prime Minister Najib Razak. Officially, Bersih 4 has several key demands: clean elections; clean government; the right to dissent; strengthening parliamentary democracy and saving the economy.

Between 2007 and 2012, Bersih organised three street protests in the capital. Organisers say 300,000 people attended in the last rally in 2012. It ended with street scuffles and police responding with water cannons and tear gas. Hundreds of protesters were arrested.

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Malaysians have been transfixed by the unfolding political and financial scandals besetting Prime Minister Najib Razak and his inner circle for the past several months. The planned protest comes amid allegations of Najib's mismanagement of the debt-laden 1 Malaysia Development fund (1MDB) and allegations of impropriety over a RM2.6 billion (US$700 million) 'donation' deposited into Najib's personal bank accounts.

The sacking of the country's most senior lawmaker, Attorney General Abdul Gani Patail, and other key ministers who spoke out about the 1MDB scandal has further incensed many Malaysians.

The political fallout is also having a financial impact. The Malaysian currency, the Ringgit, has shed 20% in value over a year as the oil-exporting country suffers from a prolonged oil price rout and escalating political scandals.

Malaysian authorities, worried that the impetus is building towards an embarrassing public spectacle, are cracking down in the hope of preventing mass participation. Malaysian police have declared the rally in Kuala Lumpur illegal, stating that proper permissions for routes and venues were not submitted for approval. The rally in Sabah has also been deemed illegal. Lawyers disagree, and the most prominent human rights legal group, Lawyers for Liberty, has posted short instructional films on Twitter to explain legal issues surrounding the protest and to offer advice for dealing with arrest and interrogation (see above). 

On Thursday, in a worrying sign for freedom of speech, Malaysia's Communications and Multimedia Commission (MCMC) banned all websites 'that promote, spread information or encourage the public to join the Bersih 4.0 demonstration.' Public universities have also warned students not to attend the rallies, saying that students could be expelled or suspended if they attend. Also on Thursday, the Malaysian military warned it will intervene if a state of emergency is declared. While this appears to be a scare tactic aimed at persuading people to stay at home, the government nonetheless seems intent on doing everything it its power to prevent a mass demonstration.

Despite these efforts, large crowds are expected. A sophisticated social media campaign has been in action for weeks and the opposition-friendly media has promoted the rallies. The hashtag #Bersih4 is trending on Twitter in Malaysia. 

If the number of protesters is large, the rallies will be seen as a public vote of no confidence in Najib. However, if the ultimate aim is to unseat him, the protests seem likely to fail. Malaysian politics has shown time and time again that the prime minister does not need the people's support to survive.

Najib seems determined to stay, perhaps worried about the legal action he could face if he stepped down. He looks increasingly likely to lead his ruling Barisan Nasional coalition into the next general election in 2017. Perhaps the best result that the Bersih 4.0 rally can hope for is to instill in the ruling UMNO leadership a sense that the Prime Minister is no longer electable. But the UMNO party leadership conference, the forum that could vote him out as leader, has been delayed for 18 months.

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I started my job at the Federal Reserve three weeks before Lehman Brothers declared bankruptcy.

I wish I had kept a diary of my initial months at the Fed, so I could recall clearly what we thought was happening each day. I do remember there was a discrete point where suddenly everything felt like it was in free-fall. It brought to mind the comment of Don Russel, Paul Keating's economic advisor, claiming there was a moment in his office when he heard the Australian economy snap, sometime in late 1989. I think I heard the US economy snap in my Washington office in 2008.

Judging by the headlines, many people heard the Chinese economy snap this week. I didn't. The stock market continues its fall, but I'm not too concerned. As I said in an earlier post, 'The stock market does not look to be of systemic importance to the Chinese economy. It is relatively small, it is not a major source of finance for firms, and stocks are not widely held.'

I do think China's next GDP numbers, to be released in October, will be disappointing. One reason is that financial services, which had accounted for a lot of growth earlier in the year (growing by 17.4%), will likely have had a poor quarter.

But there some good news stories too. Many people were concerned about low government revenue growth earlier this year, suggesting this was a sign of a weak economy. That figure has bounced back nicely, growing at 12.6%, year on year in July, and as far as I'm aware, tax rate increases are not responsible. A poor manufacturing Purchasing Managers' Index (PMI; an index gauging manufacturer's sentiment) seemed to kick off the recent round of hand wringing, but the PMI for the non-manfacturing sector has held up so far.

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This relates to a general point made by one of my favourite China experts, Nick Lardy of the Peterson Institute. Lardy thinks services are growing quite quickly. Moreover, he has this rebuttal to those who doubt the data:

Naysayers question government economic data, continuing to focus on weakness in China's industrial sector and the extremely slow growth of electric power output. But steel production, for example, is significantly more energy intensive than entertainment, so the demand for electricity has fallen sharply as the structure of the economy has evolved.

It's fair to say there is an entire industry based on the claim that Chinese GDP has long been overstated. But we don't often hear about the fact that China underestimates housing services in GDP, which is documented in the appendix of Lardy's book Sustaining China's Economic Growth After the Global Financial Crisis.

