Geo-Politics

Is the Middle East on the Edge of a Full Blown War?

A Brief

Geopolitical tensions have long plagued the Middle East, with recent developments sparking concerns of a full-scale war. Various factors, including political unrest, economic challenges, and religious and ethnic conflicts, have contributed to increased regional tensions. The Middle East is indeed edging closer to a wider regional conflict, as noted by Julian Borger, the international affairs editor at The Guardian. The struggle for regional dominance among major powers has escalated proxy warfare and exacerbated tensions, heightening the risk of conflict. Central to these tensions is the ongoing Israel-Hamas conflict, rooted in deep-seated historical, religious, and territorial disputes. Recent military operations, attacks and counterattacks have further inflamed the situation, raising fears that the conflict could destabilize neighboring nations. As global attention remains fixed on the Middle East, understanding the complexities of the Israel-Hamas conflict and its broader implications is paramount in assessing the region’s stability and the potential for wider conflict.

“While Rome finally collapsed at the end of the Roman Empire, all of Europe was ravaged by nearly a thousand years of strife and conflict. Unfortunately, the crisis resulting from the defeat of the Ottoman Empire so many decades ago will no doubt linger on for many many decades to come.” David Fromkin’s book “A Peace to End All Peace”

Situation in Gaza

There are important events that could lead to a full-blown war in the Middle East, and the situation in Gaza is presently a major cause of concern due to the ongoing battles in Khan Younis. The high death toll, ongoing combat in Khan Younis, US intelligence estimates of militant losses in Hamas, and the rejection of a hostage-release deal by Israeli Prime Minister Netanyahu are the essential issues to examine. Tragically, many have lost their lives as a result of the fierce fighting in Gaza. As Israeli forces marched into western Khan Younis in Gaza’s bloodiest combat yet, Palestinian sources said that they encircled and bombed two hospitals, impeding trauma treatment for the wounded.

US intelligence indicates significant losses for Hamas. According to US intelligence, only around 20% of Hamas militants have been killed since the Israeli attack on Gaza started on October 7. These figures, which are the first since the conflict, are inadequate, despite Israel’s claim of “destroying” the Palestinian group that controlled the Gaza Strip prior to its most recent assault. When asked about Hamas’ ability to fight Israeli forces and shoot rockets “for months,” the Wall Street Journal quoted an intelligence assessment from December 2023. Israeli authorities have estimated 16,000 wounded Hamas fighters, with half of them probably not coming back to battle, according to the story.

The issue is complicated by Israeli Prime Minister Netanyahu’s rejection of a hostage-release plan. Prime Minister Benjamin Netanyahu rejected Hamas’s ceasefire and hostage release requests, which would have left Hamas in control of Gaza and Israel out of the fight. Such a plan reflects hardened stances and a reluctance to negotiate. This position raises concerns about escalation and the difficulty of resolving the crisis.

Houthis Attack in the Red Sea

In the Red Sea, International maritime traffic and regional stability are threatened by Houthi attacks on commercial and military boats. Houthi forces spokesman Yahya Sare said the latest launches were in “continued support and solidarity with the Palestinian people.” After Israel’s Gaza invasion, the group threatened to attack ships of Israel.

“Today 50,000 to 60,000 commercial ships move through the oceans with 5000 military ships, piracy, militant attacks, and the pollution associated with shipping are the biggest concern of the day” Admiral James Stavirid’s book “SEA POWER: THE HISTORY AND GEOPOLITICS OF THE WORLD’S OCEANS”

The Houthis are an armed political and religious group that champions Yemen’s Shia Muslim minority, the Zaidis. They declare themselves to be part of the Iranian-led “axis of resistance” against Israel, the US, and the wider West – along with armed groups such as Hamas and Lebanon’s Hezbollah movement. The group emerged in the 1990s and takes its name from the movement’s late founder, Hussein al-Houthi. The current leader is Abdul Malik al-Houthi. In the early 2000s, the Houthis fought a series of rebellions against Yemen’s authoritarian, Ali Abdullah Saleh, in an attempt to win greater autonomy for the group’s homeland in the north of Yemen.

According to a senior US military officer, Iranian-backed Houthis have attacked 14 nautical and commercial vessels in the Red Sea at least 100 times in the past 30 days. In response to the strikes, U.S. Defense Secretary Lloyd Austin announced a coalition of at least eleven nations to secure the Red Sea.

Potential Implications for Regional Maritime Security:

The marine security of the region is greatly affected by the attacks in the Red Sea. Given this waterway’s strategic importance, any disturbance to it might trigger a domino effect on international trade and energy supply. More strikes might escalate regional tensions, prompting stricter security measures and perhaps even the militarization of the Red Sea.

Vessel attacks make us wonder how susceptible marine infrastructure is and how urgent it is to work together to protect global commercial corridors. Both regional and international stakeholders are worried about the possible financial consequences of ongoing attacks on the Red Sea’s maritime traffic.

International Response and Concerns about the Houthis’ Actions:

The international community is alarmed about the Houthi Red Sea attacks. The rising violence and the risk of regional conflict have alarmed governments and international organizations. The United Nations Security Council passed resolution 2722 (2024) on January 10, 2024, denouncing the attacks by the Houthis and demanding an end to them. The resolution also reaffirmed the right to freedom of navigation and highlighted the existing arms embargo against the Houthis. China and Russia remained absent, who believed that a truce should be pursued instead of a US response that could escalate the Israel-Hamas conflict. Several US and UK lawmakers voted in favor of the measure.

