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The police get their guns

The arms deal with China is done and the weapons are just awaiting collection. It’s a great deal – the Philippines will pay for them with a soft loan over the next quarter of a century. That’s real credit – there isn’t a country on Earth that wouldn’t want a deal like that. We don’t have precise numbers for the consignment but we know it’s large enough to re-equip the Philippine National Police (PNP) whose armoury was left seriously depleted after the US State Department blocked the sale of 26,000 assault rifles at the beginning of last month when a US senator refused to OK the transaction.

In fact, it was that action by Senator Benjamin Cardin, the top Democrat senator on the Foreign Affairs Committee, before which the rifles deal came for vetting, that clinched the contract for Beijing. Had Cardin – one of the most liberal Democrats in the US Senate and an Obama loyalist – not intervened, the Philippines right now would be taking delivery of American-made weapons. The PNP had already placed the order with a US supplier and was awaiting the State Department’s rubber stamp when Cardin decided to get involved.

If it was an attempt at hardball to get President Rodrigo Duterte to abandon his war on drugs – the death toll in that conflict was Cardin’s rationale for his veto – it failed. If it was intended to put pressure on Duterte, to dissuade him from moving away from Washington and closer to Bejing – the gun deal serving to illustrate the sort of forfeit Manila could expect by such an action – it also failed.

Instead, what it succeeded in doing was to ensure that the Philippines would acquire its arms elsewhere and force the country into a closer Chinese embrace. In fact China – and Russia for that matter – couldn’t have picked a better envoy for their own foreign-policy agendas than Senator Benjamin Cardin. As far as arms shipments to the Philippines are concerned, his trowel work virtually cemented the China deal – and the likely Russia deal to supply members of the Armed Forces of the Philippines (AFP) with sniper rifles. And, as every trader knows, once you lose a customer it’s very difficult to get them back.

But if Cardin misjudged Duterte’s resolve, so did a number of other “experts” – not to mention the ever-present media pundits who certainly failed to get their heads around what was happening. Their received wisdom seems to have revolved around the notion that in fact it was Duterte who was playing hardball. In their reading of the runes, when the Philippine president said he didn’t need American arms – that he could go elsewhere for them –he was bluffing to get America to sweeten the pot. That he’d secure new concessions and then return to the US gun bazaar.

An article in Hong Kong’s South China Morning Post (SCMP) encapsulates this mindset. Under the headline, “Just empty talk? Philippines’ Duterte is playing China off against US on arms purchases, analysts say”, readers are given the view of the “experts” as to how the Philippine president was playing his cards.

The subhead to the article declares: “Manila not brave or powerful enough, and existing treaty, lack of mutual trust and compatibility issues make option of buying Chinese arms ‘unrealistic’”.

Hard to believe that analysts and so-called market watchers could get it so badly wrong … Second thoughts, we take that back, it’s not hard to believe; they do it all the time. But in this article they excelled themselves. Here are three excerpts.

“What Duterte is doing is to play the US off against China and vice versa, to hopefully achieve the greatest benefits for the Philippines. In this regard, he could afford to be more ‘severe’ and ‘colourful’ against the US, which considers the Philippines to be an important pillar for its rebalancing policy and is thus more restrained in its responses to Duterte’s outbursts, than to China, which typically does not take foreign impoliteness or diplomatic slights too lightly. I think what Duterte is really looking for is better weapons sales terms from the US.” – Oh Ei-sun, a senior fellow, S Rajaratnam School of International Studies, Singapore.

“The Mutual Defence Treaty between the US and the Philippines is a legally binding document approved by the Philippine Supreme Court and a few words from Duterte cannot stop that deep military engagement with the US, which obviously wants to maintain and even boost its geopolitical sway in the region. China also may not sell weapons to the Philippines as Duterte wishes due to a lack of mutual trust. And it would be embarrassing if the Philippines used Chinese warships to fight against China”. – Wu Shicun, President, National Institute of South China Sea Studies, Hainan.

Meanwhile, “military observer,” Zhou Chenming, claimed that the Philippines was neither brave nor powerful enough to split from the US. His assertion was, as the SCMP reported, “that Duterte’s proposal to buy arms from China was mere posturing to please Beijing, which was infuriated by The Hague ruling on the South China Sea [territorial dispute over Scarborough Shoal], rather than a realistic plan”. Zhou added: “Also, compatibility problems hinder Chinese arms sale to the Philippines, as the latter is accustomed to US-style weaponry, which is totally different from Chinese designs and production”.

The real problem that most ‘political observers’ seem to have with understanding what’s going on in the Philippines right now is their inability to understand Duterte the man. Academics and analysts are constrained by the media’s depiction of him as some sort of backwoodsman who’s fumbling to get some sort of grip of what’s required to fix his country; that he’s lurching from one crisis to another making it up on the hoof.

Well, nothing could be further from the truth. He knows exactly what he’s doing and he knew exactly what needed to be done years before he ever thought of running for the presidency. Theorems that percolate out of think tanks and from the minds of often idealistic academics – not to mention narrative-driven “analysis” proffered by the media – are poor substitutes for actual understanding.

Sometimes the truth is in plain sight; that what you see is what you get. If analysts – this also applies to investors – allow their judgement to be coloured by media chatter, and loosen their discipline, their appraisals will fall far short.

So now, when Philippine Defense Secretary, Delfin Lorenzana, says he may be placing an order with Moscow for sniper rifles, what that actually means is that he may be placing an order with Moscow for sniper rifles – and not that ‘he may be placing an order with Moscow for sniper rifles to get the Chinese (or the Americans) to knock down the price of theirs’.

And why does it mean that? Because this is not simply about sniper rifles – though the Russian ones will need to pass muster with the AFP – this is about something much bigger. It’s about forming an East-Asia nexus that binds the Philippines with Russia as well as China and a deal with Moscow over arms will be highly symbolic of that endeavour. It will also reinforce the fact that Manila is not constricted to buying arms from the US, its traditional supplier; nor does it require Washington’s permission to source them elsewhere.

For the time being, the US has scorched its bridges where the Philippines is concerned – and that, not the reverse, is the case. If truth be known, Cardin’s dismissive behaviour over those 26,000 firearms was the last straw; he forced Duterte’s hand. That said, however, come 20 January next year, when President-elect Donald Trump becomes the 45th President of the United States, those bridges could get a new lick of paint. We’ll guarantee here and now, he won’t be butting into the internal affairs of the sovereign state of the Philippine Republic like his predecessor has.

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