Why F1 cannot afford to lose S'pore

Sep 24, 2012
 
NEWS ANALYSIS: SINGTEL SINGAPORE GRAND PRIX
 
By Abdul Hafiz ASSISTANT SPORTS EDITOR
 



SO HOW much did Singapore agree to pay Formula One to host its night race for the next five years?

Figures remain strictly hush-hush, but there has been at least some discount on the reported $50 million that was paid to Formula One Administration between 2008 and this year.

The Singapore Grand Prix is, after all, one race F1 does not want to lose.

And it is not just because of the waves of praise that the floodlit spectacle - one that "sends chills down the spine of any Hollywood director" wrote The Times' Kevin Eason last week - attracts from the international press every season.

Singapore remains one of F1's most potent arguments in the battle with other sports such as tennis and European football for Asian dollars.

Elsewhere in the region, apart from Japan where F1 has been almost a regular fixture since 1963, races have been struggling.

China? The Shanghai circuit cost a record US$240 million (S$301 million) to build, but that did not stop serious soul-searching on whether the still loss-making race - so unpopular with locals that spectators had to be bused in to fill up stands - should continue past 2010 before a new deal was signed.

South Korea? After just two years, organisers warned they could not afford to keep on losing money. Only after having thrashed out a lower sanctioning fee with Formula One will the race go on next month, although organisers are still predicting they will be US$26 million out of pocket.

India? The most enduring memories of its inaugural race last season was of the cancellation of the Metallica concert headlining the off-track entertainment due to "technical reasons", and four organisers being arrested for the fiasco.

Even Malaysia is considering whether to continue with its race in Sepang after its contract ends in 2015 because of declining interest despite its low ticket prices.

And then there is Singapore, with a race that has been sold out for all but one season (2009 because of the economic crisis), taking place in the heart of a modern metropolis, producing a heady mix of sporting pleasure and business deals, and primed for the European television market.

The Singapore Grand Prix is more than unique, it is a truly remarkable race.

"Sponsors love it, drivers love it, fans love it, this race has energy, it has a future, unlike some of the duds which have been added to the mix in recent years," wrote The Telegraph's Tom Cary.

Monaco may have the charm of old Europe, but Singapore is Asia's future, now.

To lose the race, in this period of European austerity and when Formula One's majority shareholder CVC Capital Partners is looking to cash in with a US$3 billion IPO in Singapore, will not be a healthy message to send to investors.

Especially when there are already concerns about the lack of a suitable candidate to fill the big shoes of Bernie Ecclestone, the 81-year-old face of the sport who has turned a past-time for the rich into a business worth US$7.6billion.

Singapore has its own reasons for keeping a race that puts it on the world's sporting map, even if the trickle-down effect to the man in the street is harder to quantify.

But for F1, Singapore is proof that a race can be a real success in this part of the world.

When consumers win, who loses?

by Richard A D’Aveni
Todayonline Sep 21, 2012


For most companies, doing what is best for consumers makes sense. But for economies, it can be dangerous.

To understand why, start by thinking of an economy as simply two groups: Producers and consumers.

Government policies can favour producers through import restrictions, low corporate taxes, low regulation and easy commercial credit.

Alternatively, they can favour consumers with free trade, low sales taxes, pro-consumer regulation and easy consumer credit. Either group can also get direct subsidies: Tax breaks and grants for companies or transfer payments for consumers.

Every economy is a mix, but usually one group gets more goodies than the other.

China is famous for its producer-oriented economy - a capitalist paradise where tariffs, government supports and generous bank loans make it easy to build a company. Consumers (and workers) have few rights and little access to credit. Experts often call on China to do more to favour its consumers.

The United States, though it had similar producerist tendencies in the 19th century, is now at the opposite extreme. Why don't economists call for the US to strike a balance? Because prevailing theory - the neoclassical economics that drives most American policy - does not recognise a conflict.


SHOPPING, BUT JOBLESS

In the ideal market, companies compete so effectively that all the value they create goes to consumers, save for the minimum needed to pay for capital and labour. In theory, the choice between producers and consumers need not be made, because serving the latter supposedly ends up strengthening industries.

Unfortunately, this theory is making a lot of American consumers poorer right now. Sure, they can buy flat-screen TVs for incredibly low prices. But that's little help if they are unemployed. The effect of putting too much weight on consumers has been to make the US economy less competitive.

