Asean Weekly ending 8 Feb 2013

The Week That Was

Myanmar
Government, KIO meet after army closes to within miles of Kachin headquarters. Government negotiators and representatives of the Kachin Independence Organization (KIO) met on February 4 to talk about reducing military tensions and opening lines of communication with the hope of achieving an eventual cease-fire. The two sides, meeting in Ruili, China, did not appear to come to a firm agreement to end their clashes, but a statement released after the talks said the two sides would hold further talks before the end of February. The meeting followed the capture by government troops on January 26 of the last major Kachin stronghold surrounding the KIO’s headquarters at Laiza. Kachin forces have reportedly fallen back to positions within three miles of the city, where thousands of civilians are taking refuge.

Creditors cancel $6 billion of Myanmar debt. The Paris Club, an informal group of creditors including the United States, Japan, and Norway, agreed on January 25 to cancel $2.2 billion in arrears owed by Myanmar—which in combination with the $3.7 billion forgiven by Japan in April 2012 amounts to more than half of Myanmar’s debt to the group. The Paris Club restructured the remaining debt to be paid over 15 years. As a precondition of the deal, Myanmar on January 27 cleared its arrears with the World Bank and Asian Development Bank (ADB) using a nearly $1 billion bridging loan from Japan.
Telecoms minister resigns amid corruption probe. Minister of Communication and Information Technology Thein Tun resigned on January 16 after the Myanmar government launched an investigation into his alleged involvement in graft. The former minister is under house arrest, and presidential spokesman Ye Htut confirmed in late January that the investigation is ongoing. Thein Tun refused to follow President Thein Sein’s 2012 call to lower SIM card prices, reinforcing concerns of widespread corruption in the ministry. The former minister is the first cabinet member investigated for graft since the civilian government took office in March 2011.

Myanmar abolishes public protest ban, dissolves press censorship board. Myanmar dissolved the country’s Press Scrutiny and Registration Division—the state’s press censorship board—on January 24. The move came just ahead of the January 29 release of Reporters Without Borders’ Press Freedom Index 2013, in which Myanmar jumped 18 spaces, from 169 to 151, in a ranking of 179 countries. State newspapers announced the same day that the government had abolished a 1988 law banning public gatherings of more than five people.

U.S. Treasury Department lifts sanctions on major holding company executive. The U.S. Treasury on January 24 removed Myanmar businessman Kyaw Thein from its Specially Designated Nationals (SDN) list, which enumerates individuals covered by U.S. sanctions. Kyaw Thein is a partner in the Htoo Group of Companies and director of its subsidiary, Air Bagan. The Htoo Group is Myanmar’s largest exporter and was closely tied to the former military junta. Sanctions remain in place against Htoo Group chairman Tay Za, an associate of former military junta leader Than Shwe.

Indonesia
Yudhoyono issues controversial security decree. President Susilo Bambang Yudhoyono issued an executive order on January 29 allowing closer cooperation between military, police, and local officials to prevent communal conflicts. Activists and opposition parties have criticized the move, arguing that it circumvents the Indonesian legislature by strengthening the hand of security services in ways similar to those contained in a controversial national security bill held up in the parliament. Military and police officials signed an agreement the day after Yudhoyono’s order allowing the deployment of military personnel to conflict-prone areas without the consent of police or civilian officials.

Former trade minister begins campaign for WTO director-general. Former Indonesian trade minister Mari Pangestu lobbied for her selection as World Trade Organization (WTO) director-general during the January 22–26 World Economic Forum in Davos, Switzerland, and the January 29–31 WTO General Council in Geneva. Pangestu, who is currently minister of tourism and creative economy, has until March 31 to convince the 157 members of the trade bloc that she is qualified to succeed Pascal Lamy and become the first woman to lead the WTO. Eight other candidates from emerging markets are vying for the position.

General Election Commission drafting guidelines for political party transparency. Indonesia’s General Election Commission (KPU) announced on January 28 that it is finalizing regulations requiring political parties to disclose details about donor companies and individuals who contribute more than $3,300. The planned regulations will ban anonymous donations and require political parties to submit triannual campaign finance reports. Implementation of political party financing regulations in Indonesia is weak, with nearly all parties seeking funds from illicit sources. The new move is the latest attempt at reform ahead of 2014 elections.

