 back to Think Tech. I'm Jay Fidel and this is Global Connections. We're talking about the Philippines versus China in the South China Sea with security analyst Carla Cruz who joins us from Manila. Here's a map of the area. We'll be talking about this map through the show. And Carla, welcome to the show. So happy to have you here. Hi Jay. Good morning from the Philippines. So let's talk about the South China Sea. I mean we all hear about it and I'm afraid a lot of people don't know exactly where it is or what it means. So we'll show the map but you need to tell us why it's important. The String of Islands under Taiwan, kind of in the middle of everything, the Philippines. But we are the Mexico of Asia, as Dokoi says. So we were conquered by the Spanish, very different from I guess the rest of the region with the only Catholic country in this another side of the world. Yeah. Okay. So why is the South China Sea important? You know, I was on a cruise not six months ago in the South China Sea. My wife said to me, are you sure it's safe? I said, no, I'm not sure it's safe. Is it safe? Where did you go? Where did you go? Indonesia, to Thailand, to Vietnam, to Singapore. There, I guess there's a lot of navies there so you would have been safe. But is it okay? So what is happening? You know, when you, I was trying to find a way to explain this to your viewers especially because there's so many more Filipinos there than people realize and the problem is not only a Filipino problem but it's a global problem. It's a Pacific problem, first of all. And what is at stake and what we have to come together to understand is one, we're not talking to somebody on the other side who sees the same kind of adversaries as we do. We don't share the same value system. So it hasn't been since time immemorial, right? But since 1989, China's rhetoric changed towards America and its allies including the Philippines. And the, you know, just like America, China also has this whole patriotic national education but I think there's this at an extreme. And so while this nine dashed line, 10 dashed line, maybe tomorrow it'll be an 11 dashed line, you know, comes at the end of the day, we cannot live together in harmony. And I think that's what everybody wants. And so that's what's making problems. Yeah. Yeah. Well, but they're economically driven. They want to control traffic in the South China Sea. And they're geopolitical. They want to control territory wherever they can. And unfortunately, you're part of their effort in that regard. You talked about the nine dashed nine line, the nine dashed line and the 10 line and 10 dashed line, 11 dashed line. That was a joke. Yeah, I know. It's really nine and 11. It's no 10. Yeah. So why don't we put the map up and you can give us a kind of handle on where those lines are and what they mean and whether they are real or unreal and who likes what line? Well, okay. When you China claims that they've had this map since I don't know who's, you know, I don't know who's time, right? And this nine dashed line was what the Philippines took to the Hague and was awarded territorial claim over, if we can draw it, it's from all the way from, basically from Japan, like the Senkaku Islands, all the way down to Malaysia. So they pretty much own the entire South China Sea. And that's no, that's not considered anything under own clause, which they are a party to actually that mentioned the exclusive economic zones of countries, archipelagic sea lanes that should be respected when practicing freedom of navigation, for example. So it's kind of this convoluted convenience that they have. But when it doesn't suit them, obviously, then they try and they try and push their their lines. That's how I think we had the simplest way to explain it. Well, I thought that that proceeding in the Hague, which was the first time under the law of the sea convention, as I recall, somebody took a dispute like this over exactly what China was entitled to. That dispute, they did not participate in that controversy, even though they are a member of the law of the sea, you know, that which I thought was interesting. And the Philippines want, am I right? The Philippines won that arbitration under the law of the sea, and they won in the Hague. And then there was a decision that favored that agreed with the Philippines, you know, a line in the sea and its claims. And so the Chinese completely ignored that, which I think the world condemned them for that. They didn't participate. And then they ignored the result. And, and they're just being bullies. That's what it looks like to me. What are the people in the Philippines feel about that? You know, a good example, actually, is the US respecting the rule of law. And we just talk about rule of law. And, you know, whether the US isn't a party to in class, but they respect the rules that come with the in class, whether or not they're a party to it. China does not, right? And, you know, I think that the Philippines at first, you know, we're a nation of 7,107 islands and the people of 120 million populations strong, right? And it's hard to get everybody to understand something that's like very big and kind of national security related, like how do you explain to somebody that like, you know, our power grid has a foreign ownership. And you have a Huawei whose devices are tapped. But, you know, a couple of days ago, we had an incident where a commercial vessel rammed into a fishing boat in the area where the barriers were cut out. And three people died. And this is now people this is not the first time this has happened. But I think this is the worst because one, the vessel didn't even stop. What