Building Sandcastles in the South China Sea

NOVAsia
2
I
Gordon Gatlin
3rd Semester, ITFM
Staff
n international relations, security is the axel upon which all
other issues turn. Always in the background of negotiations
on more noble goals of sustainable development, free trade,
human rights or moral justice, security never takes the backseat.
The financial crisis of 2007 put financial security in the foreground,
but changing currents in the Middle East, the Far East and the information highway have reminded the world that basic security
concerns are never to be ignored. These flash points are not limited to their regional or online realms, but can spillover quickly
into everyday lives of citizens around the world. Personal data is
always vulnerable. Commuter train stations can quickly become
crisis centers for human outflows from war-torn countries. Hot
rhetoric can bleed off the page. In this issue of NOVAsia, our staff
authors and contributors tackle an array of security concerns that
not only make headlines, but force its way into living rooms too.
3
NOVAsia
EDITOR-IN-CHIEF
Ceinwen Thomas
DESIGNER
SungEun Kim
STAFF
Cesare Marco Scartozzi
Gordon Gatlin
Lilith-Isa Samer
SungEun Kim
JUNIOR STAFF
Chance Dorland
Gene Kim
CONTRIBUTORS
Rosa Utset
Cheol Bin (Jason) Shin
Tom de Vroome
Julieta Salvo
Send letters, submissions, or
suggestions to [email protected]
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p31 Picture Name_Credit
Catedral Mountain_ buenosairesstay.com
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Civic Centre_ commons.wikimedia.org
4
Llao Llao Hotel_01Argentina.Travel
Lopez Mountain_ SalvoJulieta
Lopez Mountain2_ Salvo Julieta
Moreno Lake_Salvo Julieta
Nahuel Huapi National Park_Salvo Julieta
Nahuel Huapi National Park2_Salvo Julieta
Panuelo Port_Salvo Julieta
The pictures for other articles are labeled for noncommercial reuse.
ISSUE 27
FALL 2015
WHAT’S
IN THIS ISSUE ?
08
Cyclical Failure
10
Nigeria: A Troubled Economic Giant
11
Political Correctness
12
Beijing, what shall you do with Hong Kong?
14
Catalonia
16
Building Sandcastles in the South China Sea
18
Russia’s Past and Present in the Syrian Civil War
19
The Good, The Bad, and The Refugees
22
The End of Pacifism?
Or Japan as a “Normal” Country?
24
The Current State of Cyber Warfare
between the US and China
25
PHOTOJOURNAL Scandinavia
28
Multiculturalism in Korea
29
Student Internships
31
MY CITY Bariloche
34
TIELESS with Professor Jeong Yeon Lee
5
NOVAsia
6
Editor’s Note
W
e had great difficulty choosing one theme for this issue. To put the proverbial umbrella over
all the articles this time would have been a profound disservice to the breadth and depth of
topics, which our editors and contributors chose to tackle. It is, therefore, in this edition of
NOVAsia that we have instead decided to present a range of articles that are both current
and contentious.
The featured articles permit the reader a perspective on a range of sensitive security concerns. Jason takes on cyberwarfare between heavyweights China and the US, and highlights
the urgent need to institute a body, which can mediate between the two. Cesare outlines
Russia’s involvement in Syria, while Lilith deliberates on the Syrians now fleeing to Europe
due to instability in Syria, and the reactions Europe has displayed. Finally, Gene considers implications of the changes in the
Japanese Constitution to allow its forces to fight overseas.
In the realm of economics, we head to the southern hemisphere, where Gordon looks at cyclical failure in Argentina, and Tom
discusses prospects of investing in Africa’s most populous country, Nigeria.
Cesare, Rosa, and I have looked at sovereignty concerns in various regions. Cesare dissects Hong Kong’s governing bodies and,
in doing so, analyses Beijing’s role in potentially answering Hong Kong’s demands for independence without repression. Rosa
contributes her careful thoughts on the debate on Catalonian elections and, among other things, gave me cause to look up the
word plebiscite in the dictionary. I discuss the unfolding events in the South China Sea, where China has completed ‘building’
several reefs in the disputed Spratly Islands and how, if at all, this territorial dispute could be solved.
For those who like more colour on the pages, Julieta writes about her beautiful Argentinian home city, Bariloche, while this
issue’s photojournal gives you glimpses of a Swedish summer.
Lilith and Sungeun unpack the ideas that surround phrases like “political correctness” and “multiculturalism” respectively
in present-day discourse, and the consequences of misinterpreting them, deliberately or otherwise. In a slightly similar vein,
Chance looks at whether our own Career Development Center at GSIS does what it says on the tin. The answer may or may not
surprise you.
I sincerely thank the team and the contributors for all their hard work. The birthing process of an article, let alone a magazine,
can be a challenge, but taking up the reins as the new Editor-in-Chief has been a lot less rocky than it might due to the selfless
efforts of the group, and the way the editors and contributors collaborated. For that, I am relieved and very grateful. Finally, a
massive thanks to Sungeun for designing this issue.
7
NOVAsia
Cyclical Failure
Economic Crisis and Commodities in Latin America
Gordon Gatlin
3rd Semester, ITFM
Staff
D
espite a great deal of discussion on the information
economy in recent years,
much of it useful and much of it
overhyped, the actual world economy’s health is still reliant on raw
materials, which is expressed in
their prices. While in parts of the
developed world the recent fall in
commodity prices has been referred
to as the equivalent of a tax break,
in countries that are heavily dependent on commodity exports, calam-
8
ity is a better reference point. The
primary issue here is dependence.
Many developed nations also produce raw materials in great quantities, but their economies are comparatively diverse. When a nation’s
basket of exports is dominated by
only a few commodities, but its import basket is varied, economic crises are more likely to occur.
While this statement oversimplifies the workings of millions of
people, and their historic, cultural,
and geographic concerns, it does
accurately describe the crux of certain economic crises. The details of
each crisis are always different and
important to learn from. However, a straightforward lesson can be
drawn from crises that involve developing economies whose exports
are dependent on a strong market
for only a few commodities.
Much of the analysis of the Argentinian economy of the 1990s,
leading up to the balance of pay-
ment and currency crisis of 2001, has focused on the
currency board, or peg to the dollar. This meant that
at anytime one Argentinian peso could be converted
into one US dollar. That policy, as part of a move towards more market liberalization, has been credited
with creating stability and growth in the early and
mid 1990s. It has also been the center of blame for
events leading up to the currency crisis in 2001 given
that Argentina was not an optimal currency zone for
the dollar. The ensuing recovery has received more
mixed treatment, with some scholars pointing to a
commodity boom, while others give more credit to
devaluation, hard tactics with the International Monetary Fund (IMF) to restructure debt, changes in taxation, and other government policies.
The overall tactics of the government during the
“good times” of 1991 to 1998 were very different
from those used during the recovery of 2003 and after. It seems odd that scholars could credit one set of
policies for success in one decade and then a nearly
opposite set of policies for recovery in the following
decade. The one aspect that both decades share is a
strong export market for Argentina’s primary exports,
while the few years of deep recession that separated them were a time of very weak prices for those
same products. Certainly, government policies in
both decades had positive and negative effects. However, neither the market liberalization reforms under
President Carlos Menem, Finance Minister Domingo
Cavallo, and the IMF nor the more populist policies
under Presidents Nestor and Cristiana Kirchner can
claim responsibility for the boom in the agriculture
commodity prices that were separated by a trough
from 1997-2002.
Today, Argentina, Venezuela, Ecuador, Brazil and
even OECD member Chile are facing economic
headwinds because of their dependence on exporting
raw materials during times of weak global demand.
Certainly not all of these countries are heading towards an outright economic crisis, and perhaps none
of them will ever reach something as traumatic as
the Argentinian experience of 2001. However, those
countries whose export baskets are most dependent
on one or a few products are at greater risk.
A balance of payment crisis occurs when a nation
as a whole, including its central bank, firms, and individuals, no longer has sufficient and reliable currency to pay for its imports. Today, the most commonly
used currency in global trade and widely believed to
be a credible store of value is the US dollar. When
the overall economy of a nation is no longer able to
provide sufficient US dollars to foreign states, firms
or individuals in exchange for goods or debt, there is
a serious problem. If a nation’s export basket value
drops precipitously because of a weak world market,
this means that the nation, as a whole, will have fewer
US dollars in the economy. Therefore, the nation will
be less able to purchase imports from abroad.
This is already happening in Venezuela where a
shortage of basic goods is all too common. The market does not see Venezuela’s currency as reliable. The
official exchange rate at which banks and other institutions are allowed to exchange US dollars for Venezuelan bolivars is 6.35. On the black market just this
past June, one could exchange 1 US dollar for anywhere between 275 and 423 bolivars. This is a very
dangerous discrepancy and shows that Venezuelans
are desperate to exchange their currency for USD.
There is a palpable fear that the official rate will also
eventually collapse under depreciation pressure.
Venezuela is an extreme case where petroleum
products count for about 90% of their exports. Due
to a variety of factors beyond Venezuela’s control,
the collapse of oil prices this year means the country is now receiving fewer dollars. However, in this
count Venezuela is not alone in Latin America. Soy
products, major exports for both Argentina and Brazil, have lost over 15% of their value in the last year.
Copper, which accounts for over 50% of Chilean exports, has dropped by about 27%.
Some countries are better governed than others.
Natural resources are not innately a curse. Rather, it
is their mismanagement that wreaks havoc on many
developing economies blessed with oil, minerals, or
fertile land. Some nations use their massive gains
during boom years to put savings into sovereign
wealth funds for rainy days that are bound to come.
Chile, in particular, has been doing this for years.
Rainy day funds are a great way to get through
the tough times, but not even they are a long-term
solution to the boom and bust cycle that has plagued
much of Latin America. Without a more diverse export basket, many Latin American countries will never be able to escape this vicious cycle. Leaders will
come and go, they will take credit for the good years
and then be blamed mercilessly for the bad ones, but
true leadership will find new markets to enter. Maybe
the information economy is the future after all.