Yudhoyono visits Africa, Middle East to promote economic ties. President Susilo Bambang Yudhoyono visited Liberia, Nigeria, Saudi Arabia, and Egypt between January 30 and February 7 to promote new economic ties. Yudhoyono also attended the summit of the Organization of Islamic Cooperation and, with British prime minister David Cameron, cochaired the UN High-level Panel on the Post-Millennium Development Goals during his stop in Liberia. The visits did not result in any significant deliverables, but did highlight Yudhoyono’s attempts to boost investment opportunities before his term in office ends in 2014.
Democrat-backed Lukas Enembe leads Papua gubernatorial elections. Lukas Enembe, former head of Papua provinces’ Puncak Jaya district, secured a plurality of 36.2 percent of votes in the province’s January 29 gubernatorial elections, according to an exit poll by the Indonesian Vote Network. Official results are not expected until February 13. Enembe, who was supported by the ruling Democrat Party, is the first member of Papua’s mountain communities to gain political success in the separatism-plagued province. The elections were delayed by a series of legal disputes, including over the respective electoral jurisdictions of the Papua Election Commission, the Papua Consultative Assembly, and the Papua General Assembly.

Thailand
Thai military officers accused of trafficking refugees. Army commander-in-chief General Prayuth Chan-ocha announced January 20 that three army officials from Thailand’s Internal Security Operations Command are under investigation for trafficking refugees from Myanmar. The Chunphon province-based officers allegedly spent several years smuggling Rohingya refugees to Malaysia. Officials have not said whether the officers were smuggling the refugees for profit but have confirmed a full investigation is under way.

Pressure mounts for central bank intervention as currency appreciates. Thailand’s currency, the baht, reached a 17-month high on January 21, prompting increased calls for central bank intervention. Finance Minister Kittiratt Na-Ranong in a January 24 interview urged the Bank of Thailand to cut interest rates, but cautioned against more widespread measures. Other economists, such as Ammar Siamwalla of the Thailand Development Research Institute, have called for more expansive capital controls to boost exports, which account for two-thirds of the nation’s economy.

Rohingya granted six-month amnesty in Thailand. Thailand will permit 1,400 Rohingya discovered in raids in January to remain in the country for six months, Foreign Minister Surapong Tovichakchaikul announced on January 25. The Thai government will work to identify third countries willing to receive the refugees, but has not eliminated the possibility of repatriating them to Myanmar. Thailand’s National Security Council announced January 31 that Thailand would keep the individuals in detention centers and would not establish a refugee camp for them as originally proposed.

The Philippines
Royce makes Philippines first overseas trip as chairman. U.S. congressman Ed Royce, the new chairman of the House Foreign Affairs Committee, made his first overseas trip as chairman with a January 28–30 visit to the Philippines. Royce and a delegation of other House members discussed U.S.-Philippines relations, defense, trade, and investment cooperation as well as regional stability with Philippine president Benigno Aquino and other officials. They also expressed regret over the grounding of a U.S. Navy warship on Tubbataha Reef off the Philippine coast, and voiced their support for Manila’s decision to bring arbitration proceedings under the UN Convention on the Law of the Sea against China for its claims in the South China Sea.

Reproductive health bill activist sentenced to 13 months in prison. Popular activist Carlos Celdran was sentenced to 13 months in prison on January 28 for disrupting mass at Manila Cathedral in protest of the Catholic Church’s objection to the Philippines’ new reproductive health law. Celdran dressed up as Filipino national hero José Rizal and raised a placard with the name of a villainous priest from one of Rizal’s novels. The court found Celdran guilty of “offending religious feelings.” Human Rights Watch called the verdict a “setback for free speech.”

