Lowy Institute

Bringing together the best Interpreter articles you were too busy to read this week.

Two big regional stories this week: Jokowi's probable win of the Indonesian presidential elections and Japanese Prime Minister Shinzo Abe's visit to Australia.

Throughout the Indonesian election campaign, Aaron Connelly and Catriona Croft-Cusworth have both provided exceptional analysis.

Catriona looked at the effectiveness of grass roots campaigning by Jokowi and his team:

Where Jokowi's campaign has found success, it has been at the level of the grassroots. Volunteers have carried the presidential ticket with self-initiated activities in communities, public spaces and online.

Because Jokowi's supporters are spread among so many small groups, it comes as a surprise to see their numbers when they gather in one place. Prior to Saturday night's debate, a public concert supporting Jokowi was held in Jakarta's Gelora Bung Karno, a stadium complex named after the first president, Sukarno. Headlined by Slank, one of Indonesia's most popular rock bands and the producers of a campaign song for Jokowi, the concert filled the stadium to capacity with supporters holding up two fingers to indicate their preference for Jokowi, candidate number two on the ballot. Other artists in the line-up reportedly performed for free in support of Jokowi, while online news reported that concert-goers volunteered to clean up rubbish after the show so that Jokowi would not be blamed for making a mess.

A couple of days before the election Aaron Connelly reported on Jokowi's late rebound in support and the importance of the final presidential debate:

In the final segment, in which one ticket was able to ask the other a question, Kalla noted matter of factly that Prabowo had spoken about thieves the day before. Gesturing toward himself, Kalla said, 'We and the parties that support us are not thieves.' Then, clearly relishing the chance to strike, he ran through a list of the other side's iniquities. 'My question is, because we (on our side) don't have oil thieves, don't have meat thieves, don't have a rice mafia, we don't have a hajj mafia, we don't have forest thieves, who is it that you are referring to?'

Prabowo, struggling to regain his narrative and his cool, admitted there might be thieves in his own party. His running mate, Hatta, stood up to calmly and cynically suggest that if there problems with corruption, then the police and the Corruption Eradication Commission (KPK) could take care of it. Kalla, seeing he had landed a blow, shot back with no small amount of scorn that all of these problems were already under consideration or on trial in KPK. Jokowi suggested Prabowo had not yet answered the question and invited him to do so again.

And on the morning after, Aaron outlined Prabowo's options now that it seemed like he'd lost he election:

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Prabowo has every right to await the official count by the KPU and to challenge the result in the Constitutional Court. We should remember that the chair of Jokowi's party, former President Megawati Sukarnoputri, did just that in 2009 when her opponent's margin of victory was a much higher 34%. I cannot forsee any scenario in which Prabowo would not exhaust every legal avenue available to challenge the result. He has come too far and invested too much time and money to not do so. Assuming he takes this as far as he can, the KPU and Constitutional Court would not be able to declare Jokowi the winner of the election until late August.

In a speech to supporters on Wednesday night, Prabowo told them to 'have patience, follow the law, and try to be polite.' But Jokowi supporters expressed grave concern that Prabowo might use his muscle to disrupt or taint the vote counting. Prabowo has cultivated ties with underworld figures as well as nationalist and Islamist thugs. He can also call on considerable reserves of cash — he disclosed $140 million in assets to the election commission earlier this month — and neither the KPU nor the Constitutional Court have avoided Indonesia's unfortunate history of graft. In just the past year, the former chief justice of the Constitutional Court was caught selling rulings in electoral cases. The KPU's computer system is also thought to be vulnerable to tampering. These are serious concerns in Indonesia's young democracy.

On Prime Minister Abe's visit to Australia, I added a quick comment immediately after the Japanese leader addressed the Australian Parliament:

Note the three-way link Abe draws between Australia, the US and Japan, which could yet prove consequential. Because as Buruma concludes, Washington's security guarantee to Tokyo is becoming more 'fraught with danger' as Japan's relationship with China erodes, with the Senkaku/Diaoyu dispute being the flashpoint. Why? Because 'it risks dragging the world's largest military power into petty regional conflicts'.

Now more than ever, the risk is that allies of the world's largest military power will get dragged along too.

The next day, Malcolm Cook countered:

Friendships, special relationships and skilful diplomacy are built upon the recognition of convergence of interests and beliefs. This is different to a commonality of interests and beliefs, and such a convergence does not have to imply required future action. I would hazard that the burgeoning of the China-Australia relationship, despite the huge differences between the two states, is testament to this distinction.

If one accepts that Australian officials and politicians can do their job and realise this difference, it is hard to see how the steps taken by Japan and Australia to foster closer security ties is putting Australia or the Australia-China relationship at any greater risk. Forgoing such opportunities with Japan for doubts that deserve to be dispelled would be an opportunity lost and would raise questions in Japan about how good a strategic partner Australia really is.

Sticking with Asia, here's Griffith University's Andrew O'Neil on the limitations of the realist paradigm in understanding the current geo-political climate:

The region is characterised by great-power rivalry between the US and China, to be sure, but there is little evidence non-great-powers feel under pressure to 'choose sides'. And there are few indications this will change in the future. Indeed, small and middle powers are demonstrating a degree of agency in shaping geopolitics that undermines the validity of the realist model for predicting how states in Asia will behave.

Indonesia, Thailand, and Malaysia have resisted bandwagoning with the new rising power in Asia, but nor have they joined the US, Japan, and Australia to balance against China. Far from being pressured into choosing camps, all three have been highly adept at exploiting benefits from close relations with Beijing and Washington.

And Julian Snelder wrote on the recent political protests in Hong Kong:

'We hope young people can raise their understanding of the rule of law, and make themselves the vanguard of preserving Hong Kong's prosperity and stability', thundered Li Yunchao, China's powerful vice president.

