Taiwan post..of 'sino-cism' and 'de-sinicisation'

Taiwan government is pursuing a drive to remove references to 'China' or 'Chinese' from the names of state owned companies, in an attempt to assert a stronger Taiwanese identity. There have been a spate of name changes recently and some more may be in the offing. Chinese Petroleum Corp has become CPC Corp, Taiwan, while China Shipbuilding Corp has become CSBC Corp, Taiwan and Chunghwa Post Co will be known as Taiwan Post Co. Earlier Chiang Kai Shek International Airport was renamed as Taiwan Taoyuan International Airport, as the current independence leaning ruling dispensation seeks to downplay the historic links with the mainland. This was also reflected in recent changes in history textbooks.

The Democratic Progressive Party of president Chen Shui-bian considers establishment of an independent Republic of Taiwan under a new constitution as its objective and its move to mobilise support for the same is leading to sharp political divides. Although Taiwan is a de facto sovereign state, it exists only under the official name of the Republic of China and has little diplomatic recognition. China considers Taiwan as a part of its territory and has even threatened use of force to prevent any attempt to declare independence. US, Taiwan's strongest ally, and most of the international community favour the status quo to be maintained.

Japan to Shed its Nuclear Abstinence?

The Japanese government recently commissioned a study to look into the possibility of developing indigenous nuclear warheads, according to a newspaper report. Findings of the study were, however, disappointing as the effort and investment required to produce nuclear warheads have been estimated to be far more than earlier believed.

According to the Sankei Shimbun report, the experts study concluded that it would take at least three to five years and an investment of about ¥200 to 300 billion (US$1.7 to 2.5 billion) for Japan to make a prototype nuclear warhead. This is contrary to the claims made in the wake of North Korean missile and nuclear tests that Japan can quickly produce nuclear weapons if it chooses to, due to its high level of technology and civilian nuclear industry.

Government officials have denied the existence of any such study and maintain that there are no plans to launch a nuclear weapons development programme. As the only nation ever attacked by nuclear weapons, Japan has for decades espoused a policy of not possessing, developing or allowing the introduction of nuclear bombs on its soil. However, the growing security concerns in Japan following North Korea’s intransigent nuclear weapons programme, have more voices calling for a debate on the non-nuclear stance. With the new government led by Shinzo Abe pursuing a nationalist agenda, Japan may finally take the plunge to go nuclear.

Rising nationalism in Japan - history re-visited?

If last decade of the 20th century marked the 'end of history', is the first decade of this century going to be one of ‘history re-visited’? Rising nationalism in Japan is a trend that has largely been ignored in the contemporary world's obsession with the wars being fought in the name of religion. Or, is it too early to call it a trend?

Japan is seeing a revival of nationalist sentiments after half a century of ‘pacifism’ imposed by the US-drafted post-war constitution. After series of visits by the former Prime Minister Koijumi to a controversial war shrine that had evoked angry reactions from neighbours China and South Korea, there are more subtle signs of a shift in national psyche that wants to shed the post-war guilt, build up a sense of patriotism and national pride and have a larger role in international military operations.

Japan’s parliament has enacted a new law upgrading the Defense Agency to a full ministry for the first time since World War II and also passed a new education reform bill that requires schools to teach patriotism.

The upgrading of the Defense Agency under the Cabinet Office to a full ministry gives Japan's generals greater budgetary powers and prestige. This comes in the backdrop of deep concern in the country over North Korean pursuit of missile and nuclear weapons development programme which some observers believe may push Japan to go nuclear sooner or later.

Japan’s military has maintained a low profile under the US-drafted pacifist constitution which prevents Japan from using force to settle international disputes. Tokyo maintains fighting forces only for self-defense and U.S. has some 50,000 troops in Japan under a security alliance. Of late, there has been a discernible shift and Japan seeks a greater role in global military co-operation. Japanese troops have begun participating in international military operations, including in Iraq.

The education reform bill, the first change to Japan's main education law since 1947, calls on schools to “to cultivate an attitude that respects tradition and culture, that loves the nation and homeland.” Critics say this reminds of Japan's war-era education system, in which children were instructed to support the country's imperialist military and sacrifice themselves for the emperor and nation.

THE ABC OF SEZ
What is Special about SEZs, China's experience, the Indian experiment, the politics and the economics ...

A Special Economic Zone (SEZ) is a geographical region where economic laws are more liberal than a country's typical economic laws. SEZs are set up with a view to increasing investments – typically foreign investments - and promoting exports, by offering privileged trading terms. Usually an SEZ is designated as a duty free enclave and treated as foreign territory for the purpose of trade operations, duties and tariffs.

SEZs have been established in many countries like China, India, Philippines, Russia, Iran, Jordan, Poland, Kazakhstan and North Korea at varying scales and with varying degrees of success. In India, the government’s big bang approach to push through a large number of SEZs has generated lot of heat and triggered a nation-wide debate on the costs and benefits of SEZs, including the issues like social displacement caused by large-scale conversion of agricultural hinterland into industrial belts.

