Time for Asean to drive the Indo-Pacific process: Jakarta Post writers

JAKARTA (THE JAKARTA POST/ASIA NEWS NETWORK) – Asean is making significant progress in deliberating over the new regional Indo-Pacific architecture, but the bigger challenge is yet to come: convincing the big powers, particularly China and the United States, to come on board.

Also, there is an unresolved issue with the term “Indo-Pacific”, with China harboring suspicions that it is part of a containment policy against its rise in the region and the world.

The “Indo-Pacific Outlook” concept paper, drafted by Indonesia, provides the 10-member Asean the intellectual leadership to discuss the future of the wide region that is already becoming the main driving force of the global economy.

Several countries have developed their own ideas, proposals and terminology with their own perspectives.

Japan has the Free and Open Indo-Pacific Strategy (FOIP) and India its Security and Growth for All in the Region (SAGAR).

Also, the US has expanded its Pacific military command to encompass both oceans to become the US Indo-Pacific Command (USINDOPACOM) and Russia has proposed the name “Indo-Asia Pacific” to ensure it is not excluded from the emerging regional architecture.

The Asean concept is not an attempt to blend all these different ideas into one single concept, but rather it has its own proposals and ideas that are often different from others.

For one, it emphasizes common interests rather than common values, the idea being that it is always easier for countries to collaborate on the basis of mutually beneficial cooperation.

Values can be very divergent because of different political systems.

The US and Australian Indo-Pacific proposals stress values such as democracy, making them an exclusive club.

The Asean Indo-Pacific concept would be inclusive as it uses the East Asia Summit (EAS) forum as the launch pad.

The EAS, inaugurated in Kuala Lumpur in 2005, was an Asean creation that expanded on its regionalism to bring its 10 members together with China, Japan, India, South Korea, Australia and New Zealand.

It expanded again later to include the US and Russia.

Rather than creating a new layer of organisation, which would mean more meetings and summits, Asean’s proposal seeks to revitalise the EAS, since all the major powers in the Indo-Pacific region are already represented at the annual summits.

The expansion would still be significant as it would bring in all littoral states along the two vast oceans for a combined gross domestic product in 2017 of US$52.1 trillion (S$71.5 trillion), 57 per cent of the global economy, as compared to US$46.5 trillion for the 18 EAS countries.

With China soon to overtake the US as the world’s largest economy the center of the global economy is shifting to Asia.

By using the East Asia Summit platform, participating countries can sit down and explore possible mutually beneficial cooperation projects across many platforms.

One of these is China’s Belt and Road Initiative (BRI) that seeks to connect countries in Asia and Europe through land and maritime routes, which partly overlaps with the proposed Indo-Pacific region.

The plan to build a business link between Aceh in Indonesia and India’s Andaman and Nicobar Islands in the Indian Ocean is an example of how two countries in the Indo-Pacific region can forge cooperation on the basis of their converging interests.

“Indo-Pacific” may be universally recognised terminology to depict this region that encompasses the countries beside the two vast oceans, but the name may be an issue that hinders China’s participation.

To Beijing, “Indo-Pacific” smacks too much of the US agenda to build an alliance with Japan, Australia and India – called the Quad – essentially to contain China.

The Indo-Pacific as a geopolitical construct would inevitably lead to competition among existing and emerging powers in expanding their spheres of influence.

China has actually expanded its sphere of influence through the BRI, but other than the issue of the name there is no reason for Beijing to be concerned with the emergence of the regional architecture.

Indonesia, and Asean for that matter, is flexible about finding an appropriate name that would accommodate China’s concerns.

Alternative names have been mooted in the Asean discussion, including Indonesia’s “Asean’s Indo-Pacific Concept” and Malaysia’s “Asean Inter-Oceanic Concept”.

There is also Pacindo, short for the Pacific and Indian Ocean region, which President Joko “Jokowi” Widodo used when he eloquently presented his vision of Indonesia as a Global Maritime Fulcrum (GMF) straddling the two oceans in his maiden speech at the Asean summit in Naypyitaw, Myanmar, in 2014.

Leaving the name issue aside, what is most important first and foremost is for Asean to take ownership of the Indo-Pacific concept.

Now that everyone recognises the emergence of a new regional architecture, it is vital for Asean to take the leadership in driving this process, for geographical reasons and for its geopolitical and geo-economic interests.