9
NOVAsia
Nigeria: A Troubled Economic Giant
T
he Modern Portfolio Theory in the early 1970s argued that
investors should invest in Asian and Latin American stock
markets that are less intertwined with the European and
American stock markets. Today, investors are now increasingly
looking for new, potentially booming investment opportunities
in Africa. The new investment opportunities would require characteristics similar to the Chinese market in the 1970s, namely a
sufficiently large economic market with profit and growing perspectives, natural and human resources, and little or no connection
with any other markets.
The economic market that fits the criteria best would be Nigeria.
In 2014, Nigeria overtook South Africa as the largest economic
market in Africa. Besides being the 20th largest economy in the
world with a GDP of US$500 billion, it is the most populous
country in Africa at 174 million, also making it the seventh most
populous country in the world. With these
statistics, Nigeria offers itself as an interesting investment opportunity with plenty
of growth possibilities. Even though there
is still a strong bias towards the oil industry, the market is diversifying as telecommunications, consumer products and the
automotive industry become increasingly
more important. Other factors that would
make an investment worthwhile include the little amount of government debt, abundant natural resources, a big working population, as well as the absence of big currency fluctuations.
Following this logic, many companies and private investors
have decided to invest in Nigeria to diversify and profit from the
potential economic growth of Nigeria and Africa as a whole.
However, while investing in general is not without risk, investing in Nigeria appears to be riskier than usual. While it is one
of the more developed countries in Africa, it still has its issues.
Nigeria ranks 136 out of 173 on Amnesty International’s Corruption Perceptions
Index, making it one of the more corrupt
countries in the world. Moreover there are
about three to five million Nigerians living
with HIV/AIDS, and ethnic and religious
conflicts between Muslims and Christians
are commonplace. This has manifested itself in the formation of radical religious
groups such as the Islamic group Boko Haram, which from its
founding in 2002 has been trying to enforce Sharia law and make
Nigeria an Islamic country.
One recent example of instability in Nigeria is the abduction
of 276 schoolgirls by the group in April 2014. These events tend
to scare investors away, as seen in Graph 1, the Foreign Direct
Investment (FDI) graph of Nigeria. Graph 1 shows greater volatility than Graph 2, which displays the FDI in China and has been
somewhat steadily increasing over time. One of the reasons FDI
dipped from 2009 to 2010 is the insurgency of Boko Haram, which
radicalized in 2009 with an armed rebellion. This was one of the
reasons that drove investors away, as can be seen in Graph 1.
10
Tom de Vroome
2nd Semester, ITFM
Contributor
Nevertheless, Nigeria still offers too many potential profit opportunities for private investors to be completely neglected. Every
investment comes with a risk, and investors should invest with the
knowledge that they might lose all their investments. Unfortunately, this does not seem to be different for the companies trying to
get a foothold in the Nigerian market. While the biggest companies
are often more than welcome in Nigeria, this does not mean they
are not taking any risk. Shell estimated that they have been losing
over US$1 billion a year as a result of oil pipeline sabotage over
the past years and has decided to divest their activities in Nigeria.
Furthermore, smaller- and medium-sized companies have argued that it is impossible to enter the Nigerian market without
breaking any of the international corruption laws. This became
more apparent with the stricter application of the American Foreign Corrupt Practices Act in 2008, which has made engaging in
corruption increasingly risky. For example, the Japanese Marubeni Corporation
had to pay a fine of US$54.6 million after
it was found they bribed Nigerian government officials to win various contracts
in Nigeria. According to the American
Foreign Corrupt Practices, any company
engaging in corruption can be fined up to
Graph 1: FDI Nigeria
10% of their worldwide revenue, a risk
most companies are not willing to take.
Much of Nigeria’s future as a global economic player has been
put in the hands of its new president, Muhammadu Buhari, who
was elected mainly as a result of his promise to fiercely battle the
ever-present corruption. As soon as he got elected, he appointed
anti-corruption advisors to start his campaign against the corruption that plagued the country over the past decades. While eliminating corruption and taming Boko Haram are arguably the most
important domestic problems to address, the current state of the
economy should be another important
point of focus if Nigeria wants to become
an important economic power.
Even though the Nigerian economy has
been slowly diversifying over the past few
years, it is still vulnerable as it is mainly
focused on oil. In 2009 former president
Jonathan Goodluck managed to strike a
Graph 2: FDI China
deal with the militants who were attacking
oil pipelines and kidnapping foreign oil workers. The deal includes
generous payments to the militants but is set to end in late 2015.
This should definitely be taken care of if President Buhari wants
to make his country an attractive and safe investment for foreign
companies. These are complex issues Nigeria has to deal with and
judging by the past it is very unsure whether the country will be
stable in the near future. If the country manages to deal with these
issues however it would most definitely attract investors and push
the Nigerian economic market to new heights.
Sources:
http://data.worldbank.org/indicator/BX.KLT.DINV.CD.WD/countries/NG?display=graph
http://data.worldbank.org/indicator/BX.KLT.DINV.CD.WD/countries/CN?display=graph
Political Correctness
A New Form of Censorship?
W
ith a bit more than a year left
to the presidential elections in
November 2016 in the US, the
candidates are already campaigning all
over the country. One of the Republican
candidates, the billionaire and businessman Donald Trump, has garnered attention not only for his trademark look, side
swept strawberry blonde hair, but also for
the general tone of his statements; for instance referring to women as fat pigs (later
amended to only
have meant Rosie
O’ Donnell) and
using slurs against
Mexican
people
drawing
cheers
from the crowds.
In a recent blog
post Scott Adams, a
cartoonist and creator of “Dilbert”,
referred to Trump
as the “unstoppable
clown car”, using
slurs against women and minorities to entertain the public.
Donald Trump is certainly not big on political correctness, even proclaiming it to
be a big problem in the US. The support he
garners begs the question: does the majority of the American public agree with this
statement that political correctness really
is a big problem in the US?
But what really is political correctness
and where does it come from? Usually,
the term political correctness refers to
the avoidance of any action or expression
to exclude or alienate a group of people.
The first time it was used in the modern
sense was in William Safire’s 1968 anthology Safire’s Political Dictionary more
as a self-critical satire of young left-wing
liberals. However, the term political correctness only reached its widespread use in
the 1990s. In 1992, Herbert Kohl said that
the term political correctness was used “to
insinuate that egalitarian democratic ideas
are actually authoritarian, orthodox and
Communist-influenced, when they oppose
the right of people to be racist, sexist, and
homophobic” which sets the general tone
regarding opinions about this term.
In the following years, the practice of
political correctness has been criticized
by many. Recently the famous comedian
Jerry Seinfeld, in reaction the backlash he
received for some jokes in a College Campus show, that “there’s a creepy PC (political correctness) thing out there that really
bothers me.” Patrick Buchanan wrote in
his 2001 book The Death of the West that
“Political Correctness is Cultural Marxism, a regime to punish dissent, and to
stigmatize social heresy, as the Inquisition
punished religious heresy. Its Trademark is
intolerance.”
Recently, the comedian Nicole Arbour
has been caught in the crossfire of criticism
when she posted a video entitled “Dear
Fat People” on YouTube. In the video she
claims that “fat shaming”, the act of body
shaming an overweight person, is “not a
thing”. After the video blew up on social
media, she received countless negative
responses from people all over the world
criticizing her for the negative message her
video sent. She even lost a job opportunity
for a movie. So far, the comedian has not
apologized for the video, maintaining that
its message is still valid. Similarly to Seinfeld, she opposes the political correctness
norm.
Many comedians and politicians agree
that political correctness and the constant
adherence to a previously approved vocabulary and set of topics that can be joked
about stifles creativity and is essentially another way of censoring free speech.
However, research conducted by a team at
Cornell University examining how politi-
Lilith-Isa Samer
3rd Semester, PIC
Staff
cal correctness norms influence creativity
in mixed-sex work groups showed that the
constraint imposed to the working groups
in the experiment, came up with more creative ideas (as rated by an independent
audience) than working groups in which
the political correctness norm was not established. In same-sex working groups the
results are diametrically different in that
the established political correctness norm
had an adverse effect on creativity. Even
though the results of
this study are not completely clear due to the
anomaly in same-sex
work groups, it can
still act as a proof that
political correctness
enhances
creativity
as opposed to being
the downfall of it, especially since most
work groups are co-ed.
Maybe, this is because
people who are subjected to such a norm
have to come up with new and creative
ways of solving a problem instead of reverting back into mainstream stereotypes.
In the months leading up to the primaries of the US elections that will decide
which candidates become the major party
nominees, we will undoubtedly see much
more of Donald Trump’s politically incorrect verbal outburst against women and the
Mexican minority in the US. Some may
say that he should not be attacked for his
opinions, quoting the right of free speech
as the reason. However, free speech only
protects from legal prosecution by the state
and not the backlash in the media, which is
also an expression of freedom of speech.
Political Correctness, often demonized as a
stifler of creativity and a tool to enact censorship, might even have a positive effect
on our society in enabling us to think in
new ways outside of stereotypes regarding
race and gender. In that sense, we have the
ability to move towards a future in which
stereotyping groups of people based on
their race or gender for the sake of humor
is not necessary anymore.
11
NOVAsia
Beijing, what shall you do with Hong Kong?
Cesare Scartozzi
4th Semester, PIC
Staff
A
fter a tumultuous
year of protests,
Hong Kong (HK) is
no longer making headlines.
Beijing has been able to deescalate pro-democratic demonstrations and exacerbate internal
divisions among activists of the
Umbrella Movement and the
more moderate, silent majority
of Hongkongers. As a result, social unrest has abated and protests have gone silent. Beijing
has once more proved its ability in crisis management, but
missed the opportunity to find
a resolution. Now that domestic and international pressures
have eased, Beijing should
consider the future of the Special Administrative Region and
decide whether to continue its
game of repression or tackle the
socio-political problems that
caused protests in the first place.
Those problems lie in HK’s
exclusive institutions and in a
political class that lacks incentives to reform. The Basic Law,
the de facto constitution of the
Special Administrative Region,
paradoxically institutionalizes
a modern and liberal socio political order while at the same
time preventing it from having
an accountable government.