Catholic bishops to campaign against “immoral” politicians. The Catholic Bishops’ Conference of the Philippines declared publically during its annual plenum on February 1 that it will campaign vigorously against politicians who ignore their “moral” beliefs during the upcoming election season. The bishops are demanding that politicians clarify their views on social issues like same-sex marriage and divorce. The powerful coalition of bishops decided to target politicians in response to the passage of a highly contested reproductive health bill. The Philippines will hold legislative elections on May 13.

Assad asks Philippines to help find political solution to Syria’s violence. Syrian president Bashar Assad is seeking Philippine help to find a political solution to the civil war in Syria, according to a January 31 report by the Star. President Benigno Aquino and high-ranking officials from the Philippines’ Department of Foreign Affairs met with Assad’s political and media adviser, Bouthaina Shaaban. in Manila on January 25. Foreign Secretary Albert del Rosario confirmed that a political solution to the conflict in Syria was discussed at the meeting, but denied rumors that Assad is seeking asylum in the Philippines.

Vietnam
Vietnam sentences 22 members of outlawed group to lengthy prison years. A Vietnamese court on February 4 sentenced 22 members of a pro-democracy group to prison on charges of plotting to overthrow the government. The court sentenced the group’s leader, Phan Van Thu, to life in prison and the other 21 activists to between 10 and 17 years in jail. Human rights groups say little is known about the group other than that it is labeled a terrorist group by Hanoi. In early January, a court convicted and imprisoned 14 activists on similar subversion charges.

Vietnam’s largest private lenders seek merger. Vietnam’s leading private lenders, Eximbank and Sacombank, signed a five-year cooperation agreement on January 29 that they hope will lead to a merger between the two banks in three to five years. The two are currently seeking approval for the merger from shareholders and relevant authorities. Eximbank chairman Le Hung Dung said the merged bank would hold total capital of more than $1.4 billion. The merger is part of an effort to restructure Vietnam’s banking system, which is burdened by a large number of nonperforming loans.

Vietnamese-American activist released from prison and deported. Vietnamese-American activist Nguyen Quoc Quan was freed from jail and sent back to the United States on January 28 after spending nine months in prison on subversion charges. Quan is a leading member of Viet Tan, a U.S.-based nonviolent pro-democracy group that Vietnam’s government considers a terrorist organization. Vietnam’s Foreign Ministry said Quan was released after “[confessing] to his crime,” but his wife disputes that claim. U.S. diplomatic pressure likely played a role in Quan’s release and deportation.

Central bank proposes limiting large cash purchases. The State Bank of Vietnam proposed a draft decree on January 25 limiting the use of cash for large purchases in order to fight corruption, among other reasons. The decree would prohibit the use of cash to purchase cars and securities and would limit cash purchases of real estate and motorbikes. The draft would replace a current decree that only limits large cash payments for state budget-related transactions. The government is expected to make a decision on the draft in the second quarter of 2013 so it can enter into effect by June.

Malaysia
Citizenship-for-votes probe sparks outrage. Malaysia’s Royal Commission of Inquiry (RCI) sparked anger among voters on January 14 with the release of findings that officials gave immigrants identity cards reserved for citizens ahead of the 1993 Sabah state elections. The findings mark the latest embarrassment for the ruling Barisan Nasional coalition, which claims that Malaysia’s elections have always been free and fair. A former government official admitted on January 16 to receiving over $25,000 to issue identity cards to Filipino, Indonesian, and Pakistani immigrants. Former prime minister Mahathir Mohamad is accused of spearheading the conspiracy in order to stay in power.

Government lifts ban on Hindu rights group. Malaysia’s government lifted a ban on the Hindu Rights Action Force (HINDRAF) on January 26, a day before the Hindu holiday of Thaipusam. The group was banned under Malaysia’s now-repealed Internal Security Act after 30,000 people attended a 2007 rally for Indian rights. HINDRAF youth chief S. Thiagarajan said on January 27 that the group will continue to demand that the government take action to stop the marginalization of the Indian minority. Indian voters came out in force for the opposition Pakatan Rakyat coalition in 2008 as a protest against government policies.