Its companies invest abroad not only because labour elsewhere is cheaper but also because these places favour producers, offering a better chance of success. In thoroughly globalised markets, US firms are weak fish swimming in a lake stocked with piranhas - the supercompetitors spawned by governments less concerned with stock market efficiency.


GERMANY'S BALANCE

What would a more balanced economy look like?

In the past decade, the supposed welfare state of Germany shifted away from consumers. Value-added taxes went up, as did the retirement age. The revenue gains from taxes on fossil fuels and lower-value-added manufacturing went to support Germany's higher-value-added industrial goods and renewable energy sectors, in the form of vocational training and research and development.

A government in favour of free trade within the European Union worked to keep EU tariffs up on industrial goods from outside the EU. Because this prevented Asian rivals from undercutting German producers, domestic companies had the confidence to invest and keep workers employed.

Yet the tariffs were low enough that these industries could not devolve into complacent oligopolies. They had to seek growth elsewhere, and their worldwide competitiveness is a big reason Germany emerged from the Great Recession with lower unemployment and debt than those of other nations.

In the US, there have been cuts to public pensions and some lowering of business taxes. But such actions have been taken in the context of debates over government's size, not to re-balance the interests of producers and consumers. (Thus, some have argued against government spending on vocational training, though that would help producers.)

By reframing the choice and recognising that voters care more about jobs than consumption, US policymakers could create a strong economy in which producers remain healthy - because the customer is not always right.

© 2012 Harvard Business School Publishing Corp. (Distributed by The New York Times Syndicate)


Richard A D'Aveni is a professor of strategic management at the Tuck School of Business at Dartmouth College and the author of Strategic Capitalism.

Why they won’t calm down

Muslim rage
Mischief, not madness, often underlies Muslim anger

Sep 15th 2012
The Economist

TO OUTSIDE eyes it is as bizarre as it is repellent. A single event, book, cartoon, film or teddy bear, which represents nothing but its originator, who may not even be American, sparks lethal outbursts of mass protest. What, to prejudiced Westerners, could better exemplify Muslim backwardness and depravity?

The latest bloody furore was provoked by the belated release on the web of an amateurish film, probably made by a Coptic Egyptian resident in America, attacking the Prophet Muhammad as a fraud, brute and pervert. Yet the film had been available (with stunning lack of success) for months, though dubbed in Arabic more recently. Undoubtedly offensive, it could count as an incitement to religious hatred—illegal in some countries, though not in America. But it is no worse than plenty of other material only a mouse-click away.

So why the ire? In a hallmark essay in 1990 called “The Roots of Muslim Rage”, Bernard Lewis, an Anglo-American commentator on Islam, blamed a mentality twisted by history. He cited the obligation of holy war, dating from the faith’s turbulent birth and shaped by centuries of setbacks ranging from the retreat from Europe to Western imperialism, and even the challenge to Muslim male authority from rebellious children and emancipated women. The result was an inferiority complex, in which humiliation was compounded by Western ignorance.

There is also a less apocalyptic explanation. Muslims’ resentment at slights to their religion is readily aroused by reports of desecration of the Koran or books, films and pictures that include a blasphemous (ie, any) depiction of the Prophet Muhammad or of God. Yet outbursts of rage can also be stirred by political grandstanding and mischievous politicians preying on an ill-informed and aggrieved populace.

It is certainly odd, for example, that the latest film suddenly began attracting attention in the run-up to September 11th, an anniversary almost as politically charged in the Muslim world as it is in the West. It was energetically publicised (albeit in caustic terms) by two Salafist (hardline Islamist) television channels.

Most outbursts of Muslim rage bring political dividends to someone. The Ayatollah Khomeini, for example, reaped the benefits of his fatwa demanding the death sentence on Salman Rushdie for his book “The Satanic Verses”, published in 1988. Pakistani politicians gain from whipping up sentiment against Christians—and against politicians seen as soft on them.

The furore over the cartoons of the Prophet Muhammad published in a Danish paper, Jyllands-Posten , was also curious. It held a cartoon competition (about supposed Muslim intolerance) in September 2005. Protests erupted four months later, sparked by a dossier that included pictures the paper had never published. The row, which cost at least 100 lives, was a boon for those with mischief-making agendas.

Ignorance of the way the West works in many Muslim countries makes rabble-rousing easy. Protesters at the American embassy in Cairo on September 11th erroneously believed the offensive film to have been shown on “American state television”: in a place with a weak tradition of independent broadcasting, that claim is not as absurd as it might be elsewhere.