International experience with SEZs has shown that by offering various incentives, SEZs can attract investment and foreign exchange on a large-scale, generate employment and boost infrastructure and technological development. However, critics claim that SEZs attract investments only by offering distortionary incentives rather than building underlying competitive conditions. These incentives create a fiscal burden on the taxpayer and hurt environmental and labor standards. In addition, critics argue that the direct and indirect costs of maintaining zone privileges do not benefit the rest of the economy and, instead, lead to “out-of-bound” enclaves of prosperity. It has been widely recognized that promotion of SEZs in the context of an overall strategy to promote economic development, active linkage programs and adequate social and environmental safeguards are necessary to reap the maximum benefits from SEZs at the minimum cost to the society.

China's Experience
The Chinese model of SEZs has been very successful and SEZs there have been considered as remarkable contributors to the miraculous economic growth of the country. The dragon’s success story has inspired many other countries, including the other Asian giant India, in their pursuit of foreign investment and export-led growth. A brief on how China did it.

China started the SEZ experiment as early as 1980s as part of the broader economic reforms and opening-up policy. The first group of SEZs was set up in Shenzhen, Zhuhai & Shantou in Guangdong province and Xiamen in Fujian province - all located in costal areas of Southeast China. This was followed by other 10 costal cities, Hainan Province and Pudong area in Shanghai. To further build on the success of these SEZs, China went on to establish “Economic and Technological Development Zones” (ETDZ) on similar lines. Compared to SEZs which were developed in the whole city (sometimes whole province), ETDZs are developed on relatively small geographical areas earmarked in coastal and other open cities. The overall development of SEZs in China has moved along the following 3 dimensions: extending from SEZs to ETDZs; stretching from east costal region to inland middle and west region; upgrading from fundamental industries to hi-tech industries..

The Indian Experiment
Government of India embarked on the path of economic liberalisation way back in 1991, with foreign investment as one of the foundations of economic policy. However, it was only in 2000 that a policy on SEZs was formulated.

The objective of the policy is to facilitate setting up of SEZs, with a view to providing an internationally competitive and hassle free environment for exports. The policy provides for setting up of SEZs in the public, private or joint sector and envisages a lead role for the state governments, in line with the general trend of decentralization in governance and policy implementation. SEZ units may be for manufacturing, trading or service activities.

The SEZs are designated as a “duty free enclave” and will be treated as foreign territory for trade operations and duties and tariffs. The privileges include no license requirement for imports, exemption from customs duty on import of capital goods, raw materials, consumables, spares, etc., exemption from central excise duty on procurement of capital goods, raw materials, consumables, spares, etc. from the domestic market, reimbursement of central sales tax paid on domestic purchases, 100% income tax exemption for a block of five years, 50% tax exemptions for two years and upto 50% of the profits ploughed back for next 3 years, and 100% foreign direct investment allowed in manufacturing sector through automatic route barring a few sectors.

SEZs currently operating in India are located at Kandla and Surat in Gujarat, Cochin in Kerala, Santa Cruz (Mumbai) in Maharashtra, Falta and Manikanchan - Salt Lake in West Bengal, Chennai in Tamil Nadu, Visakhapatnam in Andhra Pradesh, Noida in Uttar Pradesh, Indore in Madhya Pradesh, and Jaipur in Rajasthan. In addition, numerous SEZs are at various stages on development in various parts of the country.

The current debate on the potential revenue loss, the accusations of “land grab” by real estate operators in connivance with politicians and middlemen and the sharp political divides on the issue (there are differences even within the government) are likely to slow down the development of SEZs in the near term. This may actually be an occasion to look at the issues afresh and tighten the policies so as to harmonise the whole process with the broad goals of economic development.

Bangkok Bomb - the Coup and the Road Ahead

As the newly ‘appointed’ prime minister, retired Army General Surayud Chulanont has assumed office in Thailand, the world is eagerly watching as to what lies ahead for the young Asian democracy. General Surayud replaces Thaksin Shinawatra, who was ousted in absentia in a bloodless coup over charges of corruption, shady business deals and abuse of power. The coup, led by General Sonthi Boonyaratglin and endorsed by the country's beloved monarch is the first in fifteen years and sets the clock back on evolution of democracy in a country that has a long history of military coups. The coup leaders, however, portray themselves as democracy-friendly, have pledged to return power to the people and say Thaksin's ouster was necessary to rid the country of the political uncertainties that had come to paralyse it since the beginning of this year.