Najib draws controversy with visit to Gaza. Prime Minister Najib Razak’s January 22 visit to the Hamas-controlled Gaza Strip drew criticism at home and abroad. West Bank president Mahmoud Abbas and Malaysian opposition leader Anwar Ibrahim accused Najib of intensifying tensions in Palestine. Najib defended his visit as a humanitarian mission in a January 23 Bernama article. As the first non-Arab Muslim leader to visit Gaza since 2007, Najib condemned perceived Israeli aggression and announced scholarships for Palestinian students.

Minimum wage policy to push inflation to 2 percent. Malaysia’s inflation rate will increase to between 2 and 2.5 percent in 2013 due to the implementation of the government’s new minimum wage policy and subsidy rationalization program, according to a January 28 Star report. Malaysia’s central bank announced on January 31 that it would maintain the country’s key interest rate at 3 percent to support economic growth while containing inflation. Malaysia’s 2012 inflation averaged 1.6 percent.

Malaysia criticized for deporting six Uighurs to China. Human Rights Watch issued a report February 3 accusing Malaysia of violating international law by deporting six Uighur asylum seekers on December 31. The UN High Commissioner for Refugees registered the six men for interviews to determine their refugee status after they were caught trying to leave Malaysia using false passports. The deportation took place ahead of a February 5 visit to Malaysia by senior Chinese Politburo member Jia Qinglin. It is the second time Malaysia has deported Uighur Muslims to China despite international opposition.

Singapore
PAP unexpectedly loses by-election. The ruling People’s Action Party (PAP) received a shock on January 26, losing a Punggol East by-election. Workers’ Party (WP) candidate Lee Li Lian garnered 54.5 percent of votes, while the PAP’s Koh Poh Koon received 43.7 percent. Lee’s decisive victory was unexpected, as observers had predicted that the four-way contest would split the opposition vote and favor the long-governing PAP. The win is the WP’s second in eight months and pushes its representation in the parliament to an unprecedented seven seats.

Singapore projects population to hit nearly 7 million by 2030. Singapore’s government expects the city-state’s population to reach 6.9 million by 2030, with 45 percent being noncitizens, according to a White Paper on Population released January 29. Singapore’s total fertility rate is just 1.2 children, well below the replacement rate, and the government has proposed accepting 30,000 new permanent residents each year in order to sustain economic growth. The plan sparked angry reactions online, as citizens blame immigration for high housing prices and straining public services.

Singapore finds evidence of currency manipulation in offshore markets. Singaporean banks found that foreign exchange traders colluded to manipulate the exchange rate of the city-state’s currency in offshore markets, according to a January 27 Reuters report. Banks uncovered the manipulation during a July 2012 internal review ordered by the Monetary Authority of Singapore after a scandal broke out over the manipulation of the London Interbank Offered Rate (Libor). In response to the news, Malaysia’s central bank ordered local lenders to use domestically set exchange rates for its currency, rather than those set in Singapore, according to a January 29 Bloomberg Businessweek report.

International soccer match-fixing operations based in Singapore. European investigators have traced a global soccer match-fixing ring back to Singapore, according to a February 4 Reuters report. Europol and national prosecutors identified 680 soccer matches suspected of being fixed, including Champions League matches and qualifiers for the World Cup and European Championships. Chief investigator Friedhelm Althans said authorities have already collected evidence for 150 cases. The Singaporean network allegedly consisted of couriers delivering bribes of up to $135,000 per match to 425 corrupt players, officials, and criminals in 15 countries.

Barry Wain, longtime Southeast Asia journalist, dies. Barry Wain, 69, a longtime journalist and managing editor with the Asian Wall Street Journal, died in Singapore on February 5. His last major work was Malaysian Maverick, a biography of Malaysia’s controversial former prime minister, Mahathir Mohamad. Wain, an Australian, was one of the first reporters to begin chronicling Vietnam’s economic reforms in the mid-1980s. Most recently, Wain was a scholar at the Institute of Southeast Asian Studies in Singapore where he was working on a history of Southeast Asia.