China is alarmed by the mobilisation of the Hong Kong public in recent weeks, including a large rally for democracy in 1 July. Beijing's earlier publication of a White Paper had goaded the local democratic Occupy Central movement and surely boosted turnout in its informal online referendum last week: 88% of the 787,767 respondents demanded direct voting in the 2017 chief executive election, citing 'international standards' of democracy.

Visibly irate, Beijing has denounced the referendum as 'illegal', 'ridiculous' and a 'farce…of mincing ludicrousness'. Hardline voices mutter darkly about 'the PLA coming out of their barracks'. A sophisticated hacking campaign took place while banks and accounting firms have strained to distance themselves from the rabble rousers. Hong Kong has even been warned about losing its RMB currency trading business. The city thus faces a barrage of intimidation,which may backfire on Beijing.

We had Vaughan Winterbottom return to The Interpreter this week. He looked at tightening restrictions on freedom of expression in China:

On Tuesday, official news agency Xinhua revealed new guidelines issued by the country's media regulator that prohibit journalists from reporting or blogging on state secrets, commercial secrets, 'or information which has not yet been made public.' It was not immediately clear what the latter phrase meant, though 'revealing state secrets' is acatch-all crime in China that has been used to bring troublemakers to trial before.

The guidelines are the latest move by the Government under President Xi Jinping to tighten restrictions on journalistic freedom, both in traditional media and online. In June the media regulator announced new rules forbidding journalists from publishing reports critical of the Government without employer approval. The rules also ban journalists from setting up their own websites and conducting interviews or writing reports outside their assigned field of coverage.

 Shashank Joshi gave us a rundown of recent opening of debate on India's nuclear doctrine:

This debate has been catalysed by a variety of factors. These include Indian disquiet at Pakistan's development oftactical nuclear weapons, a widespread sense that India's nuclear deterrence has failed in the face of state-sponsored terrorism, concern that India's ability to project deterrence against China remains inadequate, and a general sense that India has been slow to translate its national power into usable capabilities.

Typically, only those at the fringe of this debate – the ultra-hawks – have proposed radical changes in India's nuclear policies, such as the resumption of testing or a shift to nuclear war-fighting doctrines. But a growing number of mainstream Indian voices – including former officials and military officers – are expressing dissatisfaction with India's nuclear doctrine, the first and only public version of which is now over a decade old. See, for example, the former civil servant PR Chari writing for the Carnegie Endowment in June, the April manifesto of the Bharatiya Janata Party (BJP) before it came to power this year, and articles such as those in The Hindu last week.

But it is fascinating to see an official who until recently was at the heart of Indian nuclear policies, in both military and civilian institutions, make such explicit criticisms of a doctrine with whose classified details he would be intimately familiar.

And on the Middle East, Roger Shanahan expertly examined the 'caliphate' declared by the Islamic State of Iraq and Syria (ISIS) in the Iraq-Syria border region:

ISIS has certainly gained kudos and headlines through its military success but its dominance in parts of Iraq is aided by political gridlock in Baghdad and Iraqi military ineffectiveness. Neither of these will last forever and Baghdadi's forces will at some stage be engaged in decisive fighting in Iraq, at which point his tactical alliance with the tribes will come under enormous pressure. He needs to maintain military momentum, and he has been attempting to do this in eastern Syria. How long he can maintain his cross-border empire remains to be seen, but it will in all likelihood remain an ephemeral construct.

Baghdadi's caliphate claim has shown how diffuse, splintered and broadly-based the regional Islamist threat has become and how easily groups can be swayed by martial success. Even though ISIS's success, and its caliphate, will not last forever, in the idealised worldview of radical islamists it will serve as a model of what can be done by committed and observant Muslims.

The Afghan Arabs under bin Laden had to shelter in non-Arab lands and were constantly under threat. Baghdadi by contrast has achieved what nobody among contemporary jihadists has before him: he has carved out a piece of the historical Arab world, defeated the 'kafir', done away with the Western-imposed borders and placed his territory under Islamic rule. Even if few people physically join his caliphate and it lasts only weeks or months, the damage may have been done.

Photo by Flickr user Ikhlasul Amal.

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A few weeks ago I featured extended excerpts from a truly eye-opening essay by Swinburne University academic John Fitzgerald on Chinese Government activity among the Chinese diaspora in Australia, which include the orchestration of pro-Chinese demonstrations along the Olympic Torch relay route through Canberra in 2008 (photo above), and the Chinese state's attempts to buy up the Chinese-language community media here.

I'm a couple of days late to this, but I want to flag a blistering op-ed from China watcher Paul Monk which appeared in the Fairfax papers on Wednesday, also on the subject of Australia's Chinese-language media. 'The Chinese Communist Party’s propaganda bureau has been buying up radio stations and newspapers across the country and channelling the voice of Beijing into them from editorial offices in China', Monk writes:

What Beijing is doing is of a piece with its more general drive to extend its sway in the region in terms of both hard and soft power. But this particular initiative is blatant interference in Australia’s internal affairs of a kind that would never be tolerated on the receiving end by China and is, in fact, rendered impossible there by the Party’s tight monopoly of news media. It is a strategic move on Beijing’s part to create what can only be described as a fifth column inside our borders. It should be scouted out and the Party sent packing.

Read the whole thing. I assume the Government is receiving regular reports on this topic from ASIO. No wonder it is taking a tougher line on China.

Photo by Flickr user Michael Lieu.

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Earlier this week the Lowy Institute hosted former Australian Prime Minister Malcolm Fraser to discuss his new book Dangerous Allies. Below is the full video of the event.

Yesterday evening Mr Fraser tweeted the video, adding that he was 'debating the established political class!', which brought a wry response from his interlocutor at the event, Lowy Institute Executive Director Michael Fullilove.

If you want to know more about Dangerous Allies, note also my interview with Mr Fraser in May.