This lack of accountability is
caused by the electoral law,
which states that only a minority of citizens are entitled to vote
for the Chief Executive (CE)
12
and Legislative Council (LegCo). Under the Basic Law, the
CE is elected by a broadly representative Election Committee
and appointed by the Central
People’s Government, while the
LegCo is composed of 70 members elected among functional
constituencies and geographical
constituencies. The problem is
that functional constituencies
grossly over-represent tycoons
and, due to their small electorates, are prone to manipulation.
For instance, functional constituencies break the principle of
“one man, one vote”, because
their electorate is of only about
240,000 individuals vis-à-vis
the GC electorate that counts
3.47 million voters. Thus, one
“functional vote” carries the
same weight as 14.5 “geographical votes.” Consequently, the current electoral law
distorts the true preferences of
the electorate and divides the
population between those who
are granted functional representation and those who are not.
Changing the electoral law
could be possible, but not without political will from legislators and Beijing. HK’s LegCo
is divided into three groups of
political actors: pro-Beijing
legislators, tycoons’ legislators
(mostly elected in functional
constituencies), and democratic legislators. Each of the three
actors has a de facto veto over
any change of the electoral rule
because such amendments require a two-thirds majority to
pass. In other words, none of
the three groups can unilaterally
amend the law, and inter-party
support is necessary for constitutional reforms. Pro-Beijing
and tycoons’ legislators are currently united in blocking any
reform which could undermine
the existing status quo. Moreover, thanks to a Basic Law interpretation bill issued in 2004,
Beijing now has veto power
over electoral law amendments.
As previously mentioned,
HK’s exclusive institutions
could be reformed and democratized, but the current governing elite lacks incentive to
change the status quo. Historically, there are reasons why
the status quo has not been
changed. With the transfer of
sovereignty in 1997, Beijing inherited the UK’s undemocratic
political order where tycoons
and colonial institutions were
the sole groups with access to
the city government. Then, after Beijing took the place of the
UK, it continued to franchise
HK governance to the business
elite of the city. This governing
coalition between Beijing and
tycoons has lasted until today
because it is rooted in a series
of reciprocal interests exclusive
to HK’s citizens and their democratic accountability. The two
groups used their respective
institutional powers to reach
a two-pronged goal: Beijing
sought control and stability
while tycoons sought profit. In
the mind-set of the 1990s, the
two goals of economic development and stability were perceived as mutually reinforcing,
and thus Beijing and the business elites were able to coexist
in the tiny region of HK. However, is this still the case today?
Beijing’s intransigent protection of the current status quo reveals that the Communist Party
of China (CPC) believes it is.
However,
macroeconomic
trends and figures tell another
story. Indeed, it seems that economic growth and stability are
not coexisting anymore in HK,
and that the interest of Beijing
and tycoons are becoming more
mutually exclusive. Tycoons
have been using their legislative
power to protect their oligopolistic interests and veto bills
that are set to solve public problems. Consequentially, they
have built an exploitive system
where citizens’ wages are taxed,
but interests, inheritances, dividends and capitals gains are
tax-free. As a result, despite a
GDP per capita of US$32,000,
more than half of the population earns less than US$1,400
a month, and roughly 1.3 million people (19.6 percent of
the population) are considered
to be living below the official
poverty line. The Hong Kong
Quality of Life Index compiled
by The Chinese University of
Hong Kong confirms the trend
of increasing economic inequality, and in 2012, its seven
economic indicators registered
the lowest score in a decade.
Economic inequality could be
reduced with more redistribution, welfare and progressive
taxation. However, tycoons
have no interest in increasing
taxes and veto any proposals
that aim to solve the problem.
The net result of this impasse
is that economic inequality
is becoming a social problem
that fuels discontent among
citizens for their government.
Ideally, economic growth
could foster stability and legitimization for the CPC, but not
if profits are seized by a cleptocratic elite of billionaires whose
wealth already equals over 70
percent of HK’s annual GDP.
Tycoons break the distinction
between private and public interest, thus transforming HK
into a neo-patrimonial state
where they govern for private
gain. Such a state fails to provide the substance of what people want from government; it
corrodes welfare policies and
decreases accountability. For
these reasons, it should not
come as a surprise that Hongkongers sought to change the
political balance in 2014. However, they cannot have a voice
in or access to political institutions without reform of the
existing electoral law, and that
reform cannot be done without the will of the CPC and
pro-Beijing legislators. To summarize, from a citizens’ perspective, tycoons are the source
of the problem, and Beijing
is the obstacle to its solution.
Citizens’ protests for fair elections are not merely idealistic;
they are task-oriented. Substantial accountability did not meet
the expectations of the citizens,
and therefore they ask for procedural accountability. Creating an accountable government
should be top priority for Beijing
as the unaccountable tycoon-led
government has failed to create
stability and fostered social unrest. Beijing should prove that it
is able to adapt to both changing circumstances and the rise
of new social groups and their
political demands. If the CPC
does not understand or accept
citizens’ demands, the only way
left for the citizens to overcome
institutional rigidity and political decay will be unrest and
disobedience. Beijing can still
continue to postpone democratization, but by doing so, it will
not solve the fundamental problem of economic inequality and
will have to cope with the population’s latent social unrest.
The only way Beijing can
escape this vicious circle is by
establishing agency between
Hongkongers and their government. Once agency is created, the citizens will realize
that Beijing is not the cause of
their socio-economic problems
but instead a solution. For the
CPC, there is no reason why an
alliance with citizens would be
less beneficial than one with the
tycoons, a group that has proved
to be a cleptocratic oligarchy
that uses institution and resources for private gains at the cost of
reduced welfare for citizens and
reduced stability for Beijing.
13
NOVAsia
Catalonia
A New State in Europe?
Rosa Utset
1st Semester, PIC
Contributor
O
n the 27th of September,
Catalan
parliamentary
elections were held. The
next morning the results were analysed by international media outlets
such as CNN, The Financial Times,
and Al-Jazeera. Why did the parliamentary elections of this Spanish
region generate so much interest?
According to Catalan pro-independence parties who won the election
(72 seats out of 135), it was not just
a regional election but also a plebiscite on whether Catalonia should
remain part of Spain or become an
independent country.
This conflict raises many interesting questions. How has the Catalan government reached the critical
point to hold a plebiscite on Catalan independence without any previous agreement with the Spanish
government? Will Spain eventually
negotiate with the Catalan government?
To answer the first question, we
first need to understand what Catalonia actually is. Catalonia’s history
goes back to the 9th century, when
the county of Barcelona, along with
other counties, formed a defensive
barrier between the Carolingian
empire and the Umayyad Moors
of Al-Andalus. During the Middle
14
Ages, Catalonia became more and
more powerful and expanded its
territory over all the Mediterranean
Sea through wars and marriages. One of these marriages linked
Castile, Aragon and Catalonia: the
union between Ferdinand II of Aragon and Infanta Isabella of Castile
in 1469. Despite the unification of
the three regions under one sovereign, each kept its own institutions,
parliaments and laws.
However, after several disputes
and the War of the Spanish Succession (1701-1714), Catalonia lost
its institutions and laws. Catalan’s
independent administration was
abolished. Since then, the people of
Catalonia have struggled to defend
its culture against Spanish institutions’ attempts to centralize and
make the country uniform.
The situation improved for Catalonia after 1978, when Spain became a democracy. Nevertheless,
the Catalan issue has never been
fully resolved and in recent years
the repeated misunderstandings
between the Spanish and Catalan
governments have turned into a
political and cultural conflict. The
Spanish government has consistently refused to negotiate or try to
find an acceptable solution to the
problem. What started as a call for
more respectful treatment of Catalonia and a more fair fiscal treatment
has ended up in a plebiscite on Catalan independence.
The Spanish government has
maintained that these elections
were not a plebiscite, as the government of Catalonia has no legal
power to decide on this matter. On
the other hand, it also tried to threaten the people of Catalonia with the
possible risks of an eventual independent Catalonia. This proves that
independence is considered a real
threat by the Spanish government.
Spain is a democratic country and
a member of the European Union
(EU). So in principle, it seems appropriate to compare Catalan pacific separatism movement with
Quebecois or Scottish precedents
and not with violent secessionist
processes involving other regional
powers. Quebec held two referendums on sovereignty in 1980 and
F acts and figures
Population: 7.5 million (smaller than Seoul but bigger
than other EU countries such as Denmark or Finland).
Represent 16.6% of Spanish population.*
Capital: Barcelona
Official languages: Catalan, Spanish and Occitan
GDP (2014, current prices): 199,786 million euros. Represent 18.9% of Spanish GDP.*
*Sources: Idescat (Institut d’Estadística de Catalunya) and
INE (Instituto Nacional de Estadística)
in 1995 with the agreement of the Canadian government. In
2014, a referendum on Scottish independence took place and
it was previously cleared with the government of the United
Kingdom (UK). During the campaign, David Cameron even
tried to seduce Scottish voters with many electoral promises
if Scotland were to remain in the UK. Why is the approach
of the Spanish government so different?
The Spanish government is trapped in its own past arguments. Even though Spain is a multi-national state, the central government has never recognized Catalonia as a nation.
Catalonia has always been against the idea of a centralized
state. In the last decade, the Catalan request for more fair
fiscal treatment was always described as Catalonia’s lack of
solidarity with the rest of Spain. The Spanish government
reached a point where making concessions to Catalonia was
too costly politically as it was against past statements and
probably not understood by the rest of Spanish voters who
are highly influenced by Spanish media.
On the other hand, most of the Catalan population does
not trust the Spanish government since in the past it has repeatedly broken promises regarding Catalan affairs. Even if
the Spanish government made some compromises, it would
probably not be very effective as Spanish politicians have
lost all their credibility, and any promise would be seen as
empty words. As a consequence, a growing number of Catalans think that there is no other possible solution for the
conflict other than independence.
During the Catalan elections campaign period, one of
the main threats used by the Spanish government was that
an eventual independent Catalonia would be automatically
kicked out of EU. However, according to article 11.2 of the
Spanish Constitution, “no Spaniards by origin can be deprived of their nationality.” So, according to Spanish law, in
the eventual case of an independent Catalonia the population
would be able to keep the Spanish citizenship and in turn the
European citizenship as well.