Multiple governments have demanded that the Houthis end their violence in their statements. Notable among the 44 states that “condemned Houthi interference” with freedom of navigation in December 2023 were NATO and EU countries. The United Kingdom, the United States, Bahrain, Germany, and Japan were among thirteen states that released a supplementary declaration on January 3, 2024. “We will hold malign actors accountable for unlawful seizures and attacks” in the Red Sea, the government stated.

Hostage Situation and Diplomatic Efforts

The Palestinian militant group Hamas is holding a large number of captives, which is adding fuel to the fire. More recently, a number of hostages were released. However, the hostage situation is dire and painful for the families and hostages themselves. The United States, Qatar, and Egypt are among the major regional and international actors that have been actively involved in the hostage negotiations. These nations have played significant roles as mediators in the talks between the warring factions. Participation of multiple countries in the talks is indicative of the situation’s complexity and the acknowledgement of the necessity of a multilateral strategy for reaching a settlement.

With its diplomatic clout, the US has been trying to open lines of communication and even negotiate a solution. As regional powers with connections to different groups, Egypt and Qatar each bring unique viewpoints and bargaining power to the table. A peaceful resolution to the hostage crisis is of the utmost importance.

Escalation in Lebanon and Syria

The escalation in Lebanon and Syria, particularly involving Israeli airstrikes in south Lebanon and the death of Hezbollah members has threatened the peace and stability of the Middle East. In June 2023, tensions between Israel and Lebanon intensified following the erection of Hezbollah tents and amidst claims by Hezbollah that Israel was constructing a wall on the Lebanese part of Ghajar, a village divided by the UN-drawn “Blue Line,” which serves as the de facto border between Israel, Lebanon, and the Golan Heights. Ghajar, initially designated to be divided between Lebanon and Israel, had been fully occupied by Israel in 2006. The presence of Hezbollah tents inside the Shebaa Farms and the Kfar Chouba Hills, areas disputed between Israel and Lebanon, prompted Israel to lodge a complaint with the United Nations. Israeli media reported the removal of one tent by Hezbollah, although the group did not officially confirm this action.

Simultaneously, Lebanese officials raised concerns about Israel’s construction of a wall around Ghajar. Lebanon warned that Israel’s actions could lead to the annexation of the northern part of the village into the Israeli-controlled area. This situation added to the existing tensions, reflecting the complex territorial disputes and longstanding animosities in the region.

Meanwhile, Israeli airstrikes on Hezbollah in south Lebanon have shaken the entire region. On December 27, 2023, an Israeli airstrike damaged two vehicles near a Lebanese army checkpoint in south Lebanon, killing a Hezbollah member and a woman and wounding many others. An Israeli push toward targeted executions in Lebanon surfaced after more than three months of near-daily border fighting with Hezbollah fighters during the Gaza crisis.

Historically, Hezbollah has been a regional power and Iran’s partner. Israel-Hezbollah enmity has increased after one of its members died, sparking concerns about a broader conflict.

The United Nations Interim Force in Lebanon (UNIFIL), the peacekeeping force stationed along the border, has announced its investigation into the incidents. Describing the current situation as extremely severe, UNIFIL has issued a plea for all parties involved to refrain from any actions that might contribute to the escalation of tensions in any form.

Worsening Situation in Syria

Since the Iranian revolution in 1979, which marked the ascendance of religious hardliners to power, Iranian leaders have consistently advocated for the elimination of Israel. Iran rejects Israel’s legitimacy, viewing it as an illegitimate occupier of Muslim land. Iran’s involvement in supporting the Syrian government has expanded significantly, with the dispatch of thousands of fighters and military advisers. Israel has always been concerned about potential covert efforts by Iran to supply weapons to Syria, which pose a threat to Israel.

Meanwhile, Five IRGC members were murdered in Syria in a raid on 20^th January 2024. The loss of IRGC members has complicated regional politics. Iran vows to retaliate against Israel after the Lebanon and Syria crises. Israel has not confirmed its involvement in the assaults; therefore, its reaction is unknown. Iran’s foreign ministry spokesman Nasser Kanaani called the strike an attempt to promote instability in the area.

US Involvement and Tensions in Western Iraq

Twenty years after the U.S. invaded Iraq — in blinding explosions of shock and awe — American forces remain in the country in what has become a small but consistent presence to ensure a check on probable militancy. Simultaneously, six years after the war against the Islamic State, Iraq still faces significant challenges in its recovery. Over a million people remain internally displaced, 4.1 million people need humanitarian assistance, and reconstruction is projected to cost at least $88 billion. An already unstable situation has become much worse as a result of attacks on air bases by the Islamic Resistance, injuries sustained by the US and Iraqi troops at the hands of militants backed by Iran, and general deterioration in ties between the US, Iraq, and Iran. Militants backed by Iran wounded US and Iraqi forces in western Iraq, marking a major episode in the Middle East. As a result of Iran’s backing for militia groups that oppose the US occupation in Iraq, this strike is symptomatic of the long-standing proxy wars in the area. Combat casualties heighten geopolitical tensions and highlight the complex network of alliances and rivalries, both of which contribute to heightened security concerns.

An air base in western Iraq was attacked by the Islamic Resistance, an organization with apparent links to Iranian interests. On January 12, 2024, a militia backed by Iran launched rockets and ballistic missiles against the American-occupied Al Asad airbase, according to the US Central Command. The attack wounded one Iraqi soldier. The attack on the base was claimed by the Islamic Resistance in Iraq. According to the Washington Institute for Near East Policy, the group was created in late 2023 by a number of Iraqi military groupings with ties to Iran.