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Earlier this week Hugh White wrote a column for the Fairfax papers about Shinzo Abe's visit to Australia, in which he argued that Prime Minister Abbott was embracing a closer relationship with Japan either without considering the larger strategic consequences or because he wanted to 'spur on' regional rivalries. Japan-China tensions are rising and the US and China are manoeuvring for regional supremacy, Hugh wrote, but:

There is no sign that Mr Abbott has considered any of these questions. One reason might be that he simply does not understand what’s happening in Asia today, and so he doesn’t really understand what Mr Abe is after. This might seem hard to believe, but Mr Abbott often speaks as if he simply does not accept that strategic tensions are growing. For example he told a Washington audience recently that America should not worry about China’s rise because it is not a strategic rival. I doubt Mr Abe would agree.

A second possibility is that Mr Abbott is just pretending not to understand. He does understand what is going on in Asia, and has decided that, as regional strategic rivalries escalate, Australia’s best move is to spur them on – not just by strengthening our alliance with America, but by becoming Japan’s ally against China.

Let's consider both these possibilities in turn.

The first is based on what strikes me as a misreading of Abbott's speech to the US Chamber of Commerce in Washington. Far from dismissing rivalry, Abbott acknowledges the possibility by saying 'it’s understandable that Americans should be wary of potential rivals.' To me, the tone of the speech is not one of denying or wishing away a rivalry, but of implicitly pleading with Washington and Beijing to please keep their rivalry in check, for the good of us all:

The relationship between America and China is worth all the effort that both countries are putting into it – because no relationship is more vital for the world’s future. I remain fundamentally optimistic because conflict is in no one’s best interest. We will all advance together or none of us will advance at all.

But as of this morning, we probably don't need to parse the PM's words to solve this mystery, because, in an interview with Fairfax, his foreign minister Julie Bishop has...

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...made the clearest public statement yet of how the increasingly militarised disputes on China’s periphery were prompting Australia to deepen and broaden military ties with the United States and other nations, most notably Japan. Those trends have been on display this week with Prime Minister Tony Abbott agreeing to a “strategic” defence relationship and new military technology sharing agreements with Japan’s Prime Minister Shinzo Abe, who leaves Australia on Wednesday.

“We know that the optimum is deeper engagement [with China],” said Ms Bishop. “But we’re also clear-eyed about what could go wrong. So you have to hope for the best but manage for the worst.”

Bishop also recently made some dark comparisons between Asia today pre-World War I Europe (compare this to her tone during the 2013 election campaign to get a sense of how dramatic this change is). Earlier this week I aired some reservations about the tightening of ties with Tokyo, yet Bishop's statements at least show that the Government is not in denial about the challenge China represents to the Asian strategic order.

So if the Government is not aligning blindly with Tokyo, then what of Hugh's second possibility? I'm thrown by Hugh's claim that Abbott may wish to 'spur on' the rivalry between Japan and China. What possible Australian interest could this serve? Surely the more straightforward interpretation is that the Abbott Government is practicing a form of offensive realism. It recognises the risk of conflict between Asia's great powers, and judges that the best way for Australia to help prevent or deter such a conflict is to signal that Japan is not alone. Hugh may think this will spur on a China-Japan rivalry, but the aim is surely to damp it down by showing resolve and thereby convincing China that it is losing.

Whether one agrees with that policy or not, at least it shows that the fog has lifted. Previously, open acknowledgement of the risks of China's rise was left to ex- political leaders such as Paul Keating, Bob Carr, and Malcolm Turnbull, while sitting governments preferred a more rose tinted view, captured in the Gillard Government's Asian Century White Paper and Bishop's early focus on economic diplomacy (as if Australia faced no greater problem than how much money it could make from the region).

The Abe visit and Bishop's interventions suggest things might be shifting inside Cabinet and that the Government feels the need to talk to Australians about it. And that means the question of how Australia should respond to China's rise can now move to centre-stage in the national debate about Australia's place in Asia.

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If you're looking for some context for Japanese Prime Minister Shinzo Abe's visit to Australia this week, and his speech to parliament earlier today, you could do worse than spend five minutes with Ian Buruma's op-ed.

Abe has recently announced a re-interpretation of Japan's constitution to allow his country's armed forces to take part in operations alongside allies that are not directly related to Japanese security. Some have conflated this move with Abe's nationalism, his determination to restore patriotic pride, and his visit to Yasakuni Shrine (where Japanese war criminals are buried) to imply that we are witnessing the beginnings of some kind of imperial Japanese revanchism. Buruma rightly dismissed that theory:

The contradiction in Abe’s nationalism is this: even as he talks about sovereignty regained and patriotic pride, he has done nothing to distance Japan from the postwar dominance of the US. On the contrary, his reinterpretation of the constitution is meant to help the US in its military policing of East Asia.

In fact, what appears to be driving Abe’s endeavors even more than the desire to revise the postwar order in Japan is a widely shared fear of China’s increasing regional dominance. A cursory glance at the Japanese press, or even the kind of books piled high in Japanese bookstores, shows just how frightened the Japanese are. All of the talk in Tokyo is about Chinese aggression in the East and South China Seas.

Abe’s reinterpretation, then, is not really a radical departure from the postwar order at all. China’s growing power has actually reinforced Japanese dependence on the US for its security.

What we heard from Abe in the Australian parliament this morning (full transcript) is that Australia has now been willingly enlisted in this cause (my emphasis):

So far as national security goes, Japan has been self absorbed for a long time. Now, Japan has built a determination. As a nation that longs for permanent peace in the world, and as a country whose economy is among the biggest, Japan is now determined to do more to enhance peace in the region, and peace in the world. Ladies and gentlemen, it is to put that determination into concrete action, that Japan has chosen to strengthen its ties with Australia...

...There are many things Japan and Australia can do together by each of us joining hands with the United States, an ally for both our nations. Japan is now working to change its legal basis for security so that we can act jointly with other countries in as many ways as possible. We want to make Japan a country that will work to build an international order that upholds the rule of law.

Note the three-way link Abe draws between Australia, the US and Japan, which could yet prove consequential. Because as Buruma concludes, Washington's security guarantee to Tokyo is becoming more 'fraught with danger' as Japan's relationship with China erodes, with the Senkaku/Diaoyu dispute being the flashpoint. Why? Because 'it risks dragging the world's largest military power into petty regional conflicts'.