Is it true that the EU would be willing to exclude an eventual independent Catalonia? I do not think so. The Catalan
independence movement has been 100% pacific and the EU
has always claimed democracy as one of its core values.
From a pragmatic perspective, an eventual independence
process of Catalonia would not be a big deal for the EU if it
were a smooth and negotiated one. The Spanish attempt to
avoid negotiation is not sustainable in the long run.
Spain’s past approach has been based on the idea that Catalan separatism claim was illegitimate and illegal so there
was nothing to be negotiated or offered under this assumption. The Spanish government wanted to cool down the separatism movement by inaction. But this strategy proved to
be completely counterproductive and as a result the Catalan
separatism movement is now stronger than it used to be in
the past.
At some point, probably after Spanish parliamentary elections, both the Catalan and Spanish governments will be
forced to start negotiations. Both actors have interests at the
stake. Currently, Spanish debt represents almost 100% of the
GDP and one of the richest regions in Spain is Catalonia.
It would be very difficult for Spain to pay back all the debt
without the contributions of Catalonia. The EU and Spain
would be interested in transferring some of the debt to Catalonia while Catalonia would be interested in international recognition in the case for an eventual Catalan independence.
Timeline
9th century: The county of Barcelona formed along other
coun ties as a buffer zone between the Carolingian
emprire and the Umayyad of Al-Andalus.
12th century: First mention of Catalonia
1469: Ferdinand I of Aragon and Queen Isabella of Castile marry creating a dynastic union between Castile,
Catalonia and Aragon region.
1705-1714: War of the Spanish succession. Catalan’s
support Archduke Charles of Austria. Catalans lost the
war and the new king, Philip V supress Catalan separate
legal system and abolish the administrative use of Catalan language.
1931-1936: Republic of Spain. An autonomous Catalan
regional government is created, “La Generalitat”.
1936-1939: Spanish civil war
1939-1975: Spanish Franco dictatorship. Suppression of
Catalan autonomy, language and culture.
1975: Franco’s death. A democratization process starts.
2010: Constitutional Court in Madrid strikes down part
of the 2006 a
Statute of Autonomy (legal text) sustaining that there
is no basis for recognising Catalonia as a nation. Statute
of Autonomy was supposed to give more autonomy to
Catalan government and institutions but the most controversial parts were stroke down.
2009-2011: Non-binding votes on independence in regional towns and cities, including Barcelona.
11th of September of 2013: On Catalan National Day, a
480km Human Chain was made to support Catalan Independence movement.
27th of September 2015: Catalan Parliament Elections
As you would have already realized, the Catalan separatist
movement is nothing but complicated. It represents a challenge both to Catalonia, Spain and the EU. Challenges can
be ignored for some time but not forever. Sometime soon we
will probably have the opportunity to follow the resolution
of a very interesting conflict.
15
NOVAsia
Building Sandcastles in the South China Sea
Ceinwen Thomas
3rd Semester, PIC
Editor-in-Chief
From just two rocks jutting out of the South China Sea,
the Fiery Cross Reef has, in the space of about a year, transformed into an island complete with a three kilometer-long
airstrip, a deep-water harbour, and several piers and cement
factories. The reef, also known as Yongshu Island, was almost completely underwater until August 2014 when China commenced its project to construct islands that are more
concrete among the Spratly Islands. The speed at which the
artificial islands have appeared has been met with anger and
alarm from all countries with coastlines bordering the already heavily disputed South China Sea, fanning the flames
the contested waters have lit.
The ever-present disagreements over maritime boundaries
have soured relations for decades. With China’s own ambiguous yet “indisputable” nine-dash line covering most of the
South China Sea as shown in Figure 1. Drawn up initially by
Chiang Kai-Shek as the 11-dotted line in 1947, and revised
in 1949 to the nine-dotted line, the claim China makes covers waters in the second most used sea lane worldwide, and
also contains oil and natural gas reserves. China has already
made a move on this, and last year started drilling for oil in
waters disputed with Vietnam. Needless to say, there is gen-
16
eral uproar in the Philippines, Vietnam, Malaysia, Indonesia
and Brunei, all of which have officially protested over the
proposed line.
One area in particular in the South China Sea that has become a point of contention is the Spratly Islands. The archipelago of the Spratly Islands is comprised of hundreds
of uninhabited coral reefs and sandbars scattered between
the Philippine coast and Vietnam’s southern coast. Now one
of the biggest as a result of Chinese development, the Fiery
Cross Reef is among the seven reefs that China has filled
for various purposes, ranging from access channels to seawalls to military facilities. China’s most recent project in the
Spratly Islands has been completed, with over 2.74 million
square meters now reclaimed on this reef alone. With all
seven reefs, China has reclaimed more land in the past 20
months than all other countries combined over the last 40
years, according to the U.S. Defense Department.
This development did not start so recently, however. In
1987, China was involved in a UNESCO project to build
weather stations on five islands, including one on the Fiery
Cross Reef in the South China Sea. Using this as means of
justification for its occupation of the reef, it began construc-
tion in 1988, although there was nothing more than a small
concrete block until 2014. Since the late 1980s, the closest
any country in the region has gotten to confronting China is
Vietnam, which has with little-to-no success tried to contest
construction when it was denied access to the Fiery Cross
Reef by China, escalating tensions between the two.
It is here that the United Nations Convention of the Laws
of the Sea (UNCLOS), created in 1982, plays a key role in the
accusations. According to UNCLOS, territorial claims can
only be made for islands that have been “naturally formed,”
meaning an island that has not been created by humans. The
addition of the phrase, penned in by the US, has been key
in arguments both scholars and contesting states have made
to stop the Chinese encroachment in the Spratly Islands.
UNCLOS more importantly establishes that a country can
have up to 200 nautical miles from their land as an Exclusive
Economic Zone (EEZ), although in order to have an EEZ,
one must prove that the islands in the proposed region can
support human life. Under UNCLOS, if an island cannot be
inhabited by human beings, it means it is just a rock in the
sea, which is one of the main reasons why China is building,
among other things like airstrips, houses and residential areas for habitation on these islands.
China is not the only claimant building in the Spratly
Islands. Vietnam too has built a couple islands of its own;
Taiwan has spent about $100 million on its island Itu Aba,
including an artillery installation in 2012; and the Philippines in March of this year have gone so far as to break the
self-imposed ban on construction and resume “repairs and
maintenance” according to their Foreign Secretary, Albert
del Rosario.
China’s intentions of constructing an island on Fiery Cross
Reef were never explicitly ones that involved the military
until April 9 this year, when Chinese Foreign Ministry
Spokeswoman Hua Chunying issued a statement that China
officially acknowledged that their construction was intended
for military as well as civilian purposes. In acknowledging
this, there is a possibility that their next step will be to exert
control of the sea and air with an Air Defense Identification
Zone, or ADIZ, as they had done back in 2013 in the East
China Sea.
Efforts to slow down, if not fully stop China’s movements
in the South China Sea have quickened pace since. The US
Pacific Fleet will increase its number of ships deployed outside of the US by 30% over the next five years, directing
much of it to patrolling the international waters charted by
UNCLOS in the South China Sea. This has put China on
“high alert” but tensions have not boiled over yet.
Perhaps one of the only ways in which China may be pressured to stop reclaiming land is through a public denouncement of the environmental harm it is causing to the reefs.
Although this strategy sounds laughable at first, considering
that China is one of the biggest polluters in the world, Hua
insists that China has undertaken “scientific assessments and
rigorous tests” to ensure that “the ecology of the South China Sea will not be damaged.” If genuine, then organisations
like ASEAN could very well use this as a pressure point,
and studies shared on the matter could be a stepping-stone
forward into reducing China’s further reclamation projects
in the future.
17
FEATURE
Russia’s Past and Present
in the Syrian Civil War
Cesare Scartozzi
4th Semester, PIC
Staff
R
ecently, there has
been a surge of images and videos from
Syria showing Russian planes, troops,
and heavy vehicles operating in the
country. The surfacing of this evi-
18
dence did not come as a surprise.
Russia has been in Syria since before the start of the conflict and the
country has been selling weapons
to the al-Assad regime all along. As
the open-source intelligence blog
Belligncat has pointed out, Russian
NOVAsia
troops and vehicles have been spotted many times in Syria, yet there
has been no proof that the Russian
infantry is involved in the conflict.
This is not to say that Russia will
never engage in the conflict more
than it has already done. For in-
FEATURE
stance, if the Latakia region or the Tartus port were
to be threatened by the Syrian rebels, Russia would
likely engage in the conflict to protect its presence
and logistical hubs in the country. In such a scenario,
Moscow could decide to operate alongside the Syrian
troops in the conflict.
What really matters, and is often overlooked, is the
role Russia has had over the past two years in shaping the international narrative of the conflict and supporting al-Assad. As you may remember, the US was
on the verge of attacking al-Assad in response to the
chemical weapons attack that occurred in Ghouta on
August 21, 2013. However, thanks to a great mobilization and coordination in public diplomacy from
al-Assad and Russia, the US attack was eventually
deterred until the point when the Obama administration was not willing to directly engage against Assad
anymore.
Russia’s support of al-Assad is the result of many
factors. First, Russia and the Syrian regime share a
similar national interest and they have a similar narrative in world affairs. Second, Moscow and Damascus are both pro non-interference and against US-led
military interventions in the Middle East. Third, they
share the same fear of Islamism and they are afraid of
the exacerbation of a sectarian conflict since they are
representative of minorities in Syria: al-Assad of the
Alawites and Putin of the Orthodox Church and of
the thousands of Russian citizens who reside in the
country. Fourth, the Syrian civil war has become a
proxy war in which Russia could gain or lose substantial regional power and prestige. Lastly, Moscow
fears negative spillovers in terms of domestic security
if Islamist forces were to operate freely in its neighbouring countries.