Cambodia
China pledges military training, weapons to Cambodia. Chinese and Cambodian officials signed a military assistance deal on January 23 under which China will train the Royal Cambodian Armed Forces, provide military equipment, and deliver 12 Zhi-9 helicopters to Cambodia. The agreement was signed in Phnom Penh by Chinese army deputy chief of general staff General Qi Jianguo and Cambodia’s Ministry of Defense secretary of state Moeung Samphan. A Chinese-funded military institute in Cambodia’s Kampong Speu province opened the following day.

Funeral ceremony for former King Sihanouk draws tens of thousands. Cambodia held funeral ceremonies on February 1 for former King Norodom Sihanouk, who died of natural causes on October 15, 2012, in Beijing at the age of 89. Tens of thousands of Cambodians gathered in Phnom Penh to witness the elaborate funeral procession through the streets of the capital. A private cremation was held on February 4. Sihanouk assumed the throne in 1941 and reigned until he abdicated in 2004 in favor of his son Norodom Sihamoni.

Court convicts first defendant under new Acid Law. A Phnom Penh municipal court sentenced defendant Be Soeun to five years in prison on January 28 for throwing acid on his ex-wife in 2012. The case is the first conviction under Cambodia’s new Acid Law, which lawmakers passed in December 2011 to prosecute perpetrators of acid attacks. The practice commonly occurs in domestic disputes. The Cambodian Acid Survivors Charity welcomed the verdict, saying the passage of the law has helped reduce reported attacks from 17 in 2011 to 7 in 2012.

Laos
Laos to establish tobacco control fund. The International Network of Health Promotion Foundations, which supports the work of government-supported antismoking foundations, announced on January 28 that Laos will establish a tobacco control fund. Tobacco companies will be required to contribute 2 percent of their profits to the fund, which will support antismoking efforts in the country. The legislation establishing the fund also decreed a price hike for cigarettes. Laos is the fifth ASEAN member, after Thailand, Singapore, Malaysia, and Vietnam, to set up a fund to fight tobacco use.

Laos misses rice production target for second consecutive year. Laos failed for the second consecutive year to reach the government’s target for rice production due to natural disasters and a shortage of seeds, according to official figures released on January 25. Laos produced nearly 2.97 million tons of rice, about 11,000 tons less than the official target. A government official attributed the low production to frequent floods and farmers not knowing how to use seeds properly.

Laos finally joins WTO. Laos formally became a member of the Word Trade Organization (WTO) on February 2 after seeking membership for 15 years. The Lao government adopted a series of new laws on investments, regulation, intellectual property rights, and imports and exports in order to qualify for membership. Laos is expected to draw additional foreign investment in 2013 thanks to these legislative changes. It is the last of the 10 ASEAN members to join the WTO.

Missing agronomist’s wife demands updates on investigation. Ng Shui Meng, wife of missing agricultural economist Sombath Somphone, appealed to Lao authorities on January 30 to release results of the investigation into her husband’s disappearance. Ng listed seven inquiries in her appeal and asked that the government answer them promptly. The government has issued no official statements regarding Sombath’s status other than “police are still investigating.” The well-known agronomist went missing on December 15, and video footage showed him being bundled into a vehicle at a police checkpoint.

Timor-Leste
Former minister of justice starts prison term. Timor-Leste’s former minister of justice, Lucia Lobato, started her five-year prison term on January 21 after a Dili court rejected her appeal. Lobato was charged with corruption on June 8, 2012, in a case relating to the purchase of prison uniforms, and was sentenced to five years in prison and a $4,000 fine. The allegations against Lobato emerged in 2008, but she was not removed from office until 2012.
Telkom Indonesia enters Timor-Leste mobile phone market. Telkom Indonesia launched its new Timorese mobile brand, Telkomsel, through a subsidiary in Dili. The company hopes to control 60 percent of the mobile market in Timor-Leste within five years, according to a January 19 Jakarta Globe report. Telkomsel currently operates 30 transceiver stations in the country and will have more than 110 by April, covering 95 percent of Timor-Leste according Telkom president Arief Yahya. Timor Telecom is Telkomsel’s only competition in Timor-Leste.