The casualties of such outbursts are not only innocent lives and lost livelihoods. The truth suffers too. A reluctance among many Muslims to accept that America could be a blundering victim of atrocities rather than a wily perpetrator meant that the 9/11 terrorist attacks on the Twin Towers were widely reported from the outset as an inside job, facilitated by Israel’s intelligence service, to stoke up Western hatred of Islam. Three-quarters of Egyptians now believe that conspiracy theory. It is a headache for their new president, Muhammad Morsi, as he plans to visit New York for the United Nations General Assembly (see next article). For many Americans, only an explicit disavowal of his past support for such theories would signal that he is a decent man worth dealing with.

Why balanced discussions fail

Sep 20, 2012


By Cass R. Sunstein

IT IS well known that when like-minded people get together, they tend to end up thinking a more extreme version of what they thought before they started to talk. The same kind of echo-chamber effect can happen as people get news from various media. Liberals reading left-of-centre blogs may well end up embracing liberal talking points even more firmly; conservative fans may well react in similar fashion on the right.

The result can be a situation in which beliefs do not merely harden but migrate towards the extreme ends of the political spectrum. As current events in the Middle East demonstrate, discussions among like-minded people can ultimately produce violence.

The remedy for easing such polarisation, here and abroad, may seem straightforward: Provide balanced information to people of all sides. Surely, we might speculate, such information will correct falsehoods and promote mutual understanding. This, of course, has been a hope of countless dedicated journalists and public officials.

Unfortunately, evidence suggests that balanced presentations in which competing arguments or positions are laid out side by side may not help. At least when people begin with firmly held convictions, such an approach is likely to increase polarisation rather than reduce it.

Indeed, that is what a number of academic studies done over the last three decades have found. Such studies typically proceed in three stages. First, the experimenters assemble a group of people who have clear views on some controversial issue (such as capital punishment). Second, the study subjects are provided with plausible arguments on both sides of the issue. And finally, the researchers test how attitudes have shifted as a result of exposure to balanced presentations.

You might expect that people's views would soften and that divisions between groups would get smaller. That is not what usually happens. On the contrary, people's original beliefs tend to harden and the original divisions typically get bigger. Balanced presentations can fuel unbalanced views.

What explains this? The answer is called "biased assimilation", which means that people assimilate new information in a selective fashion. When people get information that supports what they initially thought, they give it considerable weight. When they get information that undermines their initial beliefs, they tend to dismiss it.

In this light, it is understandable that when people begin with opposing initial beliefs on, say, the death penalty, balanced information can heighten their initial disagreement. Those who tend to favour capital punishment credit the information that supports their original view and dismiss the opposing information. The same happens on the other side. As a result, divisions widen.

This natural human tendency explains why it is so hard to dislodge false rumours and factual errors. Corrections can even be self-defeating, leading people to stronger commitment to their erroneous beliefs.

The news here is not encouraging. In the face of entrenched social divisions, there is a risk that presentations that carefully explore both sides will be counterproductive. And when a group, responding to false information, becomes more strident, efforts to correct the record may make things worse.

Can anything be done? There is no simple term for the answer, so let us make one up: surprising validators. People tend to dismiss information that would falsify their convictions. But they may reconsider if the information comes from a source they cannot dismiss. People are most likely to find a source credible if they closely identify with it or begin in essential agreement with it.

In such cases, their reaction is not, "how predictable and uninformative that someone like that would think something so evil and foolish" but instead, "if someone like that disagrees with me, maybe I had better rethink".

Our initial convictions are more apt to be shaken if it is not easy to dismiss the source as biased, confused, self-interested or simply mistaken. This is one reason that seemingly irrelevant characteristics like appearance, or taste in food and drink, can have a big impact on credibility. Such characteristics can suggest that the validators are in fact surprising - that they are "like" the people to whom they are speaking.

It follows that turncoats, real or apparent, can be immensely persuasive. If civil rights leaders oppose affirmative action, people are more likely to change their views. Here, then, is a lesson for all those who provide information. What matters most may be not what is said, but who, exactly, is saying it.

The writer is a Harvard law professor.

THE NEW YORK TIMES

[This has bearing on the Singapore Conversation. And the prognosis is not good. People are likely to come to the conversation with their views and leave with a stronger conviction of the correctness of their position.]

China: Cheap labour to cheap genius

Sep 17, 2012
 
By Thomas Friedman
 

ONE of the standard lines about China's economy is that the Chinese are good at copying, but they could never invent a hula hoop. It's not in their DNA, we are told, and their rote education system reinforces that tendency. I'm wondering about that: How is it that a people who invented papermaking, gunpowder, fireworks and the magnetic compass suddenly only became capable of assembling iPods? I'm wondering if what's missing in China today is not a culture of innovation but something more basic: trust.