Al-Assad’s alliance with Russia became particularly fruitful for him after August 21, 2013 when the US
Senate approved a bill on the authorization of the use
of force against the Syrian government in response
to the Ghouta attack. At this stage of the conflict,
Russian support to the Syrian regime became crucial.
First, Russia gave long-range surface-to-air missiles
(S-300) to al-Assad with the purpose of deterrence
against the establishment of a no-fly zone by the US.
Second, Moscow opened negotiations with Syria
on September 10, 2013 to discuss the destruction of
chemical weapons, and therefore, to signal with actions to the international audiences its intentions to
deescalate the crisis. Then, President Vladimir Putin
wrote an op-ed in the September 11, 2013 issue of
the New York Times urging President Barack Obama
not to conduct a military strike in Syria. In the letter, Putin warned Americans that a strike would increase violence and unleash a new wave of terrorism
in the region. He also added that such a deal could
undermine multilateral efforts to resolve the Iranian
nuclear problem and the Israeli-Palestinian conflict,
throwing the entire system of international law and
order out of balance. Putin’s op-ed was in hindsight a
very effective campaign of public diplomacy that also
contributed to shift the attention of western audiences
from the misdeeds of al-Assad to those of the Islamist
forces.
Russia has already played a decisive role in the
conflict and it has effectively shaped the Syrian civil
war. Al-Assad has not been protected by the few Russian military advisors and tanks on the ground alone,
but instead by the great game of foreign policy made
in Moscow.
NOVAsia
19
FEATURE
The Good,
The Bad,
and
The Refugees
Lilith-Isa Samer
3rd Semester, PIC
Staff
20
NOVAsia
FEATURE
N
o matter where you look, from shocking
pictures and TV reports to newspapers and
radio, the current influx of refugees from
the Middle East to Europe is a difficult
topic to escape from. No one knows what
to do, yet everyone in Brussels seems to have an opinion
both blue-collar workers and politicians alike. While public debate on the refugee crisis continues, the constant
stream of refugees pouring into Europe from every corner remains uninterrupted. In times like these, looking
at how media reports on the refugee crisis can be an important tool in gauging the public opinion in that matter.
To understand why so many people have risked their lives
to leave their homes and travel to Europe, one must first understand the situation they face in their country of origin.
Currently, a total of nine civil wars are ongoing in the Middle
East, among which the
sole Syrian civil war has
caused countless casualties and has forced millions out of their homes.
It is estimated that around
eight million people have
been forced to leave their
homes and some four
million people who fled
are now refugees in other
countries. This number
has been steadily rising
since the start of the conflict in early 2011. Additionally, the rise to power
of the Islamic State in the
region has also forced
millions of Iraqis out of their homes. Given the circumstances, it is not surprising that a large number of people
are trying to seek asylum in Western countries in Europe.
Over the past several months, pictures of refugees
who were washed ashore after drowning while trying to
cross the Mediterranean Sea have been circulating in the
media, and it seems like every day there is a new evocative story from the tragedies at the borders of Europe.
One recent story that shocked the continent involved the
discovery of the bodies of 71 refugees, including four children, in an abandoned truck on the side of the road in Austria.
Following that, the picture of a three year-old Syrian boy lying limp and lifeless on a Turkish beach went viral and was
picked up by media outlets around the world. However, the
question on everyone’s lips is whether Europe can support
incoming refugees while also facing the ongoing Eurozone
crisis, a situation that has its roots in the recession of 2008
and 2009. With an unemployment rate of more than 20% in
countries like Greece and Spain, as well as being in billions
of euros in debt, the economic situation in Europe is not ideal
to say the least. Coincidentally, the two hardest economically
hit countries, Spain and Greece, alongside Italy and Portugal,
are the countries of first contact for many asylum seekers due
to the countries’ geographic position around the Mediterra-
nean Sea, over which many people arrive on boats. Many
people fear that the influx of refugees, which need to be taken care of, pose a financial burden to these countries who
are already struggling with the current economic situation.
The high unemployment rate, together with the precarious
circumstances, set the mood for a negative public opinion
regarding refugees seeking asylum in Europe. The question as to how to finance the stay of thousands of refugees,
when the countries seemingly cannot take care of their citizens anyway, is in the minds of many people. When reading
the comment section of online newspaper articles regarding
the deaths of asylum-seekers, it is clear that not everyone
is willing to open their homes and wallets for those incoming. An argument often used by the disgruntled public is that
while there is certainly a number of refugees fleeing from
their war-ridden countries, a large number are just economic refugees who come
to Europe to receive
welfare from European
countries. The fact that
countries like Germany
and Sweden, in which
the benefits for refugees
they receive from the
state is higher compared
to other European countries would give a foundation to this argument.
However, not everyone agrees. Stories
in which the civilian
population has taken
it upon themselves to
assist refugees, either
through donations or by offering their own homes, persist.
For instance, around 13,000 Icelanders showed exceptional moral courage by offering to open their private homes
to Syrian refugees. In Austria, a campaign, most likely
sparked by the recent tragedy in the country, was started
in which 2200 drivers agreed upon taking refugees across
the border in their cars. All over Europe, citizens greet refugees coming in at train stations with signs, and humanitarian aid organizations had to stop taking donations because their facilities could not hold any more donations.
Whether you have a positive or a negative reaction to the ongoing refugee crisis, what both sides can
agree upon is that the governments are unable to handle the situation. All around Europe, refugees are being kept in degrading circumstances in makeshift tent
towns, which do not offer protection against the elements.
Humanitarian aid comes mostly from charity organizations and not from the governments, which are unable to process the sheer number of applications for asylum. In order to deal with this situation in a manner that
is consistent with European values and morals, countries
need to work together to create a system that efficiently handles, processes, and screens applications for refuge.
NOVAsia
21
FEATURE
The End of Pacifism?
Or Japan as a “Normal” Country?
O
Gene Kim
1st Semester, PIC
Junior staff
n August 30, 2015, tens of thousands of
Japanese citizens, young and old alike,
gathered in front of the Diet in Tokyo.
Holding signs reading “No War,” some
protesters even demanded the prime minister’s resignation, likening him to Adolf Hitler. Japan
has not seen demonstrations of such a magnitude since
the protests in the 1960s against changes to the Japan-US
security treaty. This time, the trigger was a series of eleven security-related bills that Prime Minister Shinzo Abe,
his Liberal Democratic Party (LDP), and its allies have
pushed through the Diet. The proposed legislation would
reinterpret the constitution to allow the Japan Self-Defense Force (JSDF) to engage in collective self-defense
and participate in foreign military operations. In July, the
lower house approved these bills, earning a key victory for Abe and proponents of this legislation. Before the
end of the incumbent Diet’s session on September 27,
the upper house, of which the LDP’s coalition also holds
control, was widely expected to pass the bills as well.
Indeed, after over 200 hours of debate, the upper house
approved the bills, allowing J apanese armed forces to
fight overseas for the first time since World War II.
The contentious nature of the proposed legislation
dates back to post-World War II Japanese constitutional
history. On the heels of the surrender of the Japanese military on September 2, 1945, General Douglas MacArthur
issued General Order No. 1, calling for the complete disarmament of all Japanese military officers. By the time
discussions for a new constitution were underway in
1946, both the Imperial Army and the Navy had been fully dissolved, with the exception of minesweeping naval
forces to track down the remaining mines planted around
Japan. On November 3, 1946, the postwar Imperial Diet
promulgated a new constitution, to take effect on May 3,
1947. The very Preamble to the constitution set the tone
for the remainder of the document by proclaiming “We,
the Japanese people, … resolved that never again shall
we be visited with the horrors of war through the action
of government….” Going even further, under Article 9
of the constitution, Japan explicitly embraced pacifism,
declaring that “the Japanese people forever renounce war
as a sovereign right of the nation and the threat or use of
force as a means of settling international disputes.”
22
In the course of Japanese history, however, this
article has been loosely interpreted to at least allow for
self-defense. Rearmament of Japan to guard against Soviet encroachments began to feature prominently in US
military strategy, and by 1950, General MacArthur himself announced, “Article 9 is based upon the highest of
moral ideals, but by no sophistry of reasoning can it be
interpreted as complete negation of the inalienable right
of self-defense against unprovoked attack.” Months later,
the advent of the Korean War moved many U.S. troops
out of Japan, and Japan, left without adequate military
protection in the event of a Soviet invasion, authorized
the creation of a National Police Reserve. By 1954, these
forces were reorganized to establish the JSDF, and the
constitution was reinterpreted as allowing Japan to defend itself against unprovoked attack.
Now, Prime Minister Abe has spearheaded an attempt
to pass legislation that would once again reinterpret the
constitution and would allow Japanese forces to engage
in “collective self-defense,” meaning it can aid its allies
abroad, which had hitherto been prohibited. Numerous
constitutional scholars, including three experts that testified before the Diet in early June, have opined that the
security bills are in fact unconstitutional, but their testimonies have apparently not dissuaded the LDP coalition.
It is further unlikely that the Japanese Supreme Court
would even rule on the issue at all, considering its historic reluctance to weigh in on such matters; in 1959, the
court ruled that it should not judge the constitutionality
of issues related to national security, instead leaving it to
the democratically elected government to decide.
The protests of an apparent majority of Japanese citizens have likewise been of little effect. A poll conducted by Asahi Shimbun a week earlier reported a meagre
29% of respondents supporting the bill, while 54% opposed the bills. 68% saw no need to pass the bills in
the current session of the Diet. On August 30, 2015, as
many as 120,000 protesters had claimed to have assembled outside the Diet (police reports estimate a turnout
of 30,000), their demonstrations echoed by another 200
rallies around the country. By the week before the final
vote, opposition lawmakers expressed the frustration of
their constituents with physical wrangling in a desperate
attempt to delay the passage of the bills.
NOVAsia
FEATURE
The US has welcomed the changes, as they will now
permit Japanese armed forces to aid the American military abroad. For many Japanese citizens, the continued
American military presence in places like Okinawa is
already a source of much discontent. With the new legislation, many now fear that Japan will be further dragged
out of its 70-year-long peace and into American conflicts
abroad.
