Guest blogger: Jim Della-Giacoma is an Associate Director at the Conflict Prevention and Peace Forum at the Social Science Research Council in New York City.

Having lunch in Singapore recently, an Asian acquaintance who had just visited Dili for the first time said he came home feeling the capital of Timor-Leste was more like a Portuguese town than an Asian one. Having been back and forth to Dili over the last 14 years in many of its dramatic seasons, I readily disagreed.

Timor-Leste today is courting new friends in Asia rather than flattering old ones in Europe. A week driving the dusty and bustling streets left me feeling that the former Portuguese colony was increasingly integrating itself into Asia as it acquired all the sights, sounds, and smells of the region’s great cities.

In what could have been an apt description for a series of UN missions or its ubiquitous white vehicles with black logos, Alfred Russel Wallace observed in 1861 that, in Dili, 'officials in black and white European costume, and officers in gorgeous uniforms abound in a degree quite disproportionate to the size or appearance of the place'. However, with talk of downsizing the UN mission, the day could soon come when Chinese construction workers outnumber international civil servants.

1. Portugese embassy, Dili

The site for the future Portuguese embassy (photo 1, above) has been growing weeds for years, while the new Chinese embassy (photo 2) rises on the sea front framed by bamboo scaffolding. Within a kilometre, the new Chinese-built foreign ministry (photo 3) and soon to be completed Presidential Palace (photo 4) is testimony to Beijing’s growing influence. As are the two Type 62 Shanghai Class patrol boats and heavy fuel oil plant also coming Timor’s way from Chinese factories.

2. Chinese embassy, Dili

More...

So Indonesia has requested budget assistance from Australia. Whatever we might provide will be relatively small compared with the magnitude of the problem, so we have a choice: to go bilaterally and put our own 'label' on what will inevitably be seen as a modest amount, or join a larger group in the hope of leveraging our funds by influencing others to contribute more.

This is not a clear-cut choice, but here's an additional element favouring the second option. If offering some funding though the regional swap arrangements (the Chiang Mai Initiative) encourages China and Japan to put just a tiny part of their huge foreign exchange reserves into this support framework, we might give our money some substantial leverage and, as well, provide a demonstration of our interest in being treated as a serious regional partner.

Of course, for the Chiang Mai Initiative to be a viable assistance framework, it needs to shed the IMF conditionality that makes it politically unacceptable to those countries which need it most. See my new Lowy Institute Analysis paper for more.

Ben Davis writes: 

Just read Fergus Hanson's piece on Indonesia's response to Obama's election, and I must say the print media also seems to be quite the Obama fan. Calling him the 'anak Menteng' ('Menteng kid'), his time in Indonesia has encouraged a sense of fondness and hope among the majority of Indonesians. Check out this Facebook group, for example.

The academic community is interpreting Obama's win as hope for the future — possibly an improved US-Indonesian relationship. But interestingly, Obama's victory has also been an inspiration for the youth of Indonesia and the 'orang kecil' (lit. 'little people'; ordinary people).

On the funnier side, the Indonesian print media widely reported that Obama was keen to return to Indonesia and that he missed some Indonesian favourites; nasi goreng, rambutan and Bakso. Imagine the excitement if Obama was to speak bahasa in Jakarta next year just as Rudd spoke Mandarin when he was in China?

Guest blogger: Jim Della-Giacoma is an Associate Director at the Conflict Prevention and Peace Forum at the Social Science Research Council in New York City.

Last week, Dili was a busy place. While not changing at the speed of Jakarta, where a new shopping mall sprouts between my annual visits, the Timor-Leste capital is not the sleepy backwater I used to know.

It keeps evolving in surprising ways. It used to be a '10-minute town', defined by the time it took to drive from anyone place to another. But as I went about my business driving a local rental car (found on a blog) I started to allocate 15-20 minutes for every journey, particularly during rush hour.

The fact that Dili does indeed have a rush hour demonstrates that its narrow and dusty roads are being filled by a level of unprecedented economic activity – not all of it driven by international largesse. The seaside capital has traffic lights, too, and when they are working I can testify that they are obeyed, with or without a police officer present. It's a sign that would have warmed my heart in days when I traveled the post-conflict world working on democratic development and rule of law.