Asean centrality has never been more important.

Arifi Saiman is director of the Center for Policy Analysis and Development on Asia-Pacific and Africa Regions at the Policy Analysis and Development Agency (PADA) of the Foreign Ministry and Endy M. Bayuni is a senior editor of The Jakarta Post. The paper is a member of The Straits Times media partner Asia News Network, an alliance of 23 news media organisations.

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Marysville, Wash. active shooter fires out of a home as police negotiate for a peaceful exit

Police in Marysville, Wash. were negotiating with an active shooter who was firing out of a house in the city that neighbours Everett on Monday night.

The Marysville Police Department told Global News that numerous SWAT teams were on the scene in the 13500- and 13600-block of 47th Drive NE as they tried to ensure that the shooter left the home.

Coverage of gun control on Globalnews.ca:

Police did not confirm whether there were any injuries, but they said officers from numerous agencies including the Snohomish County Sheriff’s Office were on site.

They also could not confirm how many officers were present.

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All 78 child hostages released in Cameroon, two teachers held

BAMENDA, CAMEROON (REUTERS) – All 78 children and a driver kidnapped in south-west Cameroon were released on Wednesday (Nov 7), but a principal and one teacher are still being held by the armed men that took them, a priest conducting negotiations said.

“Praise God, 78 children and the driver have been released. The principal and one teacher are still with the kidnappers. Let us keep praying,” Mr Samuel Fonki, a minister of the Presbyterian Church in Cameroon, said, two days after they were taken into the bush by armed men.

He had earlier put the number of children taken at 79, but one of their number was in fact a teacher, who remains with the kidnappers.

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How Apple is losing its grip on India

BENGALURU (Reuters) – Software engineer Samee Alam was ready to take the big leap and buy an iPhone in this week’s Diwali festival sales, but at the last minute he opted for cheaper Chinese competitor OnePlus instead.

Alam, 27, spends hours on his phone watching shows, surfing and shopping, making him the perfect target for Apple Inc as it strives to raise sales among India’s 1.3 billion consumers.

But in a country where the average per capita income is around $2,000 a year, even the cheapest of this year’s new iPhones, the XR at 76,900 rupees ($1,058), costs twice as much as many of the alternatives.

Hong Kong-based Counterpoint Research says that iPhone sales are falling as a result. From three million phones in 2017, sales may sink to two million this year, according to their estimate, the first decline in four years.

More than half of those sales will come from cheaper older models, and the lack of progress in India was among problems cited by Chief Executive Officer Tim Cook when he gave a disappointing holiday outlook last week.

Even in the premium segment, smartphones that cost more than $400, Apple lagged Samsung and China’s OnePlus in the third quarter.

“I have never used an iPhone and I was keen on getting my hands on one but it didn’t make sense,” says Alam, who works for one of the raft of firms to have invested in the southern city of Bengaluru, often called India’s Silicon Valley.

“I look for storage, camera and processor in phones and cheaper alternatives like OnePlus are more value for the money. The new iPhones cost almost 100,000 rupees – I can get three good phones for that price or even a decent gaming laptop.”

Solid Mac sales and the high unit price of iPhones meant Apple’s total revenue of $2 billion in India last year was still double that of OnePlus, which only sells mobile phones. But Counterpoint’s data says that gap will also shrink.

OnePlus’ India head Vikas Agarwal told Reuters this week that 10-15 percent of new customers in recent months have been defectors from Apple, suggesting even some loyalists are opting out of upgrading their handsets.

HIGH IMPORT DUTIES

Apple’s problems go beyond price.

The company, facing down a handful of regulatory headaches, lost some of its top executives in India at the start of this year.

An Apple spokesman said the departures had nothing to do with the company’s performance, but people familiar with the matter told Reuters that the departures were likely linked to the company changing its distribution system. Apple has cut the number of distributors in the country to two from five.

The sources, who declined to be identified because they have business relationships with Apple, also said company veteran Michel Columb is still working on solidifying business relations since taking control of the Indian operation in December.

Apple declined to comment further.

Prime Minister Narendra Modi’s government has sought to drive electronics producers into manufacturing locally by steadily moving tariffs up the supply chain from simple phone cases to sophisticated chipsets and boards.

Along with local firms like Lava, global smartphone giants including Samsung Electronics Co Ltd, Oppo and Xiaomi Corp have responded aggressively, investing millions of dollars in plants around Bengaluru and Delhi tech hub Noida.

