US 'pivot' as bankrupt diplomacy

Sep 19, 2012
By George Amurao
Asia Times Online

During United States Secretary of State Hillary Clinton's recent regional tour, America's top diplomat acknowledged the crucial role economic aid will play in the US's "pivot" towards Asia. Despite that recognition, Clinton failed to present concrete plans for a significant boost in non-military aid to allies in Southeast Asia, underscoring the US's fiscal straits and future ability to project financial power.

As the US bids to recalibrate its foreign policy more towards Asia, the world's lone superpower faces the dual challenge of China's growing military muscle and stores of soft power accumulated through years of checkbook diplomacy in the region. Unless the US is able to match or exceed China's economic and financial sweeteners, its "pivot" policy will come under rising criticism for its emphasis on strategic affairs.

China owes much of its power and influence in the region to generous hand outs and a fast growing economy, both of which have propelled economic growth across much of Southeast Asia during the wider global slowdown. While recent confrontations with the Philippines and Vietnam over contested territories in the South China Sea have raised concerns about China's long term intentions, its growing economic clout in the region has so far helped to cap those anxieties.

Nonetheless, Southeast Asia is poised to become more militarized as the US and China jockey for regional position. Earlier this year, the US announced that 60% of the US Navy will be re-deployed to Asia, part of its so-called strategic "pivot". The US maintains many strong alliances in Southeast Asia, including with Indonesia, the Philippines, Malaysia, Singapore and Thailand.

Over the past decade, American aid in the form of military and counter-terrorism training and weaponry were poured into all five countries. According to a Congressional Service Report (CRS) issued in August 2008, Indonesia led the US list of counter-terrorism aide recipients with an average of US$150 million in annual aid between 2006-2008. It was followed by the Philippines, which received an annual average of $119 million over the same period. The bulk of that assistance was earmarked for counter-terrorism training, according to CRS.

Yet many analysts felt the disbursements served a dual purpose of indirectly checking China's rising regional power. American forces have in recent months ramped up joint military exercises with Australia, Indonesia, the Philippines, Thailand and Malaysia, all staged under strategic pretenses ranging from counter-terrorism, to natural disaster relief to search and rescue missions.

China's assertiveness over contested maritime territories has intensified in the past year, with numerous incidents involving both civilian fishing boats and military warships with the Philippines and Vietnam. Some analysts believe China aims to dominate the South China Sea's potential rich stores of oil and natural gas, providing an important strategic hedge to its current dependency on fuel shipments from the Middle East.

Strategic analysts believe that in a potential conflict the US would leverage its naval superiority to block China's fuel shipments, including around the Malacca Strait in Indonesia. China has attempted to circumvent that risk through planned new pipelines in Myanmar, designed to extend from the Indian Ocean to China's landlocked southwestern region. But the warming trend underway between the US and Myanmar has cast new doubts on the future reliability of that alternative route.

While Washington has avoided direct confrontation with China by insisting that it is only interested in assuring freedom of navigation in the South China Sea and that claimant countries should use peaceful means to resolve their differences, the US has simultaneously provided new military assistance to regional allies to build up their capabilities vis-เ-vis China.

Weak strategic link

That is most evident in the Philippines, considered by many the weakest link among the US's Southeast Asian allies. Last year the US tripled its Foreign Military Financing, financial assistance granted to US allies to procure excess American military hardware, to $30 million for the Philippines.

Last year the US also facilitated the Philippine government's $13 million purchase of the recently retired US Coast Guard cutter Hamilton. Its sister ship, the Dallas, was turned over to the Philippine Navy in May this year; a third ship purchase is currently under negotiation.

Though Washington has remained non-committal about its mutual defense treaty obligations to the Philippines in relation to disputed territories in the South China Sea, the US has said it will assist in building coast watch facilities, including installation of powerful land-based radars that can be used to monitor China's naval movements in the disputed area.

While the US is helping the Philippines and strengthening strategic links with Vietnam, China has also recruited strong allies in the region through its economic diplomacy. Cambodia, Laos and Myanmar are among the top three regional countries to receive financial aid from Beijing in the form of grants, soft loans and infrastructure projects, not to mention trade agreements and private investments.

China has leveraged this soft power to play divide and rule politics inside the Association of Southeast Asian Nations (ASEAN), seen in Cambodia's stonewalling of the Philippines' and Vietnam's attempts to include its South China Sea grievances against China in a joint ASEAN communique. Cambodia's stand came soon after Chinese President Hu Jintao's promised to double bilateral annual trade with Cambodia to $5 billion.

China has pledged more than $2 billion in aid, mostly in soft loans, to Cambodia since 1992, according to Cambodian government statistics. Beijing's total foreign direct investment in the underdeveloped country, meanwhile, reached $1.2 billion in 2011. Beijing is gradually parlaying that economic power into strategic alliances, seen in a $20 million defense agreement signed with Cambodia in May this year.

US economic and financial aid to the region pales in comparison. According to a CRS report released in July, no Southeast Asian country will be among the top ten global recipients of US aid for fiscal year 2013. Israel topped the list with $3 billion, while Tanzania held down the tenth spot with $531 million.

The CRS report noted that the Obama administration's request for aid for the East Asia and Pacific region for 2013 remained pegged below $1 billion, nearly the same amount earmarked before the announcement of its strategic "pivot". South and Central Asia, where the US is bogged down in military conflict in Afghanistan, received $5 billion in aid this year.

The same CRS report noted that foreign aid is "an attractive target for significant spending cuts in order to reduce deficit spending." House Foreign Affairs Committee Chairman Ileana Ros-Lehtinen earlier this year told US Agency for International Development head Rajiv Shah during a congressional hearing that his aid agency should consider cutting back on certain countries "that no longer need support." Southeast Asian allies such as Indonesia, Thailand and Malaysia arguably fall into that category.

Although US officials like Clinton have spoken to the need to put more economic largesse behind its "pivot" policy, fiscal belt-tightening motivated by the recent financial crisis and costly wars will likely constrain Washington's ability to offer any time soon richer economic aid packages to its regional partners and allies. As long as that is the case, the US's strategic pivot will lack economic ballast and will likely be overshadowed by China's comparatively more generous mix of soft and hard power.

George Amurao, a former journalist in Manila, until recently worked for the Southeast Asian Press Alliance. He is now with Mahidol University International College in Bangkok, Thailand.