was the nationality of the vessel? Marshall Islands. And what about the other vessel? Filipino, Filipino fishing vessel. Okay. All right. And it's too small vessel. So it was anchored because of the weather. You know, when they're fishing, their lights are on, you're not going to miss them, right? And they all have transponders because they're over 30 metric tons. They can't sail out here over 30 metric tons without a transponder at least or a radio. So they definitely knew they were there. Okay. This Pacific Ana, an oil tanker with the Marshall Islands registered in the Marshall Islands in that too early in the morning, rammed into it. Just rammed straight into it and killed three fishermen. They did not stop. So the other fishermen in the smaller boats had to go back. The boat had completely capsized and cut in half. They had to retrieve the bodies of their three companions and then bring them to shore. This is 190 nautical miles off the shore. So I'll leave it up to you. The Filipino shore? The Philippines, yes. The economic zone is 200 miles, isn't it? Yes. Correct. That's correct. You can look at the ownership. You can look up where the ship has been and if it's really been an oil tank, let's put it that way. But what needs to be highlighted is the irregular gray zone that China operates in and that we as people, our lives are really disturbed. We cannot fish in our water because even if they say we can fish, they come and harass our fishermen or they'll shoot them away. Vietnam is the same. Really, for centuries, we've lived in harmony with Vietnam and Malaysia and no matter what conflict we have, we've been able to resolve. As much as they say ASEAN is useless, ASEAN is useless maybe because we don't want to confront each other but ASEAN is useful because we have been able to live this way. Only when these people have come in has this happened. Again, our fishermen are dying. Our fishermen cannot fish and even if it was an accident, they could have stopped and brought them to it. Are you saying that the oil tanker was Chinese? It appears that it is owned by a Chinese company yet. Well, there's been a lot of incidents over the past year and it's increasing, isn't it? I mean, for example, I read about this barrier that the Chinese put down that to stop Filipino fishermen from fishing. And Marcos Jr. instructed his coast guard to go out there and cut that barrier, cut the line to it so it folded. And then the Chinese were all who-who about it. And they said this is a provocation. Oh, they said they cut it. They said they cut it. Really? We have these photographs in the newspaper of a guy from the Filipino coast guard showing that he cut it. So this is interesting. That was their press release to their country that they cut it because it was endangering the corals and I don't know what story they put out. Yeah, but they also attacked the Philippines for provocations. That is all very provocative kind of thing. Although they didn't do anything about, they said they had to be some response, but there was no response except the rhetoric. So I mean, this goes on and on and maybe some lying in there too, some propaganda in there too, but that's not a happy time. And then there was another one where there's a Filipino ship that was used as a residence. And what did the Chinese do with that? So is that the Sierra Madre? Yes, the Sierra Madre. So the Sierra Madre was actually marooned in that area in 1998 because those are our islands, right? And we don't obviously have the money to build these monstrous, artificial islands and set up a base, but to lay our flag and stake our claim, we marooned the boat, which is kind of smart for a third world country, I must say, J. Yeah, we'll have a pretty good deal with China. Stroke for stroke. Yeah, yeah, yeah. I think, you know, and yesterday I went to visit our troops that do their resupply. And just to see them and ask them, you know, how is it? And they said, you know, ma'am, every day is a different day. And every day they get braver. And they think that's going to be the day that's going to be the day that they're going to be shot at. And that's going to be the day that it's going to all start. And you know, they're ready. I mean, it's like the Filipino has so much heart, right? The Chinese, I don't know how much heart they have, or I don't know how far they're going to go because they actually haven't really gone to war, a war this big, J, if you study it, right? And our numbers show that their attrition before they would even begin is about 30%. So I don't know how well they would do, you know. Well, you know, let's talk about, take another thread now. Let's take the thread of the American military and its presence in the Philippines. When I was in the service, was in the 60s, we had Sangly Point, we had, we had Subic Bay, and there were others too, all around the Philippines. And you mentioned before the show that they went away, that the United States pulled all those bases in what, in the 90s, I guess? 