Sunday, May 27, 2018

Kerry B. Collison Asia News: INDONESIA Shifting Sands: POLRI-TNI Ties In Counte...

Kerry B. Collison Asia News: INDONESIA Shifting Sands: POLRI-TNI Ties In Counte...:   Despite many looming questions with regard to the rules of engagement, militarisation of counterterrorism in Indonesia seems to be ...

INDONESIA Shifting Sands: POLRI-TNI Ties In Counterterrorism – Analysis


 

Despite many looming questions with regard to the rules of engagement, militarisation of counterterrorism in Indonesia seems to be an irreversible trend. Ruffled ties between the Indonesian Armed Forces (TNI) and the police (POLRI), however, continues to hinder interoperability between the two.

In the second week of May, a string of terrorist acts broke out in Indonesia, from a prison riot at a police headquarters in Depok, West Java, to suicide bombings on three churches in Surabaya, East Java. Such a worrying development pushed President Joko Widodo (Jokowi) to issue an ultimatum to the House of Representatives (DPR) to conclude the revision of the much-delayed Anti-Terrorism Law.

Otherwise, the President warned, he would issue a regulation in lieu of law (Perppu) to strengthen the authority of the state apparatus against acts of terrorism. While welcomed by some, such an ultimatum has generated some concerns, including the militarisation of the counterterrorism landscape.

Military’s Move to Tweak Status Quo

On 8 January 2018, a letter was personally delivered by the newly appointed Commander of the Indonesian National Armed Forces (TNI), Air Marshall Hadi Tjahjanto, to the DPR’s Special Committee on Revision of the Anti-Terrorism Law.

In the letter, Hadi not only posited the need for a bigger role for TNI in counterterrorism operations, but also specifically proposed to omit the word ‘criminal’ in the title, so it will read Penanggulangan Aksi Terorisme or translated as the Law on Countering the Act of Terrorism.

The Minister of Law and Human Rights, Yasonna Laoly, insisted the name be kept as it is. At the heart of the disagreement, the fundamental question is whether the act of terrorism falls under the category of extraordinary crime thus warranting special measures such as the involvement of the military.

TNI’s Role in Counterterrorism

Since 2000 TNI has attempted to change the status quo that tethered the military to operations led by the Indonesian Police (POLRI) when it comes to counter-terrorism operations. Among many changes proposed by TNI, one of the most pivotal is to remove the position of the supporting role or bawah kendali operasi (BKO). The consequence of such abolition is that TNI can wage independent counterterrorism operations without having to consult the DPR. Such a proposal, however, has faced enormous resistance from civil society.

TNI principally is inclined towards a vague law that enables the military or political leadership to flexibly define the circumstances of TNI intervention in counterterrorism. As explained by the Coordinating Minister of Politics, Legal, and Security Affairs, also a former Commander of TNI, Wiranto, it is best if the law is not too detailed, as this can compromise speed and room for manoeuvre against terrorism.

Indeed, the revised law is likely to only give a broad-brush explanation on TNI’s involvement and a presidential regulation will further specify the rules of engagement. Given their close relationship and President Jokowi’s political reliance on many retired army generals such as Moeldoko, Luhut Panjaitan, Ryamizard Ryacudu, Wiranto, and Agum Gumelar; coupled with the good relationship between Hadi and the Chief of POLRI, Tito Karnavian, it is likely for the military to get what it wants – a bigger role in counterterrorism.

Since the success of the Tinombala Operation, a joint POLRI-TNI manoeuvre on 18 July 2016 led to the killing of Santoso, the leader of the Mujahidin Indonesia Timur. Given that this group pledged allegiance to Islamic State, the perception of TNI involvement has been overwhelmingly positive. On 29 May 2017, in a cabinet meeting, Jokowi reiterated the importance of having TNI involved.

Echoing such instruction, Tito argued that TNI is pivotal especially in circumstances such as hijacking at sea and operations in rough terrain such as mountains and jungles due to its guerilla warfare expertise. Furthermore, according to a survey conducted by Kompas (involving respondents from 14 cities around Indonesia), the majority of respondents (92.6 percent) supported TNI’s involvement.

The survey, however, also indicated as much as 23.7 percent of respondents were worried about the potential of human rights abuses. This concern stemmed from the culture of impunity in the TNI. Due to the legal loopholes and the lack of checks and balances from civilians on the military, there is fear that the involvement of TNI can lead to abuse of power. Moreover, TNI personnel could not be tried under civilian courts.

