The Asia Pacific boom

HONOLULU, Hawaii — The US economy continues to show signs of weakness with Americans still showing reluctance to spend over uncertainties of recovery. According to the US Department of Labor, applications for unemployment benefits reached the highest level in nine months — confirming the Federal Reserve’s gloomy admission that their economy is unlikely to improve in 2012.

Not surprisingly, the Obama administration is looking at the tourism industry and its critical role in job creation and economic recovery. Politicians are calling for the approval of the proposed VISIT USA (Visa Improvements to Stimulate International Tourism to the United States of America) Act to expedite visa processing, increase the list of countries included in the Visa Waiver Program and other provisions like five-year multiple entry visas to Chinese visitors, extended stay for Canadian retirees and three-year (renewable) non-immigrant visas to those who will buy property in the US — all intended to boost the US tourism industry.

The US Department of Commerce is investing millions to strengthen the tourist appeal for places like Hawaii where the influx of visitors particularly from the Asia Pacific region is simply unbelievable. Close to 7.3 million tourists visited the Aloha State last year and spent over $12.5 billion. While Japanese tourists comprise the biggest number, there has been a surge from Australians (whose numbers grew to 32 percent) and Chinese (30 percent increase).

I must admit — Hawaii is Hawaii and nothing can quite compare to this tropical paradise. Wealthy businessmen are riding on the economic boom in the islands, like Oracle CEO Larry Ellison, the sixth richest individual with a net worth of $36 billion, who bought 98 percent of Lanai island for an estimated $600 million. Ellison - now called “Mr. Lanai” - will plunk in more money to stimulate tourism for his 88,000-acre property which has two Four Seasons hotel resorts, golf courses and several clubhouses.

Tourism aside, one other importance of Barack Obama’s birthplace is its strategic location in the Pacific, making it a critical military asset in light of America’s “pivot” to Asia. I have visited Hawaii many times before especially when an old friend, Retired Admiral Ron Hays, was the Commander of the US Pacific Command (USPACOM) which has its base in Honolulu — and to describe it as impressive or overwhelming would simply be an understatement.

The USPACOM’s geographical reach encompasses “half the earth’s surface” from the US West Coast to India, from Antarctica to the North Pole. Its area of responsibility covers 36 nations, with a force structure of over 300,000 military personnel and main combat power formed by the Marine Forces Pacific, US Army Pacific (five Stryker Combat vehicle brigades), Pacific Air Forces (300 aircraft plus 100 more based in Guam) and the Pacific Fleet with six aircraft carrier strike groups, 180 ships and 1,500 aircraft. 

Aside from being a preferred immigrant destination, Filipinos have an innate affinity for Hawaii on account of Pearl Harbor because its bombing in 1941 by the Japanese forced the US to get involved in the Pacific front during World War II. While the relationship between the US and the Philippines went into a cold spell when we removed the US bases in Clark and Subic, both countries are now renewing close ties given the current issues involving the Spratlys.

China has increasingly been flexing its muscle both in the economic and political fronts — and its growing power is making many nations in the Asia Pacific region wary. The perception of China’s increasing belligerence — getting embroiled in controversies with other claimants to the Spratly Islands — most likely triggered the shift in America’s focus on the Asia Pacific region. US Defense Secretary Leon Panetta went on an extensive Asian tour to Vietnam, Singapore and India; had face-to-face meetings with Asian leaders; and bolstered defense agreements with Australia, New Zealand and Japan. An incensed China called on the US not to meddle in matters that concern Asia, but the two giants are not about to engage in a confrontation that would have mutually disastrous repercussions.

While the US has reiterated its commitment to the terms of the Mutual Defense Treaty, it is careful to say that it is not taking sides, consistently calling for a peaceful solution to the Scarborough impasse via the negotiating table. Understandably, there are those who take a “hard line” stance, saying that our dignity as a nation is at stake. But no matter what, the most practical option is still to balance our pride with pragmatism.

China is far too large and far too important to be at odds with, given its economic muscle. At the recent G-20 Summit in Mexico, the power shift to the Asia Pacific region became more pronounced. As summed up by an economist and former Bush-era official, countries like China, India and Russia are translating their economic power into political clout, wanting to have more say and demanding bigger roles in the International Monetary Fund in exchange for the billions they are giving to bailout troubled European nations like Greece and Spain. European leaders ate humble pie, publicly thanking China for pledging $48.3 billion — in contrast to the US that could not spare a penny due to “serious restrictions of a legal and political nature.” 

Any which way you look at it, a giant like China cannot be taken out of the equation because it is a driver of growth especially in Asia Pacific, the region heralded by the UN as an anchor of stability for the world’s economy. 

Given the dynamics of the region, what is clearly needed is not the “boom-boom” kind of conflict but the “boom” of an economic kind.

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