92, yeah. 92, leaving no American military base. So can you continue the story on from there about what happened with military presence in the Philippines? So in 1992, basically, they were completely removed by Senate legislation, I think one vote, one anyway. And so, you know, it slowed down our military progress because much of the rent that was being paid was going to modernize your military. Anyway, cut the long story short, in 1997, the visiting forces agreement was signed, which allowed for troops to rotate every six months in our bases. And as the, I guess, as the threat increased with our neighbors from the north, then there was a need to, you know, stock weapons here, use them as forward locations, and, you know, and actually train and be interoperable with each other. So the Balikatan exercises happened, which happened once a year, and that last year was the biggest 40,000 troops from both countries. And we now have games year round with our partners and allies. And not only with the military, but I think there's a lot of civil military, I'm a civilian in this defense sector. So there's a lot of civilian military cooperation. And we've learned so much. And, you know, so we've gone from from VFA to EDCA. And now we have nine EDCA bases. Two of them are up north, three, four of them are up to the northern side. And then some closer to Palawan and then in the center. But again, we're going to be adding some in the Pacific side. These are American bases to talk about. No, no, no. So these are Filipino bases. So it's unconstitutional to have American owned bases. Foreigners also cannot own land in the Philippines. So what we've been able to do is allow for the Americans to be present in our bases, help us build out our bases, fortify our bases and actually locate in our bases. So we live in the same barracks. We eat the same food. We, you know, we hang out together. And it's amazing. It's an amazing setup that I think, you know, is admirable for two sovereign nations to sit side by side with each other and actually work side by side. Well, we've been close, you know, actually, we were close after what, 1898 in the Spanish American War. We were close, certainly with MacArthur coming back in the Second World War. And, you know, we have a very close relationship with the Philippines. And you know that Hawaii has tons and tons of Filipino families here who enjoy Hawaii and across the country. So there's a certain shoulder to shoulder relationship and therefore, you know, it only, it only fits that we have a geopolitical relationship as well and a military defense relationship. So I want to talk about, I want to talk about military defense, you know, in that incident where the, the Filipino Coast Guard cut the cable. There was an article that said that Fernando Marcos Jr. would not have, would not have taken that step because it was a risky step. He could have, he could have had a bad reaction from China. But he did that because Joe Biden is closer to the Philippines now. And he swears protection to the Philippines. What is the situation as far as your concern? I think it takes to, to tangle, right? But the relationship like I told, like, you know, goes very deep. Douglas MacArthur, more than I shall return his most, second most famous quote is, give me 10,000 Filipino soldiers and I will conquer the world. Right? So I mean that I love. And Filipino soldiers are, are different. Filipinos are different, right? So one, we have a mutual defense treaty, which was signed in 1956, I think, which any attack on the Philippines or on the US make is an attack on the other and, you know, guarantees each other the protection. But I would say that under Joe Biden, I'm not saying as, as just as a Democrat president, but under Joe Biden, yes, there has been a lot of movement. And the commitment made, especially by both houses. So there was a hearing last week in the lower house, your lower house. And we've had several visits from, for example, Senator Rick Scott of Florida is very, very supportive of the Philippines and has taken the time to understand what the issues are. Right? More than just military assistance, Jay, I think that the Philippines needs to become part of the defense supply chain, which will allow us to contribute to the defense economy of the US. We cannot just be a receiver of goods. We cannot just be a receiver of technology. We have to contribute somehow to this partnership. Right? And I think that's the most important and logical step forward. And our president, Marcos, has a, has a very, very strong economic program. And I believe when he sees that, that this is what Joe Biden also brings to the table, he will definitely, he'll definitely see that and make that happen. Now that's very important because it helps your economy, doesn't it? Big time. Yeah. So I actually wanted to add, you mentioned Subic Bay earlier. So Subic Bay was taken, was returned to American ownership, but through a private deal through Cerberus. So they own a facility called Aguila, which used to be the Subic Bay, Subic Naval Bay, and then was taken over by hands-in-heavy industries of Korea. Then they went into our receivership in 2017, I believe. And then Cerberus purchased the debt and took over the facility and they're back to building ships and, and repairing, you know, military vessels for, for this, for this side of the world. So, you know, it looks very, very promising. And, and I believe that that's the start of a really great economic partnership for the defense sector. Yeah. And, and of course there, you know, the US has lots of reasons to be friendly and to support the Philippines, lots of reasons. It's not, not just the people, the culture, you know, the respect for the character, you know, the Filipinos, but it's an all the economy for that matter because it's your location that counts. And, you know, just a stone's throw away is Taiwan and China and Taiwan, which is, you know, explosive and seems like every day gets more explosive. And what happens with you guys in the South China Sea is, you know, sort of instructive about what the Chinese would do to Taiwan. How do you feel about that? How do you feel about the role of the Philippines in protecting Taiwan, in joining with the United States in protecting Taiwan, and other countries like the Quad down