While my inner political economist would like to see more data and conduct deeper analysis than a week-long visit allows, I feel the story behind the traffic jams is, at its heart, a tale of two documents. First, the last UNTAET budget approved on July 2001 showed a total of USD$65 million with about $23 million for wages and salaries, $32 million for goods and services and a mere $9 million for capital expenditure.

The second came into my inbox this week. Dated 24 November, the Government of Timor-Leste press release announced the Council of Ministers had approved the draft law on the State General Budget for 2009. The Government has announced it intends to allocate about USD$93 million for salaries and wages, $248m for goods and services, $35m for minor capital, $205m for capital development, and $95m for public transfers (aka handouts?). For a small country with high unemployment, this spells a lot of jobs.

The controversy still rages after three judges of the Timor-Leste Appeals Court ruled against the government in a case brought by the opposition FRETILIN party that called into question the constitutionality of the decision to exceed by $180 million the 'sustainable income' or allowable drawdown on the Petroleum Fund. The 'aid watch' group Lao Hamutuk has a comprehensive but succinct summary of the case here. Whatever the outcome of this legal, political, and fiscal battle, these days the Government of Timor-Leste seems to be in good global company when it comes to stimulating economic growth through government spending.

Photo, of a Pantai Kelapa sunrise, by the author.

Unfortunately, the Lowy Institute's recording technology failed us yesterday, so I cannot direct you to an mp3 of Professor Harry Harding's (George Washington University) excellent Wednesday Lowy Lunch address on America's China policy.

But you can listen to the interview I conducted with Professor Harding after his speech. We discussed the four major themes of US China policy, and why they will endure under the Obama Administration. Professor Harding also talks about why he worries more about US Asia policy than he does about its China policy.

Guest blogger: Peter McCawley is a Visiting Fellow at the Indonesia Project, ANU, and former Dean of the ADB Institute, Tokyo.

Stephen Grenville suggests that Australia should aim for an 'EAS plus G20' grouping to bolster Australia's role in regional diplomacy in the Asian region. This may indeed be the best way to go. However we need to bear in mind that these discussions about 'regional architecture' are very difficult for at least four reasons.

First, there is a formidable array of domestic lobbies in every country bent on trumpeting both their domestic and international importance.  Second, the regional architecture is already byzantine. Third, every country tends to promote its own interests with but limited attention to the common interest. And fourth, there is a wide gap in attitudes and approaches between rich countries and poor countries.

The last issue — the gap in attitudes between rich and poor countries — is something that Australian policy-makers need to consider carefully. More...

After visiting 13 countries Richard Woolcott has discovered there is 'no appetite' for a new Asian regional body to discuss political and strategic issues at heads of government level.

That seems to leave him with the option of tweaking an existing body. In a speech at the Lowy Institute in July, Foreign Minister, Stephen Smith, seemed to foreshadow this possibility. He said:

There could be a new piece of architecture, as ASEAN and APEC once were. Or it could evolve and emerge from and through the existing architecture….As currently configured, none of the current architecture is comprehensive in membership, scope or purpose. India is not a part of APEC. The United States is not part of the East Asia Summit.

Indeed, Mr Woolcott has said he is now looking 'at adapting either APEC or the East Asia Summit or an existing organisation in a way which can achieve the objective.' But at a time when APEC is being sidelined or diminished how will this impact Woolcott's efforts More...

As we ponder the first year of the Rudd Government, it is worth reflecting on how much better Prime Minister Rudd and his government have performed than their democratic peers in East Asia. Today’s Australian reports that Rudd and the Labor Party are still very popular and would easily win an election if one were called today.

Yet, to our north, democratically elected governments and leaders are suffering from bad and declining popularity. East Asia’s democracies from Taiwan and Japan to Malaysia to Thailand, with the Philippines and South Korea in the middle, are all discontented. Only President SBY in Indonesia looks relatively comfortable in the run-up to next year’s elections, and even he may face a credible threat from Megawati. More...

Guest blogger: Andrew Selth, Research Fellow, Griffith Asia Institute, and author of  Burma and the Threat of Invasion: Regime Fantasy or Strategic Reality?

Burma’s opposition movement has always been strong, but never united. After 20 years of struggle, with no sign that the military government is weakening, the fissures in the movement seem to be more pronounced and the divisions more obvious. This could have far-reaching consequences.