Militarisation of Counterterrorism?

Despite the Anti-Terrorism Law not yet being revised, TNI and POLRI have been attempting since 2015 to improve interoperability in counterterrorism operations. Publicly known as the Group 5, two of the POLRI anti-terror special units known as Detachment 88 and Detachment C Gegana Brimob, have been working closely with three of the TNI’s own.

The TNI units are namely Detachment 81 of the Army Special Forces (Kopassus), Detachment Jala Mengkara of the Marine Corps, and Bravo-90 Unit of the Air Force Infantry. Five of them are jointly stationed at the National Agency for Combating Terrorism BNPT under the auspices of the Centre for Crisis Control (Pusat Pengendalian Krisis – Pusdalsis).

There have been a series of combined counter-terrorism training ongoing under the coordination of BNPT. For example, in April 2015, a week-long joint exercise called Gulkonsis V on counter terrorism operation against ISIS was held in a hotel in Sidoarjo, East Java. On 8 December 2016, the Gulkonsis VI was conducted in the Soekarno Hatta Airport, Tangerang, involving the Group 5, Aviation Security, and civilians. In October 2017, a joint terrorism training was also held in an offshore oil Rig in Pabelokan Island, North Jakarta.

On 18 May 2018, President Jokowi has also reinstated the formerly suspended Koopsgubgab, a joint force of TNI’s three anti-terror units, to assist the National Police during crisis conditions. These have highlighted the efforts to enhance interoperability between TNI and POLRI in counter terrorism operations.

The Persistence of Tension

Given the significant cuts in the military’s authority coupled with the expansion of the police’s role, and with the police and military sometimes sharing overlapping responsibilities, both institutions sometimes found themselves in opposition to one another. One example is an incident between TNI and POLRI on 27 July 2016, where Team 1 Tinombala Task Force, comprising Kopassus and the local military, was ambushed and attacked by personnel from POLRI Mobile Brigade.

The incident highlighted the lack of communication during the operation. According to the Centre for Political Studies in Bandung, between 1999 and 2014, there have been at least 200 cases of clashes with 20 fatalities. Such altercations show the competitive nature of both state institutions.

The ideal reconciliatory approach warrants a comprehensive solution, not only delineation of functions, but also enhancing interoperability and internal reform of both POLRI and TNI.

*Emirza Adi Syailendra is a Senior Analyst at the Indonesia Programme at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore. This is part of a series on Inter-Agency Dynamics in Indonesia.

 

Saturday, May 26, 2018

Kerry B. Collison Asia News: Former British minister Malcolm Rifkind calls for ...

Kerry B. Collison Asia News: Former British minister Malcolm Rifkind calls for ...: Former British minister Malcolm Rifkind calls for probe into Hong Kong role in CIA rendition programme that sent Sami al-Saadi to be tor...

Former British minister Malcolm Rifkind calls for probe into Hong Kong role in CIA rendition programme that sent Sami al-Saadi to be tortured in Libya


Former British minister Malcolm Rifkind calls for probe into Hong Kong role in CIA rendition programme that sent Sami al-Saadi to be tortured in Libya


As Prime Minister Theresa May apologises for ‘appalling treatment’ of Abdul Hakim Belhaj, former foreign secretary calls for top-level inquiry into almost identical case that involved a 12-day detention in Hong Kong

Hong Kong’s role in a pan-Asia secret rendition programme run by US and British intelligence services should be scrutinised as part of a top-level inquiry, a former British cabinet member has said.

The call from former foreign secretary Malcolm Rifkind came as it emerged a prominent human rights barrister retained to pursue legal action against the Hong Kong government over an alleged role in the CIA and MI6-led rendition programme – which included cloak-and-dagger operations in Malaysia and Thailand – was no longer involved in the case.

The new probe became a possibility after Britain issued a full public apology earlier in May to Abdul Hakim Belhaj – an opponent of Libya’s then ruling regime led by the late dictator Colonel Muammar Gaddafi.

In 2004, Belhaj and his wife Fatima Boudchar – who was 4½ months pregnant at the time – were abducted in Kuala Lumpur following a tip-off from Britain’s Secret Intelligence Service (SIS or MI6) before being transferred to an alleged CIA black site in Thailand.

The couple were taken to Libya, where they were tortured and Belhaj was sentenced to death. The couple were subsequently released.

While the Belhaj ordeal has remained in the headlines, an almost identical case – also in 2004 – in which senior Hong Kong officials allegedly sanctioned an illegal detention and secret rendition on the say-so of US and British intelligence, has received scant coverage.