Assessment of Middle East Stability

The obvious causes of instability are right there. The majority of the area is either coping with violent extremism or experiencing some kind of internal strife. The Arab Spring of 2011 has sparked violent conflicts that will, even after the fighting stops, at most, pose long-term obstacles to peace and progress. Negotiated settlement remains vague due to escalating tensions between Israel and the Palestinians, growing political obstacles on both sides and emerging military dangers posed by Iran and Hezbollah.

“We need international maritime cooperation and improved international treaties on maritime laws including regulations and more protective waters. Admiral James Stavirid’s book “SEA POWER: THE HISTORY AND GEOPOLITICS OF THE WORLD’S OCEANS”

Many of the countries in the region suffer from a combination of issues, including corrupt and self-serving elites, inadequate or nonexistent economic development, difficulties finding and keeping a job, threats to national unity and instability from growing populations, and increasing extremism.

Taken as a whole, the lack of a straightforward method to estimate or forecast the degree of stability in any particular nation, much alone the area, becomes abundantly evident. If we try to generalize about the Arab world or the MENA region based on a single set of characteristics—which vary considerably even between nearby countries—we will miss the big picture. There are just too many variables at play here.

Additionally, as history has shown all too clearly, stability or instability can shift in an instant due to the acts of a specific figure or leader, interpersonal conflicts or capacities for cooperation, the missteps or interactions of specific players, interference from outside sources, the effectiveness or ineffectiveness of crisis management or warfare, and attention-grabbing catalytic events.

End Note

To conclude, the Middle East is at a crossroads, flirting with conflict, as of 2024. Multiple geopolitical, historical, and socioeconomic forces are straining the region’s stability. Escalating war in Gaza, attacks in western Iraq, and the attack on transit ships in the Red Sea have raised tensions and instability. Hamas hostages, the Israel-Hamas conflict, Red Sea Houthi attacks, and other regional developments have produced a fragile web of interconnected problems. All of these incidents have exacerbated rivalries and strained diplomatic relations, raising concerns about a wider and more catastrophic conflict. Events are shaped by regional powers like the US, Iran, and Israel. Foreign parties like Qatar, Egypt, and international organizations demonstrate the region’s instability’s global impact. Traditional tensions and unresolved grudges worsen the situation and could lead to war. The region’s history of rising tensions and outright confrontations makes each episode a potential ignition point for further conflict. Collaboration to address conflict’s root causes, promote understanding, and promote sustainable peace has never been more important for the international community. Despite the hurdles, diplomatic interventions can prevent a full-scale war in the Middle East. The global community must act quickly and decisively to avoid a regional disaster.

Analysis

Is Philippines the Next Japan?

Manila has long cast a longing glance at Tokyo. Japan’s post-World War II economic miracle—a phoenix rising from ashes—is a tale etched into the annals of global capitalism. Now, the Philippines, a nation of 118 million, is attempting its own ascent. But can it replicate the Japanese magic formula?

The archipelago’s economy has been on a tear. Growth rates have outpaced most of Southeast Asia, sustained by a burgeoning call center industry, remittances from overseas Filipino workers, and a growing consumer class. Infrastructure projects, once the stuff of political promises, are now breaking ground. The question is: is this a sustainable boom, or a mirage shimmering in the tropical sun?

I. Economic Growth

The Philippines’ recent economic trajectory contrasts sharply with Japan’s post-World War II economic miracle. Japan’s rapid economic growth from 1945 to 1991, known as the “Japanese Economic Miracle,” was characterized by disciplined fiscal policies, deliberate industrial development, and significant infrastructure investments. This period saw Japan’s economy grow at a rate twice as fast as the prewar average every year after 1955, achieving a peak last seen in 1939 in less than ten years.

Japan’s unique political structure, characterized by strong centralized authority, social consensus, and a long-term perspective, fostered an environment conducive to implementing consistent and far-reaching economic policies. This, coupled with deeply ingrained cultural values of respect for authority, discipline, and collective good, contributed significantly to the nation’s rapid post-war recovery. Ezra Vogel, in his seminal work “Japan as Number One: Lessons for America,” highlighted how Japan’s economic policies were marked by a “remarkable coherence and stability.”

In contrast, the Philippines has struggled to achieve steady economic growth despite having abundant natural resources and a youthful labor force. The Philippines’ efforts to emulate Japan’s swift rise have been impeded by policy changes, political unpredictability, and infrastructure deficiencies. While Japan’s economic policies were marked by stability and continuity, the Philippines has faced a more fragmented political landscape, making long-term planning more challenging.

Despite all these challenges, The Philippines’ real GDP is projected to grow by 0.2 percentage points annually between 2024 and 2029, reaching 6.4 percent by 2029. In 2023, approved foreign investments in the Philippines amounted to roughly 889 billion Philippine Pesos, with the power, gas, steam, and air conditioning sectors receiving the largest share. However, no foreign investments were made in the public sector that year, particularly in defense and administration, including mandatory social security. In May 2024, the Philippines’ trade balance showed a deficit of USD 4.6 billion, slightly down from the previous month’s deficit of USD 4.7 billion. The main economic sectors of the Philippines are manufacturing, agriculture, private services, and trade, with agriculture, forestry, and fishing contributing 8.6% of the GDP in 2023.

