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 ANALYSIS BIWEEKLY

                                                                                                                       Asean Affairs   18 September  2015 



Biweekly Update

Singapore

Ruling party wins general elections, regains constituency lost in 2011. The Peoples’ Action Party (PAP) won 83 of 89 seats in general elections on September 11 and captured 70 percent of the vote, despite significant competition from opposition parties. It also regained Punggol East, a constituency that it lost to the opposition in 2011. The PAP, which has ruled Singapore for over 50 years, suffered a setback in the 2011 elections, in which the opposition Workers’ Party won six parliamentary seats and the PAP scored a record-low 60 percent of the vote. Prime Minister Lee Hsien Loong is expected to reshuffle his cabinet in the wake of the elections.

Short-term interest rate hits seven-year high, home prices continue to fall. Singapore’s key short-term interest rate on September 9 hit its highest level since 2008, amid uncertainty about a possible rise in U.S. interest rates. The Singapore dollar hit a six-year low against the U.S. dollar on September 8, prompting speculation about a recession following an industrial production slowdown in July. High borrowing costs and a weaker currency have resulted in a continuing slide in property prices, which may decline by 5 percent this year, according to a September 8 Bloomberg News report.

Singapore eases ban on HIV-positive visitors. The government on August 31 lifted a ban on HIV-positive visitors to the city-state following its suspension of short-term travel restrictions on foreigners with HIV in April. The ban was in place for more than 30 years. The Ministry of Health said that the new policy follows in the footsteps of other countries in the region, including Australia and New Zealand.

Myanmar

Campaigning kicks off for November elections. The campaign for Myanmar’s November election officially kicked off on September 8 with roughly 6,300 candidates running in 1,171 constituencies. Of 93 registered political parties, opposition leader Aung San Suu Kyi’s National League for Democracy is fielding the most candidates with 1,151, while the ruling Union Solidarity and Development Party (USDP) is fielding 1,134. The USDP will not contest in 14 constituencies in Shan State, 8 in Kachin State, or against two ethnic parties elsewhere in the country, suggesting it has reached an accord with some ethnic parties.

Assistant Secretary of State Daniel Russel visits Myanmar. Assistant Secretary of State for East Asian and Pacific Affairs Daniel Russel met with cabinet officials, members of the Union Election Commission, opposition leader Aung San Suu Kyi, and ethnic leaders during a September 4–7 visit to Myanmar. Russel said the upcoming election will be a test of Myanmar’s reform process and urged that it be credible, transparent, and inclusive. He said the United States expects the election to be imperfect and criticized the disqualification of dozens of mainly Muslim candidates, but said Washington will evaluate the election more broadly based on whether it represents progress toward democracy.

Clashes continue while Thein Sein meets with ethnic leaders. President Thein Sein and ethnic leaders met in Naypyidaw on September 9 for further negotiations on a national cease-fire agreement, even as clashes continued between the Myanmar military and three ethnic groups—the Kachin Independence Army, Shan State Army-South, and Ta’ang National Liberation Army. The government and ethnic representatives reached a tentative agreement to sign the national cease-fire in October despite failing to resolve the issue of which groups would be included. The government is refusing to include three groups still fighting the army in the Kokang region, as well as three organizations that it says are too small, while ethnic leaders are advocating for inclusion of all six groups in the agreement.

Thousands lose jobs as first minimum wage is implemented. Manufacturers laid off thousands of factory workers on September 1 as Myanmar implemented its first minimum wage, set at 3,600 kyats or about $2.80 per day, after two years of heated negotiations. Factory owners had already reduced supplementary compensation packages and laid off hundreds of workers since July. International clothing companies such as H&M and Gap had advocated for setting the minimum wage at 3,500 kyats, or about $2.70.

Thailand

National Reform Council rejects draft constitution. Thailand’s junta-appointed National Reform Council on September 6 rejected a controversial draft charter by a vote of 135 to 105. The rejection effectively extends the military regime’s rule for at least 22 more months, according to officials. Authorities will begin drafting a new charter in November, which is expected to take six months, after which the government plans to hold a referendum and then an election in 2017.

