Anti-globalisation is No 1 threat facing Asia-Pacific: Report

PHOTO: Reuters

The anti-globalisation sentiment sweeping Europe and the United States is the greatest threat to the Asia-Pacific in the years ahead, a risk consultancy firm said on Monday.

"The backlash in Asia-Pacific's two biggest markets against globalisation is the greatest threat to this region's overall economic and political security over the next decade, never mind the next year," said Control Risks in a report.

"Since the end of the Cold War, the Asia-Pacific has been the globe's greatest beneficiary of the resulting vast liberalisation of trade, direct investment and supply chains. The region's middle classes have profited enormously from this process in a way that the middle classes of the US and Europe feel, at least more recently, that they have not."

These come on top of raging territorial tensions.

While the consultancy noted that such clashing forces have been at odds for decades, China's pressure has added a new dimension.

"What has changed is a new willingness by a resurgent China to press these claims and a new apparent ambivalence for the US to actively police them," the consultancy pointed out.

Japan, which has always looked to the US for security, will now begin to "self-insure" against Chinese aggression by ditching its peace constitution and ramping up its military spending, Control Risks said.

Japan’s Abe visits Philippines as Duterte’s first top guest

  • A Filipina "comfort woman", who was forced into sexual slavery for Japanese soldiers during World War II, speaks during a protest in front of the Japanese embassy in Manila on January 12, 2017, hours before the arrival of Japanese Prime Minister Shinzo Abe.
  • A Filipina "comfort woman", who was forced into sexual slavery for Japanese soldiers during World War II, speaks during a protest in front of the Japanese embassy in Manila on January 12, 2017, hours before the arrival of Japanese Prime Minister Shinzo Abe.
  • A former Filipina comfort woman holds a banner during a protest in front of the Japanese embassy in Manila on January 12, 2017, hours before a visit by Japanese prime Minister Shinzo Abe.
  • Japanese Prime Minister Shinzo Abe arrived in the Philippines on Thursday for a two-day visit aimed at shoring up ties with its mercurial new leader, and boosting Tokyo’s economic foothold in the face of anticipated competition from China.
  • Abe’s visit is the first by a head of state to the Philippines under President Rodrigo Duterte and comes amid a changing geopolitical landscape, much to do with a dramatic foreign-policy shift by the firebrand leader in Manila.
  • Duterte has been hostile towards traditional ally the United States while reaching out towards historic adversary China, putting Japan in an uneasy spot given its warm ties with Washington and rivalry with Beijing.
  • Workers sweep the red carpet in preparations for the arrival of Japanese Prime Minister Shinzo Abe and his wife Akie Abe for a state visit in metro Manila, Philippines
  • Upon arrival, Abe headed straight for a meeting with Duterte at the presidential palace in Manila. He will travel to Duterte’s native of Davao on Friday, during which he and his wife will visit Duterte’s family home.
  • Abe described being the first leader to visit Duterte as a“tremendous honour”. “I chose the Philippines as my first destination this year and that is testament to my primary emphasis on our bilateral relationship,” he said in addressing the meeting. “I’m committed to elevating our bilateral relationship to a higher ground.”
  • Abe’s arrival is timely and comes as China seeks to capitalise on Duterte’s openness to its investment in areas that include infrastructure, where Japanese firms have long been important players in Southeast Asia.
  • Japan is one of the biggest investors in the Philippines, mainly in electronics, financial services and auto manufacturing, through firms that include Toyota, Mitsubishi and Canon.
  • Representatives of more than 20 Japanese companies are due to join Abe in Davao for a meeting with Philippine companies, which are keen to link up in areas like construction and agribusiness, Philippine business sources said.
  • Jose Ma. Concepcion, the Philippines presidential consultant for entrepreneurship, said Chinese business would have no impact on Japan’s interests, and there were plenty of opportunities up for grabs. “If you look at the level of investments, the Japanese are far much more entrenched,” he said. “China also has opportunities. The more countries that help us, the better.”
  • Akie Abe, wife of visiting Japanese Prime Minister Shinzo Abe, is introduced to schoolchildren from the Philippine National School for the Blind in Pasay city
  • Akie Abe (Top R), wife of visiting Japanese Prime Minister Shinzo Abe, poses for a photograph with schoolchildren from the Philippine National School for the Blind in Pasay city
  • Akie Abe, wife of visiting Japanese PM Shinzo Abe, poses for a photograph with schoolchildren from the Philippine National School for the Blind in Pasay city

Meanwhile, countries in South-east Asia, such as Malaysia and the Philippines, are drawing closer to China, taking a hedge against US uncertainty.

"Providing China doesn't seek to flaunt its territorial expansion, tensions in the South China Sea may actually decline, but divisions within ASEAN are likely to increase."

China will also hold the spotlight, as it may raise "punitive regulation" against foreign businesses in the country.

Its "regulatory whiplash", as Control Risks puts it, would be the worst side-effect from potential trade disputes between China and the US, with the US soon to be led by incoming president Donald Trump.

China's slowdown and Western protectionism will also serve up a heady brew of populism in many parts of Asia.

"Elites in this region will seek to shore up their legitimacy through populism. This will vary in style, but the intent will be the same - shore up faltering political machines with popular gestures," it noted.

"In Malaysia, Prime Minister Najib Razak will continue to fight a rearguard action against his poor standing by wooing conservative Muslims. In the Philippines, President Rodrigo Duterte, who built his mandate from the very beginning on populist gestures, will continue to skirt the country's more intractable problems with dubious campaigns."

Control Risks is less concerned about the impact of fragmenting ISIS forces, saying Asia's terrorism risk landscape has been, and should stay, considerably more benign.

"The lines of communication are long between East Asia and the Middle East, and there is no refugee crisis to exploit and conceal within. Asia lacks the sheer numbers of individuals with the experience, access to weapons and suicidal intent on the scale of the Middle East or Europe."

leejamie@sph.com.sg


This article was first published on January 17, 2017.
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