ASEAN KEY DESTINATIONS
Myanmar mulls revamp of financial system. Myanmar authorities launched a new foreign exchange regime April 1, announcing a reference exchange rate of 818 kyat per dollar, close to the black market rate. The official exchange rate has long been approximately 6 kyat to the dollar. Central Bank deputy governor Maung Maung Win said that the government plans to open a new stock market, introduce debit cards in the next few months, and introduce greater central bank independence, according to a Wall Street Journal report April 4. The government is also considering letting foreign banks move into the country's largely closed economy, though officials have said that could take years.
Myanmar’s government and Karen rebels agree to cease-fire. Myanmar president Thein Sein met April 7 with Karen National Union (KNU) officials in Naypyidaw in another signal that the government is trying to end one of the country’s long standing wars with ethnic insurgencies. The meeting followed an agreement a day earlier in which government officials and KNU representatives agreed to strengthen a cease-fire agreement reached in January while they continue to negotiate a more comprehensive peace plan. The negotiators reached a 13-point plan that sets up a code of conduct to monitor the cease-fire. Some KNU leaders had rejected the initial agreement, saying the KNU representatives sent to negotiate with the government were not authorized to make a deal.
Myanmar's commander-in-chief defends army's political role. Army chief General Min Aung Hlaing March 27 told troops at the country’s annual Armed Forces Day parade that the army “has to respect and obey as well as preserve the state constitution.” He said unelected military representatives sitting in parliament were acting “in the national interest” and “just performing a national political duty.” Some observers interpreted the commander’s comments as a warning to incoming opposition parliamentarians not to attempt to modify the constitution. Others noted that the parade was low-key compared to years past and pointed out Min Aung Hlaing’s call to “respect and obey.”
U.S. Pacific Command sends representative to ASEAN’s first regional environment security forum. The U.S. Pacific Command (PACOM) sent a representative to ASEAN’s first regional environment security conference held April 2–5 in Jakarta. The meeting was organized to tackle the connection between climate change, environmental security, and the role of the military. Representatives from the United States, Australia, China, Timor-Leste, and all ASEAN states except Brunei attended the conference. Joshua Curtin, the deputy U.S. representative to ASEAN, said PACOM could play a unique role in sharing best practices and expertise in dealing with environmental issues and disaster relief.
Second ASEAN- EU Business Summit held in Phnom Penh. The European Union and ASEAN held their second business summit April 1 in Phnom Penh. EU trade commissioner Karel De Gucht urged the two regional blocs to make concrete progress toward negotiating a far-reaching free trade agreement, saying the EU had already begun bilateral negotiations with Singapore and Malaysia, with Vietnam soon to follow. ASEAN is the EU’s third-largest trading partner, while the EU is ASEAN’s second-largest trading partner.
ASEAN discusses South China Sea and North Korea during summit. Regional security issues took center stage during the 20th ASEAN Summit April 3–4, with ASEAN leaders divided over the South China Sea and expressing concern about a planned North Korean rocket launch. Philippine president Benigno Aquino said ASEAN should forge a common position on a proposed code of conduct on the South China Sea prior to negotiating with China. Philippine foreign secretary Albert del Rosario said that the proposal sparked disagreement. Analysts were surprised that Chinese president Hu Jintao visited Phnom Penh days before the leaders gathered for talks that were expected to include discussion on territorial disputes in the South China Sea.
Thai-Cambodia border group fails to produce agreement. The Cambodia-Thailand Joint Working Group of the General Border Commission announced April 5 that it had failed to reach agreement on the implementation of an International Court of Justice ruling calling for the withdrawal of troops from the disputed area around the Preah Vihear temple. The Cambodian delegation said that progress was made during two days of talks and another meeting will be planned in the near future. Indonesia’s foreign minister Marty Natalegawa is facilitating the discussions between the two countries. Fighting has erupted around the temple from time to time since a 1962 World Court ruling awarded the temple to Cambodia, a decision many Thais consider unfair.