Thai authorities allege bombing ringleader flees to Turkey. Turkish authorities on September 14 denied claims by Thai authorities that a suspected leader of the plot to bomb the Erawan shrine in downtown Bangkok, known as Ishan, is believed to have traveled from Bangladesh to Turkey on August 30 after fleeing Thailand a day before the attack. Thai police also said two suspects arrested earlier are accomplices of Ishan. Meanwhile Malaysian police on September 14 detained three suspects in relation to the attack, though their suspected roles remain unclear.

King being treated for a blood infection. King Bhumibol Adulyadej, Thailand’s revered 87-year-old monarch, is being treated for a blood infection and lung inflammation, according to a September 7 palace statement. The king has been in and out of a hospital for two years and has not left since being hospitalized in May due to water on the brain. Discussions about the king’s health beyond official press releases are considered taboo in Thailand, where journalists and normal citizens fear being accused of violating the country’s strict lèse-majesté laws.

Two Pheu Thai Party members and a journalist released after being detained for “attitude adjustment.” Thai authorities on September 15 released former energy minister Pichai Naripthaphan and former lawmaker Karun Hosakul—both members of former prime minister Yingluck Shinawatra’s Pheu Thai Party—as well as Pravit Rojanaphruk, a veteran journalist with the English-language Nation newspaper. The three had been detained at military-supervised detention centers for “attitude adjustment” following vocal criticisms of the junta government. Pichai and Karun both adopted conciliatory language following their release, but Pravit suggested that he would not refrain from criticizing the government.

Malaysia

Najib announces $4.6 billion stimulus package. Prime Minister Najib Razak on September 14 announced that state firm ValueCap would invest $4.6 billion into some of the worst-hit stocks on Malaysia’s stock market in an attempt to lift a sagging economy. Najib also said that the economy is in much better shape than it was during the 1998 Asian financial crisis and pledged not to impose capital controls. The prime minister stressed that the ringgit’s depreciation will not impact government debt as 97 percent of it is funded by domestic sources.

Police detain three in connection with Erawan shrine bombing. Inspector General Khalid Abu Bakar on September 14 announced that one Pakistani and two Malaysian nationals had been detained in connection with the Erawan shrine bombing in Bangkok last month. The three were arrested following a tip provided by Thai authorities. Thai officials suspect the detainees to be human traffickers who may have helped the bombers leave Thailand. Meanwhile, Malaysian police have refrained from speculating on the suspects’ roles.

Sixty-one confirmed dead after boat carrying migrant workers capsizes. A boat carrying over 70 allegedly illegal Indonesian migrant workers capsized on September 3 off the coast of Selangor State, killing at least 61 people. Indonesian foreign minister Retno Marsudi on September 8 said that the migrants were probably victims of human trafficking. At least 19 passengers have been rescued and detained by Malaysian authorities, who are in the process of investigating the incident.

U.S., Malaysia reportedly discuss hosting U.S. surveillance aircraft in Malaysia. Senior U.S. defense officials have confirmed that the United States and Malaysia are in intense discussions over the possible use of Malaysian facilities to host U.S. surveillance aircraft for their patrolling missions over the South China Sea, according to a September 3 Bloomberg View report. Malaysia has stepped up defense cooperation since last year, following a series of Chinese incursions into Malaysian waters.

Pro-Anwar rally organizers charged with illegal assembly, police question Mahathir for Bersih involvement. Authorities on September 8 charged eight organizers of the Bersih 2.0 rally—a movement calling for clean and fair elections in Malaysia—with illegal assembly for their participation in a rally calling for the release of jailed opposition leader Anwar Ibrahim in March. Those charged included Bersih chairwoman Maria Chin Abdullah. Meanwhile, police have questioned former prime minister Mahathir Mohamad about his appearance and comments at the Bersih rally on August 29–30. Mahathir called for a vote of no confidence against Prime Minister Najib Razak at the rally.