It involved the 12-day detention at Hong Kong International Airport of Libyan national Sami al-Saadi, his wife and their four young children, followed by their forced repatriation – also via Thailand – to the Tripoli torture cells of the Gaddafi regime.

This month’s apology to Belhaj, for what British Prime Minister Theresa May described as their “appalling treatment”, came six years after the UK government paid al-Saadi £2.2 million in compensation for his ordeal which began in Hong Kong.

British police give prosecutors file on Sami al-Saadi’s rendition from Hong Kong to Libya


It was at this point al-Saadi launched what has been a protracted – and highly secretive – legal bid for compensation from the Hong Kong government.

Both the government and al-Saadi’s legal representative John Clancey, from the law firm Ho, Tse and Wai, declined to answer questions about what both would only confirm were “ongoing discussions” over legal action.

Almost 14 years after the only known secret rendition ever carried out in Hong Kong, new pressure could be applied after Rifkind – an elder statesman of British politics and a former chairman of the intelligence and security committee (ISC) of the country’s parliament, which would almost certainly be tasked with carrying out a probe – called for a new inquiry.

Sami al-Saadi’s secret rendition may cost millions in compensation


Rifkind’s primary aim was to discover how much then British prime minister Tony Blair knew of the secret rendition programme. When asked this week if the Hong Kong case should be an integral part of the probe, he told the Post: “In my view, [it would be] desirable for the ISC to consider each and every case where there have been admissions or serious allegations that British intelligence agencies were involved directly, or indirectly, in the illegal rendition of individuals to Libya.”

Rifkind, who was foreign secretary in the government of Margaret Thatcher, added: “Any such investigation by the ISC should also consider whether the prime minister, or any other minister, was aware of and gave any degree of consent to any such renditions which are considered to have taken place.”

Edward Snowden and Sami al-Saadi cases ‘show double standards’


It also emerged that prominent human rights barrister Paul Harris SC, who joined al-Saadi’s Hong Kong legal team in December 2012, was no longer part of al-Saadi’s Hong Kong legal team.

In 2012, Harris said he was confident Sami al-Saadi had a strong case given the cache of classified papers unearthed in Tripoli, which implicate security officials in Hong Kong alongside British, American and Libyan spy agencies in the illegal extradition.

“The documents I’ve seen show a very strong case,” he said at the time.

Asked about the case and the fact he was no longer involved, Harris said he “could not comment on the case at present for legal reasons”.

South China Morning Post

Kerry B. Collison Asia News: The Petroyuan – Analysis

Kerry B. Collison Asia News: The Petroyuan – Analysis: The Petroyuan – Analysis Many oil futures denominated in yuan were launched on the Shanghai market at the end of March 2018 and quick...

The Petroyuan – Analysis


The Petroyuan – Analysis

Many oil futures denominated in yuan were launched on the Shanghai market at the end of March 2018 and quickly traded for 62,500 contracts – hence for a notional value of 27 billion yuan, equivalent to 4 billion US dollars.

The financial process of the new petroyuan, however, had already begun as early as 2016.

Hence there was obviously the danger of an internal financial bubble in China, but linked to the crude oil price – yet the Chinese government had decided that the fluctuation allowed for those contracts had to be only 5%, with a maximum 10% fluctuation only for the first day of trading.

Furthermore considering the average level of oil transactions in China, we can see that oil and gas imports could back financial operations totalling over 200 billion yuan.

According to industry analysts, the level of Chinese oil imports is expected to increase by approximately 2.1 million barrels per day from 2017 until 2023, which implies that the Chinese market will change the future level of oil barrel prices – be they denominated in dollars or in another currency.

Hence, from now on, China will explicitly challenge the “petrodollar” to create its petroyuan – with an initial foreseeable investment by the Chinese government, which will take place on the sale of a 5% shareholding of Saudi Aramco.

Nevertheless the prospect of an IPO on the Saudi “jewel in the crown” – which was also at the core of Prince Mohammed bin Salman’s Vision 2030, all focused on the Kingdom’s economic diversification – has been postponed to at least 2019.

The Saudi Royal Family is not at all homogeneous, both politically and for its different financial interests.

This is demonstrated by the attack – obscure, but thwarted with some difficulty -on Riyadh’s royal palace, launched by some armed units on April 21 last.

Should the sale of a 5% shareholding of Saudi Aramco finally take place, however, it would be the biggest IPO ever.