Burmese politics has long been known for its fissiparous tendencies. Institutional structures and processes have been weak. Ideological, ethnic and religious loyalties have been strong. Parties and pressure groups have formed around key personalities, rather than durable policy platforms. Patron-client relationships have been the norm, including in the armed forces. And power has been seen as an absolute, making political contests into zero sum games. All this has led to factionalism and instability. Such traits can also be found in the opposition movement. More...

There is a view that the creation of the G20 leaders meeting will diminish the role of APEC. There will be some resistance to this idea among Canberra’s long-standing APEC aficionados, but it might not work out too badly for Australia. Let’s leave to another day the debate about whether APEC has become a bloated, directionless and messy hodge-podge of disparate countries in search of something useful to do, and look at how this latest development might be turned to our advantage.

First, the main plus for APEC was the Leaders Meeting, and G20 could replace this, for Australia, without loss.

But what about the benefits of keeping the US engaged in Asia? If the East Asia Summit could become the principal regional debating ground. Its 17 members include six G20 members, so this could be the venue where Asian positions are sorted out (no easy task, but well worth taking as far as it will go), with the distilled position then being carried to G20. G20, in turn, is much better linked into the still-evolving global rule-setting framework than APEC: whatever new rules come out of the current financial crisis, they will be developed in bodies such as the Basle Committee on Banking Supervision and the Financial Stability Forum, which link more logically to G20 than to APEC.

This strong presence in G20 – almost one third of the members – gives the EAS a head-start over the slightly smaller Asian groups (ASEAN and ASEAN+3 include only four G20 members) which at present are seen by most of the region as the principal vehicles for regional cooperation. It would take some slick diplomatic work on Australia’s part to shift the action to EAS, but the logic of the EAS plus G20 is compelling.

Courtesy of Newstopia, an interview with the Dalai Lama. Who knew he was such a Scorsese fan? Have a good weekend.

This line from an Economist article on China's aviation industry caught my eye:

Many foreign analysts doubt that Western airlines will ever be prepared to buy Chinese aircraft. But, as in other fields, China is playing a long game.

That's a point I didn't convey in my post earlier this week on China's naval modernisation. That modernisation — and indeed, China's military modernisation as a whole — has been rapid over the last two decades. But you cannot say that it has been breakneck or resembles a crash program.

Nor do we see a Soviet-style imbalance — China is not developing a superpower military at the expense of its economy. There may even be some slowing down — after a rash of new designs entering service in the first half of this decade, it now seems as if China has no new destroyers under construction.

Australia would be alarmed to see a massive expansion of China's navy over the next decade, but a continuation of the steady evolution we are now seeing might actually be more worrying, because it would reinforce the 'long game' thesis. And that long game would change the regional power balance profoundly, making life a lot more complicated for Australia.

Coming on top of recent reports that China is close to reaching a deal with Russia for carrier-based fighters, the Financial Times writes that a Chinese Major General, while not commenting on China's carrier ambitions specifically, has made  'the defence ministry’s most forthright statement yet on the issue':

“The navy of any great power . . . has the dream to have one or more aircraft carriers,” he said in the interview, which aides said was the first arranged by the defence ministry on its own premises. “The question is not whether you have an aircraft carrier, but what you do with your aircraft carrier.”

Major General Qian Lihua goes on to argue that China would use its carriers for offshore defence rather than global reach. Translated, that means they could be used in a Taiwan War scenario, but not to project power globally like the US does with its carriers.

As the FT says, such assurances are unlikely to reassure many, and they are unconvincing anyway, since carriers are probably not that useful to China in a Taiwan scenario. The island is well within range of Chinese air bases, and if China wanted to extend its air 'umbrella' over Taiwan, it would be cheaper to invest in air-to-air refuellers than carriers.

That doesn't mean we should leap to the opposite conclusion that China is racing toward a naval fleet to challenge the US. It will take China years (perhaps more than a decade) to actually build the carriers and escort ships, and to have crews trained to use them. They are only just starting this process by slowly refurbishing a half-finished ex-Soviet carrier (photo below courtesy of Sinodefence.com), which might be used as  training vessel.

So what we will see initially is a fleet similar in capability to that of France or the UK, rather than a competitor to the US.  Still, that would be a massive leap forward for a navy that was, until the 90s, a rather antiquated coastal defence force.