1MDB scandal spreads to Switzerland and UAE. The International Petroleum Investment Company (IPIC), an investment fund owned by the United Arab Emirates’ government, , has alleged that it never received a $1.4 billion payment that state investment fund 1Malaysia Development Bhd (1MDB) was supposed to make to an IPIC subsidiary, according to a September 9 Wall Street Journal report. Officials from 1MDB said that the payment had been made and demanded an investigation into the Wall Street Journal for breaking Malaysian laws. Swiss authorities on September 2 announced that they had frozen tens of millions of dollars in assets linked to 1MDB on suspicion of money laundering.

Indonesia

Several high-profile politicians accused of misappropriating government Hajj funds. Former religious affairs minister Suryadharma Ali claimed during his trial on September 7 that former president Megawati Sukarnoputri and former vice president Boediono were among many government officials who took advantage of free Hajj pilgrimage trips under Suryadharma’s term in 2012. Suryadharma, who is also accused of embezzling over $125,000 while in office, claimed that Megawati, along with senior politicians including then cabinet secretary Pramono Anung and former public housing minister Djan Faridz, accepted at least 50 allocated Haj slots despite a 17-year-long waiting list for some 2 million ordinary Indonesians.

Indonesia expects full OPEC membership in December; government approves 18 new oil and gas projects. Energy Minister Sudirman Said on September 8 confirmed that Indonesia would rejoin the Organization of Petroleum Exporting Countries at the organization’s annual meeting in December. The government on September 2 approved plans to invest over $3.6 billion in the development of 18 oil and gas fields, which are expected to generate over $10.5 billion in state revenue. Meanwhile, President Joko Widodo on September 9 canceled plans to construct $5.5 billion worth of fuel pipelines and a $2.4 billion fuel storage project.

Government cancels one high-speed rail project, plans another. The government on September 4 canceled a $5 billion plan to construct a high-speed railway between Jakarta and the city of Bandung, disappointing Chinese and Japanese contractors who had vied over the tender for the large-scale project. Meanwhile, construction on greater Jakarta’s light rail system began on September 9, after more than a decade of delay. The transit system aims to link commuters from satellite cities such as Bekasi to Jakarta. President Joko Widodo said at the inauguration ceremony of the transit rail system that preparations for railway lines on the island of Sulawesi and in the province of Papua are under way.

Jokowi announces deregulation, stimulus package to lure investment. President Joko Widodo on September 9 unveiled a series of reforms aimed at reviving economic growth and strengthening the rupiah. In the first of three deregulation packages, the president announced the removal or simplification of 89 regulations to facilitate business, increased subsidies for rice and fuel for small boats, eased foreign investment regulations, and reduced interest rates on small business loans. Widodo also pledged to simplify the process of starting new businesses by offering more Web-based registration services to prevent corruption.

Vice President Jusuf Kalla suffers heart attack. Vice President Jusuf Kalla on September 9 was hospitalized for a heart attack. Kalla spent the night in the hospital for observation before being released the next day. The vice president could not be present when President Joko Widodo announced his new economic stimulus package.

Indonesia sends over 10,000 troops to fight forest fires. The Indonesian government on September 11 announced it would send over 10,000 troops to fight fires that were caused by slash-and-burn farming practices in southern Sumatra. Authorities on September 15 deployed 1,600 troops to Riau and South Sumatra provinces after a state of emergency was declared in Riau due to the severe haze. The annual smog, which spreads to neighboring Singapore and Malaysia, is a byproduct of fires set primarily by paper and pulp and palm oil plantations to clear land each season.

Philippines

Philippine Congress announces extended sessions in effort to pass BBL, budget. Both chambers of the Philippine Congress on September 3 agreed to hold additional sessions in order to tackle priority legislation, including the 2016 budget and the Bangsamoro Basic Law, before the October 10 legislative recess. Lawmakers will hold extra sessions on Thursdays and Fridays, adding an extra 10 working days. Focusing on a short list of priority legislation means that other legislative issues, such as the Freedom of Information bill and amendment of the constitution’s economic provisions, will likely be sidelined until November.

Grace Poe announces candidacy, faces tribunal for disqualification under citizenship law. Senator Grace Poe, the front-runner for the 2016 presidential election according to opinion polls, on September 16 announced her candidacy for president in the 2016 election. Poe appeared before the Senate Electoral Tribunal on September 11 to answer a challenge to her eligibility for the Senate and presidency. Rizalito David, whom Poe defeated in the 2013 senatorial contest, filed the case arguing that a constitutional requirement that a candidate be a “natural-born” Filipino disqualifies Poe, who was adopted after being abandoned on a church doorstep as an infant. Poe’s team has filed papers to dismiss the charges immediately.