The legislation has, of course, not gone unnoticed
by Japan’s immediate neighbors. China and South Korea, both victims of Imperial Japanese aggression, have
predictably reacted with unease. Furthermore, as many
interpret the calls to remilitarize Japan as an attempt to
counter Beijing’s growing influence, Chinese media outlets have decried the bills as tarnishing Japan’s pacifist
reputation. North Korea’s Foreign Ministry accused Japan of “forgetting lessons from history” and of harboring “ambition for reinvasion,” declaring that it would
“strengthen [its] power to deter war.”
Over these objections, the Abe administration has insisted that the security bills have been misunderstood
and unfairly portrayed as inevitably leading Japan on the
road to military conflict. The Abe administration has implied that many of the protesters are misinformed about
the nature of the bills and assert the changes are critical
for Japanese defense in the 21st century. Proponents have
argued that for far too long, Japan has been punching
below its weight and prevented itself from acting like a
“normal” country in military matters. Japanese inability
to act in the midst of hostage crises further contributed
to a sense of “abnormality” and helplessness. In late January of 2015, two Japanese citizens were abducted and
murdered by ISIS. The Abe administration argued that
Japanese armed forces loosened from constitutional restrictions would be able to engage in hostage rescues.
The ambiguity in the wording of the security bills has
sparked fears that future governments will be empowered to greater and broader military action. Increased
militarism is rarely to be desired, but the consequences
of these changes are certainly not clear and may not necessarily be as dire as its opponents fear. If protesters are
indeed misinformed, the government undoubtedly faces
an uphill battle to change their opinions. Perhaps now
manifesting itself in Abe’s slipping approval rates, continued vocal opposition of the majority of its citizenry to
war will no doubt prompt Japan’s democracy to respond.
Indeed, Japan’s 70-year-long history of commitment to
pacifism will not easily be forgotten.
NOVAsia
23
FEATURE
The Current State of Cyberwarfare
between the US and China
T
he evolution of warfare
throughout history has
brought about different
domains in which war can
take place. Until recently,
the four traditional domains in which
threats could originate from included land, sea, air, and space. However,
within the past two decades, a new fifth
domain has been created to classify activities within information operations.
The framework behind the adoption of
the fifth domain can be closely linked
with the development and widespread
implementation of Information Technology (IT) in the latter decades of the
twentieth century.
While in the traditional domains
there is a multitude of weapons and
technology to conduct war with, the
primary mode of attack within the IT
field is cyber-warfare. Cyber-warfare is
defined as an internet-based conflict involving politically motivated attacks on
information and information systems.
Cyber-warfare attacks can disable both
official websites and networks, disrupt,
or disable essential services, steal or
alter classified data, and cripple financial systems. While the conduction of
cyber-warfare is not exclusively associated with nation-states, US based
academic think-tanks have frequently
used it to explain China’s behavior as
it seems to help level the playing field
versus the United States as it tries to
assert itself on the international stage.
In comparison to the US, China
lacks both the soft and hard power to
challenge the current global dominant
power. In terms of military, while China might have more manpower, the US
has access to better technology, firepower, and logistics, as well as security alliances with many of the region-
24
al powers in both the Pacific and East
Asia, which includes Australia, South
Korea, and Japan. Also, as evidenced
by many of the current global crises
including Syria, Ukraine, and Iran, the
US still has significant international
leverage, which allows it to pass unilateral economic sanctions against countries, who pose a threat to the current
liberal democratic system. Expanding
on this, China has also stated multiple times in its annual defense white
papers that, while it seeks to shore up
active defense in the maritime sector, it
seeks to avoid any direct international
conflicts
The main problem with ascertaining China’s capabilities regarding cyber-warfare is that it has not publicly
revealed any information associated
with it. In fact, it was not until May
2015 that the Chinese People’s Liberation Army (PLA) formally acknowledged that the country’s military and
intelligence community have specialized units for waging wars on computer networks. However, this is understandable since one of the fundamental
tenets of national intelligence is not to
reveal the capabilities of the country
in fear of rival countries reallocating
resources to match the strengths and
weaknesses.
An answer to the Chinese threat is
the United States Cyber Command
(USCYBERCOM), an armed forces
sub-unified command under the United States Strategic Command that centralizes command of cyberspace operations, as well as organizing existing
cyber resources. Since it was found in
2009, it has established components
in the four main US military branches
(Army, Navy, Air Force, and Marines).
In addition, USCYBERCOM has pub-
NOVAsia
Cheol Bin (Jason) Shin
2nd Semester, PIC
Contributor
licly acknowledged that it frequently
coordinates with civilian cyber defense
efforts to prevent espionage against
domestic corporations and institutions.
Because cyber-warfare has been mostly
conducted through secret means, there
have been no valid methods to link the
attacks back to governments. As a result, representatives of both China and
the US have taken to the media to not
only “call out” the other side but also
to boast of their respective countries
cyber-defense capabilities in order to
dissuade future attacks.
An example of this would be President Obama’s latest warning to the
Chinese regarding cyber-attacks. He
stated his displeasure with certain Chinese “practices” regarding cyberspace
and warned that if the Chinese chose
to compete rather than cooperate with
the US, the US would win. This warning comes in lieu of the recent hacking
of the computers at the US Office of
Personal Management that allowed the
hackers to gain access to nearly 20 million files of current and former US government employees. While there has
been no direct evidence linking it back
to the Chinese government, the attacks
are widely known to have originated
from the Southeast China coastline.
A potential solution to the ongoing
cyber-warfare attacks is to establish a
definitive arbitration institution or governing body that mediates and gives
judgment on future cyber conflicts. Up
until now there have been no attempts
to implement such an idea. While it is
nearly impossible to press sanctions
against non-state actors, even a rudimentary institution for state-to-state
cyber warfare should suffice to drastically reduce attacks made between
governments.
PHOTOJOURNAL
By Ceinwen Thomas & Lilith-Isa Samer
Roof in Malmoe
Beggar in Malmoe
Malmoegata
Goldfishvarning
Full
NOVAsia
Multiculturalism in Korea
I
n preparation for this year’s Chuseok, married migrant
women in Ulsan were busy participating in a social event
run by the Ulsan Buck-gu office to teach them how to set
up a traditional Korean memorial service table. Omyung Guan,
the president of Buck-gu Women’s Community said, “setting up
the traditional table is difficult even for native Koreans. Women
from multicultural families who are not familiar with Korean
culture must find it more difficult. We wanted to help the migrant women so they could have first-hand experience of it and
quickly adjust to our culture.” This event is just one of the Korean government’s multicultural programs. But since when has
Korea become a multicultural society? And what does multiculturalism in Korea mean?
Even a decade ago if you looked at a Korean history textbook,
the first page began by proudly saying that Korea has maintained
an ethnically homogeneous nation state. Korean ethnic nationalism was actually established for various political purposes and
it has been used for enhancing social solidarity. While Korea
is still very homogenous, it has now transformed into a more
ethnically diverse society. In the late 1980s, the government decided to accept foreign workers due to the shortage of domestic industrial workers. In the late 1990s, as young men in rural
areas had difficulty finding a wife, the number of international
marriages with China and other South Asian countries rapidly
increased. It was only in the mid-2000s that the Korean government institutionalized its policy on immigrants. The first change
was to replace the phrase ‘interracial marriage family’, which
in Korea had gained a discriminatory connotation, with a more
politically correct term. It was at this point that the new concept
of multiculturalism, or damunhwa, was introduced. According
to Banting and Kymlicka, multiculturalism generally refers to
respecting cultural differences and autonomy of different ethnic
groups and supporting laws and programs in order to manifest
diversity.
As a result, government-led multiculturalism has a very short
history in Korea compared to European multiculturalism. Given
that Korea has held on to the pretense of being a homogeneous
nation with a history of five thousand years, it is not difficult to
see why the direction of multicultural policy is focused more on
assimilation than pluralism. According to research by the Asan
Institute for Policy Studies throughout the country, more than
28
SungEun Kim
2nd Semester, PIC
Staff
half of the programs focus on assimilating immigrant brides and
mixed marriages (54.4%) followed by Korean cultural experience (16.1%), mutual cultural understanding (14.4%) and cultural experience for native Koreans (5.4%). The easy conclusion
is that South Korean multiculturalism focuses on marriages and
multicultural education for their children.
Meanwhile some have criticized Korea’s multicultural policies and argue Korea should contemplate the genuine meaning
of multiculturalism. There have been attempts to change this situation, but progress is slow. Why is this the case? The answer
might be found in Koreans’ perception of multiculturalism.
According to the report by the Asan Institute for Policy Studies, the majority of Koreans (79.2%) don’t have antipathy to
foreigners while 10% lower of Koreans (67.5%) are in favor of
multicultural family. Interestingly enough, there are gaps among
respondents based on gender and generation. Young generations,
who have relatively more experience of traveling abroad and
exposure to foreign cultures having frequent exposure to multicultural societies are more negative. The twenties agree at the
highest rate (35.1%) that the more we have multicultural families the higher social unrest is and the more difficult we have
social integration. Women have more negative attitudes toward
multiculturalism than men. Also notable is the fact that Koreans’
perception of foreigners and multiculturalism has changed negatively in the past three years. There is an increase in negative
view of foreign labor. In those cases as well, perception change
of young people accounts for the pessimistic results.
Perhaps since multiculturalism has been mainly used only for
implementing policy to solve social problems rather than describing a natural societal process, most Koreans seem to understand only a narrow view of multiculturalism. For example, Koreans are likely to consider multicultural education as a welfare
program or educational concept only for minorities. Koreans
also tend to have different attitudes toward immigrants depending on their nationality or race. In a survey conducted by Asan
Annual Survey that asks people’s feelings about immigrants
from five different countries (Japan, China, the US, Philippines,
and Nigeria) Koreans were found to only favor immigrants from
the US. After other questions related to ethnicity being asked,
the report says Koreans tend to have a bias to non-western cultures or non-white races.