When there is trust in society, sustainable innovation happens because people feel safe and enabled to take risks and make the long-term commitments needed to innovate. When there is trust, people are willing to share their ideas and collaborate on each other's inventions without fear of having their creations stolen.

The biggest thing preventing modern China from becoming an innovation society, which is imperative if it hopes to keep raising incomes, is that it remains a very low-trust society.

I've been struck at how many Chinese businesspeople and investors have volunteered that point to me over last week. China is caught in a gap between its old social structure of villages and families, which created its own form of trust, and a new system based on the rule of law and an independent judiciary. The Communist Party destroyed the first but has yet to build the second because it would mean ceding the party's arbitrary powers. So China has a huge trust deficit.

To see what happens when you introduce just a little more trust in this society, spend a day, as I just did, participating in the "AliFest" - the annual gathering of thousands of Chinese entrepreneurs who are linked together in the giant Chinese e-commerce website Alibaba.com. Founded in 1999, Alibaba says its sales this year could top eBay and Amazon.com combined. This happened, in part, because it has built trusted, credible markets of buyers and sellers inside China, connecting consumers, inventors and manufacturers who would have found it hard to do transactions before.

Alibaba has three major businesses: Taobao.com and Tmall. com, which together constitute a giant online marketplace where anyone in the world can go to buy or sell anything - from Procter & Gamble selling toothpaste to Chinese firms offering their engineering prowess. The Tao companies this year are expected to move some US$150 billion (S$183 billion) in merchandise between buyers and sellers, mostly in China.

The second is Alibaba.com, where, if you want to make rubber sandals that play The Star- Spangled Banner, you click on Alibaba and it will link you with dozens of Chinese shoemakers that will compete for your business.

And, lastly, there is Alipay, a Chinese version of PayPal that can enable, for example, a small Chinese manufacturer in the hinterland to sell its goods to a Chinese consumer in Shanghai. The buyer puts his money in escrow with Alibaba and it is released to the seller only when the buyer says he got the goods he ordered.

Presto: trust. What has been the impact? There are more than 500 million Chinese Taobao users and 600 million Alipay accounts.

While here in Hangzhou, I visited the workshop of Mr Robert Luo, the president of Classic-Maxim, a firm he started to make kitschy wall art for hotels, using foreign designs. Mr Luo used to drum up sales by flying to trade shows, but, in 2006, he got a huge US order through the Alibaba platform, enabling him to greatly expand his business. He has since shifted from doing outsourced artwork for others to hiring Chinese and foreign artists to produce his own original designs. "We design so much now" - outdoor art, solar art - and "we've applied for so many US patents", he said.

There are two trends to watch from all this: One, argued Mr Ming Zeng, Alibaba's chief strategist, is that Alibaba - which now serves more than 100 million consumers daily, through 6.5 million retail shops connected to 20 million manufacturers - is, in effect, creating "a virtual combination industrial park and online marketplace", where anyone in China or abroad can come to invent, collaborate or buy and sell goods or services.

Alibaba, Mr Zeng predicted, will eventually connect in some way with Facebook, Amazon, eBay, Apple, Baidu, LinkedIn and others to create a giant trusted virtual "global commercial grid", where individuals and companies will offer their talents and buy and sell products, designs and inventions.

Eventually, Mr Zeng argued, "every individual will have to find a way to succeed" on this global grid. "National boundaries will offer you no protection."

The other trend is that the Chinese will be big players on this grid. The creation of global trusted business frameworks like Alibaba is starting to enable a new generation of Chinese innovators - who are low-cost, but high- skilled - to extend their reach. We've seen cheap labour out of China; now we're going to see more cheap genius.

Which is why professors Phillip Brown and Hugh Lauder, in a recent essay on Eurozine.com, argued that a big shift of the global labour market is under way, in which "many of the things we thought could only be done in the West can now be done anywhere in the world, not only more cheaply but sometimes better".

NEW YORK TIMES

BLOCKED HORIZON TOWERS SALE

Sep 19, 2012
 
Minority owners sue over costs

They are claiming $585k from first sales committee's chairman, member
 
By esther teo property reporter
 

MINORITY owners who won a landmark court ruling to overturn the collective sale of Horizon Towers returned to the High Court this week as fallout from the bitter dispute continues.