I digress. Yes, the Chinese economy faces risks. Debt has ballooned over the last eight years. The IMF, in its 2014 Article 4 consultation, had these words to say:

Looking at a sample covering 43 countries over 50 years, staff identified only four episodes that experienced a similar scale of credit growth as China's recent TSF growth. Within three years following the boom period, all four countries had a banking crisis.

That's a worry. But it does not imply that crisis is a certainty, or even the most likely result. The IMF, in its 2015 consultation, was more upbeat. And this is money the Chinese owe to themselves in their own currency. That takes off the table many of the risk factors that have plagued other emerging economies.

Am I foolishly saying 'This time is different'? Ken Rogoff, a former Chief Economist at the IMF who wrote the book on financial crises, may suggest that I am. I could look silly in six months. What I am not saying, however, is that China is certain to grow steadily, without incident, for years. It would be remarkable if China did not encounter turbulence. I just think we are some way from a full blown crisis.

Photo courtesy of Flickr user Kevin Dooley.

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A month ago, international trade was in the headlines. President Obama had just obtained Trade Promotion Authority for the Trans-Pacific Partnership (TPP), and in Australia, the China-Australia Free Trade Agreement (ChAFTA) was signed. But then all went quiet.

Trade Minister Andrew Robb.

The ministerial meeting in Hawaii that was supposed to finalise the details of TPP didn't reach full agreement. ChAFTA's passage through the Australian parliament is not without opposition. Both these initiatives, however, are still very much alive.

The TPP negotiations are being held behind closed doors, but there seem to be three problems:

  • Canada doesn't want to open up its milk market, while New Zealand (the world's biggest exporter of processed milk) sees this as an important issue.
  • In automobiles, the US wants better access to the Japanese market. Interaction between TPP and NAFTA rules are also complicating this trade.
  • The US pharmaceutical industry wants to keep its biologics testing results secret for 12 years, but Australia thinks five years would be enough.

There may be other issues as well (Australian sugar producers are still hoping to open up the US market), but these are the main stumbling blocks. None of them look insurmountable.  It's hard to see further protection for pharmaceuticals as a deal-breaker for Australia even though our trade minister has given assurances that the TPP will not undermine Australia's pharmaceutical benefits arrangements, a key component of social welfare.

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Nor will the deal be lost because of US-Japanese auto trade. Some observers would regard US manufacturers' hopes of shipping lots of cars to Japan as a conceit and a delusion. But even if there is substance in this trade-opening initiative, it's too small to stand in the way.

It seems just as unlikely that dairy trade will torpedo the agreement, although it might mean that Canada joins late (or New Zealand, as one of the initiators of the TPP, goes away very disappointed). It's just not substantive enough to stop the broad-reaching TPP from going forward.

Given Obama's high-profile commitment to the TPP and the need to put substance into the US rebalance to the Asia-Pacific, he is not going to lose this one without a very serious fight.

The wild card in all this is the US Congress. With the various delays, Congressional consideration is unlikely to take place until next year, while the presidential election is in full swing. There will be the usual Congressional histrionics in defence of local interests, and the vote could be lost, almost by accident. This is the main threat to the TPP. 

The pity of the current debate is that it largely misses the substance of the TPP. Most of this horse-trading has been old-fashioned guerrilla resistance to the longer-term inevitability of integrated global markets. The essence of the TPP is not in trade-opening measures (although they are present, of course), but rather in its effort to lay down a set of broad rules to cover general aspects of international trade, with intellectual property (IP) rights the most prominent. 

IP (and the other behind-the-border issues) are not the win-win issues which usually characterise reductions in global trade barriers. Instead, the rules around IP arbitrate the division of the benefits of innovation between owners and users – a zero-sum game. This should be settled not by an arm-wrestle between trade negotiators, but by a technical consideration of which rules offer the greatest incentives to ongoing innovation. Giving past inventors a monopoly may not be the best way to foster future innovation.

Australia's stand on pharmaceutical data secrecy is on the side of the angels. It's inefficient to keep testing data secret, because it ends up either lost to the wider community or duplicated by other researchers. But it's inconceivable that we would take our principled stance to the stage where we walked away from the negotiations. There is too much else at stake to want to infuriate the US over this issue.

If the TPP goes ahead, the outcome on these rule-setting issues (not just IP but also investor-state dispute settlement) will be a measure of how successful our negotiators have been. 

In the longer term, history may judge the most important issue to be the exclusion of China from the negotiations. Does this tactic allow a superior set of global trading rules to be put in place, with China coming to adopt these later, to everyone's benefit? Or will this turn out to be a missed opportunity to make China a responsible stakeholder in global economic infrastructure, helping to convince it that cooperation within such a framework is better than confrontation?

We don't know if Australia's negotiators ever explored this issue. But we now have the example of the Asian Infrastructure Investment Bank, which suggests that where China is blocked from full participation (as it has been in the IMF and World Bank), it seeks alternative arrangements where its role, for good or bad, will be exercised more individually.