Now more than ever, the risk is that allies of the world's largest military power will get dragged along too.

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I'm a sucker for these video tutorials which explain economic concepts. This one has an Australian angle:

(H/t MR.)

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With Indonesia's presidential election to be held next Wednesday (9 July), we thought we'd depart from our normal weekend catch-up to highlight some of the first rate Indonesia election coverage we've featured on The Interpreter.

Back in September 2013 Stephen Grenville commented on the possibility of Joko Widodo running for president:

You can't read a paper or watch TV in Indonesia without coming to the conclusion that Joko Widodo ('Jokowi'), the mayor of Jakarta, is a shoe-in for the 2014 Indonesian presidential election.

Not only is he the front runner in most polls, he is ubiquitous, getting footpaths fixed, sorting out street vendor logistics, shoring up Jakarta's flood defences and restarting construction of the city's monorail.

How does someone who a year ago was just a small-town mayor become the likely leader of Southeast Asia's largest country? The US experience provides a clue. Presidential systems can elevate a peanut farmer to the POTUS role. And the other current candidates seem fatally flawed for one reason or another.

In January Catriona Croft-Cusworth joined The Interpreter as a regular contributor from Jakarta. Since then she has contributed an enormous amount of excellent material. A few of her best posts below.

On why Islamic parties generally don't do well in Indonesian elections:

Lost claims to moral superiority and a lack of ideological difference to secular parties has made it difficult for Islam-oriented parties to compete in Indonesian politics. Another lost selling point has come with the improved provision of social welfare by secular parties, undercutting the services provided in health and education by NU and Muhammadiyah. Though still far from perfect, government welfare services are improving and in some cases now cater better to poorer voters than those provided by the two big Muslim organisations.

With all three factors thrown into question, Islam-based parties have lost their major platforms for public support. Meanwhile, secular parties are free to court all religious groups and make promises on social welfare from a non-Islamic, but still religious, ideological background.

And why Islamic parties did a little better than expected in the 2014 parliamentary election:

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Islamic parties actually saw a rise in support compared to previous legislative elections, taking a collective 32% of the vote compared to 29% in 2009. All Islamic parties took a bigger share of the vote than in the previous election, with the exception of the scandal-ridden Prosperous Justice Party (PKS), which was punished with only a 1% decline in voter support.

Rumours are now flying about plans for the Islamic parties to form a coalition and put forward a presidential candidate, though commentators have dismissed this as unlikely, if not impossible.

Journalists and analysts in Jakarta have been scratching their heads over the result, which put the Islamic National Awakening Party (PKB) in the top five, just below President Susilo Bambang Yudhoyono's Democratic Party. Some have pointed to corruption among secular nationalist parties as a reason voters looked to Islamic parties, deemed to be more morally sound. But this does not explain why parties such as the PKS were not punished more harshly.

 Following legislative elections in April, Catriona reported on the first chinks appearing in Jokowi's armour:

Then came the legislative elections last month and the poorer than expected result for Jokowi's party, the Indonesian Democratic Party of Struggle (PDI-P). By quick-count results (official results are due to be announced in the coming days), the PDI-P secured about 19% of the vote, less than the 25% needed to independently nominate Jokowi for president. Suddenly, doubts began to arise about whether Jokowi could simply sail into the presidency, as many had come to believe.

In a thorough rundown of events on Inside Indonesia this week, Mietzner defends PDI-P's legislative result, arguing that it only looks disappointing because of unrealistic expectations raised by experimental* polls and local media. However, he concludes by saying that 'losing is no longer an impossibility' for Jokowi in the presidential race.

Lots of people talk about Indonesia's  obsession with social media, and as Catriona wrote, it naturally permeates the election campaign:

 On social media, campaigning is in full swing. This means YouTube clips, Facebook pages, Twitter hashtags and a whole lot of election-related apps.

Jokowi is a newcomer to national politics but no stranger to social media campaigning, which he used to great effect in his campaign for Jakarta governor. There are plenty of apps available under his name, most of which appear to be made on a budget by his supporters. One is called 'Flap Jokowi Man' — presumably a mash-up of 'Flappy Bird', Jokowi and Superman — by Shayort Games, which has the presidential frontrunner dressed in a green and purple superhero outfit. As in 'Flappy Bird', the aim of the game is to keep the character flying through a series of obstacles at the top and bottom of the screen, which in Jokowi Man's case come in the form of fistfuls of cash. And as in 'Flappy Bird', it's really difficult to avoid falling flat.

 And here's Catriona's take on what the two presidential candidates might mean for relations with Australia:

On Sunday night, Indonesia's rival presidential candidates, Prabowo Subianto and Joko 'Jokowi' Widodo, held their third televised debate ahead of the 9 July election, this time with the theme 'International Politics and National Defence'. In a wide-ranging discussion of regional concerns and Indonesia's national interests, Australia received special mention.

Jokowi, a small-town politician who has only recently risen to national-level politics, gave a surprisingly confident performance against the former military commander Prabowo, who was expected to dominate the international-themed debate. During a question and answer session, Jokowi asked his opponent for his opinion on why Australia-Indonesia relations had tended to run hot and cold.

Prabowo's response gave the Australian media its sound bite for the evening: 'Honestly, I think that the problem is not in Indonesia. Perhaps Australia holds some kind of suspicion towards Indonesia. A kind of phobia,' Prabowo said.

Jokowi had his own comments prepared for the topic. He didn't go so far as to suggest that Australians had an irrational fear of Indonesia, but did identify the two main issues that he believed were affecting relations between the two countries: distrust and a lack of respect for Indonesia's integrity. 'There is a problem of trust, which is what led to the spying problem,' he said. 'We are regarded as a weak nation. It's a matter of national respect, a matter of integrity,' he added.