After the revelation last week about Iran's diplomatic intervention in the Pacific, I was interested to find out a little more Middle Eastern financial links to the South Pacific and environs. East Timorese Prime Minister Xanana Gusmao’s recent visit to Kuwait, for example, has highlighted a very low-key but sporadically active approach by Gulf nations to aid and investment  in our region. Prior to Gusmao’s visit, Ramos Horta made two visits to the country, ostensibly to seek development funds.

Through Kuwait’s overseas aid vehicle, the Kuwait Fund for Arab Economic Development, other regional countries have sought development funds at concessional rates. Not that we are talking big sums. Since the early 1980s, for example, the Solomon Islands has received a little over $11 million. Western Samoa was another even smaller aid recipient over 20 years ago.

The PNG Government has sought investment from the Gulf, with an Abu Dhabi investment body to fund a stake in a Liquid Natural Gas project. However, it’s unlikely that PNG will become a tourist destination for Gulf Arabs any time soon, after Saudi Prince Walid bin Talal’s 15-minute tour of Port Moresby last year.

The main storyline coming out of the first G20 leaders meeting was that it marks the end of the G7 (or G8) era and replaces it with a new inter-regional, North-South body, and one that includes Australia.

APEC also made this claim to inclusive novelty when it was set up 19 years ago.  Yet, the inaugural meeting of the leaders of the G-20 is eclipsing the upcoming APEC leaders meeting in Peru. Who has heard mention of it despite it being this week and despite the fact that Australia created it, under the last Labor Government, and hosted it last year? More...

Awhile ago, there was a debate on The Interpreter and the ANU’s East Asia Forum about the pros and cons of the latest deal struck between Washington and Pyongyang and then presented to the other members of the Six-Party Talks. I focussed on the potential strategic cons, while East Asia Forum retorted with the supposed pros.

Alas, for the supporters of the latest deal, pithily called the ‘get real’ school of diplomacy by East Asia Forum's Peter Drysdale, it appears Pyongyang believes it has reached a much different and more favourable agreement with Christopher Hill than the one American officials told us about. Basically, North Korea is saying it only agreed to what it has already offered before, nothing new, and only after it gets all the fuel it has been promised for progress it has not followed through on.

If this deal really has kept North Korea 'on track to denuclearisation', it seems that Pyongyang continues to be walking backwards on this track and not forward.

Dominic Meagher at East Asia Forum is far less kind to the Bush Administration's record on China than I was yesterday. Dominic's critique puts me in mind of this James Fallows anecdote, the moral of which is that, had it not been for 9/11, the same neoconservative faction that created the war in Iraq would have fomented a conflict with China.

We're never going to know if that's true, but because John McCain had so many of the same foreign policy instincts as President Bush, I argued some months ago that the danger of conflict with China would be higher under McCain than under Obama. Hugh White, some readers will recall, disagreed. He argued that, as a tough Republican, McCain had the political capital to 'do a Nixon' and create a sustainable modus vivendi with China.

What interests me, however, is the possibility that Bush may already have done this. It is way too early to say what will come of the G20 as an institution, but if, as Graeme Dobell speculates, it becomes a modern equivalent of the Concert of Europe, we may have George W Bush to thank for the decisive move that  makes China an active participant in the global order rather than a resentful and unsatisfied outsider.

Guest blogger: Robert Ayson is Director of Studies, Graduate Studies in Strategy and Defence, ANU.

The centre-right National Party’s unambiguous triumph in New Zealand’s general election leaves Prime Minister-elect John Key (pictured) with a strong political hand. Like all governments since the adoption of New Zealand’s proportional voting system (see this post for a quick explanation) Key and his National colleagues (who hold 59 seats) will need the support of other parties to hold a majority in the 120 seat House.

But the pre-arranged assistance of the very free market ACT Party (5 seats) and the one-man-band called United Future gives Key all the parliamentary votes he needs. Reaching out to the Maori Party, which also won 5 seats (although little more than 2% of the popular vote) is therefore not a requirement of political mathematics, but it shows that Key is already thinking about prevailing in the 2011 election as well.

Labour, in government under Helen Clark’s leadership for 9 years, has been soundly beaten (43 seats), and will take some years to recover. But perhaps even better news for Key is that he will be the first New Zealand Prime Minister in years who will not have to bargain with Winston Peters and his populist New Zealand First party. The ultimate political survivor, Peters became an unlikely Foreign Affairs Minister when Helen Clark’s tiring government needed support from the most unusual quarters. But Peters is a political suvivor no more. And even the prominent Greens (8 seats) did not poll quite as well as some thought they might.