The construction industry is also a significant player in the Philippines’ economy, with a projected contribution of 7% to the GDP in 2023. The national government’s infrastructure initiative has generated employment opportunities for thousands of Filipinos and attracted foreign investments worth around 14.2 million Philippine Pesos.

The services sector, comprising business process outsourcing, retail, real estate, and tourism, has been a key driver of the Philippine economy. Despite global challenges such as climate change and economic volatility, the country has made progress in poverty reduction, with rates declining from 23.3% in 2015 to 18.1% in 2021.

Economic growth in the Philippines is expected to accelerate to 5.8% in 2024, up from 5.5% the previous year, and reach 5.9% in 2025.

The medium-term economic projection is expected to be sustained by healthy domestic demand, driven by a strong labor market, ongoing public investments, and potential benefits of recent revisions to investment policy that may encourage private investment. With sustained recovery and reform initiatives, the nation is regaining momentum toward its goal of becoming an upper middle-income country, with a gross national income per capita of US$4,230 in 2023.

II. Political Landscape

Japan is seen as having a parliamentary system, whereas the Philippines is a presidential one. The Japanese political system is a bicameral parliamentary constitutional monarchy with a dominating party system. The Emperor serves as the head of state, while the Prime Minister leads the government and the Cabinet, which oversees the executive branch.

The Philippines is a democratic nation with a president who is chosen directly by the populace to fulfill the dual roles of head of state and head of government. The president is a significant political person who leads the executive branch. When assessing the influence of stability and governance on economic growth, Japan and the Philippines offer significant insights. Although Japan’s economic dominance has been bolstered by stability, the democratic administration of the Philippines provides opportunities for response to public demands and participatory decision-making.

III. Infrastructure Development

Underdeveloped infrastructure is a significant obstacle to the Philippines growth. Congested roads, inefficient ports, and unreliable power supply constrain economic activity and deter foreign investment.

The “Build Better More” program, which replaced the “Build! Build! Build!” initiative, aims to improve the country’s infrastructure. According to data from the National Economic and Development Authority (NEDA), as of April 2024, out of the 185 projects that were identified, 35% were still in progress, and less than 1% had been finished since 2022. The primary sources of project funding for this nine-billion-peso project are public-private partnerships (PPP), official development aid (ODA), and the General Appropriations Act (GAA).

Japan’s post-war infrastructure development was pivotal for its economic growth. Investments in manufacturing and heavy industries necessitated rapid urbanization and infrastructure development, creating a solid foundation for industrial growth. “Japan’s development strategy was heavily dependent on infrastructure investments, which became the backbone of its industrialization policy,” wrote Chalmers Johnson in his book “MITI and the Japanese Miracle.”

Japan’s industrialization policy was largely dependent on its infrastructure investments, which enabled effective connectivity and logistics to promote export-oriented companies and economic growth. While promoting economic development through infrastructure investment is a similar objective of both Japan’s post-World War II infrastructure projects and the Philippines’ Build, Build, Build program, they differ in scale, breadth, and historical context.

IV. Industrial Policy and Innovation

Japan’s post-war industrial policy emphasized key industries such as steel, automotive, and electronics. The Ministry of International Trade and Industry played a crucial role in guiding industrial development through subsidies, tax incentives, and preferential financing. Japan also heavily invested in technological innovation and R&D, fostering a skilled workforce capable of driving industrial growth.

In comparison, the Philippines has faced challenges in establishing a robust industrial base. While the country has seen growth in industries such as electronics, business process outsourcing (BPO), and agriculture, it has yet to achieve the same level of industrial diversification and technological advancement as Japan. The Philippine government has recognized the need for industrial policy reforms and increased investment in innovation to drive sustainable economic growth.

The Philippine Development Plan 2023-2028 outlines strategies to enhance industrial productivity, including improving the regulatory environment, fostering innovation, and promoting technology adoption. The government aims to develop a competitive industrial sector by supporting micro, small, and medium-sized enterprises (MSMEs) and attracting foreign direct investment (FDI). Additionally, initiatives to enhance education and skills training are underway to build a workforce capable of supporting a modern industrial economy.

V. Human Capital Development

Human capital development has been a cornerstone of both Japan’s and the Philippines’ economic strategies, albeit with differing approaches and outcomes. Japan’s post-war economic miracle was significantly aided by its investment in education and workforce training. The Japanese government prioritized universal education, with a strong emphasis on science, technology, engineering, and mathematics (STEM). This created a highly skilled and disciplined workforce that could meet the demands of rapidly advancing industries.

Japan’s cultural values, such as diligence, teamwork, and respect for authority, further reinforced its human capital development efforts. The Japanese education system and corporate culture emphasized lifelong learning, continuous improvement (kaizen), and innovation. These factors contributed to a workforce that was not only technically proficient but also adaptable and committed to excellence.

In the Philippines, human capital development is recognized as a key driver of economic growth. The government has made strides in improving access to education and healthcare, which are essential components of human capital. However, challenges remain, particularly in terms of education quality, skills mismatch, and underemployment.

The Philippine’s government is working to align educational curricula with industry needs, promote technical and vocational education, and expand access to higher education. Efforts to improve healthcare services and social protection are also part of the broader strategy to build a healthy, educated, and productive workforce.

The Philippines’ young and growing population presents both opportunities and challenges. With a median age of around 25 years, the country has a demographic dividend that can drive economic growth if properly harnessed. Investing in education, skills development, and health services is crucial to maximizing the potential of this demographic advantage.

