On the summit of Jebel Hafeet, on the border of the UAE and Oman, I found this graffiti—the characters for “China” spray painted on the rock.

I saw similar graffiti in a natural valley in Sapa, Vietnam, back in 2005. As China grows richer, and its citizens find more opportunities for overseas tourism, I guess we should expect more of this kind of vulgar graffiti to pop up in the natural tourist sites of the world.

I’m happy that China’s economic development has created an upwardly mobile middle class that has the opportunity to travel overseas. I just wish they wouldn’t take out their lack-of-modern-empire-penis-envy frustrations on the natural environment of the world.

(It could be worse—at least the Chinese government doesn’t have management over tourist sites outside China, which would be a real disaster for human civilization).

Or so says Christopher Hitchens in a compelling piece in Slate on North Korea. Part reminiscence, part reconsidertion, and part book review, Hitchens praises the book The Cleanest Race: How North Koreans See Themselves and Why It Matters, recently written by B.R. Myers, in which Hitchens repeats Myer’s theory that communism in North Korea is dead—its most recent constitution drops all mention of the word and there is no dictatorship of the proletariat. Instead, Pyongyang operates like a textbook fascist totalitarian government, maintained by slave labor, and based on racism and xenophobia. (Ironically, many of the principles may be carried over from Japanese imperialism.)

I think the population’s ignorance about their state of affairs is overblown, and I don’t think that Hitchens’ one racist, xenophobic tour guide is quite as representative of the population as he claims to think, and I think that in the past few years the people of the DPRK have learned that their government is dirt poor compared to their southern neighbor. (The country recently backtracked on its currency devaluation after it unleashed public outrage, a mighty rare occurrance.) But that’s about the only point of optimism in the Korea.

Hitchens’ article is titled A Nation of Racist Dwarfs, and the reason is clear only at the end of the article:

Here are the two most shattering facts about North Korea. First, when viewed by satellite photography at night, it is an area of unrelieved darkness. Barely a scintilla of light is visible even in the capital city. Second, a North Korean is on average six inches shorter than a South Korean. You may care to imagine how much surplus value has been wrung out of such a slave, and for how long, in order to feed and sustain the militarized crime family that completely owns both the country and its people.

But this is what proves Myers right. Unlike previous racist dictatorships, the North Korean one has actually succeeded in producing a sort of new species. Starving and stunted dwarves, living in the dark, kept in perpetual ignorance and fear, brainwashed into the hatred of others, regimented and coerced and inculcated with a death cult: This horror show is in our future, and is so ghastly that our own darling leaders dare not face it and can only peep through their fingers at what is coming.

I think the last line is interesting coming from Hitchens, a left-wing radical who supported advocated invading Iraq on the grounds that the civilized nations of the world will inevitably have to face off against such a tyrant, and that it was better to do so on our terms. He stops short of advocating a strike on North Korea, but the dreaded implication is that we are going to have to deal with the fallout from North Korea’s tragic situation at some point, and the legacy will likely be with us for a century or more.

By the end of the 19th century, the island of New Guinea (the origins of that name can be read at a previous post here) was colonized by three European powers. The Dutch colonized the western portion, the Germans claimed the northeast coast, and the British held the southeast coast adjacent to the colony of Australia. However, the jungles of the island were so thick, and the mountains and valleys in the interior so treacherous, that the colonial interests kept to the coastal fringes. There was little exploration deep into the jungle, and the official border between the territories between the European powers did not need to be properly defined.

After World War I, the British claimed the German territory and the island was then evenly split between the Dutch in the west and the English in the east. Western New Guinea became part of Indonesia when the Dutch possessions gained independence, just as possession of eastern New Guinea (Papua New Guinea, or PNG) passed from England to Australia. Because exploration of the deep interior was limited, the border was only loosely defined as an neat slice down the island.

It was not until 1973 when the land border was finally demarcated. The Indonesian and Australian governments entered into a treaty but which the border would follow the 141st east meridian, cutting neatly down the middle of the island. Looking at the border from a distant view, such as on the left side of the picture above, the border looks perfectly straight—with one small exception. What appears to be a minor deviation on the map is in fact a complicated squiggle when viewed closely, such as on the right side of the picture above.

That is the Fly River, a river that flows mostly through the eastern part of New Guinea but which protrudes slightly to the west of the 141st east meridian longitude line. The impracticality of leaving a minor sliver of land with Indonesia was recognized as the interior was more closely explored, and this territory was ultimately granted to Papua New Guinea. To compensate for this slight gain in territory for PNG, the border south of the Fly River is slightly east of the 141°E longitude line. And another part of this deal was that Indonesia would have the right to use the Fly River to its mouth for navigation to the Ocean.