While Key has a strong mandate and few obvious political obstacles in his way, he lacks a correspondingly free hand in the economic realm. Rather like Barack Obama, he inherits an economy in recession, with unemployment rising and house prices falling. While Key has promised tax cuts, delivering them would probably require deficit financing, although he has said that one of his first priorities is to go through public expenditure line by line for each department. More...

Ben Davis writes about our ongoing discussion about Indonesia's anti-corruption drive. What started this thread was a claim by Gerry van Klinken in a conference presentation that this drive had been imposed on Indonesia by foreign actors (a claim he has since retreated from a little). Gerry van Klinken's presentation can now be found here:

I fully support Rod Brazier's argument that there were elements in civil society, namely advocacy NGOs, that were vital to post-Suharto anti-corruption efforts.

I conducted an honours thesis last year on advocacy NGOs' efforts in eradicating corruption in the post-Suharto era, and to say that the good governance agenda was created purely by foreign donors is a stretch. But to downplay their role and other societal efforts is equally problematic. The story is a bit more complex than that. More...

Guest blogger: Jim Della-Giacoma is an Associate Director at the Conflict Prevention and Peace Forum at the Social Science Research Council in New York City.

Two weeks ago I asked, somewhat rhetorically, 'how many weapons are there in Timor-Leste?' To start to find an answer, you first have to decide whether you want to count guns or weapons. As of last week, there could indeed be fewer weapons in Timor-Leste.

On UN Day (31 October) there were some elaborate ceremonies in and around Dili as a culmination of Operation Kilat. Some thousands of traditional or craft-made weapons, known locally by the Indonesian name of rakitan, were steamrolled. Also destroyed were thousands of rounds of high-powered ammunition.

While rakitan may not be accurate or reliable, they are not harmless to either intended targets or their users, as these crudely made and mostly single shot devices (see above and below) use military-issue rifle bullets. 

New research from the AusAID-funded Timor-Leste Armed Violence Assessment project shows that Operation Halibur, which rounded up the remaining rebels involved in the attack on the President and Prime Minister, also collected some (but not all) of the modern weapons from the Timorese Government inventory lost since 2006 (see below). Curiously, they also found four bipod mounted light machine guns allegedly smuggled from Indonesia. It did not turn up the mysterious M72 grenade launcher flaunted by Alfredo Reinado. 

The weapons seized and destroyed as part of the much publicized Operation Kilat were almost all homemade rakitan, air rifles, or sharp weapons. This means they could be easily made again if tensions rose and Timorese felt they needed to arm themselves. This Issues Brief, Dealing with the Kilat, contains these facts and highlights a number of other issues. It underlines that the existing problem with modern or industrial weapons in Timor-Leste is less that they are in private hands, and more that government stocks have historically been subject to poor inventory control.

This research, from a joint project between Austcare and the Geneva-based Small Arms Survey, builds on its earlier work on the draft gun law. It is not the first time that someone has tried to inventory guns in Timor-Leste, but it has pulled into the public domain some interesting and scattered data previously found only on the hard drives and filing cabinets of a few government and UN agencies.

Photos supplied unofficially to the author from sources within the Timorese security forces and UN Police.

Rod Brazier from the Asia Foundation comments on the motivating forces behind Indonesia's anti-corruption drive, a debate we revived recently on The Interpreter:

Jo Gilbert, a PhD candidate at the Griffith Asia Institute, writes in response to my post on US-Taiwan relations:

 I am just wondering where the United States' $6.5 billion arms sale to Taiwan fits into your analysis? 

Thanks for your question, Jo. Three points come to my mind when thinking about the links between the recent arms sale and better US-Taiwan relations under the new KMT government:

1. The largest impediment to the arms sale before Ma’s victory was not US unwillingness to sell arms to Taiwan but the KMT’s use of its control of the Legislative Yuan to block the sale, despite US pressure. The major barrier to the arms sale was Taiwan domestic politics. While in opposition, the KMT was willing to hinder Taiwan-US relations for their own domestic political gain.
2. The fact that Washington was willing to push the arms sale through before the end of Bush’s term is a sign of continuity in US-Taiwan relations and the US definition of the status quo. This is of central importance to Taiwan and probably gives Ma more space to push closer economic ties with China.
3. The fact the deal was approved after the Olympics and was smaller than the original, long-delayed one, may reinforce the point that US-Taiwan relations take place within the larger picture of US-China relations. Luckily, Ma seems to be responding to this powerful strategic reality better than Chen Shui-bian did.