VI. Trade and Foreign Policy

Japan’s economic success was supported by a pragmatic approach to international relations, focusing on economic cooperation and regional integration. The United States played a significant role in Japan’s recovery, providing financial aid and access to the American market. This fostered a strong trade relationship that was pivotal to Japan’s export-oriented growth.

Strong exports of machinery, electronics, and cars characterize Japanese trade, which has helped the nation achieve a positive trade balance. Japan has pursued free trade agreements (FTAs) to expand its access to international markets and promote economic growth. By promoting trade and fostering economic cooperation, these accords with nations in the Asia-Pacific area, North America, and Europe have been essential in boosting Japan’s economic development.

In comparison, the Philippines has faced a more complex geopolitical landscape. While the country has made progress in establishing trade agreements and regional partnerships, it has had to navigate tensions in the South China Sea and shifting global trade dynamics. The Philippines’ strategic location in Southeast Asia presents both opportunities and challenges for its trade and foreign policy.

The Association of Southeast Asian Nations (ASEAN) plays a significant role in the Philippines’ trade strategy. ASEAN’s economic integration initiatives, such as the ASEAN Free Trade Area (AFTA) and the Regional Comprehensive Economic Partnership (RCEP), aim to enhance regional trade and investment flows. The Philippines has also pursued bilateral trade agreements with key trading partners, including the United States, Japan, and the European Union.

Efforts to diversify export markets and reduce reliance on a few key trading partners are part of the Philippines’ trade strategy. The country aims to enhance its competitiveness in global value chains by improving trade facilitation, infrastructure, and logistics. Additionally, initiatives to promote exports of high-value goods and services, such as electronics, garments, and IT services, are being implemented to boost trade performance.

VII. Challenges and Obstacles

The Philippines’ economic journey is not without its challenges and obstacles. Political instability, corruption, and bureaucratic inefficiencies have hindered the country’s progress. Environmental issues, such as natural disasters and climate change, pose significant risks to sustainable development.

Political instability has been a recurring issue in the Philippines, affecting investor confidence and policy continuity. Frequent changes in leadership and political turmoil have created an unpredictable business environment. Corruption remains a major challenge, with the country consistently ranking low on Transparency International’s Corruption Perceptions Index. Addressing these issues is crucial for creating a conducive environment for economic growth and development.

Environmental challenges also pose significant risks to the Philippines’ economic prospects. The country is highly vulnerable to natural disasters, such as typhoons, earthquakes, and volcanic eruptions. These events can cause widespread damage to infrastructure, disrupt economic activities, and exacerbate poverty and inequality. Climate change further amplifies these risks, with rising sea levels, increased frequency of extreme weather events, and changing weather patterns affecting agriculture, fisheries, and coastal communities.

The Philippine government has recognized the need to address these challenges and has implemented various measures to mitigate their impact. Efforts to strengthen disaster preparedness and response capabilities, improve governance and transparency, and promote sustainable development are underway. The government is also working to enhance climate resilience through initiatives such as reforestation, coastal protection, and sustainable agriculture practices.

End Note:

The Philippines stands at a critical juncture in its economic journey. While it has made significant progress in recent years, achieving sustained and inclusive growth remains a formidable challenge. The experiences of Japan offer valuable lessons and insights that can guide the Philippines in its quest for economic transformation.

Japan’s post-war economic miracle was built on a foundation of strong governance, strategic industrial policy, investment in human capital, and international trade. While the Philippines faces a different set of challenges and opportunities, it can draw inspiration from Japan’s experience and adapt these lessons to its unique context.

To realize its full potential, the Philippines must prioritize good governance, political stability, and policy continuity. Strengthening institutions, improving transparency, and reducing corruption are essential for creating a conducive environment for investment and economic growth. Additionally, investing in infrastructure, education, and healthcare will be crucial for building a resilient and productive workforce.

The Philippines’ young and dynamic population presents a unique opportunity for demographic dividends. By investing in human capital development, promoting innovation, and fostering a competitive industrial sector, the country can unlock new sources of growth and development.

While the road ahead is challenging, the Philippines has the potential to become a major economic player in the region. By learning from Japan’s experience and implementing bold and visionary policies, the Philippines can chart a path towards sustained and inclusive growth, realizing its aspirations of becoming the next economic miracle in Asia.

Analysis

Will China and the Philippines adhere to their most recent “Arrangement”?

“China-Philippines Most Recent ‘Arrangement’ Has Nothing to Address the Root Cause of Tensions in the South China Sea”

The Philippine government has announced that China and the Philippines have reached an agreement to ease tensions over the disputed Second Thomas Shoal in the South China Sea. This agreement, negotiated by Chinese and Filipino diplomats in Manila, outlines temporary conditions for resupplying Filipino troops stationed on the shoal. Both nations claim sovereignty over the shoal, which has been the scene of frequent confrontations between their forces. The Second Thomas Shoal, also known as Ren’ai Jiao in China and Ayungin Shoal in the Philippines, lies roughly 1,000 kilometers from China’s southern Hainan Island and the western Philippines Island of Palawan. It has been a flashpoint in recent months, culminating in a violent incident on June 17. During this confrontation, Chinese forces rammed and boarded two Philippine navy boats attempting to deliver supplies to Filipino personnel on the shoal. The Chinese forces seized control of the boats, damaged and took several M4 weapons along with other supplies with them. The clash, which resulted in injuries to Filipino navy officers, was captured on video and in photographs. Both China and the Philippines blame each other for the conflict, asserting their respective claims over the strategically significant shoal. The South China Sea is a crucial global trade route with rich fishing grounds and underwater gas reserves.