They are suing Mr Arjun Samtani, the chairman of the first sales committee, and committee member Tan Kah Gee over costs incurred while trying to block the collective sale.

Both men were named as the prime movers of the sale by the Court of Appeal in its 2009 ruling to disallow the transaction of the Leonie Hill Road property.

The three sets of minority owners, comprising five plaintiffs in all, are claiming a total of $585,000 in costs and expenses incurred in a series of hearings that eventually killed the sale. They were earlier awarded $330,000 by the Court of Appeal in a separate action after the deal was quashed.

In the hearing, which started on Monday, Mr Samtani and Mr Tan contend that the claim is unsustainable since costs were already determined by the Court of Appeal. At that 2009 hearing, the plaintiffs did not seek any costs orders personally against the defendants, they pointed out.

In his opening statement, Mr Tan said that the plaintiffs' claim is "manifestly excessive and unreasonably incurred". He added that he did not breach his duties as a member of the sales committee and had acted in the best interests of all subsidiary proprietors.

The plaintiffs' alleged loss and damages were also not caused by his alleged breaches, he said. But even if he had breached them as pleaded, their loss and damages were not caused by him, he said.

Mr Samtani pointed out in his opening statement that he resigned from the sales committee in July 2007. Even if he is liable for costs, he contended, it should be limited to the first application taken by the committee for the collective sale of the property before his resignation. This would mean that he is not liable for any costs in view of the 2009 decision by the Court of Appeal, he said.

The minority owners argue that the Court of Appeal's finding that Mr Samtani and Mr Tan breached their fiduciary duties means that the two men were also the cause of the plaintiffs' losses.

The alleged breaches include failing to declare their purchase of additional units around the transaction time and failing to improve the chances of obtaining a better price for the property.

Senior Counsel Kannan Ramesh of Tan Kok Quan Partnership, who is acting for the minority owners, also argued that Mr Tan and Mr Samtani were effectively saying that the court should now come to a different conclusion from that handed down by the Court of Appeal.

This is something that they could not do, he said.

esthert@sph.com.sg


About the case

THE intended $500 million sale of Horizon Towers to Hotel Properties (HPL) in January 2007 turned into one of the most dramatic and protracted en-bloc battles in Singapore's history.

The affair spanned more than two years and went back and forth between the Strata Titles Board (STB) and the High Court twice before being decided in the Court of Appeal.

It ruled in April 2009 that the deal could not go through because the development's sales committee had failed to fulfil its duty on several fronts.

Three sets of minority owners have now cited that landmark judgment as they seek reimbursement for the hundreds of thousands of dollars they have each spent in the battle.

They are suing former sales committee chairman Arjun Samtani and committee member Tan Kah Gee, alleging that the two of them had pushed for a quick sale of the property for their personal gain.

They claim that the two men had bought additional units in Horizon Towers at the start of the collective sale process and were therefore keen to profit from a sale.

The Court of Appeal judgment accepted as fact that:

•     Mr Samtani and Mr Tan had bought additional units in Horizon Towers;
•     The sales committee had received an alternative higher offer of $510 million from Vineyard Holdings one day before HPL verbally indicated it was willing to buy the development for $500 million; and
•     The sales committee agreed to sell Horizon Towers to HPL in spite of a suggestion from one committee member that it seek the approval of the other consenting owners because property prices had shot up. The committee was concerned that the deal would fall through if the other owners were consulted.

The Court of Appeal also ruled that HPL and the estate's majority owners should share the legal costs for the second High Court hearing, the Court of Appeal hearing and the second STB hearing.

The minority owners now want compensation of $585,000 for the sums not covered by that Court of Appeal judgment.

The case will be closely watched as it is seen as a litmus test for possible legal action that can be brought to bear against those involved in collective sales.