The magnitude of the deal is huge: according to the latest Saudi estimates, the company is worth 2 trillion US dollars – hence a 5% shareholding is at least equal to 100 billion dollars.

Moreover, China is doing anything to make Saudi Arabia accept payments in yuan – the first step to replace the old petrodollar.

If Saudi Arabia did not accept at least a large share of Chinese payments in yuan, it could be “blackmailed” and witness a decrease in an essential share of its oil exports. Not to mention the fact that – also with reference to Saudi Aramco-as the saying goes, sovereign funds and Chinese state-owned companies have “deeper pockets” than many prospective Western buyers.

Moreover President Trump is doing anything to make the IPO on Saudi Aramco end up in US hands. However, it cannot be taken for granted that he will succeed. In spite of everything, Mohammed bin Salman is not the heir of the old Saudi bilateralism vis-à-vis the United States.

Nonetheless, in his visit to China last March, Prince Mohammed bin Salman already signed contracts with his Chinese counterparts to the tune of 65 billion US dollars – and they are only petrochemical and energy transactions.

Furthermore this major Saudi oil company is considering the possibility of issuing yuan-denominated bonds, at least to cover part of the trade between the two countries.

Moreover, the US imports of Saudi oil have been steadily declining for some time, which makes the US role in the future post-oil diversification of the Saudi economy – the real big deal of the coming years – more difficult.

Over the next few months, however, the Chinese financiers are preparing to launch on the market a yuan-denominated oil future convertible into gold.

According to Chinese sources, it will be open to foreign investment funds and to the various oil companies.

Hence if the use of the dollar is gradually avoided, it will be possible -also for Russia and Iran, for example – to circumvent the sanctions imposed by the USA, the EU and the UN and fully re-enter -precisely through the yuan – the global oil and financial markets.

Moreover, the “petroyuan operation” is rapidly expanding to Africa.

Just recently, we heard about the definition of a three-year currency swap between China and Nigeria worth over 2.5 billion yuan.

As is well-known, the currency swap is a special derivative contract with which two parties exchange interest and sometimes principal in one currency for the same in another currency. Interest payments are exchanged at fixed dates through the life of the contract.

Hence 2.5 billion yuan are exchanged with 720 billion Naira.

Obviously, also in this case, there is no need for either of the two contracting parties to buy US currency for trading and exchanges, while Nigeria is currently China’s largest trading partner in Africa and China is the largest foreign investor in Nigeria.

All this happens in Nigeria, with African exports to China mainly consisting of oil and raw materials, exactly what is needed to keep China’s rate of development (and the yuan exchange rate) high.

The internationalization of the Chinese currency, however, is mainly stimulated by the following factors: the expansion of the cashless economy, which favours large Chinese and global operators such as AliBaba (Alipay) or WeChatPay; the Belt and Road Initiative, which pushes China’s investment and combines it with other monetary areas; the very fast globalization of Chinese banks and their adoption of the SWIFT gpi system; finally the development of the Interbank Paying System between China and the countries with which it trades the most.

Nonetheless there are some factors which still need to be studied carefully.

Meanwhile, Hong Kong is still the largest clearing center for the transactions denominated in yuan-renmimbi – with 76% of all transactions that currently pass through the island still under the Chinese special administration.

Still today the renmimbi account only for 1.61% of all international settlements, while 22 Chinese banks are SWIFT-connected.

Many, but not enough.

Moreover, as much as 97.8% of the yuan trading is still as against the US dollar, while the exchange between the yuan and the other currencies other than the US dollar is worth very little in terms of quantities of cash and liquidity traded.

Still today 80.47% of payments whose last beneficiary resides in China is denominated in dollars.

As to the international renmimbi reserves, it all began when, in September 2016, the International Monetary Fund announced that, for the first time, the Special Drawing Rights (SDR) would include the renmimbi.

In June 2017, the European Central Bank converted the value of 500 million euro into dollars (557 million US dollars) and then into renmimbi – equivalent to 0.7% of the total portfolio of ECB’s currencies, while in January 2018 the German Central Bank decided to include the renmimbi among its reserves.

Nowadays only 16% of China’s international trade is traded in the Chinese currency.

The real problem for the dollar is still the euro.

In fact, the transactions in US dollarsfell from 43.89% of total transactions in 2015 to 39.85% in 2017 while, in the same period, those denominated in euro rose from 29.39% to 35.66%.

However, as Vilfredo Pareto said, currencies are “solidified politics”.