Philippines and Vietnam to sign strategic partnership. The Philippines and Vietnam on September 2 announced plans to sign a strategic partnership on defense, political, and economic ties by the end of 2015, possibly at November’s Asia-Pacific Economic Cooperation summit in Manila. Vietnamese officials said the partnership would help the two countries seek a resolution to the South China Sea disputes “in accordance with international law.” Concerns over China’s actions in the South China Sea have encouraged closer cooperation between the Philippines and Vietnam despite their own disputes over contested islands and waters.

Duterte “absolutely” not running for president. Davao City mayor Rodrigo Duterte on September 7 announced “categorically” that he will not run for president and will retire from politics after 2015. Some supporters of the tough–on-crime mayor insisted that despite its seeming finality, Duterte’s latest announcement was just a ploy and he will declare his candidacy by the mid-October filing deadline. Supporters held a rally September 15 encouraging him to run. Duterte has placed third in some opinion polls, ahead of President Benigno Aquino’s chosen successor, Mar Roxas.

Palace forms task force to disband private armies in Mindanao. The government of President Benigno Aquino on September 2 activated a task force to disband private armed groups in areas of Mindanao that will form the Bangsamoro autonomous region according to a peace agreement reached with Moro rebels in March 2014. The Comprehensive Agreement on the Bangsamoro declared that private armed groups would be disbanded, but law enforcement agencies have so far been ineffective in enforcing that part of the agreement. The new task force will take on policy, planning, and implementation of the effort.

Vietnam

National Assembly chairman visits the U.S. to foster ties. The chairman of Vietnam’s National Assembly, Nguyen Sinh Hung, on September 9 told Secretary of State John Kerry during a visit to Washington that Vietnam hopes to deepen its relations with the United States. Hung was the first head of Vietnam’s legislative body to visit the United States. He also met with senior U.S. lawmakers and United Nations officials in New York City. The United States and Vietnam have exchanged a series of high-level visits this year as they celebrate 20 years of diplomatic relations.

Vietnam Communist Party releases draft political report calling for further reforms. Vietnam’s Communist Party on September 15 published for public comment on its Web site a draft political report for the next party congress in early 2016. The report hailed important economic reforms over the past three decades, but pointed to problems such as public debt, low competitiveness, and corruption. According to the draft report, “corruption remains serious with increasingly sophisticated and complicated practices.” The report also calls for the government to step up reforms more comprehensively over the next five years.

Vietnam marks 70th anniversary of independence with massive parade. Vietnam on September 2 marked the 70th anniversary of its national independence with a 30,000-strong parade in the capital, Hanoi. The day marked Ho Chi Minh’s declaration of independence in 1945. Speaking during the event, President Truong Tan Sang said Vietnam has undergone dramatic changes in recent decades, but still faces challenges, including “ethnic and religious conflicts, territorial disputes, and especially the escalating island disputes in the South China Sea.”

Manufacturing slows in Vietnam, Malaysia following China’s stock crisis. Manufacturing in Vietnam and Malaysia shrank as a result of China’s depreciation of the yuan and as China’s stock market crisis continues to unfold, according to a September 1 Wall Street Journal report. The two Southeast Asian countries have struggled to compete with low-cost Chinese goods, which have benefitted from a lower yuan. Growth has slowed across the region while analysts fear that continuing instability in the Chinese economy could spread through the region.

Vietnam sees $17 billion trade surplus with U.S. in first half of 2015. Vietnam recorded a $17.2 billion trade surplus with the United States in the first half of 2015, a 20 percent rise from the same period last year, according to a September 6 Tuoi Tre News report. Total trade in goods between the two countries amounted to $27 billion for the first eight months in 2015. Bilateral U.S.-Vietnam trade, which reached $36 billion last year, is expected to grow substantially when the Trans-Pacific Partnership trade agreement is concluded.