there in protecting Taiwan? You can see it. You can feel it. It's right out there. Yeah. You know, Jay, we're preparing. The sad thing is war is never something that we know what is coming, right? When Hiroshima and Nagasaki for the harbor happened, nobody knew that that was the kind of war we were going to fight. And sadly, I think we're not prepared for the war we're about to fight. If we were just waiting for a bomb to fall, I think we would be okay because we have all the detectors in the world. We have all of that, right? But I think we're fighting a different war. We're fighting a war of the mind. Okay. China has taken a lot of American intellectual property. So how does that, I mean, that is a huge telltale of how they proceed, right? And how they move forward. They have no respect for other countries' positions. Do you think they have any respect for a person's decision-making capabilities? They will do anything in their power to make everybody become like them. And that's what worries me about their presence here, the money that they throw around developing countries, the money that they can throw around the Pacific Islands, for example, who are, you know, could be much worse off than we here in the Philippines are. And I think that's also the direction that I'd like to take another conversation. How can the Philippines need and move and become kind of a leader to these smaller Pacific Islands, knowing that we have some kind of shared history, you know, and then kind of it then goes into Hawaii. It's like the Pacific reunification in a way, right? Because that's a much bigger problem if that becomes a problem than just the South China Sea, which is easier to contain, I believe. Yeah, that makes you very important because, you know, Pacific Islands have to have, what do you call it, geographical leadership. So many places around you need to have, you know, a successful country with good diplomatic relations and all that to be a leader and to bring them together and to counteract what China is doing, has been doing and will do. So you are very important in setting the tone for this whole region, especially with regard to Taiwan. Yes. I think China will do whatever they want about Taiwan. I'll be honest with you. Nobody can stop Xi Jinping unless he realizes that that will not do him any favors. He's so set and I think it's just a matter of time. I think the Philippines needs to just, you know, accept that they'll do whatever. They're here, right? There's millions of them here. What they're doing here, we don't know, okay? But how do we then make that into something in the future, right? We still have a whole life ahead of us. How do we become a bigger sibling to our Pacific Island brothers and sisters? So does it happen to them? And they're not, well, that's my point because I have many more years, hopefully left in this industry. Well, you know, and you talk about the Marshall Islands, you know, the Chinese have a big presence in the Marshall Islands. Erdogan oil tanker under Marshall Lee's flag is really Chinese and we've heard that from other guests on our shows. Oh, you have? Yes. Yes. Yes. Yeah, we're talking about Chris... Yeah, yeah. Chris Cottrell. Yeah. Yeah, who you know. Yeah, okay. He spent plenty of time up there. Anyway, I want to get a handle on where you think this is all going. I mean, in your, in your, in an ideal sense, and in a realistic sense, where is the, where are the Philippines going? I mean, it has great promise, but you know, it is a democracy and there is voting and there is, there are governmental legislative machinations just like in this country, which may be volatile and unpredictable. And if you talk about having a steady policy, a steady policy with regard to relations with the U.S. and, you know, geopolitical diplomatic connections with all these places around you, which I agree are very important. You have to have a stable government. So query, what does it look like? Okay, the difference between the Philippines and the U.S. is the Philippine military has a mandate to protect the Philippine constitution. So if any government official leader kind of falls out of line, there are check and balance. Like that's something that makes us very different. So I'll leave that here. But the realistic situation is we are finding more and more fighting-aged Chinese undocumented here in the country that are up north, closer to Taiwan. What is going to happen? I don't know, again, but there's a reason why they're there. And again, it's only a matter of time because China is running out of many resources that they need to survive. They can't feed their people anymore and they can't do that. So worst-case scenario is, I don't know, they take all our fashion and take over Taiwan because Taiwan still has all these other resources. I think that that's the reason why they want to come back, right? But the best-case scenario I think would be for the Philippines and the first island chain to contain China and the South China Sea and force them to go all around the world and not be able to pass our lanes. Yeah, you know, they say that if Ukraine wins against Russia, that'll be a signal to China that you can't do aggression against your neighbor. And it will reduce the possibility that China would attack Taiwan. And so if the Philippines is strong, if the relationship with the Philippines in the U.S. is strong, that's another indicator for China that it doesn't pay to attack Taiwan. So it's part of a larger comprehension, but it affects their strategic thinking for sure. You mentioned one thing, Carla, that I want to follow up on. You say there are Chinese in the Philippines and there are Americans in the Philippines and there are Filipinos everywhere in the world, everywhere, which is to your credit. 