In fact, China wants to use the renmimbi-yuan also in the Pakistani port of Gwadar and in its Free Economic Zone, which is the first maritime station of the Belt and Road initiative.

Furthermore the payments in yuan between China and the USA, which is still China’s largest trading partner – account for 5% only, while Japan – the second largest country by volume of transactions with China – already operates 25% of its transactions with the yuan-renmimbi.

Only South Korea – another primary commercial point of reference for China – does use the Chinese currency for a very significant 86% of bilateral transactions.

Certainly the oil market remains essential for the creation of petroyuan or, in any case, for the globalization of the Chinese currency.

Since 2017 China has overtaken the USA as the world’s largest oil and gas importer.

Furthermore, as early as 2009, the Chinese authorities have criticized the use of the US currency alone as a basis for international trade.

In fact, the Chinese political leadership would like to define a monetary benchmark among the main currencies and later build the progressive de-dollarization of trade on it.

Obviously the expansion in the use of the Chinese currency in global transactions, which peaked in 2015, corresponded to the phase when the yuan was undervalued and gradually and slowly appreciated as against the US dollar.

After the two devaluations of the yuan-renmimbi in the summer of 2015, the profitability of replacing the US dollar with the Chinese currency has clearly diminished.

Moreover, since the possession of the yuan is still subject to restrictions and checks, the globalization of the Chinese currency cannot fail to pass through the full liberalization of China’s currency and financial markets.

A project often mentioned by President Xi Jinping and implemented by the Central Bank, especially with maximum transparency on transactions and the end of the capital “shares”, in addition to the quick acceptance of a price-based financial system.

Moreover, all the currencies with which China trades in the oil markets are still pegged to the US dollar and, for the Chinese authorities, this is another difficulty to replace the US currency.

On the domestic side, the yuan has a big problem: it is a matter of investing Chinese savings, which are currently equal to 43% of GDP.

If we consider a similar investment rate, the Chinese economy is no longer sustainable.

Therefore, either all investment abroad is liberalized – but, for China, this would mean the loss of control over domestic savings – or the yuan becomes a new international currency, thus using it for long-term loans in the Belt and Road Initiative and for creating a market of yuan-denominated oil futures.

Hence, unlike petrodollars, the petroyuan is not a US internal way to use the Arab capital stemming from the energy market, but a large internal reserve of capital to meet the needs of an expanding economy and support China’s fresh capital domestic requirements.

For Swiss banks, however, the flow of renmimbi-denominated contracts will radically change the energy financial market, but in the long run, thus obliging many global investors to invest many resources only in the Chinese financial market.

It is worth reiterating, however, that the Chinese currency has not fully been liberalized yet – nor, we imagine, will it be quickly liberalized in the future.

In essence, China wants to govern its development and it does not at all want to favour the US single pole.

Hence either a small monetary globalization, like the current one, or the large and progressive replacement of the dollar with the renmimbi – but this presupposes the liberalization of the entire financial market denominated in the Chinese currency.

Moreover – but this would be fine for the Chinese government -foreign and domestic investors’ full access to the Chinese capital market should be granted.

It already happened in 2017 but, nowadays, it becomes vital for the geopolitical and financial choices made by President Xi Jinping’s China.

Hence, it is likely that in the future China would play the game that Kissinger invented after the Yom Kippur War, i.e. the game of the dollar surplus in the Arab world that is reinvested in the US market.

Obviously, this has kept the US interest rate unreasonably low with an unreasonably high US trade surplus.

A monetary manipulation made using one’s own strategic and military leverage.

Hence, with petrodollars, the USA has invented the monetary perpetual motion.

Therefore, if most of the Chinese oil market is denominated in yuan-renmimbi, a strong international demand for Chinese goods and services will be created or there will be a huge amount of capital to invest in the Chinese financial markets.

This will obviously change the role and significance of China’s engagement in the world.

With significant effects for the dollar market, which could be regionalized, thus highlighting the asymmetries which currently petrodollars hide: the US super-trade surplus and the simultaneous very low interest rate.

What about the Euro? The single European currency has no real market and it shall be radically changed or become a unit of account among new infra-European currencies.

About the author:
*Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs “La Centrale Finanziaria Generale Spa”, he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group and member of the Ayan-Holding Board. In 1992 he was appointed Officier de la Légion d’Honneur de la République Francaise, with this motivation: “A man who can see across borders to understand the world” and in 2002 he received the title of “Honorable” of the Académie des Sciences de l’Institut de France

Source:
This article was published by Modern Diplomacy.