Parliament agrees to adopt charter amendments. A joint House-Senate committee set up to vet proposals for changing Thailand’s constitution agreed April 5 to adopt the Thai cabinet’s charter amendment plan. The plan seeks to change section 291 of the country’s charter to allow for the creation of a constitutional drafting assembly. Opposition members of parliament said they opposed some aspects of the proposal, but would discuss them during the proposal’s second reading. The House also passed a controversial national reconciliation plan based on a report by the King Prajadhipok Institute. The plan seeks to resolve remaining political tensions from Thailand’s 2006 coup, including granting amnesty to ousted former prime minister Thaksin Shinawatra. It is now awaiting consideration by the cabinet.
Film board bans film based on Macbeth, citing concerns over national unity. The movie “Shakespeare Must Die” April 4 became the second film to be banned for public release by Thailand’s Film Board. The board said the movie, which is directed by Ing Kat and based on Shakespeare’s play Macbeth, could undermine the unity of the country, though it did not cite specific reasons. The film was partly funded by the Thai Ministry of Culture.
Aceh holds elections, incumbent governor appears to lose. Five candidates, including incumbent governor Irwandi Yusuf and former Free Aceh Movement leader Zaini Abdullah, squared off in elections April 9 in Aceh. Sampling of ballots showed Abdullah receiving 55 percent of the vote to Yusuf’s 29 percent, but final results will not be available until April 15. The election proceeded peacefully, although observers worry that violence could flare if losing candidates challenge the results or if supporters allege election violations.
Prosecutors ask for seven years in Nazaruddin corruption trial. Corruption Eradication Commission (KPK) prosecutors April 3 asked a court to sentence former Democratic Party treasurer Muhammad Nazaruddin to 7 years in prison instead of the maximum 20 years. Nazaruddin is charged with taking $514,000 in bribes in connection with the construction of the athletes’ village for the 2011 Southeast Asia Games. Nazaruddin claims he is taking the fall for corruption directed by Democratic Party chairman Anas Urbaningrum and says he will soon reveal other cases of corruption.
DBS Bank of Singapore seeking to buy out Bank Danamon. DBS Bank of Singapore has placed a $7.3 billion takeover bid for Indonesia’s Bank Danamon, the sixth-largest lender in the country. The bid constitutes a 52 percent premium on the value of Danamon’s publicly traded shares. Bank Indonesia governor Darmin Nasution said on April 4 that the deal might be delayed until Singapore offers Indonesia reciprocal banking privileges. Both DBS and Danamon are majority controlled by Singapore’s sovereign wealth fund. Some legislators said that the deal lacked transparency and could affect Danamon’s ability to serve its “domestic priority customers.”
World Bank says Indonesia should increase social spending. The World Bank’s quarterly report issued April 4 says Indonesia’s economic fundamentals are strong but notes that 40 percent of the country’s fuel subsidies go to the wealthiest 10 percent of households. The report urges the government to invest instead in improving the country’s education system and shoring up the social safety net to reduce poverty and distribute the benefits of economic growth more uniformly.
Gunfire kills one, injures four aboard plane in Papua province. A Twin Otter commercial plane carrying five people to Puncak Jaya, Papua province, came under gunfire from the ground April 8 as it approached the Mulia Airport. The pilot and copilot were both wounded but managed to put the plane down in a hard landing before crashing into a building. The one fatality was a journalist with the Papuapos Nabire newspaper. Authorities have blamed an “armed gang” that fled into the brush after the attack.
Recommendations to improve elections result in shouting match, Bersih to hold rally April 28. A parliamentary committee established to improve Malaysia’s election process April 4 presented its recommendations to the parliament, resulting in a shouting match. The committee’s recommendations were passed without debate despite protests by opposition legislators that their suggestions had not been taken into consideration. The coalition for free and fair elections, Bersih, announced in response to the recommendations’ passage that it would hold another protest April 28.