In addition to China and the Philippines, other nations with territorial claims in the South China Sea include Vietnam, Malaysia, Brunei, and Taiwan. The region is a sensitive area and a potential flashpoint in the US-China rivalry. While the recent agreement between China and the Philippines marks a step towards reducing immediate tensions, it does not address the underlying causes of the broader South China Sea disputes.

Significance & Background of the South China Sea Dispute

The South China Sea is an incredibly productive area, serving as a major fishing ground for China, Vietnam, the Philippines, and other claimant states. The region’s continental shelf harbors significant natural gas and petroleum reserves. The abundance of marine life in the South China Sea is due to the large-scale drainage of nutrient-rich waters from land and the upwelling of water in specific maritime regions. This heavily fished area is a primary source of animal protein for the densely populated Southeast Asian region, with prevalent species including shrimp, shellfish, anchovies, croaker, mackerel, and tuna. Most of the catch, whether fresh or preserved, is consumed locally. The Philippines, in particular, is a major fish-producing nation.

Furthermore, the South China Sea holds tremendous geopolitical significance in the context of global politics. Its strategic location at the intersection of major maritime routes connecting the Indian and Pacific Oceans makes it a focal point for international powers and their interests. The region is critical to the world economy, facilitating the annual flow of goods worth trillions of dollars. Nearly one-third of global trade, including vital energy resources such as oil and natural gas, passes through these waters. Any attempt by China to disrupt this trade would harm the global supply chain and the economies of other countries. Consequently, the South China Sea has become a focal point for the ambitions and rivalries of major powers, including the United States, China, Russia, and Japan.

Ayungin Shoal, also known as Second Thomas Shoal, is a contested reef claimed by the Philippines, China, Brunei, Malaysia, and Vietnam. The Philippine military ship Sierra Madre, intentionally grounded in 1999 to counter China’s territorial claims, is manned by a small contingent of Philippine Marines. For years, these nations have been embroiled in disputes over the territorial status of various islands and reefs like the Ayungin Shoal in the South China Sea. This region, which includes Whitson Reef, the Paracel Islands, Thitu Island, Scarborough Shoal, and the Spratly Islands, is believed to hold significant oil and gas reserves.

In July 2016, the Permanent Court of Arbitration in The Hague ruled against China’s territorial claims in the South China Sea in a case brought by the Philippines. Recently, the Philippine Foreign Ministry announced that the Philippines and China have agreed on guidelines for de-escalating tensions in the South China Sea to facilitate the transfer of personnel and supplies to the BRP Sierra Madre stationed at Ayungin Shoal. The ministry’s statement outlined that both nations have reached an understanding of principles to prevent misunderstandings and miscalculations during the Philippines’ lawful and routine rotation and resupply missions to the shoal.

This agreement was the result of productive discussions during the 9th Bilateral Consultation Mechanism on the South China Sea, held in Manila on July 2, 2024. Despite this progress, China has refused to acknowledge or recognize the court’s ruling, which states that the islands do not form an exclusive economic zone or disputed territory. The Philippine Foreign Ministry affirmed that Manila will continue to uphold its rights and authority over Ayungin Shoal, in accordance with the UN Convention on the Law of the Sea.

Clauses of the Recent Arrangement

According to Manila, China and the Philippines have reached a ‘provisional deal’ for resupply missions in the South China Sea.

The Philippines and China have reached a provisional arrangement for resupply missions to the beached Filipino naval ship, Sierra Madre, on the Second Thomas Shoal, according to a statement from Manila’s Department of Foreign Affairs (DFA). The DFA did not provide specifics about the resupply missions but emphasized that the arrangement followed “frank and constructive discussions” during the Bilateral Consultation Mechanism earlier this month. Both sides acknowledged the need to de-escalate the situation in the South China Sea and manage their differences through dialogue and consultation, agreeing that the arrangement would not prejudice their respective positions in the area.

The Chinese foreign ministry confirmed the temporary arrangement and reiterated its demand for the Philippines to tow away the Sierra Madre and restore the shoal to its original, unoccupied state. A Chinese spokesperson expressed China’s willingness to allow humanitarian resupply missions to the ship’s occupants if necessary before the vessel is removed. However, China firmly opposed any transfer of substantial building materials or attempts to establish fixed facilities and permanent outposts on the shoal, vowing to resist such actions to safeguard its sovereignty.

Despite an offer of assistance from the United States, Philippine security authorities announced that they would conduct the resupply missions independently. White House National Security Adviser Jake Sullivan had stated that the US would do whatever necessary to support its treaty ally in resupplying the Sierra Madre. However, Eduardo Año, his Filipino counterpart, confirmed that the resupply operations would remain “a pure Philippine operation,” indicating no need for direct US involvement at this time.

Analysis of the Arrangement

Concerns of a military conflict at the Second Thomas Shoal, potentially involving the United States, loom large as tensions between China and the Philippines escalate in the South China Sea. Despite these worries, there are strong reasons to believe that both Beijing and Manila will strive to avoid a military clash. Chinese officials must weigh the regional geopolitical implications and the significant distraction from their current focus on domestic socioeconomic issues. Manila faces an immediate constraint due to an unfavourable military power balance compared to China. Many questions remain about how the United States, the Philippines’ ally, will respond if a naval confrontation occurs in the South China Sea. A critical issue is how Manila and its allies will eventually address China’s gray zone operations, which have proven challenging for regional entities and their supporters, influencing the outcome of current tensions between Beijing and Manila.