Timor-Leste extends contract in joint petroleum development with Australia. Timor-Leste’s national petroleum authority, Autoridade Nacional do Petróleo (ANP), has agreed to extend a production-sharing contract for an offshore oil and gas area with Australia’s Oilex until January 2014. However, the contract requires that additional partners be secured by June 15, according to a January 24 Offshore report. The offshore area is located in the northern Bonaparte Basin in the Timor Sea and is operated by Oilex.

ASEAN
World Press Freedom Index shows mixed results for ASEAN. Myanmar jumped 18 places in the January 30 Reporters Without Borders 2013 World Press Freedom Index, thanks to reforms ending media censorship and allowing the return of exile media organizations. Cambodia and Malaysia, meanwhile, plummeted 23 and 26 places, respectively, in the annual report on media freedom in 179 countries. Most ASEAN members saw little change in their overall rankings. The accompanying chart shows the difference between each member’s 2012 (lower bar) and 2013 (upper bar) ranking among all countries surveyed.




Most ASEAN members saw little change in their 2012 (lower bar) and 2013 (upper bar) World Press Freedom Index ratings.

Human Rights Watch report highlights shortcomings in Southeast Asia. The Human Rights Watch annual report on the status of human rights worldwide, released on February 1, contained sharp criticism of abuses in Southeast Asia. Vietnam, Cambodia, and Thailand were among the ASEAN countries accused of increasingly repressing civil society and political opposition. Indonesia, meanwhile, was criticized for ongoing issues of intolerance toward religious minorities.

ASEAN, which released its much-anticipated Declaration of Human Rights on November 18, 2012, has been criticized by activists for inadequately addressing rights violations in the region.

Trans-Pacific Partnership
Japanese prime minister hopes to submit TPP plan to parliament. Japanese prime minister Shinzo Abe said on January 29 that he expects to present a plan to join the Trans-Pacific Partnership (TPP) to the parliament before July elections for the Upper House. The announcement comes despite concerns by members of Abe’s Liberal Democratic Party over upsetting the country’s powerful farm lobby. Separately, Japan eased import restrictions on U.S. beef on February 1, suggesting a gradual market opening that could ease TPP accession.

APEC
APEC meeting focuses on food security, forest management. Indonesia, as the 2013 chair of APEC, emphasized the importance of forestry management, food security, and sustainable supply chains in agriculture during a January 24–February 8 senior officials’ meeting. Agriculture produces several of Indonesia’s top commodities, including palm oil, rubber, fish, and timber, which accounted for nearly a quarter of the country’s 2012 gross domestic product.

South China Sea
Forum Energy extends South China Sea drilling deadline by two years. Forum Energy, a London-listed subsidiary of Philippines-based Philex Mining Corp., announced on January 29 that it would extend a deadline for drilling appraisal wells in the disputed Reed Bank by another two years to August 2015. Tensions between the Philippines and China, both of which claim Reed Bank, prevented the Philippine Energy Department from approving Forum’s plans to explore for oil and gas in the area. Philiex chairman Manuel Pangilinan said that the company’s work is dependent on the management of disputes between the Philippines and China.

Brunei
Brunei, China pledge closer cooperation. Brunei’s second minister of foreign affairs and trade, Lim Jock Seng, pledged closer cooperation with China during a January 29–31 visit to Beijing. Lim met separately with Chinese foreign minister Yang Jiechi and vice premier Zhang Deijang. The officials pledged to strengthen bilateral relations, particularly in investment, energy, and education. The trip seemed geared toward reinforcing a stable bilateral relationship as Brunei succeeds Cambodia as ASEAN chair amid ongoing tensions over China’s economic and military influence in Southeast Asia.

Mekong River
Cambodia plans to dredge sand in Mekong. Cambodian prime minister Hun Sen ordered the Ministry of Public Works, the Ministry of Water Resources, and the National Mekong Committee January 21 to draw up a master plan to dredge sand from the Mekong River. The plan aims to restore shallow areas along the waterway and export the dredged sand for revenue. Hun Sen’s plan was criticized by environmentalists and villagers who fear that continued dredging will cause riverbanks to collapse and harm the river’s ecosystem.