Private investment in Malaysia rises above government predictions. Prime Minister Najib Razak announced April 1 that private investment in Malaysia in 2011 had exceeded the government’s target by 13 percent, reaching $31 billion. Najib credited his government’s economic transformation programs for the increased investment. Performance Management and Delivery Unit Minister Idris Jala said that private investment in Malaysia is at the highest level in five years.
Malaysia and Indonesia sign agreement on legal cooperation. Malaysian attorney general Abdul Gani Patail and his Indonesia counterpart, Basrief Arief, April 2 signed a memorandum of understanding (MOU) in Jakarta on legal cooperation. The agreement seeks to enhance cooperation on issues of common interest, including dealing with transnational crime. It is the fourth MOU on legal cooperation the Malaysian attorney general has signed in recent years. The previous three were concluded with Egypt, Oman, and Uzbekistan.
Former Vinashin executive sentenced to 20 years. Former chairman of state-owned shipbuilder Vinashin, Pham Thanh Binh, was sentenced March 30 to 20 years in prison, and eight other top officials received sentences of between 3 and 19 years for mismanagement at the company that collapsed in 2010 under almost $4.5 billion of debt. Vinashin defaulted on a $600 million syndicated loan from foreign lenders in December 2010, which led to a downgrading of Vietnam's credit agency ratings. That debacle prompted Vietnam’s government to promise reforms in the state sector.
First quarter GDP growth hits three-year low. First quarter GDP growth in Vietnam hit a three-year low of 4 percent, down from 6.1 percent a year ago, according to government figures released in early April. Monetary tightening measures instituted last year helped bring inflation down to 14 percent in February from a high of 23 percent in August 2011, but these moves have deeply affected the construction and manufacturing sectors, which face difficulties in getting credit. The steep slowdown in growth prompted Citibank to cut Vietnam’s GDP forecast for 2012 from 6 percent to 5 percent.
Philippines, Indonesia sign security pact to combat transborder crime. The Philippine and Indonesian militaries March 26 agreed to terms for a security pact to tackle transborder issues. Armed Forces of the Philippines chief of staff Lieutenant General Jessie Dellosa and Admiral Agus Suhartono of the Indonesian military finalized the terms of reference for establishing a joint working group to combat terrorism, drugs, and other criminal activities. The agreement is expected to be signed in Mindanao in April, according to the Philippine military.
Philippines ICT industry projected to be worth $50 billion by 2016. The Philippine government has projected that the information and communications technology (ICT) industry will contribute as much as $50 billion in direct revenue to the Philippine economy by 2016. The business-process outsourcing sector has thrived in recent years as Western corporations look for cost-saving facilities abroad. The Philippine Department of Science and Technology said March 24 that the government will look to invest significantly in the ICT industry, telecommunications, computer manufacturing, and other technology-related sectors to spur continued economic growth.
President Aquino prioritizes dismantling private militias ahead of 2013 polls. Philippine president Benigno Aquino March 28 announced his intentions to begin dismantling private militias ahead of the 2013 midterm congressional elections. Instructions were given to the Philippine National Police to prioritize tackling private armies throughout the country, some backed by powerful local politicians. The effort will focus on the southern province of Mindanao, where many private militias still operate. Although 28 private militias were dismantled in 2011, resulting in 106 arrests, upwards of 86 groups with 1,781 members remain active nationwide.
South china Sea
China warns India to refrain from involvement in South China Sea dispute. Chinese Foreign Ministry deputy director general of Asian affairs Sun Weidong March 26 warned India against getting involved in “disputes” in the South China Sea. Sun said India’s state-owned oil firm Videsh, which has leased oil and gas blocks from Vietnam in the South China Sea, should seek to “ensure peace and security in the region” by ceasing involvement until disputes are resolved. Beijing has urged foreign companies to refrain from exploring in disputed Vietnamese oil blocks.