Photo courtesy of Flickr user TPP Media Australia.

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The Asia Pacific is the most dynamic digital landscape in the world, home to the fastest adopters of new technologies and the largest concentration of mobile and social media users. An escalation in online activism, changing cyber dynamics, developments in digital diplomacy and the exploitation of big data are shaping the region's engagement with the world.

  • As Cambodia's politicians are locked in a fierce Facebook battle for influence, a string of recent arrests due to Facebook posts is causing alarm.
  • A sophisticated cyber espionage campaign is after high-profile Japanese targets.
  • Social media is shaping up to be a key front in Singapore's upcoming general election.
  • Increasing numbers of Indian youth are connecting with ISIS via social media accounts managed out of the Gulf.
  • Indonesia's 30 million+ mobile gamers are the target of a new range of app games that promote wildlife conservation.
  • How does a Bitcoin transaction work and can the technology behind it help eradicate corruption in Asia?
  • New research on the implications of social media analysis tools for disaster preparedness in the Asia Pacific. 
  • An interesting blog post about how ICT tools are being used to solve agriculture problems in Bangladesh.
  • Why Chinese electronics manufacturer Xiaomi is Apple's largest threat in China (and soon everywhere else). 
  • How NGOs are using mobile apps and social media in Cambodia to counter gender-based violence.
  • In light of the government's decision to block websites spreading information about a major anti-government rally, Al Jazeera details the battle for Malaysia's cyberspace
  • Indonesia's digital economy could be world class if the right policies and incentives were put in place.
  • This short documentary on cyber security and civil society in India tackles privacy, surveillance, anonymity and free speech:

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The view from Jakarta

Jakarta this week watched the rupiah slide to its lowest point since 1998, recalling the trauma of financial crisis. Meanwhile, it was business as usual in the capital as the governor set about making friends and enemies with work on large-scale infrastructure projects.

Indonesia surpassed Malaysia for having the worst-performing currency in the region as the rupiah this week fell past 14,000 per dollar, its weakest performance since the 1998 crisis. As economies across Southeast Asia suffered losses in recent days as a result of China's devaluation of the yuan, Indonesia's finance minister and newly installed trade minister both suggested that the use of Chinese yuan for trade among ASEAN nations could help lessen the impact of regional currencies dropping in value against the US dollar.

President Jokowi called a meeting with business representatives at his residence in Bogor to discuss further strategies for overcoming Indonesia's economic challenges. Yet the finance minister was positive that Indonesia's currency slide did not signal impending crisis for the nation's economy. Minister Bambang Brodjonegoro said that despite the downturn, Indonesia's economy was still growing and that other indicators, such as inflation, growth and the trade balance, showed a much better situation to that faced in 1998.

In Jakarta, Governor Basuki 'Ahok' Tjahaja Purnama came under fire this week for his approach to various infrastructure projects in the capital. Loved and loathed for his brusque approach to governance, Ahok made one of his least sensitive moves yet by forcibly evicting residents of a neighbourhood called Kampung Pulo to make way for a revitalisation project along the banks of the Ciliwung River, with the aim of prevent flooding in the city.

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A 2000-strong security force armed with tear gas, water cannons and riot gear forced the alleged squatters from their homes this week as civil society groups prepared a legal case proving residents' ownership of the land. Several residents reportedly held Dutch-era deeds to the area where hundreds of houses had been established for generations. Evictees received no compensation from the city government after a plan to build an 'elevated village' (kampung susun) near the river was scrapped. Low-cost apartments (rusunawa) were provided for about half of the 1000-plus families evicted.

Despite criticism over the way the eviction was handled, including from the Jakarta Police, Ahok reportedly plans to push ahead with further evictions in Bukit Duri and Bidara Cina in the near future.

The governor nonetheless retains a strong support base in Jakarta, where he plans to run for re-election on an independent ticket. A group called Teman Ahok ('Friends of Ahok') is aiming to collect the required 1 million copies of supporters' identity cards to allow Ahok to run as an independent in the next local election since he quit Prabowo's Gerindra party last year.

Support for Ahok over Gerindra was demonstrated on social media this week when a Gerindra-affiliated singer publicly criticised the governor. Rock singer Ahmad Dhani, best known outside Indonesia for his Nazi-themed contribution to presidential contender Prabowo's losing campaign last year, took to Twitter this week to question Ahok's commitment to overcoming traffic congestion on one of the city's toll roads. From his account @AHMADDHANIPRAST, the singer tweeted '(Ahok)...If you can't overcome congestion on the TB Simatupang toll road...just call me...I'm waiting'.

The singer's comments caused a stir online, particularly in light of the involvement of his underage son in a fatal traffic accident on a Jakarta toll road last year. Netizens rushed to the defence of the governor, who later responded by saying that with the amount of work he was putting into Jakarta's roads and transport, things would get worse in the short term, but would bring long-term results.

Photo by Flickr user Dino Adyansyah.

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