Back in February we featured an insightful four-part series on Indonesia's growing middle class. Authored by Joanne Sharpe, part 3 looked at voting habits of the the 'noisy' middle class:

Jakarta Govenor Joko Widodo (Jokowi) has risen to such prominence that it's hard to remember a time when he was the underdog for the 2012 gubernatorial race. A charismatic small town mayor with a track-record of reform, he and running mate Basuku Tjahaja Purnama (known as Ahok) were behind in the polls two months before the first of two electoral rounds.

As political consultant Yunarto Wijaya explains, 'all the surveys predicted that (the incumbent) Fauzi Bowo would be the next Governor. In my survey, two months before the election, I only had about 23% voting for Jokowi/Ahok'. Some polls predicted that the incumbent could win the first of two electoral rounds by as much as 49%.

But, Yunarto says, much of the middle class remained undecided. A survey by respected pollster Indonesia Survey Institute (LSI) confirmed that an unusually high 30% of respondents made their decision within the last week of the first round election. And on the day, says Yunarto, it was the middle class that turned out in force for Jokowi. Jokowi/Ahok won the first round with 43% of the vote to the incumbent's 34%. They went on to win decisively in the run-off.

LSI called the first round election result a 'middle class protest'. Does the growth of the middle class herald a sea change in Indonesian politics?

 In March, Wawan Mas'udi from Gadjah Mada University in Yogyakarta looked at some of the reasons behind Jokow's popularity:

The second factor is Jokowi's commitment to participatory governance. In particular, he gained widespread acclaim both in Solo and more broadly for his consultative approach to relocating street vendors away from a park in central Solo, where they had built up a dirty semi-permanent squatter marketplace and were causing traffic chaos. Attempts to move street vendors in Indonesia often turn violent, as police and public-order personnel clash with traders determined to stay put. Jokowi avoided this by holding as many as 56 informal meetings with street vendors, often over lunch or dinner, to find a mutually acceptable solution. In the end, to convince the traders to move, he offered them a permanent marketplace in the southeast of the city, provided financial incentives including a six-month tax holiday and free of charge relocation, as well as establishing public transport links from the city centre to their new location.

Jokowi also made a habit of making local visits to talk to residents (a practice called 'mider projo'), as well as encouraging community participation in the city's planning process. This approach resonated with a local cultural idiom of 'nguwongke uwong' (treating a person as a person) and helped Jokowi cement the 'man of the people' image that has been one of his great electoral assets. 

 Turning to the economic ramifications of Indonesia's election, Stephen Grenville examined the economic policies of the two front runners:

Will Jokowi, if elected, turn the clock back and reinstate the failed policies of the 1950s? He comes from a practical business background and has shown himself to be an adept administrator. His vice presidential running mate, Jusuf Kalla, is deeply experienced in both business and politics. The bureaucracy, too, will exert some inertia to prevent policy slipping the wrong way too quickly. 

In the meantime, Jokowi may learn a key lesson of politics: good economics sometimes requires pre-election promises to be broken or at least re-interpreted. Perhaps Australia should offer some bipartisan technical assistance on how it's done.

Finally, last week the Lowy Institute's Aaron Connelly broke the news that, despite all the hype over the last 10 or 11 months, Jokowi may not actually be the favourite in the upcoming presidential contest:

If the race is as close as it appears, that would favour Prabowo. Local party officials who have kept a foot in both camps as the race tightened are now likely to board the Prabowo bandwagon as it picks up momentum. Moreover, businessmen are now likely to place new bets on Prabowo's already well funded campaign. As The Economist notedlast week, those close to the Jokowi campaign say that a sense of panic has set in among his campaign staff.

Prabowo Subianto must now be considered the favourite to win the 9 July presidential election, a result that was unthinkable just a month ago.

Image courtesy of REUTERS/Beawiharta.

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A short and powerful piece, this, from Nir Eiskovits. Two highlights:

At this point we should introduce an uncomfortable but crucial distinction: terrorism, like guerilla fighting more broadly, is a way of behaving rather than a group designation. Scholars such as Stephen Nathanson have pointed out that it is more coherent to talk about terrorist methods than about “The Terrorists”. These methods are used, disproportionately, by non-state actors like the Taliban, Hamas and (recently) ISIS. But not exclusively. If terrorism consists in the intentional targeting of civilians, then blowing up buses is terrorism, shooting rockets into civilian neighborhoods is terrorism, retaliating in kind is terrorism, and the devastation of German cities at the end of World War II counts as well.

And this:

Refusing to “negotiate with terrorists” is the same as telling our soldiers that we will never talk to their enemies, which amounts to telling them that they have nothing to hope for if they are caught, which is the same as telling them that we don’t “have their back”. That is wrong (for obvious reasons), bad for morale, and catastrophic for our ability to recruit fighters. If any of our asymmetrical wars are worth fighting (a different question altogether), we need to face up to the moral and practical realities involved. We must, in other words, confront the enemy we find, not the one we would have fashioned for ourselves. 

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Peter Jennings says 'pretending that America can sit out (the Iraq) fight is just not realistic'. That's exactly what many pundits were saying a year ago about air strikes against Syria.

But to his everlasting credit, President Obama reconsidered, and where are we now? Syria remains a tragedy that could not have been fixed by US air power anyway. But Israel remains secure, oil is still flowing from the Persian Gulf, and there is now one less WMD-armed regime in the world. True, the terrorist threat is surely more acute, given the potential for Iraq and Syria to act as incubators for the next generation of violent fanatics. But after the experience of Iraq and Afghanistan, the bar for demonstrating that US military intervention can reduce the terrorist threat is high. As I said in my debate with Anthony Bubalo, we have a pretty good idea in this part of the world about the most effective mix of policies for combating terrorism, and military action is rarely part of that mix.