Following on from Sam’s earlier post, it looks like President Ma Ying-jeou and the KMT’s plan of improving its relations with China — and through this, Taiwan’s relations with its main guarantor, the US — has just taken a major step forward.

Not only have Taiwan and China just signed four agreements that will go a long way to further integrating the two economies, but it looks like US-Taiwan ties are drawing closer too.  The US is reported to be considering restarting ministerial-level trade visits between the US and Taiwan, stopped by Washington when Chen Shui-bian and the DPP and its harder line towards China was in power.

Ma’s aggressive push for closer economic and less fractious political relations with China seems to be paying off well internationally, even if it is causing him problems back home in Taiwan.

The Greg Sheridan essay that Sam blogged about earlier today contains this paragraph about the use of purchasing power parity (PPP) to measure China's wealth against other countries:

PPP is basically a con. It rests on the proposition that a man in Peru gets fed, so does a man in France: therefore a bowl of rice in Lima should be given the same economic value as a meal of lobster and filet mignon in Paris. The problem is the world doesn't work that way. Countries interact with each other on the basis of real dollars, not PPP.

No, PPP is not a con. Crudely put, PPP is a means of adjusting for differences in purchasing power across countries. To do this, it compares prices of the same good. In other words, it compares the price of a bowl of rice in Peru with the price of a bowl of rice in Paris. The most famous (and very simple) version is the Economist’s Big Mac index, which compares the price of Big Macs across countries. More...

Greg Sheridan's cover article on Prime Minister Rudd's Asia policy for the November issue of the Australian Literary Review is definitely worth your time. I'll say why in a moment, but first, I want to get one whinge out of the way: the massive chip Sheridan has on his shoulder regarding foreign policy 'commentators'. It's a consistent theme in his writing, implying that only Sheridan himself is brave and smart enough to stand up against a stultifying orthodoxy.

I counted four critical references to these commentators in the essay, one reference to the 'international relations orthodoxy', and then this extraordinary spray: More...

This seems like very encouraging news:

Taiwan and China Tuesday signed a range of deals aimed at bringing the two sides closer economically, after almost 60 years of hostilities that often took them to the brink of war. Officials from the two sides were shown live on television signing four agreements that are potentially worth billions of dollars, after talks that marked a significant warming of ties between the former bitter enemies.

And that's not all. Taiwan is even flirting with the idea of military-to-military contacts, and a formal peace treaty.

The concern in Taiwan is that this is a step toward a Chinese economic takeover of the island. But both Passport and the Washington Realist take the view improved economic linkages are good for Taiwan because they increase the potential costs of war. Closer economic ties, then, make the political status quo between China and Taiwan more stable.

I think this is basically persuasive, but it is worth noting that China's military modernisation of the last two decades has likely had the opposite effect on Chinese thinking, in that it has encouraged the belief that war against Taiwan is winnable.

China's big aerospace exhibition, the Zhuhai Airshow, starts tomorrow, and below is some Chinese state television news footage of the air display rehearsal. (H/t Nosint.) 

Of particular interest is the J-10 fighter, the first really advanced indigenous Chinese fighter (though China did have foreign help; the engine is Russian, and the  J-10 bears some resemblance to Israel's cancelled Lavi fighter). Chinese military enthusiasts have been posting pictures of the J-10 online for years, but this is its official coming out party, which probably signals a widespread export push. Pakistan has already ordered 36 copies.

In September we published three critiques of a presentation on Indonesia corruption by Gerry van Klinken of the Royal Netherlands Institute of Southeast Asian and Carribean Studies.  Specifically, Ross McLeod, Stephen Grenville and  Peter McCawley all argued that van Klinken overemphasised foreign pressure on Indonesia to crack down on corruption, saying that President Yudhoyono's anti-corruption drive was actually a home-grown initiative.

