The diplomatic storm in the South China Sea/West Philippine Sea

By Dr. David Jay Green / November 21, 2016 / Businesmirror

Events in the diplomatic world surrounding the South China Sea/West Philippine Sea have unfolded with breathtaking speed since the election of President Duterte. Most important, he has moved to distance the Philippines from the United States and sought a closer relationship with China. The two Asian neighbors have long been at odds over the South China Sea/West Philippine Sea. Along with several other countries, China and the Philippines have squabbled over ownership of the small islands and reefs and over the fishery and energy resources. These disputes intensified over the past decade and the risks to the region have been rising.

I’m not going to pretend that I understand all of Duterte’s concerns, and any new government needs time to formulate new positions. But one element is clear: there are unresolved tensions stemming from the history of the Philippines forcibly taken and held as a colony of the United States. In common with other ex-colonial powers, the United States shies away from frank acknowledgements of what past actions look like viewed under present values. Across the world, colonial experiences—the economic and political institutions developed under colonialism—stunt growth and development. This should not be a surprise to people in the United States; we are still dogged by the institutions of slavery—institutions that formally ended well more than a century ago.

Duterte’s instincts over his country’s long-term interests are well founded. East Asian economies are very interdependent and vulnerable to shocks that could come from any interruption to trade or investment flows. Real conflict in the South China Sea/West Philippine Sea could wreak havoc across East Asia. This is true even for China. Although its huge size suggests that it could survive trade interruptions better than its smaller neighbors, this is wrong. China has come to rely upon market-based institutions and has progressively opened its border to capital flows. Conflict in the South China Sea/West Philippine Sea could mean for China what the 1997-1998 Asian financial crisis meant for Southeast Asian nations—years of lost development.

Cooperation between China and the Philippines in the South China Sea/West Philippine Sea is definitely preferable to conflict, but saying so doesn’t make it so. History is littered with unsuccessful attempts to defuse conflict. What is needed is to encourage countries to see their neighbors as development partners, not just as competitors. Southeast Asian nations have extensive experience in this through their participation in regional initiatives that expand cross-border opportunities for investment and trade.

China, along with its mainland Southeast Asian neighbors, participates in the Greater Mekong Subregion (GMS) initiative. Beginning in the early 1990s, the GMS helped mobilize more than $16 billion in investments, building the roads and highways that supported explosive growth in trade.

Similarly, the Philippines is a member of the Brunei-Indonesia-Malaysia-Philippines-East Asean Growth Area (BIMP-Eaga), founded by one of President Duterte’s predecessors, Fidel V. Ramos, in the early 1990s. BIMP-Eaga is not the success seen in the GMS, but that is partly due to the lack of proper infrastructure investment. The experience of the Philippines in the last decade with its Nautical Highway System (a roll-on, roll-off ferry system allowing ships to move truck cargoes without costly loading and unloading) suggests that we can do better. Read more…

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