Currently, approximately 1.45 million foreign residents in
Korea account for around 3% of the total population, which
is more than four times the number of foreign residents fifteen
years ago. As this trend continues, by 2020 foreign residents and
immigrants are projected to increase to 5.5%. As a result, any
discussion of Korea should also include a discussion of multiculturalism. Even though the government has created various
policies and programs for social integration, unless Koreans
change their awareness and accept a wider meaning of multiculturalism, these governmental actions taken to boost multiculturalism will remain nominal political rhetoric. Perhaps it is time
for these multicultural polices to target the notions of native Koreans rather than immigrants.
Interning? GSIS
Students Can Receive
Academic Credit &
Maybe Even Financial
Assistance
Students can receive up to two
million won in reimbursements for an
internship, but many say Graduate
School of International Studies’ Career
Development Center does not offer
students enough support.
Chance Dorland
1st Semester, KSP
Junior staff
Kambach - Visiting food production by Ottogi in which
Hormann products are used
As Yonsei graduate students,
many of us will have the opportunity to work for a company or NGO
in both paid and unpaid positions.
By simply filling out some paperwork and giving a presentation,
those hours could also bear up to
six academic credits. I spoke with
a representative of the Graduate
School of International Studies’
Career Development Center (CDC)
and two GSIS students to find out
more about the internship process and if those experiences have
been able to help students find
jobs after graduation.
Unlike the GPA requirement for
writing a thesis, all GSIS students
are encouraged to apply for and receive internship credit before they
graduate. KSP, PIC, & ITFM students
are eligible for everything from the
minimum two credit, part-time,
400 hour internship to taking a
semester off for a 1,200 hour, fulltime, six credit internship. While
all paperwork must be submitted
and approved in advance, aside
from general information of where
you’ll be working and what you’ll
be doing, the signature of your
GSIS program concentration director and CDC director are the only
two items of actual consequence.
The Seoul metropolitan area
offers countless opportunities for
graduate students to gain work
experience, but if you are interested in interning outside Korea
(in a nation other than your home
country), students can receive as
much as two million won to help
defer some of the costs associated
with travel and living expenses,
though the final amount will be
based on the student’s need, how
many hours they worked, and the
living cost of the country they traveled to.
Before the semester ends, students must also fulfill the final
three requirements of a Yonsei
GSIS internship: 1) a final written
report, 2) an evaluation form from
their supervisor 3) and a presentation of their internship to the CDC
director that can also be attended by fellow GSIS students. These
three components are then combined to reach the student’s final
CDC score, and if that number is
90 or above, students are usually
awarded the initially requested
amount of academic credits (and
may be billed for tuition depending on how many credits they
earned) and some kind of financial
aid if they worked abroad and submitted proper receipts.
Though more students may fill
out the initial paperwork at the
beginning of the semester, by the
end of a typical internship period
only about 13 to 20 GSIS students
will have submitted written reports and presented about their
experiences. While students may
simply quit their internship for
one reason or another, I was told
some students actually end up receiving job offers from their companies and choose to leave school
without completing their degrees,
while others will finish their internships but decide they don’t need
the credits. No matter what the
situation, without the final written
paper, supervisor evaluation form,
and presentation, students will not
receive academic credit for their
internship and are not responsible for any tuition fees that would
have resulted.
David Kambach is in his final
semester studying ITFM. After
his first semester at Yonsei in the
spring of 2014, he started a paid
summer internship at Hormann, a
German company that specializes in doors and gates for building
projects that had recently opened
an office in Seoul. Over the next
year, he went on to receive six
credits academic and continues
working for Hormann as a parttime employee while finishing his
degree at Yonsei. David says he is
fortunate to have made contact
with the company while looking
for work after finishing his undergraduate degree in Germany, and
when Hormann’s Seoul office had
an open position, they offered
him a paid internship, which has
turned into a part-time job and
excellent possibility for post-grad-
NOVAsia
Natalie Grant - WHO winter interns pose in UN City on Friday
night after work
Internship Binders in the CDC office
30
uation employment. As a result,
overall he is very satisfied with the
internship process and the resulting ability to take fewer classes
with the credits he earned.
Natalie Grant is also in her final semester studying ITFM. In
January, she moved to Copenhagen for an unpaid, three-month
internship with the European regional office of the World Health
Organization (WHO). Because
she is American, the opportunity
counted as an international internship, so she applied for academic
credit with the hopes of receiving
financial aid. While she did receive
some funds from the CDC after
the conclusion of her internship,
she was disappointed as rent and
plane tickets alone totalled more
than two million won, the most
any student can receive. Despite
the personal financial cost of her
WHO internship, Natalie says doing editing, web management
and event planning for the office
of communications was exciting,
and it gave her a chance to learn
more about the topic of her thesis, public health. While WHO policy prevents her from being hired
until three months after finishing
her internship, she has remained
in contact with her supervisor and
may apply or a contract position
with the WHO at the end of this
semester. Natalie says while she
was lucky enough to be a native
English speaker and have connections to job opportunities that allowed her to work part-time while
studying at Yonsei and work fulltime between semesters, other
GSIS students who are not so lucky
may not be able to afford an internship abroad.
While both David and Natalie
only shared their suggestions for
improving the CDC after direct
questions from me, both seems
to treat the institution as the final
destination of their paperwork
rather than a resource for finding
internships or for checking their
resume or finding a job after graduation. David says that while the
process for applying for internship credit through the CDC was
straightforward and simple, he
would have liked more guidance
for the final report he had to submit; he was not sure what to focus on or if he was expected to
write 20 pages or just a few. He
also feels very fortunate to have
found an internship on his own
as other students he has talked
to told him the CDC is not very
helpful for finding an internship,
something that needs to be improved. Natalie told me she was
disappointed with the CDC’s policy to only compensate students
after they have finished internships, noting that she was told
the policy was in place because
students “could quit their internships and keep the financial aid
they were given.” Natalie says
there should be a system in place
to hold students accountable for
aid given upfront in one large
sum or in instalments during the
course of the internship, noting
that paying back financial aid
retroactively seems counterproductive.
Unlike other GSIS offices, the
CDC is not run by a faculty member, but relies on a professor to
review students’ internship reports and presentations. Many
students come looking for counseling and someone to look over
their resume, but student employees find it difficult to advise
their peers without the proper
training and skills which has led
to complaints from students. I
was told the university has been
made aware of these issues, but
staff members were told there
was not funding available to improve the situation. As a result,
while the CDC appears to do an
adequate job of keeping track
of the 13 to 20 internships that
receive credit each semester, unless it changes its name to the
Internship Processing Center,
many students may find themselves underwhelmed when
looking for help.
MY CITY
Bariloche
Julieta Salvo
1st semester, PIC
Contributor
31
Panuelo Port
W
hen someone thinks about
Argentina, the first few
things that come to their
minds are probably soccer,
tango, and steak. Others,
with a more political mindset, might instead think about defaults, inflation,
and turmoil. If you were to visit the country, you
would realize that all these stereotypes are indeed there. In Buenos Aires, the capital, people
going to the stadium every Sunday or watch the
soccer match in their neighborhood bar with
friends is a common thing. You can hear people
tango on the streets, cafes, and even in the numerous parks all over the city and steakhouses
are at almost every corner. Argentinians are also
very open about expressing their disagreement
with government policies and about complaining on how going to the supermarket is an every
week adventure due to the high inflation. Lastly,
the center of Buenos Aires is also infamous for
often hosting protests which in turn creates extreme traffic jams.
Like most Latin American countries, Argentina’s political, economic and cultural life has
always been centered in the areas surrounding
the capital. Thus, it should not come as a surprise that 30% of nationals have chosen to live
in this area. Education and working opportunities are better in Buenos Aires. But what about
the rest of the cities? What do people think of
Argentina once they get away from the capital?
Except for a couple of medium sized cities in the
center region of the country, the picture changes completely. Especially in cities like Bariloche.
San Carlos de Bariloche is a city located in the
southwest of Argentina. With its 100,000 inhabitants is the biggest and most populated city in
the Rio Negro province, part of the Patagonia region. It is inside the Nahuel Huapi National Park
and next to the Andes mountain chain, the longest in the world. And it is the city I was born in.
Bariloche was officially founded in 1902, but
before that, many Spanish Jesuits had already
established missions in the area during the
Spanish colonial era. As Bariloche is geographically closer to Chile than to Buenos Aires, it had
more connections with that country than with
Nahuel Huapi National Park
32
Civic Centre
“Bariloche is the
city where you
can find peace
and warm-hearted
people who will
quickly become
your friends.”
Argentina until the Conquest of the Desert campaign led by General Julio Argentino Roca in
the Argentinean plains. This campaign began
decades after independence with the main objective to incorporate the Patagonia region, at
that time inhabited by native tribes, into that
country’s domain. It was then decided that the
Andes would be the natural and political border
between Argentina and Chile.
During the end of the 19th century the city
received a large number of immigrants mostly
from Europe; Austria, Germany, Italy, but also
from Chile. During the 1930s Bariloche experienced a makeover and it grew into its current
appearance of an alpine town. As part of a tourism development plan many projects were carried out to transform it into a ski center. The city
is currently the biggest ski center in Latin America and attracts tourists from all over the world
especially from the northern hemisphere during
their summer, our winter. Tourism is the main
economic activity of the town.
As Bariloche is a tourism-dependent city,
most of the population works in areas related
to this field. Unlike Buenos Aires, not many people have stable 9-to-5 jobs. Locals are used to
working twice as hard during the high seasons
(winter and summer) and rest more during the
low seasons (fall and spring). This also makes
Llao Llao Hotel
the city’s economy very sensitive to weather. In
2011 ashes from the Puyehue eruption in Chile
covered the city, damaging not only its flora and
fauna, but also that year’s revenue.
Even though Bariloche is famous for its ski centers and snowy landscapes, my favorite season
is summer. It is never too hot (with an average
of 26°C/79 °F) and rarely humid. The wind that
blows all year long is fresh as it goes through the
cold lakes before reaching the city. This makes
summer great for trekking and enjoying the
breathtaking scenery of the Nahuel Huapi Na-
Catedral Mountain
Catedral Mountain
tional Park or visiting the many islands around.