ESTHER TEO

Indonesia's quiet welcome of US troops in region

Sep 18, 2012



By John McBeth Senior Writer


WHEN Indonesian Foreign Minister Marty Natalegawa asserted last November that the training of US Marines at a base in Australia's Northern Territory would create "a vicious circle of tension and mistrust in the region", he was quickly forced to back down.
After all, it was clearly an embarrassment to President Susilo Bambang Yudhoyono that US President Barack Obama was still on an official visit to Indonesia - his next stop after Darwin, where he had made the announcement of the new training arrangement.
Eight months later, Dr Yudhoyono and Prime Minister Julia Gillard pointedly chose the Northern Territory capital for bilateral talks, during which they discussed improved defence ties and Canberra gifted Indonesia with the first of four refurbished C-130H cargo planes.
Then, in early August, four Indonesian Sukhoi-30MK2 jet fighters entered Australian airspace for the first time for air combat exercises with Australian F/A-18s, US Marine Corps F-18s, Singaporean F-15SGs and Thai F-16s.
The Indonesian Air Force had only sent observers to Exercise Pitch Black in the past, so the Australians were surprised when Jakarta informed them in March it would be dispatching the Sukhois from their base in Makassar, South Sulawesi.
As much as Indonesia seeks to retain an even-handed foreign policy, particularly at a time of raised tensions in the South China Sea, the message seems clear: Within reason, the country's security chiefs favour an increased US presence in the region.
Canberra calmed any significant concerns by stressing the Marines will not be based in northern Australia. It also went further by rejecting a US think tank's proposal to station a carrier battle group at Perth's Stirling naval base, an idea that has not been endorsed by US officials.
The Australians are known to have been annoyed that Chinese leaders grilled Ms Gillard on the Marine training issue on her first official visit to Beijing last April, where she described the relationship as "important but complex".
Since then, the Chinese have raised hackles and created discomfort in the region with their renewed belligerence over the disputed Spratly Islands, which has caused a damaging divergence of views among the Asean partners.
Indonesia's participation in Australia's biggest air exercise comes when surging economic growth has enabled it to begin modernising its outdated military - even if some of the big-ticket items make little strategic sense.
One that does is the US$750 million (S$915 million) deal with the US for 24 refurbished F-16C/D jets, which will be armed with AGM-65K2 Maverick air-to-ground missiles and carry far more advanced avionics than those on its existing squadron of F-16A/Bs.
Deliveries will begin in 2014, with the Americans offering Jakarta the option of a third squadron to help fill the gap until Indonesia and South Korea enter into the planned joint production of a new-generation fighter in the mid-2020s.
The air force is also adding six more Su-30s to the five already in its inventory. Bought in response to the 18-year US arms embargo, the twin-engined Su-30's over-the-horizon radar and longer range make it better suited for maritime operations than the F-16.
Indonesia still needs 15 new radars to plug into an integrated air defence network that will allow the expanded fighter fleet to provide more effective control over the country's airspace.
Spending on the navy is increasing as well. In July, Indonesia signed a US$220 million deal with a Netherlands shipbuilder for a new Sigma-class guided-missile corvette, which will join four others shipped to the Indonesian Navy between 2007 and 2009.
The Indonesians are also in the market for three larger F2000-type corvettes, worth about US$300 million, which have been laid up at BAE Systems' Glasgow shipyard since 2002 when Brunei, the original customer, refused to accept delivery.
The Government's biggest naval order is the pending US$1.8 billion acquisition of three South Korean Type-209 submarines to go with two German-built 209s dating back to the early 1980s.
Defence Ministry officials say the diesel-electric attack craft are vital to protecting Indonesia's maritime borders, though they will do little to stop the illegal fishing and rampant smuggling that costs the country billions of dollars a year in lost revenues.
More controversially, the military appears to have broken down parliamentary resistance to its planned US$280 million purchase of 100 Leopard 2A6 main battle tanks - this time from Germany and not from the Netherlands as originally planned.
Dr Yudhoyono showed he was fully behind the deal during Chancellor Angela Merkel's recent visit to Jakarta, but it still has to be approved by the German government and a Parliament that appears to be just as hostile to it as its Dutch counterpart.
European opposition to the sale centres on a mix of "regional tensions", corruption and human rights. But it baffles military experts for a different reason: The tanks do not fit with Indonesia's strategic needs or the limitations of terrain and infrastructure.
Manoeuvring the 62-ton Leopards in overcrowded Java, with its under-strength bridges and narrow asphalt roads, would be almost impossible, reducing them to point defence and unable to engage in the mobile warfare for which they are designed.
Even then, there is confusion. A parliamentary hearing last year was told the tanks would be based in Jakarta and Surabaya. Other statements mention Kalimantan and Papua, where terrain would again be an issue - along with serious political and strategic implications.
Deploying the Leopards along accessible parts of the Malaysian border may only act as a further irritant in the relationship, with the two uneasy neighbours still embroiled in a territorial dispute in waters off East Kalimantan.
The Indonesians only recently announced they would build a submarine base at Palu in Central Sulawesi, which lies at the end of a deep-water inlet across the busy Makassar Strait shipping lane from the disputed Ambalat region.


thane.cawdor@gmail.com