Beijing appears ready to seize what it perceives as a favorable moment to capture the Second Thomas Shoal. It has employed water cannons to prevent Filipino vessels from transporting construction materials to repair the BRP Sierra Madre. The Philippines has a strong incentive to strengthen the BRP Sierra Madre to maintain control of the feature long-term. During the prolonged dispute, Manila has sent survival supplies to its marines on the ship, which Beijing claims to have allowed for humanitarian reasons. The Philippines may have covertly supplied limited construction materials to the ship, but there are concerns that the vessel will disintegrate if not significantly strengthened.

The goals of the two countries appear incompatible, and conflict is likely to escalate. From another perspective, China may continue to employ gray zone tactics, gradually depleting Manila’s resources and policy options, enabling Beijing to achieve its short-term objectives. Chinese officials recognize these geopolitical constraints but aim to increase China’s presence and influence in the South China Sea. In the ongoing dispute, Beijing heavily relies on gray zone measures, hoping to ensure the eventual failure of the Filipino vessel on the Second Thomas Shoal. When the warship fails, the shoal might swiftly fall under Chinese control. Beijing expects this strategy to help avert the worst-case regional geopolitical repercussions of a direct military conflict. Many Chinese policy elites believe that the gray zone approach is the best way to address this geostrategic challenge. For more than a year, China has effectively blocked the Philippines’ resupply sorties and prevented ship repairs using these tactics.

As a result, the Philippines is forced to choose between responding to China’s blockade and retaining control of the Second Thomas Shoal. A power imbalance and logistical challenges limit the Philippines’ ability to counter China’s strategy. In the worst-case scenario, Manila may take military action or seek military assistance from non-regional states to resist China’s activities. If this occurs, China is likely to retaliate with substantial military force, citing retribution and self defense.

Root Causes of the Tensions

China’s assertiveness in the South China Sea has steadily intensified, escalating tensions with Southeast Asian claimant nations, particularly the Philippines, near the Second Thomas Shoal in the Spratly Islands. China’s sweeping claims to sovereignty over the sea—and its estimated 11 billion barrels of undiscovered oil and 190 trillion cubic feet of natural gas—have angered rival claimants Brunei, Indonesia, Malaysia, the Philippines, Taiwan, and Vietnam. Countries began staking claims to islands and zones in the South China Sea as early as the 1970s, including the resource-rich and strategically vital Spratly Islands. The inability of Chinese and Southeast Asian authorities to resolve these disputes diplomatically risks undermining international maritime law and encouraging destabilizing military buildups.

China insists that international military forces are not permitted to conduct intelligence activities, such as reconnaissance flights, within its claimed exclusive economic zone (EEZ). The United States, however, maintains that under the United Nations Convention on the Law of the Sea (UNCLOS), claimant countries should have freedom of navigation through EEZs and are not required to notify claimants of military activity.

Recent satellite data reveals China’s growing efforts to expand its territorial control in the South China Sea by physically enlarging existing islands or creating new ones. Beyond adding sand to existing reefs, China has built ports, military stations, and airstrips, especially on the Paracel and Spratly Islands, where it maintains multiple outposts. Notably, China has militarized Woody Island, deploying fighter jets, cruise missiles, and a radar system.

To protect its regional political, security, and economic interests, the US has challenged China’s assertive territorial claims and land reclamation projects through freedom of navigation operations and increased support for Southeast Asian partners. In response to China’s aggressive stance, Japan has provided military ships and equipment to the Philippines and Vietnam to bolster their maritime security and deter Chinese aggression.

Philippine President Ferdinand Marcos Jr., who took office in June 2022, has taken a firmer stance against China compared to his predecessor, Rodrigo Duterte. The Philippines’ most contentious disputes with China center around the Second Thomas Shoal of the Spratly Islands, which lies within the Philippines’ 200-mile EEZ.

Ferdinand Marcos has agreed to increase base access, joint exercises, and weapons exchanges with the United States. In March 2024, US Secretary of Defense Lloyd Austin affirmed that the United States’ Mutual Defense Treaty with the Philippines covers both countries’ armed forces, public vessels, and aircraft in the South China Sea. Meanwhile, Japan has also enhanced its influence by supplying military weapons to the Philippines and Vietnam to enhance maritime security.

End Note

Beijing may wish to refrain from using overt force against Manila in order to resolve territorial and maritime conflicts due to its previous policy preference, regional strategic interests, and the effectiveness of gray zone tactics. Beijing does not, however, intend to forgo using military action as a means of settling conflicts. There is a chance of an armed conflict, especially if Manila takes more drastic measures to make China’s “gray area” strategy ineffectual. The best measures to keep tensions and conflict from turning into war would be to defuse the South China Sea crisis and reopen bilateral talks between Beijing and Manila. Together, Beijing and Manila’s policymakers should take into consideration the ambitious but intriguing idea of creating a maritime park at Second Thomas Shoal with the goal of advancing environmental preservation, scientific study, and cooperative fisheries. For the past ten years, experts from China and Southeast Asia have discussed this topic on occasion, but at the official level, it has not yet been addressed. This possibility might have a favorable effect on regional peace and stability if China and the Philippines give it some thought.