Nights are always a little bit chilly, perfect for
long walks and hot chocolate. And, speaking of
chocolate, artisanal chocolate is one of the most
distinguished products made in the city with
many chocolate factories and chocolate stores
that decorate the small downtown. They are a
must for every tourist.
Bariloche enjoys cultural diversity. European
immigrant’s descendants, some of whom mixed
with native people, neighboring country nationals and even tourists that visited and wanted to permanently stay reside in the city. Many
leave behind busy and noisy lives to welcome a
lifestyle more connected to nature. To retire and
live in a cottage in front of the lake surrounded
by pine trees is the dream of many Argentineans.
Moreno Lake
In contrast to Buenos Aires, Bariloche has almost no traffic lights, no busy people running
to their offices, and no Sundays at the stadium.
However, like the rest of Argentineans, ‘Barilochenses’ do follow the matches on TV. There are
plenty of steakhouses, but lamb barbecue is the
most popular. People complain more about the
lack of snow or the never-ending rain than about
the government. Talking to a perfect stranger as
if he was your best friend for a couple of minutes
and then never seeing him again is a normal experience. People often greet the bus driver as if
they were related.
Growing up in Bariloche meant that my primary school was two blocks away from home,
and my high school just five. I could play on the
street or up a tree until late at night. No one ever
saw this as dangerous at all. I could breathe fresh
air all day long and enjoy the smell of earth and
trees soaked by the rain. Things that in Buenos
Aires I could never do. Argentina’s capital is a
city that never sleeps, dynamic and modern, but
Bariloche is the city where you can find peace
and warm-hearted people who will quickly become your friends.
Lopez Mountain
33
NOVAsia with
Tieless
Professor Jeong Yeon Lee
Professor Jeong Yeon Lee has been with Yonsei GSIS since 2004, teaching a variety of economics-related courses at GSIS. He received his BA in Economics from Stony Brook University in New York, and his MA and PhD in Economics from the University of Pennsylvania. He
has served as the chair of ITFM for multiple years, and in Fall 2015 stepped into the post of
Associate Dean of GSIS. Gordon Gatlin sat down with him to discuss his academic background and research interests.
Gordon Gatlin: Thank you for sitting
down with me for this interview. Most
GSIS students know you as a professor
of economics at GSIS, especially with the
introduction to economics class. Besides
the introduction to economics class, what
other classes have you taught at GSIS, or
perhaps even at UIC?
days I am also interested in various issues
related to economic growth, such as a possible role played by financial sector development or regional integration in economic growth.
Prof. Jeong Yeon Lee: At UIC, I teach International Economics. At GSIS, I used to
teach International Economics. I also teach
International Finance, and I used to teach
a course called Global Capital Markets,
and one about Foreign Direct Investment
(FDI).
JYL: Well I mentioned financial sector
development as one of my interests. I got
involved in bond market development for
emerging economies when I was an economist at the World Bank. I also worked
on financial sector issues like corporate
governance reform in Indonesia and financial sector restructuring in Korea as
an economist at the Asian Development
Bank. These experiences have made me
interested in financial sector development,
especially in relation to economic growth.
GG: How did you become interested in
economics in the first place?
JYL: Somehow, I got interested in economic policymaking, maybe in high school.
Basically, my interest in government policy motivated me to study economics at the
undergraduate level, and then I decided to
later pursue a PhD in economics.
GG: What did you focus on in the economic field while you were a student?
JYL: In graduate school, my dissertation
was about foreign direct investment and
technology transfer. My main interest was
in the role of technological change in economic growth. I especially focused on foreign direct investment as a viable means
for technology transfer. After I finished my
dissertation, I got an offer from the Korean
Institute for International Economic Policy (KIEP). I continued to do some policy
research on international trade and FDI.
That’s one field that I am still doing some
research on and have interest in. These
34
GG: Can you elaborate a bit on those current research interests?
GG: Can you explain a bit more what you
mean when you say “financial sector development”?
JYL: There can be different dimensions
to financial sector development. One possible dimension is financial depth, or how
deep the financial sector is. The financial
sector itself can be divided broadly into
two groups, one being financial intermediaries like the banks, and then the other
being financial markets like the stock or
bond market. The banking sector may play
a bigger role in some countries while the
markets may play a bigger role in others,
but those two groups together make up the
financial sector of an entire country. Thus,
countries with a relatively bigger banking
sector, or bigger markets, can be viewed to
have higher financial depth.
Another dimension is access to the finan-
cial sector. A big banking sector doesn’t
necessarily guarantee that everyone in the
economy has fair access to banks. If only
large corporations or people with good
networks and connections can access the
financial sector, then access to the financial
sector has to be quite limited even when
the sector itself is relatively large. One can
also evaluate financial sector development
in terms of financial efficiency. Even with
a big sector, if efficiency is low, then good
investment projects could have a hard time
getting adequate funding while money is
being wasted in bad ones. The last, but not
least, is financial stability: making sure
that the financial sectors can withstand financial crises.
And why does the financial sector matter in
economic growth? Economists have been
paying attention to financial sector development in relation to economic growth
only quite recently. The financial sector
didn’t get much traction in discussions on
economic growth in the past. But, people
realized that the financial sector plays an
important role in allocating resources, so
if the financial sector is better developed,
then there can be more efficient allocation
of resources, increasing total factor productivity and eventually leading to a higher rate of sustainable economic growth.
GG: You also mentioned regional integration in relation to economic growth. What
interests you in that field?
JYL: Regional integration has been another one of my main interests in the past
few years. As you know, the current Doha
Round of trade negotiations within the
WTO is having difficulties. With progress
in multilateral trade liberalization more or
less stalled, a lot of countries nowadays are
turning to smaller scale integration. I’m interested in finding out the implications of
regional integration for long-term growth.
GG: So you are looking at some of those
smaller scale agreements and how they affect the financial market in particular?
JYL: There are many kinds of regional
integrations, but I am particularly interested in the experience of European integration. European integration has progressed
over the years; it first started as a customs
union, and over time, expanded its scope
to financial integration and a common currency. As a result, the European experience
provides a good opportunity to examine
the link between the depth and scope of
regional integration and also the growth
among the involved countries.
GG: Then are you attempting to look at the
European experience and extrapolate what
might happen in other areas experimenting
with regional integration?
JYL: Europe’s experience certainly has interesting lessons for other regions, but one
needs to be careful not to make any mechanical predictions for other regions solely based on Europe. There are many factors that have been specific only to Europe,
and thus you want to effectively control for
them before you apply the European experience to project the future path for other
regional groupings.
GG: Turning to some current economic
issues of note now, considering the recent
financial events in China, such as the stock
market collapse, maybe you can give us
your view of the Chinese financial market
in regards to the dimensions that you discussed? Some people say that the recent
troubles are a sign that Chinese financial
markets are not, in fact, very developed.
JYL: In China, the financial market is obviously not as well developed as in the US
and some other OECD countries. There
is room for development in the country’s
financial sector. What’s happening in the
Chinese stock market more or less reflects
market expectations about future growth.
Recently, the US and other developed
economies have been rather weak, thereby
limiting Chinese growth based on exports.
Then, Chinese efforts to switch to more
domestically based growth are only starting, so they have some way to go before
they begin to see the effect of the new direction. All these developments have considerably weakened market prospects for
future growth.
GG: Do you see the recent depreciation of
the Chinese yuan as a reflection of market
forces? I have heard from some sources
that the depreciation is related to government backtracking on creating a more consumer-based market, that by devaluating,
they’re trying to improve the export market for themselves.
JYL: That’s one possible speculation, but I
think that one of the main reasons for the
depreciation is that the Chinese government changed their method of pegging the
Chinese yuan so that the mid-point in the
band better reflects the market-based value
of the currency. Therefore, market forces
played a big role in the depreciation. The
introduction of the new pegging system is
part of the Chinese government’s efforts to
have the yuan included in the IMF SDR
basket. Without a doubt, the new pegging
system was also expected to have some desirable side effects at the time of introduction, as the expected depreciation would
help the country’s exporting sectors.
GG: What do you think of China’s recent
Asian Infrastructure Investment Bank
(AIIB) project, and, in particular, what is
your interpretation of China’s intentions in
creating it?
JYL: Even though many parts of China
have achieved a fairly high degree of development, still they have areas that need
to be developed. Also in Asia, there are
many other countries that need more investment in infrastructure. Therefore, the
provision of additional funding for infrastructure development in Asia would make
much economic sense. But, the creation
of international institutions cannot be motivated by purely economic reasons. For
example, why does not Beijing simply put
additional funding into the existing institution, namely the ADB? If Beijing wants to
have a bigger say over the future course of
infrastructure investment in Asia, it makes
more sense for them to create a new institution where they are a largest shareholder
rather than putting more funding into the
ADB where Japan and the US hold the biggest voting rights.
GG: Do you think it’s possible for the AIIB
and the ADB to be complementary institutions, or will they necessarily become
conflicting?
JYL: I would expect some rivalry to develop between the ADB and AIIB, but despite
any political motivations, I’m sure those
two institutions would be able to find some
room for cooperation. The funding provided by the ADB is by no means enough to
cover the needs of the Asian region, even
with its partnership with the private sector, so a second institution providing additional funding could definitely help the
process. There can even be some healthy
competition between the institutions.
GG: As a final question, do you think that
Janet Yellen and the Fed in the US made a
good decision by delaying raising interest
rates?
JYL: There is no black and white answer
to that question. Of course, you can make
an argument for delaying raising rates,
just like the decision made by the Fed,
because even though the numbers for the
US economy themselves are not too bad,
the slowdown of the Chinese economy is
not something that can be simply ignored
at this juncture. But, at the same time, interest rates will have to rise sooner or later,
and putting off the inevitable only creates
bigger uncertainty in the financial market.
So, you could also argue that raising rates
now would better serve the US economy
and other economies, especially emerging
economies, than delaying and creating bigger uncertainties.
GG: Thank you, Professor Lee, for meeting with me today and speaking on these
topics.
JYL: Thank you.
INTERVIEW BY
Gordon Gatlin
3rd Semester, ITFM
Staff
35