Such is the logic behind New Guinea’s “squiggly border,” and how a neat compromise can solve potential messy border problems.

Former South Korean president Roh dead amid suicide probe

FORMER South Korean President Roh Moo-Hyun has died, sparking an investigation whether he committed suicide amid a corruption investigation.
Roh died on Saturday after falling down a mountain while hiking with an aide, Yonhap news agency said.

Roh, at the centre of a corruption probe, received severe head injuries and died after being moved to a larger hospital in Busan from his hometown of Gimhae, Yonhap said.

Police are investigating whether Roh committed suicide, the report said.

The corruption probe centred around a payment worth one million dollars to his wife from a wealthy shoemaker, and a payment by the same man worth five million dollars to the husband of one of Roh’s nieces, Yeon Cheol-Ho.

Roh, elected partly on an anti-corruption platform, served from 2003 to 2008.

He became the nation’s third former president to be summoned by the prosecution after Chun Doo-Hwan and Roh Tae-Woo, who were both convicted in 1995 of receiving bribes and inciting mutiny.

Both were sentenced to death but were pardoned in 1997.

Ponder for a moment the peculiar borders of Malaysia. It is the only country in the world, or at least the only one in its weight class (get out of here, Equitorial Guinea!) that is half continent and half island. The peninsula juts out of continental southeast Asia, while the island portion surrounds the Sultanate of Brunei and shares the rest of the island with part of Indonesia.

The initial conclusion might be that these borders are all the fault of the British Empire. The modern borders of many Africa and Asia colonized regions today have the same borders that existed during colonial times, with little correlation to the physical or ethnic geography of the region, and Southeast Asia is no exception (see a previous post on the curious long and narrow border of Thailand here). But the British Malay Colony, and the successive Federated Malay States, were only on the Malay peninsula. The eastern region of Sarawak was not part of the British colony, and has its own curious history.

The eastern part of Malaysia that is on the island of Borneo was originally all ruled by the Sultan of Brunei. In the 1840s, a British man and failed merchant by the name of James Brooke arrived in Brunei and offered to assist the Sultan keep order in an uprising that was flaring up in Sarawak, the southern portion of the realm. Brooke was successful in arranging a peaceful settlement, but the Sultan refused to pay him, and Brooke responded by threatening the rule of Brunei with his makeshift yet professional military force. The Sultan responded by granting Brooke the title of Rajah of Sarawak —and it was not long before this title grew into genuine sovereign power over the region.

Brooke proceeded to set around establishing his rule over Sarawak. He codified laws and established civil rule. He ruled as an absolute monarch with constitutional sympathies, perhaps akin in governance to the Tudor monarchy where a Parliament existed for advisory purposes only. He passed on the title to one of his nephews (he had no legitimate children and there were rumors that he was homosexual), and for a total of three generations, Brookes ruled over Sarawak as the “White Rajahs.” Thus it was that today’s “Eastern Malaysia” was run as a private colony with little if any connection to the Malay peninsula with whom it would soon be united in political unison.

Management of Sarawak is believed to have been very efficient and orderly. The rubber and oil industries boomed. The public service institutions grew stronger, complete with a penal code modeled on the British penal code, while local traditions were preserved and Christian missionaries outlawed. However, Sarawak was attacked and occupied by the Japanese in 1941, and that same year a new constitution was adopted that turned the territory into a more genuine constitutional monarchy. Vyner Brooke, the third White Rajah, evacuated his family and himself to Sydney, Australia, where he remained for the occupation of the country by Japan. (A wise course of action considering that Sarawak was probably the most obvious example of “white imperialism” over the “Asian peoples” for which Japan was nominally waging war in the Pacific.)

After World War II, the third Brooke to rule Sarawak ceded the territory to the Colonial Office of the British Empire for a sizeable pension, paid to him and his three daughters. Ironically, this was met with outrage by the inhabitants, including a majority of the native members of the Council Negri (parliament), such that the first two British governors to Sarawak were assassinated in the resulting unrest. Twenty years later, there was similar local opposition to being fedarated with Malaysia, and there was a serious push by some segments of the population to restore the monarchy. No such serious movement exists today.

In Younghusband’s post on Friedman’s talk, another speaker at the same event was James G. Rickards, a consultant at Omnis, who spoke in unique terms about financial threats to national security, and financial warfare. He doesn’t propose the answers or guess about the future, but identifies the issues and warns of potential risks, and his fundamental argument is that smart people in the US government must look more carefully at financial threats to US national security. Here again you can right-click and save an mp3 of the speech here.