Peter says 'The opportunity for early American air strikes against ISIS has been lost', but that Obama has only delayed the inevitable because 'America's interests in the Middle East balance of power are so substantial that not even Barack Obama can ignore them forever'. I'd like to hear more about exactly what those interests are, but even assuming they are vital, it's still not clear that military action is the best way of protecting them. In fact, it will probably just damage them. America is less secure and prosperous today because of the wars in Iraq and Afghanistan (and Libya), and it is less respected in the Middle East. That's a dreadful legacy, and ought to be a caution for those demanding still more intervention.

I must correct Peter on one final point: I'm not at all motivated in this debate by a 'distaste of George W Bush'. It's more like self-loathing for my eagerness to buy the disastrous policy Bush, Cheney and Powell were selling at the time. But as President Bush himself once almost said, fool me once, shame on you. Fool me twice, shame on me.

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As Julian Snelder wrote yesterday, World War I analogies are all the rage among Asian security scholars this year (we posted a two-part examination of the similarities and differences by Robert Kelly in March). Now Australian Foreign Minister Julie Bishop has joined the fray, with what Fairfax's David Wroe described fairly as a dark speech to the Crawford Australian Leadership Forum yesterday (transcript here):

Every nation in the global supply chains has much more to lose from conflict than they could ever hope to gain. And yet, there is increasing instability and conflict in our time. We cannot take for granted that globalisation is, of itself, a bulwark against aggression and conflict.

This is not a new concept. British author, parliamentarian and 1933 Nobel Laureate, Sir Norman Angell observed just over 100 years ago, that economic interdependency at that time had become so significant, that war had become economically pointless. He argued that rational self-interest would triumph in the considerations of national leaders. Tragically history proved that global trade did not prevent irrational or mad decisions, and did not stop war.  We must learn from that lesson.

Today we are witnessing the re-emergence of Asia as an economic power. China has been the largest economy in 18 of the last 20 centuries and is set to be again in the 21st Century.  This has brought with it renewed, and increasingly significant border tensions as China asserts what it sees as its role as a global power – as we have witnessed recently between China and Japan, with Vietnam, the Philippines and other countries in the East and South China Seas.

Australia takes no position on the merits of the competing claims, but we do have a vested interest, a deep vested interest, in the maintenance of peace and stability in the seas and oceans to our north and west. That is why we urge all nations to refrain from unilateral or coercive behaviour and for all disputes to be settled peacefully through negotiation and according to international law. 

And it is in this context that perhaps the most critical lesson from WWI is relevant – that isolated, single, random events can unleash forces that quickly spiral out of control. That is why we urge all nations involved in territorial disputes to show restraint, to avoid miscalculation or misjudgement that could trigger another round of escalating tensions.

One other notable thing about this speech: Bishop confines the recent Arab uprisings to history by noting pointedly that these were 'formerly known as the Arab Spring'.

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 Bringing together the best longer Interpreter articles you were too busy to read this week.

This week the Lowy Institute revived its Lowy Institute Papers series, now to be published in cooperation with Penguin Australia. The first paper in the series (Beyond the Boom by John Edwards) looked at Australia's mining boom, asking whether the boom is really over and questioning how much it contributed to Australia's prosperity. We've kicked off a debate on these questions and John summarised his arguments for Interpreter readers:

The investment phase is certainly beginning to wind down but the mining boom is not over – and in some important respects it has barely begun. Anyway, the mining boom does not explain Australia's long run of economic success. Australia's economy grew faster in the ten years before the boom began than it did in the ten years after, and incomes rose more rapidly. Exports increased much more in the ten years before the boom began than the ten years since. Over its first decade the mining boom saw an expansion of the resources sector by something like 3% of GDP and an addition to Australian income of something like 3% of GDP – both useful contributions, but much less than the imagined gain.

The first response to John's paper came from Alex Tabbarok, a professor in economics at George Mason University:

Edwards focuses on the past. I will say more about the future. First, a simple point about China. China does not have the institutions — rule of law, honest government, sound property rights and so forth — to push beyond middle-income status. China's growth rate, therefore, while it has been astonishing, will decline. The Chinese economy will get bigger, just at a slower rate. Thus, the demand for Australian exports will remain high even as prices moderate and, with its recent investments in infrastructure, Australia is well placed to deliver exports profitably even at lower prices. Second, mining is not just about getting stuff out of the ground. Mining is about transportation, automation, and logistics. Rio Tinto's driverless train system, for example, is the most advanced in the world. Exporting logistic services is another boom field for Australia.

As Jon Stewart memorably illustrated, every US president since Nixon has called for freeing the US from 'dependence on foreign oil' (within ten years!). Every president has failed. Fracking, however, has delivered the goods. Fracking has reduced the price of energy while generating millions of jobs and reducing net emissions of greenhouse gases. The fracking revolution has only just begun in Australia. Australia has abundant supplies of natural gas and if it creates a national market and avoids parochial calls for price controls and environmental NIMBYism it will certainly become the world's largest exporter. While profiting from natural gas production and infrastructure investment, Australia will also help the world to move closer to greenhouse gas targets.

The Interpreter had a scoop this week (welcome to all our new readers), with Indonesia Fellow Aaron Connelly suggesting that Prabowo Subianto might now be the favourite in Indonesia's presidential election, which is less than a fortnight away:

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New polling data on Indonesia's presidential election — and the lack of it from certain critical quarters — suggests that Jakarta Governor Joko Widodo's 38-point lead of three months ago has evaporated. He and his opponent, former military commander Prabowo Subianto, may be locked in a dead heat. 

If the race is as close as it appears, that would favour Prabowo. Local party officials who have kept a foot in both camps as the race tightened are now likely to board the Prabowo bandwagon as it picks up momentum. Moreover, businessmen are now likely to place new bets on Prabowo's already well funded campaign. As The Economist noted last week, those close to the Jokowi campaign say that a sense of panic has set in among his campaign staff.

Prabowo Subianto must now be considered the favourite to win the 9 July presidential election, a result that was unthinkable just a month ago.