Gerry has been busy, but for the record, we wanted to publish his response now:

I may have been guilty of a little exaggeration in my remarks about the extent of foreign pressure on Indonesia to beef up its anti-corruption institutions. Susilo Bambang Yudhoyono's determination to be strong in this area was indeed driven mainly by Indonesian electoral logic. But it is only right to acknowledge the role of foreign advice and even gentle pressure.

The World Bank and USAID had done preparatory studies on legal development in the 1990s, and their recommendations proved influential in designing many reforms in 1998-99. When Indonesia's Law 31/1999 on the Eradication of Corruption required the establishment of a Corruption Eradication Commission, the Asian Development Bank helped with the planning, and the International Monetary Fund made success one of its conditions for continued assistance. In other words, plenty of foreigners have been looking over Indonesian shoulders on this issue.

On the back of a 25-year study by the Japanese Coast Guard, the Japanese Government is planning to submit to the UN a claim for a continental shelf of 740,000 sq km, or about twice the size of Japan today. This ambitious move is tied up with the UN May 2009 deadline for claims to expanded continental shelves. Up to 60 countries are expected to file new, expanded claims before this deadline. It is also tied up with Japan’s quest for resource security, as this new claim covers potential natural gas resources estimated to meet Japan’s natural gas needs for the next century.

Fortunately, this expanded claim avoids the areas around the Senkaku/Diaoyutai islands in dispute between Japan and China and the Takeshima/Dokdo islets in dispute between Japan and the Koreas. All is not good, though, as China does not recognize Japan’s claim to the Okinotori islands that are central to this new claim.

PS. Looks like Japan and South Korea have got over their most recent tiff over these disputed islets, as the first trilateral defence strategy meeting between the US, Japan and South Korea since 2006 is in the offing. 

Earlier this week, the assembled minds of the Institute got together to discuss the geo-political consequences of the ongoing global financial turmoil. One of the suggestions was that it might crimp regional arms spending and related fears of arms races (or as Graeme Dobell nicely calls them, arms strolls). In line with this, Malaysia, citing the financial crisis, recently announced it would shelve an order for 12 military helicopters.

Alas, recent border tensions between Thailand and Cambodia have led Cambodia to announce plans to double its military budget next year. The most recent collapse in the southern Philippines peace process has also led the chronically under-funded armed forces to call for more money (gold) and guns. Looks like new global troubles are bad for the regional arms trade while long-running local ones are good for it.

Guest blogger: Jim Della-Giacoma is an Associate Director at the Conflict Prevention and Peace Forum at the Social Science Research Council in New York City.

Reporting on Timor from Jakarta in the pre-internet mid-90s was a complex process involving many long-distance calls to excavate something close to the truth from what often began as a vague rumor on a foreign newswire. You might get some carefully chosen words from Timorese inside the country. And anything that went on the wire had to be crossed checked with  TNI-AD (army), POLRI (police), ICRC, the Vatican, and the Jakarta diplomatic community.

Not anymore. These days it feels like anything goes, with information overload for the non-resident foreign correspondent as well as curious locals, distant wonks, or governance voyeurs. You can easily read all about it, as the messy innards of Government of Timor-Leste and the UN Mission in Timor-Leste are laid out in the open for all to see on Wikileaks. More...

Guest blogger: Brendan Taylor is a lecturer in the Graduate Studies in Strategy and Defence program, ANU.

Claims the G20 could become the basis for a 21st century concert of powers are fanciful. I worry about such suggestions because similar thinking already appears to underlie the PM’s all-encompassing Asia Pacific Community proposal. This proposal has been gathering some influential supporters in recent weeks. But I remain unconvinced that the region’s complexity can be accommodated within a single, all-encompassing institution.

I agree with the PM, though, when he says that greater attention needs to be given to how Asia’s institutions come together to produce a viable regional ‘architecture.’ The trouble is that the Asia Pacific Community will just add one more institution to the mass of existing groupings. Rudd still has time to avoid this. But he needs to call not for a Community, but an Asia Pacific Council.

The Asia Pacific Council would function like a regional board of directors. Not unlike Rudd’s proposal, it would be an over-arching body — a ‘super-institution’ sitting directly above Asia’s existing multilateral groupings. More...

Guest blogger: Alistair Thornton is a former Lowy Institute intern doing language training in Beijing. He's The Interpreter's Beijing correspondent.

The re-emergence of swarms of elderly couples ballroom dancing to europop in public squares signals that, two months on, normalcy has pretty much returned to Beijing. So, have the Olympics been the force for positive change in China that some thought they might be, and others thought they would never be?