Analysis

Philippines President Vows not to Yield Despite New Provisional Deal with China

zIn a firm assertion of the Philippines’ territorial rights, President Ferdinand R. Marcos Jr. declared that the country would not yield or waver in its stance on the West Philippine Sea. During his 3rd State of the Nation Address (SONA) on July 22, 2024, Marcos emphasized the importance of maintaining the nation’s sovereignty and expressed gratitude for the sacrifices made by the Armed Forces of the Philippines (AFP), the Philippine Coast Guard (PCG), and the fishing communities.

“The West Philippine Sea is not a mere figment of our imagination. It is ours. And it will remain ours as long as the spirit of our beloved Philippines burns bright,” he asserted, drawing a standing ovation from the audience.

The President highlighted the increased strategic efforts to enhance aerial and maritime domain awareness, reaffirming the government’s relentless endeavor to increase the country’s defensive stance through self-reliance and partnerships with like-minded nations. “Laws governing our Maritime Zones and Archipelagic Sea Lanes will ensure that this intergenerational mandate — this duty — takes deep root in the hearts and minds of all our people,” he stated.

A significant development followed the President’s address, as the Philippines and China announced a provisional deal to manage tensions at the contested Second Thomas Shoal. This deal, reached after a series of diplomatic discussions, aims to prevent further clashes in the disputed South China Sea.

Philippine Foreign Affairs Secretary Teresita Daza announced that the agreement signifies both nations’ commitment to de-escalate tensions and manage differences peacefully. “In our desire to de-escalate the situation in the South China Sea to manage differences in a peaceful manner, we emphasize that the agreement was done in good faith and the Philippines remains ready to implement it,” Daza stated.

China’s Foreign Ministry confirmed the arrangement, reiterating its demand for the Philippines to tow away the grounded warship, Sierra Madre, from the Second Thomas Shoal. However, China expressed willingness to allow humanitarian resupply missions to the personnel stationed on the ship if informed in advance.

Despite this, the Philippines maintained its stance against prior notification to China about resupply missions, asserting the missions’ lawfulness and the necessity of preserving national sovereignty. “The principles and approaches laid out in the agreement were reached through a series of careful and meticulous consultations between both sides,” Daza emphasized.

The deal comes after a series of violent confrontations between Filipino and Chinese forces at the shoal, which both nations claim. The Second Thomas Shoal, known as Ayungin Shoal in the Philippines and Ren’ai Jiao in China, has been a focal point of these clashes, sparking fears of a broader conflict involving the United States due to its mutual defense treaty with Manila.

The most severe confrontation occurred on June 17, when Chinese forces repeatedly rammed and boarded Philippine navy boats to prevent supplies from reaching the Sierra Madre. This incident resulted in injuries to Filipino personnel and heightened tensions between the two countries.

The United States and its allies, including Japan and Australia, condemned China’s aggressive actions and called for upholding the rule of law and freedom of navigation in the South China Sea, a crucial global trade route with rich fishing areas and undersea gas deposits.

In response to the tensions, Washington reaffirmed its commitment to defend the Philippines under the 1951 Mutual Defense Treaty. National Security Adviser Jake Sullivan stated, “The US will do what is necessary to ensure its treaty ally can resupply the Sierra Madre on the Second Thomas Shoal.”

Philippine National Security Adviser Eduardo Año confirmed that the resupply missions would remain a “pure Philippine operation,” turning down offers of direct US involvement. “There is no need at this time for any direct involvement of US forces in RORE – resupply mission,” Año said.

The provisional agreement reached by the Philippines and China seeks to manage their maritime differences while preventing future clashes. Both nations recognize the need to de-escalate the situation and manage their differences through dialogue and consultation.

This rare deal with the Philippines could spark hope for similar arrangements between China and other claimant countries in the South China Sea, including Vietnam, Malaysia, Brunei, and Taiwan. However, the successful implementation and longevity of the agreement remain to be seen.

Chinese Foreign Ministry spokesperson Mao Ning emphasized that the temporary arrangement for the delivery of humanitarian supplies reflects China’s goodwill. However, China stood firm on its territorial claims and demanded that the Philippines refrain from fortifying the Sierra Madre with building materials.

The Philippines has consistently rejected such conditions, and the final deal does not include them. Philippine officials stated that the agreement was reached after careful negotiations, excluding prior notification and inspection demands from China.

The Second Thomas Shoal, located about 200km from the western Philippine island of Palawan and over 1,000km from China’s Hainan island, has been a site of repeated confrontations. Both countries assert their sovereign rights over the shoal, which is strategically important and resource-rich.

Manila deliberately grounded the Sierra Madre on the shoal in 1999 to reinforce its claims, maintaining a small contingent of sailors aboard the vessel who require resupply missions that China has repeatedly attempted to block.

The Department of Foreign Affairs in Manila reiterated that the agreement would not prejudice each side’s national positions in the South China Sea. “Both sides continue to recognize the need to de-escalate the situation and manage differences through dialogue and consultation,” the DFA stated.

China’s Ministry of Foreign Affairs confirmed the arrangement, highlighting the mutual understanding to manage the situation at Ren’ai Jiao and ensure humanitarian resupply of necessities to the personnel on the Sierra Madre.

The agreement between the Philippines and China marks a significant step towards managing maritime disputes in the South China Sea. It reflects both nations’ willingness to engage in dialogue and find peaceful solutions to their differences, despite the complex and contentious nature of their territorial claims.

As the Philippines and China implement this provisional arrangement, the international community will closely watch how both nations navigate this delicate situation. The success of this deal could serve as a model for resolving other maritime disputes in the region, contributing to regional stability and cooperation.