• Fannie Mae was being ipso facto nationalized as Russia was invading Georgia. Congress acted quickly to arrange a workout that took mere weeks, lightspeed by legislative time. In a typical private sector bailout, the equity holders are wiped out and the debt-holders take a cut on their debt, such as 80 cents on the dollar. In Fannie Mae’s case, this didn’t happen—and perhaps the primary reason is that two of the biggest bond holders are Russia and China. Cutting billions of dollars in their recievables, especially during the Russia-Georgia conflict, could have been seen as an act of financial warfare.

• Russia has the ability, through its surrogates, to make bets on the natural gas futures markets. They could short sell natural gas commodities, cut off supplies to Europe and thus manipulate the future price, and make a killing. This is effectively insider trading that uses their own insider information.

• The US economy has been hammered, the Federal Reserve is printing money with reckless abandon, but the US dollar remains strong. For how long? If the dollars is perceived to considerably drop in value, consider this: if the Chinese were to dump their US dollars all at once, they would be hurt almost as much as the Americans, because the value of those assets would drop so sharply. But China could take a halfway step, such as with an exchange of long-term U.S. debt for short-term notes, which could be part of a scheme to create am alternative to the dollar, such as a gold-backed currency.

Color me shocked that Coming Anarchy’s favorite regional Chinese capital has a law firm going international, and into the wilds of Central Asia of all places.

Urumqi legal market evolving as cross-border trade flows

In preparation for the flourishing of cross-border trade, Xinjiang Gonglian, a law firm based in Urumqi, the capital of China’s northwest Xinjiang Uygur Autonomous Region, is now busy preparing for a branch office in Bishkek, the capital city of neighbouring Kyrgyzstan. The new office is expected to open in May 2009. Gonglian will be the first PRC law firm established in Kyrgyzstan.

In the past few years, the legal market has been growing rapidly in Urumqi, the most inland city in the world. By the end of 2008, Urumqi had more than 600 lawyers in 57 firms, a dramatic increase compared to the 1980s, when there were only 20 lawyers…

In 2008 alone, Xinjiang’s total import and export levels hit a historical high, exceeding US$22bn. Regarded as the bridgehead for trade ties with Central Asia, Xinjiang’s trade dominates the mid- and west-China regions, and ranks number 11 in trade among all China’s provinces.

The autonomous region borders eight countries – Mongolia, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Afghanistan, Pakistan and India – and trade ties have been established with more than 100 countries and regions. There are approximately 6,000 trading companies in Xinjiang, most of which are headquartered in Urumqi…

“International companies are starting to show their interest in Xinjiang, and many companies from Japan, Germany, Italy, South Korea and the US hope to use Xinjiang as a springboard for entering central Asia,” said Zhang Jianwu. “But for us, as a local inland firm, we’ll try to use our geographic and language advantages to shine in the regional market, rather than trying to expand to south or east China where the legal market is more competitive.”

Prior to Obama being elected, I wrote that his foreign policy “scares me,” referring specifically to North Korea. Vice presidential candidate Biden said that Obama would be “tested” in his first year in office. Kaplan wrote that, if elected, Obama would have to send a message that, “I’m not Jimmy Carter or even Bill Clinton… I’m not the candidate who had a tepid response to the Russian invasion of Georgia.”

This is all relevant because over here in the Far East, there is intelligence that North Korea is on the brink of firing a ballistic missile, possibly towards Japan, and possibly towards the United States. The goal? Analysts say it is meant to intimidate conservative South Korean President Lee Myung-bak and grab the attention of President Obama.

Before the election, this was Obama’s stance on North Korea, according to CFR:

President-elect Obama advocates for developing an “international coalition” to handle nuclear North Korea, calls the Six-Party Talks “ad hoc,” and says he supports “sustained, direct, and aggressive diplomacy.” In a September 2008 presidential debate, Obama said a lack of diplomatic engagement with North Korea led the country to significantly increase its nuclear capacity, and said the Bush administration’s eventual reengagement with the regime led to “some progress.”

Within weeks of Pyongyang’s October 2006 nuclear test, Obama appeared on Meet the Press and said the United States had no leverage over North Korea because of Washington’s refusal to hold bilateral negotiations. He also clarified a passage from his book Audacity of Hope (in which he posed the question “Why invade Iraq and not North Korea or Burma?”) and said he did not consider invading the communist country an option to resolving the nuclear issue.

