The DailyBrief

Friday October 13, 2017

Indian central bank: In his three years as governor from 2013 to 2016, Raghuram Rajan restored calm to Asia’s No. 3 economy, William Pesek writes. In short order, the former IMF economist tamed inflation, stabilized the rupee, worked to reduce bad loans in the banking system and talked credit-rating companies out of downgrading New Delhi. And then, in September 2016, Rajan, who’s often listed among Nobel Prize candidates, was out of a job. The popular excuse: he was too slow to cut interest rates. Prime Minister Narendra Modi opted instead for Urjit Patel, Rajan’s deputy. Fears that Modi had hired a yes-man seemed confirmed by the demonetization debacle of November 2016. Dozens literally died scrambling to exchange their life savings as 86% of currency in circulation was suddenly ruled useless. Dismal logistics cratered national growth rates and dented Modi’s reputation for competence. It remains to be seen whether Patel can turn things around and rehabilitate the Reserve Bank of India’s credibility. READ THE STORY HERE

Sino-Japanese maritime dispute: Since the friction over the southern Senkaku islands (Diaoyu to the Chinese) began to intensify around 2010, China has steadily expanded its fishing fleet, coast guard, and naval activities around them, Grant Newsham writes. Chinese ships are in more places, more often, and in greater numbers than the Japanese Coast Guard can handle. China’s air force also routinely intrudes into Japan’s airspace, while harried Japanese jets dutifully scramble to intercept. In one brazen case of letting Japan know what’s in store, Beijing in August 2016 sent well over 200 fishing boats and 15 coast guard ships to the Senkakus – with China’s navy over the horizon. There was little the outmanned Japanese could do. Not surprisingly, China reckons it can take the Senkakus whenever it wishes. It’s only a question of time before Chinese “fishermen” land on the Senkakus, and the Chinese Coast Guard dares the Japanese to respond. And there’s more to it than just the Senkakus. Beijing has quietly stated that the entire island chain, which is known in Japan as the Nansei Shoto and includes Okinawa, is properly Chinese territory. READ THE STORY HERE

Southeast Asia diplomacy: A long-running territorial dispute between Australia and Timor-Leste is a step closer to resolution with last month’s announcement that talks at The Hague arrived at a new maritime border treaty for the Timor Sea, Erin Cook writes. The contested sea is home to the Greater Sunrise oil and gas fields, with estimated reserves worth over US$31 billion, sitting between one of the world’s most affluent and one of its poorest nations. Oil revenue makes up around 80% of Timor-Leste’s national revenue and with concerns current fields will be depleted within the next decade, Dili needs new exploration and production to prevent fiscal collapse while the government rolls out plans to lessen reliance on natural resources. Full details of the agreement are expected to be announced in late October, after a finalization process of the treaty is completed by The Hague’s Permanent Court of Arbitration. READ THE STORY HERE

Australia-Philippines security cooperation: The two countries have drawn closer to fight Islamic State, a strategic shift that aims to rebuild broken strategic bridges between Manila and the West, Richard Javad Heydarian writes. Australia was among the first regional powers to ring alarm bells over the threat posed by Islamic State to the southern Philippine island of Mindanao. The warning came weeks before local and foreign militants first laid siege to the city of Marawi on May 22, a four-month-old urban warfare battle Manila is still struggling to finish. “We’re coping … we also hope [the Marawi battle] will be finished in about one week,” declared Philippine President Rodrigo Duterte aboard Australia’s largest warship, the HMAS Adelaide, during a goodwill mission to Manila on October 10. Since September, a fleet of six Australian Navy ships carrying as many as 1,200 Australian Defense Force personnel has toured the region under the Indo-Pacific Endeavor 2017 – a muscular expression of Australia’s growing naval presence in adjacent waterways. READ THE STORY HERE

Russian arms deals: Saudi Arabia’s agreement to purchase the S-400 Triumf missile system is a major blow to the US and its European allies, Stephen Bryen writes. The deal follows Turkey’s $2.5 billion agreement to buy the S-400, and ongoing negotiations with Egypt for the S-400, which is considered a real game changer because it can fire multiple intercept missiles. The S-400 also has capability against ballistic missiles, a feature that surely attracted Saudi Arabia’s interest. The Russians have made a significant breakthrough with sales of weapons to some Nato countries with uncertain futures in the bloc (e.g. Greece, Turkey) and strong US client countries such as the UAE. One immediate new example: Russia says the UAE is just months away from buying the formidable Su-35 multirole fighter jet, the current queen of the Russian Air Force fighter fleet. READ THE STORY HERE

Asia Times app: Asia Times has launched an app for both iOS- and Android-based devices that delivers the publication’s regular daily news, commentary, blogs and live coverage while also bringing readers added functionality. As we report here, the app, launched on July 25, includes content notification, share and save functions and is free to download from both the Apple Store and Google Play