Apple is the only major player which does not manufacture phones in the country and it only assembles two low-cost older models through Wistron Corp in Bengaluru.

Industry experts say as a result the company still imports about 70-80 percent of its phones. That results in high import duties, which in turn make the phones expensive.

In the United States, the basic iPhone XR model costs $749 or roughly 54,400 rupees, only two thirds of its retail price in India. Beyond that, while U.S. phones are subsidized under deals with wireless carriers, Apple’s phones in India are not.

“Apple doesn’t have enough confidence … in the Indian manufacturing system right now, to set up plants and move some of the manufacturing out of China,” said analyst Navkendar Singh of tech consulting firm IDC.

“In the process they are losing around 15-20 percent of their tax incentive … which they could have passed on to the consumer.”

EMPTY STORES

Diwali, the Festival of Lights, is peak selling time for electronics in India, but the Apple-licensed store in one of Bengaluru’s big shopping malls was deserted this past Saturday.

“Features of the emerging phones are very similar to an iPhone,” says salesman Aejaz Ahmed, adding volumes have fallen in the past few months. “It is very difficult to make out the difference from a distance because they even look so alike.”

Sales staff at several stores in Bengaluru and nearby Chennai pointed to the launch this year of the latest OnePlus phone as a major problem for the U.S. phonemaker. At 37,999 rupees, the Chinese company’s 6T is half the price of the XR.

The result, says Neil Shah, from Counterpoint, is that Apple’s user base in India is set to decline about 10 percent to nine million users this year. That compares to an estimated 436 million Android users.

“If your user base is declining, you are losing grip on the market,” he says. “The new customer base is not coming.”

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How a Democratic U.S. House could alter foreign policy

WASHINGTON (Reuters) – Democrats will use their new majority in the U.S. House of Representatives to reverse what they see as a hands-off approach by Republicans toward President Donald Trump’s foreign policy, and push for tougher dealings with Russia, Saudi Arabia and North Korea.

Representative Eliot Engel, the Democrat in line to head the House Foreign Affairs Committee, said they may also push for congressional authorization for the use of military force in places like Iraq and Syria. But on some hot-button areas, like China and Iran, he acknowledged there was little they could do to change the status quo.

Now that they have taken control of the 435-member House of Representatives for the first time since 2011, Democrats will decide what legislation is considered in the chamber and have a bigger role in setting spending policy and writing legislation.

“I don’t think we should challenge something just because it’s put forth by the administration, but I do think we have an obligation to review policies and do oversight,” Engel told Reuters in a telephone interview.

Since they must still work with a Republican-controlled Senate to pass any bills, the Democratic majority’s greatest influence will be oversight, the ability to call hearings and, if necessary, subpoena witnesses, as they lead committees like Foreign Affairs as well as Armed Services and Intelligence.

HOW DO THE DEMOCRATS SEE RUSSIA?

Democrats plan Russia-related investigations, such as a probe of possible business ties and conflicts of interest between Trump and Russia.

From a policy perspective, a Democratic-led House would push to punish Russia for interference in U.S. elections and activities including its aggression in Ukraine and involvement in the Syrian civil war.

The House would push for more sanctions, including measures targeting new Russian sovereign debt. It would also try to pressure Trump to enact all of the sanctions in a sweeping bill he reluctantly signed into law in August 2017.

Members of Congress have also vowed to push harder, using subpoena power if necessary, to obtain information about Trump’s summit last summer with Russian President Vladimir Putin. The White House has released few details about the meeting.

“It’s ludicrous that there could be such a high-level meeting between the two leaders and Congress should be in the dark about it,” Engel said.

He said the issue of Russia’s interference in the 2016 election “hasn’t been at all resolved.”

WILL KHASHOGGI’S KILLING INFLUENCE SAUDI TIES?

The furor over the death of journalist Jamal Khashoggi at the Saudi consulate in Istanbul has added to lawmakers’ frustration with Saudi Arabia over the war in Yemen and human rights.

A Democratic-led House would vote on legislation to block arms deals with Riyadh, make it difficult to win congressional approval of a nuclear energy deal and consider a measure to stop U.S. aircraft refueling and other support for the campaign in Yemen.

While Engel still views Saudi Arabia as a counterweight to Iran’s influence in the Middle East, he said Washington must demand more from Riyadh. “If the Saudis want our support, then they have to address some of the things that concern us,” he said.