Still on Indonesia, Catriona Croft-Cusworth reported on the foreign and defence policy debate between the two presidential contenders:

It's not surprising to hear nationalist rhetoric in the lead-up to a presidential election. Jokowi's prepared comments on Indonesia's 'integrity' were likely drafted to dispel the public perception that Prabowo would be a more firm and decisive leader than Jokowi, who tends to solve problems via consultation and consensus. Prabowo's comments about military and economic might are surely also playing to this perception.

However, Australia should take note that its relationship with Indonesia was considered important enough to be raised during Sunday night's debate. Regardless of who emerges as Indonesia's new leader in the coming months, the Lowy poll and the televised debate suggest that Australian attitudes towards Indonesia play a crucial role in the relationship.

Kadira Pethiyagoda wrote on the the importance of cultural identity and values in the formulation of Indian foreign policy:

Despite the BJP's reputation, a focus on cultural identity won't necessarily convert to hyper-nationalism; it can also be part of India's enormous potential in the field of 'soft power'. For instance, Modi justified the maintenance of India's 'no first use' (NFU) nuclear policy by calling it a reflection of the country's cultural heritage. Granted, India's nuclear competitors don't trust the NFU pledge, but it is likely that Modi's statement is more than just spin.

Modi is likely to follow the tradition of the last BJP government (1998-2004), which did not seriously consider nuclear weapons as useable war-fighting instruments. 

In the View from Rangoon, Elliot Brennan discussed the recent political maneuvering of Aung San Suu Kyi (and constitutional reform in Myanmar more broadly):

In organising these mass rallies and upping the rhetoric around the discussion of constitutional amendments, Aung San Suu Kyi has challenged the military establishment to change its role in the country. It's a challenge that has come too soon for some. The powerful figurehead and Commander-in-Chief of the Armed Forces, General Min Aung Hlaing, is unmoved. He argued in an Armed Forces Day speech in March that the Tatmadaw (the armed forces) was 'mainly responsible for safeguarding the constitution'.

Concern over sovereignty is the chosen argument of the naysayers to the amendments. This is sensitive issue, with bubbling ethnic tensions and a violent and highly volatile situation in Rakhine state with ongoing persecution of the Rohingya, locally known as Bengalis. Any change to the constitution would likely open a Pandora's Box, opening calls for a complete rewrite. Many would want a debate on a new Panglong agreement, a federal system, which has long been popular among ethnic groups.

Switching to economics, here's Stephen Grenville on the legal complications of sovereign debt restructuring:

Just as individuals default, countries also reach a stage where they can't repay their debts in full. Simply insisting on the 'sanctity of contract' doesn't get us far in resolving the issues. The debt problem is usually as much the fault of the creditor as the debtor — remember all those Euro-periphery bonds that were bought at yields almost the same as Germany's? Sitting down to reach a practicable resolution makes sense. When the clear majority of the creditors have done exactly that, those who come along afterwards to buy the 'hold-out' debt at a heavily-discounted price and then act as if they should be paid in full shouldn't be surprised if they earn the title of 'vultures'.

The damage is now done. Sovereign debt resolution can't be left in this unsatisfactory state. Europe provides many examples (Greece being the most prominent) of where the outstanding debt is clearly unsustainable and more restructuring is needed.

And Julian Snelder on China's banking sector:

Risk of loss is the root problem. Both Chinese industry and banks lack real equity. The economy is highly credit intensive, yet banks must continue underwriting loans to keep it running. But investors have lost confidence in the true state of the banks, which are in turn forced to issue junk capital. Investors are unwilling to buy it except at a high price, perhaps 7-8%pa for the best banks, which means 10%pa or more for the weaker ones. No investor really expects a state-owned bank to go bust (if they did they'd demand a lot more than 7%) but they are nonetheless scared of corporate losses piling up at the banks.

Under China's bold new economic reforms, it still isn't clear whether and how major financial losses will be permitted. Beijing needs somehow to untangle this knot and begin the recapitalisation of the banks and the entire economy: more equity, less debt.

 The sentencing of journalist Peter Greste in Egypt this week understandably caused much outrage in Australia. Anthony Bubalo reminded us not to forget the broader political situation in Egypt:

It is these arrests that make a mockery of the regime's claim that it is only fighting terrorists. Indeed, even if every charge the regime has made against the Muslim Brotherhood is true (and some of them are), this still does not explain or excuse the wider crackdown.

Journalists like Greste are being arrested or intimated precisely because, to use the words of the Prime Minister, they 'report the Brotherhood', or anything else the regime does not like. What the Greste case demonstrates is that both as a matter of principle, and on very practical grounds, the international community cannot turn a blind eye to the wider assault on Egyptian citizens while expecting special protections for its own.

Still on the Middle East, Thomas Lonergan looked at an innovative solution to the potential problem of extremists returning to Australia after fighting in Syria and Iraq:

Government should consider establishing a Joint Inter-Agency Task Force (JIATF) to address the urgent Australian jihadist threat. The JIATF's mission would be to gather and analyse intelligence, liaise with allied and other foreign partners and take law enforcement action against Australian jihadists (it should also ensure that things like this don't happen again). At home, increased messaging to deter and prevent travel, and an invigorated effort to counter violent extremism, would be essential. 

To work, the JIATF must have a binding command and management mechanism. The JIATF's senior leaders must be given the legislative authority to give direction and make decisions for all the participating agencies. Furthermore, operational funding should be provided directly to the JIATF and not be 'filtered' by parent agencies.

Finally, here's an interesting piece by Robert Kelly on the 'dangerous indulgence' that is the debate on history between South Korea and Japan:

The Korea-Japan dispute over history is back yet again, with the Japanese Government this week releasing a 'review' of the drafting of the 'Kono Statement.'

That statement is the 1993 Japanese admission, by Chief Cabinet Secretary Yohei Kono, that the Imperial military during the Pacific War organised military brothels in which Korean women were often forced to serve. The Japanese euphemisms for this is 'comfort women' and 'comfort stations'; in reality, this was enforced prostitution that inevitably included beatings and other abuse. As the Japanese empire expanded, the practice spread across Asia, including women in Japan's Southeast Asian holdings.