12 million overseas Filipinos. So what do you see the future of that? I mean, if I really get tired and fed up with what's going on in Congress here in the United States, what about the Philippines is the place I could go to and retire to? Actually, we have a special program. I'm not kidding. We have a special program for retirees in the Philippines. Your U.S. healthcare system, I feel like I'm an ad, but the U.S. Medicare works here like a private healthcare service. And I believe some people have actually done that to take advantage of it and are pretty happy with it. So there's 7,000 islands. We're happy to have people like you definitely who love the islands just as much as we do. Have you resolved the insurrection groups around the Philippines or are they still active? I think we have. They're kind of more guerrilla fighters. They lost all ideology. I think there's maybe a couple of thousand left from 50,000, but really where we have to move our lines of towards our external defense and use technology. I think more than people, we need to use technology because there's so much water and so many islands to cover. It's crazy. I'm getting the idea that the Philippines cares about technology. It wants to develop its technology sector and develop it for not only defense but for everything else to be in the defense pipeline and maybe there are other things too. Do you see the Philippines as becoming a more technological country like India? The Philippines does a lot of business process outsourcing and has taken a lot of business away from India because we obviously speak better English. India though has good programmers. What will work to our advantage especially in the critical defense industry is that we are a partner. We have very favorable tax incentives, especially in economic zones for new industries. I think that would be attractive. Again, the security of having your own island and being able to protect whatever you're building around it is very, very attractive for investors. Yeah, it sure is. That sounds great, but the government has to protect that individual, that community for sure. That's true. That's true. We only have a few minutes to go and I just want to just ask you about yourself. How did you get to be a security analyst? What's your range of activities, your range of expertise? When did you get training for that? I want to become one too, how did you do that? Did you do that at the Sarban? I actually, I always wanted to join the military and my parents were not thrilled. I thought I was a boy, I think, but I went to school in Australia. I went to law school and I studied international studies. I majored in global security and it's always been something, I was always interested in new peer deterrent. It fascinated me, but I also never wanted to come home because I felt there was nothing at home here. It's not a natural thing for us to work for our family's businesses and my family's business didn't really interest me. Let's put it that way. I joined the World Economic Forum as a writer and then learned about how technology could essentially democratize change and kind of help us leapfrog the many years that we had lost through corruption and greed and extractive institutions and I said, okay, wait, maybe these new technologies are a thing. So I taught myself how to code and then I joined. Did you really? Now that's determination, isn't it? Yeah, yeah, maybe boredom, but yeah. So I taught myself how to code and I learned blockchain. It fascinated me. The technology and the tenants behind blockchain technology was something I thought we could apply to secure democratic institutions, elections, identity systems, et cetera. And then I worked under Amir Dostal in the UN Office of Partnerships, ran 150 blockchain pilots in 2018 and then I wrote my government and asked if I could work for them. So I did and I think they never got a letter like that ever and I learned. I learned on the job. My sheltered, I guess, upbringing allowed me to stay very idealistic and that I think many of the things I see and many, a lot of the change I want to happen in my life today is because I grew up with so much and I see so many people with so little getting taken away from them and I don't believe that's right. So, you know, defense and security is your first line to protecting your nation's integrity and I think that's why I'm here and that's why I love my job. What a beautiful story. Would you ever run for office? I don't think I can sing and dance. If Michael will tell you the elections here, you're required to sing and dance. But given the opportunity, I would love to. I would love to. Okay, well, I guess maybe you should study a little singing and dancing then. I'll finish my masters first. Priorities. Yes, yes, yes. I only have one more question for you, Carl. And that is, would you come back and share some more in another time? Can we talk to you again? Yes, yes, please. I would love to. I would love to. There's a lot we could talk about. And, you know, I hope to hear from your viewers. If you have any questions, put them in touch. You know, we'd love to just share more about what's happening here. I think people need to be educated about what's going on here. We're not that far from each other. And it's a problem that we all need to understand on our own. Yeah. Hands across the sea, for sure. Well, I'm not going to say au foie, but I will say à tout à l'eau. Mahalo. Mahalo. Thank you. Mahalo. Aloha. Thank you so much for having me. Thank you, Carla. Stay well, Jay. Bye. Bye.