Thaksin, a billionaire-business-tycoon-turned-politician, had a strong political mandate and enjoys immense popularity among the rural masses primarily due to his successful social welfare and health care schemes. Having won a landslide re-election in February 2005, he was forced to dissolve the Parliament only a year later in view of protest rallies triggered by the controversial sale of his family-owned telecom company to a group led by Singapore's Temasek Holdings. There has been no respite for the beleaguered ‘hero’ since then. The snap polls held in April this year were invalidated by the courts on grounds of electoral fraud. Although Thaksin's Thai Ruk Thai party was widely expected to win the fresh elections scheduled for October 15 owing to his rural support base, the political climate was increasingly getting divisive and it's in this context that the coup has been seen in Bangkok as a relief.

A major criticism against the ousted prime minister has been his approach in handling the sectarian violence in the restive south. The predominantly Muslim provinces of Narathiwat, Pattani and Yala have been affected by insurgent movements for “independence”. Thaksin Shinawatra adopted a confrontational approach – to fight the insurgency by force and refused any talks with the local Muslim leaders on any kind of political settlement.

Gen. Sonthi, belongs to the Muslim community in Buddhist-majority Thailand and this puts on him a responsibility to bring his fellow-Muslims into Thailand's mainstream and to find a credible political settlement of the problem of "Muslim insurgency" acceptable to the country as a whole.

General Surayud Chulanont is a respected figure, known for his integrity. He has been chosen for his ability to work with all sections of society, to ensure that the political situation is stabilised. General Surayud has said he will focus on national reconciliation and people's happiness.

Going ahead, the interim Prime Minister faces the challenge of promoting reconciliation with Thaksin supporters and reaching out to democracy advocates, while keeping the support of the military. Putting Thailand's democracy back on track and strengthening of political institutions will be a daunting task for him. It needs to be seen how much independence he will have in dealing with the tasks ahead. On the economic front, General Surayud has said he puts healing social divisions before boosting economic growth and indicators of people's happiness are more important than GDP numbers. But he can ill-afford to ignore the realities and challenges of the global economy.

There are considerable powers in the hands of the coup leaders in terms of the interim arrangement now in force. General Sonthi will have the power to appoint or sack the government. He will also appoint the members of the People’s Assembly that will start work on a new constitution. It will be important for revival of democracy that the process of drafting the new constitution is transparent and representative.

Japan's New PM....... What will be new?

He is the country’s youngest prime minister since the Second World War, the first to be born after the war and scion of one of the most powerful political families. As Junichiro Koizumi, one of the most powerful politicians in post-war Japan has passed on the baton to Shinzo Abe, there are curious questions on ‘newness’ and ‘continuity’.

What will “Japan, the beautiful country” be like? What will be the contours of the foreign policy of the country that is all set to play a more assertive role in international affairs – a role that is in contrast to the low profile it has maintained since the end of world war? How will it reconcile the goals of an assertive foreign policy with the need to maintain conducive relations with the neighbours? What direction the bold economic reforms that enabled the economic revival after nearly a decade of stagnation will take? How will Japan reconcile the conflict in its economic interests with the rising economic might of its giant Asian neighbours?

Well, the answers will unfold gradually in future. But, the indications are that the generational change is more about continuity. Abe will pick up from where his predecessor left off – his vision entails a stronger Japan, a revision of the pacifist constitution to permit the country to have full-fledged armed forces, a robust economy and a trimmed-down government, a close alliance with Washington in both trade and security.

Following are some of the key points in the policy platform of the new Prime Minister --

Security & diplomacy - Stronger, Muscular & Assertive

• Revision of Japan's 1947 ‘pacifist’ constitution, which renounces the right to go to war to resolve international disputes and prohibits the maintenance of a military
• Aggressive pursuit of a permanent seat on the U.N. Security Council
• Further strengthening of the US -Japan alliance
• Strategic dialogue with countries such as the United States, India and Australia and European nations that share "common values" with Japan, such as democracy and freedom
• Strengthening trust with China and South Korea
• Promoting an Asia-Pacific community by promoting the World Trade Organization framework and free trade agreements
• Strengthening the role of the Prime Minister's Office in diplomacy and security policies

Economy - Reforms for All

• Rebuild a healthy economy by putting priority on spending reform and work towards comprehensive, mid- to long-term tax reform
• Keep new government bond issuance under 30 trillion yen ($258 billion) for next fiscal year starting in April, a target first set by predecessor Junichiro Koizumi. The target is seen key to cutting Japan's public debt which stands at 150 percent of gross domestic product, the highest ratio in the industrialized world
• Introduce "Second Chance" measures aimed at ensuring that market-based economic reforms do not result in a society of permanent 'winners' and 'losers'
• Revitalise the countryside through private-sector leadership and reform regional governments
• Build a "Japanese style social security model" which includes a simplified pension scheme, sustainable care for the elderly and a better environment for child-rearing

Education - Values and Patriotism

Reform the education system to ensure a high level of education, respect for social values and greater emphasis on patriotism in the school curriculum