Cambodia

Interior Ministry to establish “anti-cybercrime” group; human rights groups wary. Cambodia’s Interior Ministry on September 7 announced plans to establish an anti-cybercrime department with broad powers to combat online crime. Offenses under the jurisdiction of the new department will include not only hacking but also “incitement” and insulting language, sparking worries among human rights groups that the department will be used for political ends and to stifle dissent. Officials described the planned department as a media-monitoring team evaluating open source news and online postings to prevent “danger to society.”

Resettled Rohingya seeks return to Myanmar. An Interior Ministry official on September 7 announced that a Rohingya man who was resettled in Cambodia in June as part of a $28.1 million deal to accept asylum seekers from an Australian-run detention center on Nauru has asked to return to Myanmar. The Rohingya man and three Iranians are the only detainees so far to agree to be resettled under the controversial program, which Australian officials are scrambling to keep alive. The Cambodian government has agreed to take in more asylum seekers from the detention center, reversing an earlier statement that it would take only the original four, but so far none have agreed to come.

Outbreak of porcine reproductive and respiratory syndrome strains pork markets. An outbreak of porcine reproductive and respiratory syndrome in northwest Cambodia has infected nearly 5,000 pigs since late August, according to the Ministry of Agriculture. The virus cannot jump to humans, but eating tainted meat causes illness. Authorities culled over 1,000 pigs in September and have launched an aggressive disinfection campaign. The government also plans to increase imports to stabilize prices before the Pchum Ben religious festival in October. Pork farmers are expected to face considerable financial strain as the virus attacks breeding populations.

South China Sea

Indonesia to beef up military facilities on Natuna Islands. Indonesian defense minister Ryamizard Ryacudu said September 6 that the country will upgrade military facilities on the Natuna Islands, which lie in the South China Sea, as well as nearby Kalimantan on the island of Borneo. Ryamizard cited ongoing maritime and territorial disputes in the South China Sea and underlined the need to maintain security and stability, “especially with the recently increasing intensity of threats.” Indonesia’s military is upgrading a port and runway on the Natunas that will be able to accommodate newer fighter jets.

India restarts oil and gas exploration off Vietnam. India’s state-owned Oil and Natural Gas Corporation (ONGC) on August 27 announced that it will restart oil and gas exploration off the Vietnamese coast in the South China Sea. Chinese media called the decision potentially sabotaging to Sino-Indian relations. ONGC holds a license to one exploration block in waters off the Vietnamese coast that lie within China’s “nine-dash line.” It gave up rights to a neighboring block that was deemed to lack commercially viable oil and gas reserves.

Trans-Pacific Partnership

U.S. official sees TPP ministerial meeting within weeks. Deputy National Security Adviser Caroline Atkinson on September 9 said that she expects negotiations on the Trans-Pacific Partnership trade agreement to be concluded within weeks, while Australian ambassador to the United States Kim Beazley is less optimistic about the timeline, according to Reuters. Beazley suggested that a final agreement may be forthcoming at the Asia Pacific Economic Cooperation Leaders’ Summit in the Philippines in November, but observed that the window for the deal to reach the U.S. Congress by year-end may have passed.

USTR appoints Timothy Reif chief transparency officer. U.S. Trade Representative Michael Froman on September 4 announced the appointment of Timothy Reif as USTR’s chief transparency officer, a position that will oversee transparency issues in trade negotiations and enforcement of trade agreements. Reif has been the agency’s top lawyer since 2009, after serving as chief international trade counsel for the House of Representatives’ Committee on Ways and Means. He is expected to coordinate closely with Congress over the Trans-Pacific Partnership as well as the Trans-Atlantic Trade and Investment Partnership trade deals.

Laos

China pledges to strengthen relations with Laos during leaders’ meeting. Chinese premier Li Keqiang pledged to strengthen ties between China and Laos during a September 2 meeting with Lao president Choummaly Sayavone in Beijing. Li emphasized the two countries’ similarities and China’s desire to advance relations with ASEAN countries and protect the peace, prosperity, and stability of the region. Choummaly said Laos looks forward to working with China on future projects. The two countries are moving ahead with a controversial rail line from Kunming to Vientiane, funded with loans from China.