In May 2005, Obama named North Korea as one of the “biggest proliferation challenges we currently face.” Obama has called for the strengthening of the Nuclear Non-Proliferation Treaty so that countries like North Korea “that break the rules will automatically face strong international sanctions.”

Obama said in September 2008 he believes the United States needs a missile defense system in part because of the nuclear threat North Korea poses.

Pyongyang knows exactly what it is doing. It knows the US watches its activities with spy satellites. It knows there are ROK and Japan intelligence units with sources in the country. It knows that Obama became president on an anti-Bush mandate. And it’s goal here is to act with its typical brinkmanship, and try to get something in exchange. In other words, Obama is being tested—just two weeks after his inauguration.

Marmot expects Pyongyang is trying to push Seoul out of the six party talks (relations between Pyongyang and Seoul are at present pretty darn bad) and push Obama into “bilateral mode.” All this will give Obama the chance to show the world what he means by “sustained, direct, and aggressive diplomacy.” I had no clue what he was talking about then, and am no closer to understanding how those rules would apply to this situation not that we have a hard fact pattern. And frankly, while I’m no sore loser, I still think McCain had it right.

When the Arabs conquered the Mediterranean, shutting off the flow of goods, money, people and security from Europe to North Africa and the Levant, the center of Western civilization moved northwards. As the synergy between mass communications, transportation and new technology empower the East, we see a lagging Asia catching up and the center of world power shifting, albeit slowly, from the Atlantic to the Pacific. Both Thomas Barnett (who I hope to meet Tuesday!)and Robert Kaplan have discussed this trend and that the US is uniquely positioned to be a major player on both sides thanks to its geography.

The announcement that Secretary of State Clinton’s first trip will be to Asia instead of Europe is further evidence.

One interesting question is, assuming the center of global power (political, economic, military) does slowly shift to the Pacific, what will it mean for Oceania’s vast array of failing and ungoverned states? Will we see more interventions and peacekeeping missions? Will the US take the lead or may Australia, New Zealand, Japan, China or India. As traffic increases will instability on the many island states there lead to intervention, or can they be bypassed and isolated given their geographic location? Will they face increased pressure to democratize or to regulate their financial systems (e.g. lots of money laundering)? It would be an interesting topic for the boys at Pacific Empire (if they are still alive).

The developed world is accustomed to firing employees when times are hard. But the concept is new for many of the world’s emerging economies. In many cases, the legality and process of how a lay-off even happens is vague. Consider the situation that workers in China and Dubai, United Arab Emirates, are currently facing.

CHINA

China established a the first workplace-protection legislation, known as the Labor Contract Law, last January, which sought to tighten job security and guarantee severance payments. Recent job-discrimination laws also made it easier to file complaints against employers.

But as the global financial crisis hits the heart of the world’s factory floor, worker protections are put on the back burner in an attempt to stop the job loss hemorrhage. Local authorities are permitted to freeze minimum-wage levels, reduce or suspend employer social-insurance contributions. This threatens the public trust in the still-developing rule of law, and the ability of government. Yet these are the types of dodgy practices emerging:

After their factory closed last month, workers from the Shatangbu Yifa Rubber & Hardware Factory in Shenzhen filed for the back pay and severance promised under a contract required by the new law. The Hong Kong-based owner disappeared, according to Shenzhen officials. That left many migrant workers stranded without enough money to return to their hometowns hundreds of miles away. About a third of the factory’s 300 workers went to the Shenzhen government to request a speedy resolution of their case… Local officials later gave the employees 500 yuan ($73) in back pay from a special fund, but said other claims would have to go through a bankruptcy court.

DUBAI, UAE

The UAE is experiencing its first mass job losses across the board for the first time ever, and such a situation was not envisioned to happen anytime soon be legislators. Essentially no new labor laws have been established in a decade, and the concept of redundancy does not exist in statute. Interpretation is varied, no compensation payments are clearly required in such an event, and by law, prior written notice is sufficient to lay off employees.

That being said, there are certain minimum statutory entitlements—all accrued benefits (such as accrued but unutilised leave) and so-called termination “gratuity” must be paid, and in the event of foreign employees—a major issue in Dubai, where 80% of the population is foreign—paying for repatriation is also an obligation. However, employers that refuse to pay for accrued benefits and gratuity have a wide leeway to escape prosecution.

The authorities are starting to look at managing redundancy compensation to address a lack of legislation, but at very least, according to one local lawyer:

employers in the UAE were ill prepared to deal with the effects of the volatile world economy and have had little option but to let their employees go, and this will undoubtedly continue into 2009.