DON’T DEMOCRATS WANT PEACE WITH NORTH KOREA?

Democrats say they are determined to obtain more information about meetings by Trump and Secretary of State Mike Pompeo with North Korean Leader Kim Jong Un, worried that Trump is so eager to make a “great deal” that he will give Kim too much.

Engel and other Democrats plan to call administration officials to testify in public, and behind closed doors, about the status of talks. But they also will walk a fine line, because they do not want to be seen as interfering with diplomacy and efforts to prevent a nuclear war.

“I think it’s good to have some kind of a dialogue with them. But we shouldn’t be deluded in thinking that they’re going to have any major changes,” Engel said.

CAN DEMOCRATS CHANGE CHINA POLICY?

Democratic House control is not expected to yield significant changes in China policy. Democrats will hold more hearings and demand more briefings, but criticism of Beijing has so far crossed party lines and that is not expected to change.

Prominent Democrats, such as Representative Adam Schiff, who is in line to chair the House Intelligence Committee, have joined Republicans backing measures to clamp down on China, like legislation treating ZTE Corp and Huawei Technologies Co Ltd [HWT.UL] technology and phones as major cyber security threats.

But Engel and others acknowledged the need for China as a partner, particularly in dealing with North Korea. “I think we need to be careful not to lash out,” Engel said.

Like Republicans, Democrats are divided on Trump’s trade war with China. Some party members see free trade as a generator of jobs, while others back tariffs to protect workers in industries such as steel and manufacturing.

CAN DEMOCRATS REVIVE THE IRAN NUCLEAR DEAL?

Democrats were infuriated by Trump’s withdrawal from the international nuclear deal with Iran that Democratic President Barack Obama’s administration reached in 2015. But there is little they can do to change the policy as long as Republicans occupy the White House.

Lawmakers also are wary of seeming too friendly to Iran, especially given hostility to Tehran by the government of Israel. While Israeli Prime Minister Benjamin Netanyahu has worked increasingly closely with U.S. Republicans, strong ties to Israel remain a top priority for both parties.

Engel was among Democrats who opposed the Iran deal, but he said Trump should work more closely with important allies, like the members of the European Union, on that and other issues. “I think what we should do is try to repair the damage with our alliances that has been done,” he said.

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Ikea sales in Ireland pass the €180m mark

Ikea sales in Ireland grew 7.4pc in their last financial year, to €181.5m.

The company said the introduction of online shopping had helped boost revenues.

Ireland market manager Claudia Marshall said the move to online “has been a great success and has performed strongly in its first 10 months in operation, giving customers all over Ireland the opportunity to shop with IKEA whenever and wherever they want”.

The sales figure covers the year to the end of August last.

The company also said it had been boosted by investment in its two outlets here – the full-sized store in Ballymun and its order and collection point in Carrickmines, South Dublin.

It said price reductions and the hot summer had also helped.

“Ikea’s seasonal sales saw a bumper boost and as a result, Outdoor Furniture was the biggest area of growth in IKEA Ireland this year, with a total sales increase of 29pc,” the company said.

More to follow

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Goodbody upgrades outlook on Irish economy, but Brexit the 'wildcard' for assessing prospects

Goodbody has upgraded its outlook on the Irish economy.

The stockbrokers now expects domestic demand growth of 6pc in 2018, up from 4.8pc previously.

Growth of 4.4pc is anticipated in 2019, according to the ‘Q4 Irish Economy Health Check’ from the group.

  • Read more: Coffee shops ‘at saturation point’ in cities as Bord Bia report warns of staff shortages

Consumer sentiment, business investment and the construction sector have been the key drivers in the “exceptional” 7pc growth achieved in the first half of 2018.

However the report warns that Brexit remains the most important uncertainty around prospects for 2019 and beyond.

“The wildcard in assessing the prospects for the Irish economy in the coming twelve months is of course Brexit,” Dermot O’Leary, chief economist at Goodbody, said.

However it also noted that there is evidence that Ireland is becoming the most popular destination for firms looking for an EU base in the post-Brexit world.

The report also looks at the labour market and finds that there are few resources not being used, as evidenced by a labour market which is very close to full employment.

There is some scope for participation to increase, but this will be a slow process.

“Migration provides an important source of labour, but this is not available to the same extent as in the mid-2000s,” Mr O’Leary, said.