Well, in the relatively short time since the end of the Games, a number of positive developments have taken place. Arrangements for foreign press freedoms granted during the Olympics have recently been extended, rather than left to expire. Traffic restrictions that made such an impact on the city’s pollution levels are being continued (albeit slightly watered down). Plans for universal healthcare by 2020 have been announced, with the government expecting 90% of the population to be covered within two years. And perhaps most significantly, the government has announced rural land reforms, allowing the trading of land that was previously allocated by local government, aiming to improve agricultural productivity and narrow the inequality between the rural and urban populations. More...

Lowy Institute Executive Director Allan Gyngell has an op-ed in the Financial Review today. My attention was drawn to one particular paragraph, questioning how the world can govern itself more effectively:

Despite the end of the Cold War, despite the rise of Asia, the world's central institutions remain stubbornly resistant to change. States that possess power are notoriously reluctant to give it up. So year by year, outmoded structures like the United Nations Security Council or the G7 group of industrial powers or the World Bank and the International Monetary Fund (in which the Benelux countries have a larger share of the votes than China) are being drained of their usefulness and their legitimacy.

My initial reaction was that, although it is certainly true that those who hold the upper hand in these institutions are reluctant to surrender it to China, what is China itself doing to grasp this influence? Is there much evidence that China even wants a leadership role? I see an answer of sorts in today's Australian:

EUROPE turned to Asia and the Middle East for help yesterday as the financial crisis threatened to overwhelm Hungary and other ailing European economies.After talks with other Western leaders, British Prime Minister Gordon Brown urged China and the oil-rich Gulf states to come up with hundreds of billions of dollars to aid countries struggling to survive.

Any help from Asia and the Middle East is likely to come at a high price. China, Japan and the Gulf states are demanding more say in the way the International Monetary Fund and the World Bank are run. Both organisations are dominated by the US and western Europe.

The esteemed Chicago Council on Global Affairs recently published its poll results on American views of Asia, particularly Japan and China. These show some interesting parallels and differences from our own Lowy Poll. Also, both polls were carried out in July 2007, strengthening their comparability.

Parallels:

• Australians and Americans both have noticeably warmer views towards Japan (64% for Australians and 59% for Americans) than towards China (56% and 41% respectively), with feelings towards Japan remaining largely consistent over the last few years, while those towards China experienced a moderate downturn.
• A slight majority of respondents in both countries also support their country joining others to limit’s China’s rising influence. In the case of the Chicago poll, this question was narrowed to whether the US and Japan should work together to limit China’s growing power.

Differences:

• Americans clearly do no rate Indonesia as an important country for the US, with only 14% (the lowest rating for all countries listed) picking it as a country that is 'very important'. Egypt was deemed to be more important to the US than Indonesia, while Australia did not even make the list.
• Echoing this difference in geography and worldview, Americans still see Europe as more important than Asia (54% to 42%), though this gap has been shrinking.

Guest blogger: Jim Della-Giacoma is an Associate Director at the Conflict Prevention and Peace Forum at the Social Science Research Council in New York City.

After finalizing the budget, Timor-Leste's National Parliament is expected in the near future to reconsider a draft firearms law unusually defeated on the floor of the assembly last June. The new law was intended to update the existing UNTAET Regulation 2001/5, which created a right to private firearms ownership even before the country re-established its nationhood in May 2002.

By any international yardstick, Timor-Leste does not have a firearms problem. But as we saw with the attacks on the President and Prime Minister in February, a few guns in the wrong hands is enough to make big trouble. More...

Guest blogger: Derek Quigley is a visiting fellow with the Strategic and Defence Studies Centre, ANU. He is a former New Zealand Cabinet Minister and co-founder of the ACT New Zealand Political Party.

Helen Clark – New Zealand’s Prime Minister since 1999 – and her coalition Labour Party-dominated government, should lose office at the 8 November election. The main opposition party, National, has been consistently ahead in the polls since February 2007, with the average of five polls in September giving it a lead of 15% over Labour. If this reflects National’s position on election night, it will win sufficient seats to be able to form a Government on its own.

However, pre-election polls are one thing and election night results are another, particularly as New Zealand has had, since 1996, a Mixed Member Proportional (MMP) electoral system. More...