Much of this is well known and widely accepted outside of Japan. There is a fairly substantial literature on it, especially in Korea where the practice was widespread (this is a good place to start). Even within Japan, it is really only the hard right which disputes this history, insisting that all these women were voluntary prostitutes (for a colourful example of the sort of hate mail I get on this, try here). Kono himself says there is nothing to add to the previous statement, and even the US has urged Japan to leave it alone.

Photo by Flickr user Ed Yourdon.

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Billed as a French version of the British political parody The Thick of It, The French Minister (titled Quai d'Orsay in France) is the story of a young speechwriter working for the French foreign minister. According to Wikipedia, the character of the foreign minister is based on Dominique de Villepin, who was President Chirac's chief diplomat from 2002 to 2004.

The film is screening in Melbourne from 17 July.

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ASPI's Peter Jennings yesterday drew parallels between President Obama's recent West Point speech and a 1950 speech by then US Secretary of State Dean Acheson which set geographic boundaries to US interests in Asia. South Korea was placed outside those boundaries, and the speech is widely thought to have encouraged Pyongyang and Moscow to believe that they could invade South Korea without US retaliation.

According to Jennings, Obama's speech, in which the President said the US would only use force to protect 'core interests', has sent the same message to America's contemporary adversaries:

Around the world, America’s frenemies now know that they have a free hand to push the limits of their own aggressive intensions against neighbours. All they have to do is avoid harming American ‘core interests’, itself a flexible concept. Obama’s West Point speech repeats in all fundamental respects the same disastrous errors of Dean Acheson’s 1950 oration. Emphasising what America will not do in international affairs only emboldens the world’s zealots, nationalists and chauvinists to fill the vacuum created by absent US power.

Peter might have drawn on other examples to illustrate what America will not do in international affairs. For instance, the US opposed the Soviet incorporation of the Baltic republics in 1944, but took no military action to stop it. Nor did it send tanks into Hungary in 1956 to resist the Soviet invasion, or into Prague in 1968. Then there was China's war against Vietnam in 1979, various wars and skirmishes between India and Pakistan since partition, and countless civil and international conflicts in Africa and South America.

You get the point: American foreign policy is, like that of every country, defined by limits, of both resources and interests.

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In fact, that sentiment is so obvious it borders on trite. So why should Obama not articulate it? What is controversial about a US president saying that there are a whole bunch of conflicts the US will not get involved in? Surely it would be much more extraordinary if a US president were to declare that his country's foreign policy had no limits? But of course, we've been there:

So it is the policy of the United States to seek and support the growth of democratic movements and institutions in every nation and culture, with the ultimate goal of ending tyranny in our world.

That's from George W Bush's second inaugural, delivered in January 2005, though even that sweeping statement was immediately followed by the caveat that 'This is not primarily the task of arms'. Unfortunately, Bush was about two years late to this realisation. A more sober assessment of the limits of American power in early 2003 might have  saved Bush from making the greatest strategic blunder of any president since the Vietnam War.

Peter Jennings thinks that, in articulating the limits of American power, Obama has emboldened groups such as ISIS in their take-over of Iraq. He says 'Small crises...have a way of growing into bigger ones, and sooner or later those will infringe core interests. The message for Barack Obama should be if you aren’t prepared to fight small fires, you’d better get ready to fight bigger ones.' That sounds like a call for the US to be permanently prepared to pre-emptively intervene in essentially any local conflict anywhere, a sentiment more at home in the heady early months of the Afghanistan invasion or Operation Iraqi Freedom. Our experience since then should have taught us that even 'small fires' are often beyond the ability of the US to put out. In fact, trying to put them out is what got Iraq into this mess in the first place.

It's not the articulation of limits that has weakened America over the last decade or more, but the refusal to accept any limits. Obama's speech was a necessary correction to that over-reach.

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The Interpreter has been flooded with traffic since we published Aaron Connelly's analysis of the Indonesian presidential race on Tuesday afternoon.

Aaron said Prabowo Subianto was now favourite to win the Indonesian presidential election, an unthinkable prospect just a month ago in the race against former Jakarta governor Joko 'Jokowi' Widodo. Aaron also said that some Jokowi-aligned institutions are holding back their opinion polling because they fear that Prabowo's strong showing in those polls will, if published, further weaken their preferred candidate. Fairfax Indonesia correspondent Michael Bachelard has now backed up this analysis via his own sources.

As you will hear in Aaron Connelly's Quick Comment below (the interviewer is Lowy Institute intern Steven Hong), some Prabowo supporters in Indonesia have used Aaron's analysis to claim that their candidate is in front. There's no direct evidence for that claim yet, though as Aaron wrote, it is looking more likely. Listen also for Aaron's thoughts (4.20)  on what a Prabowo presidency might mean.

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A few items that have crossed my desk today:

  1. The Canberra Times reports today on the massive increase in the number of Australian bureaucrats with security clearances, including plumbers working for the Industry Department and field workers for the Plague Locust Commission. It's all because so much more of the information these public servants need for their jobs is classified when it probably shouldn't be.
  2. Spiegel has published in PDF form a new tranche of Snowden documents relating to the NSA's activities in Germany.
  3. The New York Review of Books has a review of three new books about Snowden and a documentary by the American public broadcaster, PBS. Parts 1 and 2 of the doco embedded below.
  4. The same review mentions a piece by prominent American political commentator Michael Kinsley, in which he states that 'the private companies that own newspapers, and their employees, should not have the final say over the release of government secrets, and a free pass to make them public with no legal consequences'. For reasons outlined here, I don't think that's a persuasive argument, but I do think governments do themselves no favours by classifying so much material (see point 1). They could help themselves by setting up systems that allow for the controlled release of classified information, as a kind of safety valve against uncontrolled leaks. It's an argument I make at greater length in this WSJ op-ed.

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