“We believe further skills shortages and upward wage pressures are likely given the expected further fall in unemployment to 4.5pc.”

On the issue of housing, the report finds that supply needs to double again to reach the estimated level of household demand.

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Former US vice-president Joe Biden leads potential Democratic field for 2020 presidential election: Poll

WASHINGTON (REUTERS) – Former US Vice-President Joe Biden is the early leader for the 2020 Democratic Party nomination, a Reuters/Ipsos Election Day opinion poll found, in a field likely to quickly take shape as candidates seek to challenge Republican President Donald Trump.

Mr Biden received 29 per cent of the support.

Senator Bernie Sanders, an independent who made an unsuccessful run for the Democratic nomination in 2016, finished second in the hypothetical field with 22 per cent. The rest of the poll was tied between Senators Cory Booker of New Jersey, Ms Elizabeth Warren of Massachusetts and Ms Kamala Harris of California.

All of the Democrats fared well in a popular vote hypothetical match-up against Mr Trump.

Before a single dollar has been spent on election ads or campaign rallies, the poll found Mr Biden scored best in a hypothetical match-up, beating Mr Trump 51 per cent to 39 per cent in the popular vote.

The poll found Mr Sanders, Mr Booker and Ms Harris would also defeat Mr Trump nationally if the election were held today.

Mr Trump did the best against Mr Booker, losing by only 4 percentage points in the hypothetical popular vote.

In 2016, Democrat Hillary Clinton won the popular vote by nearly three million ballots, but lost the presidential election to Mr Trump, who won the state-by-state Electoral College vote.

Opinion polls at this early a stage tend to be largely dominated by those with the most widespread name recognition.

Several polls after the 2014 congressional midterm elections found Mr Jeb Bush, who ultimately lost his bid for the Republican nomination, to be the front-runner. Few polls even included Mr Trump.

On the Republican side, 65 per cent of Tuesday’s midterm voters said they would renominate Mr Trump to represent their party. Another 11 per cent said they would prefer Vice-President Mike Pence and 12 per cent said they did not know who should be the nominee.

The poll was conducted online on Tuesday and based on responses from 38,196 people who voted in 37 states.

The poll is ongoing and will be updated as the vote is tallied.

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Passengers on Indonesia flight create stink over pungent planeload of durian

JAKARTA (AFP) – A cargo of pungent durian fruit led an Indonesian plane to be delayed for an hour after passengers turned their noses up at the funky freight and refused to fly.

Durian is highly popular in Southeast Asia but very divisive.

While some consider it the “king of fruits”, likening its creamy texture and intense aroma to blue cheese, detractors consider its odour to be closer to sewage, stale vomit or damp socks.

Passengers booked on a Sriwijaya Air flight from Bengkulu province in Sumatra to Jakarta on Monday (Nov 5) complained to staff after smelling the fruit and refused to get on the plane – repulsed by the pungent payload and concerned about the extra weight on board.

The airline admitted it was carrying more than two tonnes of the whiffy wares but insisted they posed no danger to the flight, adding the smell would dissipate once the aircraft took off.

“Durian is not classified as a hazardous material to be transported on a plane,” Sriwijaya Air official Abdul Rahim told national television station Kompas TV late Tuesday.

He blamed unusually hot weather for the stench.

“We made the necessary precautions, such as putting in pandan leaves and coffee powder to absorb the durian smell,” Rahim said.

Staff decided to unload the fruit after passengers who had boarded the flight decided to get off the plane, which took off an hour later and landed safely in Jakarta.

Bengkulu airport staff said they would review procedures regarding transport of durian to avoid passenger discomfort in the future.

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AXA buys $9.4 billion U.S. real estate debt business from Quadrant

LONDON (Reuters) – AXA Investment Managers will acquire a U.S. debt investment team and a $9.4 billion portfolio of U.S. commercial mortgage loans from Quadrant Real Estate Advisors, AXA said on Wednesday.

AXA IM, owned by AXA Group (AXAF.PA), will hire 24 people from Quadrant including five of its founding partners, as part of a plan to expand its business in the United States.

“The acquisition of this market leading U.S. team together with the significant commercial real estate senior loan mandates, will enable us to expand the leadership of our real estate debt platform from a European to a global level,” said Isabelle Scemama, CEO of AXA IM – Real Assets.

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