Vietnamese prime minister Dung visits Laos. Prime Minister Thongsing Thammavong and his Vietnamese counterpart, Nguyen Tan Dung, met in Vientiane on September 14 to discuss cooperation between the two countries and witness the signing of an agreement on a transport cooperation strategy for 2016 to 2020. A day earlier, Dung attended the launching ceremony of a $522 million potassium mining and processing project in Laos’s Khammouane Province funded by Vietnam National Chemical Group.

Familial poverty rate drops to 6.6 percent. The percentage of Lao families living below the official poverty rate has dropped to 6.6 percent from 18.9 percent five years ago, according to the government’s 2011–2015 poverty and developmental assessment report released in early September. Prime Minister Thongsing Thammavong recently approved the report, which will be used to set goals for poverty alleviation and village and town development.

Brunei

Asia-Pacific intelligence chiefs meet in Brunei, discuss security cooperation. Military intelligence chiefs from 24 Asia-Pacific countries gathered on September 6 in Bandar Seri Begawan to attend the eighth Asia-Pacific Intelligence Chiefs Conference, which was cohosted with the U.S. Pacific Command. Speaking at the conference, Brunei’s chief of armed forces, General Mohd Tawih Abdullah, urged attendees to cooperate and trust one another in the face of difficult transnational challenges. He also highlighted the challenge of addressing the Islamic State’s use of social media to recruit in Southeast Asia.

Brunei and Philippines discuss stronger defense relations. Army chiefs from Brunei and the Philippines met on September 3 in Manila to discuss the formation of a working group to promote closer defense ties through training exchanges and joint exercises. The Philippine army’s spokesman, Colonel Benjamin Hao, said that the two chiefs did not discuss the South China Sea dispute during their meeting.

ASEAN

Third group of Fulbright U.S.-ASEAN Visiting Scholars announced. ASEAN deputy secretary-general Hirubalan V P on September 1 announced the third crop of 10 visiting scholars who will visit the United States under the Fulbright U.S.-ASEAN Initiative. The scholars, representing each of the 10 ASEAN countries, will join a prestigious group of Fulbright alumni and conduct up to four months of research in the United States on a range of topics such as international law, human rights, entomology, technology and innovation, and climate change.

Japan viewed most positively among Asian countries. Some 71 percent of the public across 10 Asia-Pacific countries hold a favorable view of Japan, according to a Pew Research survey released September 2. Japan is viewed more positively than China, India, or South Korea. China was viewed favorably by 57 percent of those polled. Respondents in Australia, Indonesia, Malaysia, the Philippines, and Vietnam view Japan the most positively, while those surveyed in South Korea and China see Japan generally unfavorably.

ASEAN announces implementation of common prospectus for cross-border securities issuers. The ASEAN Capital Markets Forum (ACMF), a high-level group of ASEAN capital market regulators created by the ASEAN finance ministers, on September 2 announced the implementation of a framework for cross-border securities issuers to use a common prospectus across ASEAN markets. The framework is intended to reduce the time needed to get securities products to market and boost access to regional capital, creating more opportunities and avenues for ASEAN businesses and investors.

Vietnam becomes fifth state to join ASEAN Single Window. Vietnam on September 8 became the fifth member of the ASEAN Single Window, which aims to expedite cargo clearance at ASEAN ports, exchange data securely and reliably using international open standards, and increase transparency. Indonesia, Malaysia, Singapore, and Thailand are already taking part in the live operation. ASEAN secretary-general Le Luong Minh said he hoped Vietnam’s addition to the operation would motivate ASEAN’s remaining member states to join.

APEC

APEC finalizes draft for Cebu Action Plan. Senior officials from the Asia Pacific Economic Cooperation member countries on September 9 finalized a draft for the Cebu Action Plan, a 20-year roadmap that aims to, among other things, help small and medium-sized businesses integrate into the global supply chain and boost resilience across the region. Asia-Pacific countries have been increasingly concerned about the impact on regional growth of events such as the recent downturn in China’s stock market.



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ASEAN  ANALYSIS

This year in Thailand-what next?


AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More

 


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