Philippines and Vietnam propose joint “war games” in South China Sea. A proposal for joint maritime exercises by the Philippines and Vietnam in the South China Sea was publicized March 27 after a Philippine delegation visited Vietnam March 11–14 to explore opportunities for military cooperation. Philippine-Vietnamese navy commanders proposed a communication hotline and joint military patrols while agreeing to standard operating procedures for interaction between their two navies in the vicinity of Southeast Cay Island and Northeast Cay Island in the Spratlys. China has protested the proposed military exercises as violating its sovereignty.
Search begins for new judge in Khmer Rouge tribunal. The United Nations announced March 30 that it would begin its search for two new international co-investigating judges for the Extraordinary Chambers in the Courts of Cambodia, the joint tribunal established to prosecute former Khmer Rouge officials for war crimes. Two previous investigating judges resigned in the past six months, citing interference by the Cambodian government in court proceedings. The United Nations called the events “worrying” and has asked for the Cambodian government’s full cooperation.
Exports to the European Union rose 40 percent in 2011. European trade commissioner Karel De Gucht announced at the April 2 ASEAN- EU Business Summit that Cambodian exports to the European Union rose 40 percent to $1.3 billion in 2011. The EU simplified its generalized system of preferences in January 2011, allowing for the increases in trade with Cambodia. The current economic crisis in Europe has cast a shadow over the prospects for EU-ASEAN trade, and both regional bodies are working to ensure that trade relations remain strong.
Hun Sen lashes out at critics during ASEAN Summit press conference. Prime Minister Hun Sen lambasted his domestic critics at what was expected to be a mundane press conference April 4. Speaking at the concluding press conference for the 20th ASEAN Summit, Hun Sen referred to one unnamed critic as a “bald-headed doctor” who was “silly” and “wrong thinking.” The 30-minute rant was sparked by a question regarding speculation about China pressuring Cambodia on South China Sea issues ahead of the summit.
Singapore home prices fall for first time in three years. Singapore has experienced the first drop in home prices since June 2009 following government measures aimed at bringing down prices, according to estimates released April 2 by the Urban Redevelopment Authority. Singapore’s private residential property price index declined 0.1 percent from the previous three months to 206 points in the quarter that ended March 31. Singapore has been trying to bring down home prices since 2009 through measures such as barring interest-only loans for some housing projects.
Singapore makes changes to rules for Indonesian domestic helpers. Singaporean employers will no longer need to fork out an up-front payment of $2,400 in placement fees for maids from Indonesia. Employers will instead have to pay a substantially higher one-time agency fee of between $1,000 and $1,300, up from $320 to $475. Under the new rules that go into effect May 1, Indonesian domestic helpers without experience must undergo 400 hours of training before leaving for Singapore.
Yale faculty raise concerns about Yale-National University of Singapore joint campus. Professors at Yale University passed a resolution April 6 calling for a planned Yale-National University of Singapore joint campus to protect human rights and political freedom. The resolution raised concerns about Singapore’s “history of lacking respect for civil and political rights.” Yale faculty had earlier expressed outrage at not being able to vote on the establishment of the liberal arts college set to open in Singapore next year. Yale president Richard Levin opposed the resolution, saying it does not capture the "mutual respect" of the collaboration.
Ramos-Horta says new government should make Greater Sunrise oil and gas field a priority. Lame-duck president José Ramos-Horta said April 4 that Timor-Leste’s next government should make it a priority to get the Greater Sunrise oil and gas field up and running. Voters will go to the polls April 16 for a runoff vote to elect a new president, and again in June to vote for members of the parliament. The Greater Sunrise field is shared between Australia and Timor-Leste, and the current working agreement will expire in 2013. Ramos-Horta has previously criticized the government for its lack of progress in bringing the field on line.
Politicians and political parties line up to support presidential candidates. José Luis Guterres, deputy prime minister and leader of the minority Frente Mudanca Party, pledged to support Tuar Matan Ruak for president in Timor-Leste’s April 21 runoff vote. Ruak, the former head of the military, is running as an independent against FRETILIN party leader Lu-Olo. Current prime minister Xanana Gusmao also pledged support for Ruak. Angela Freitas, a presidential candidate in the first round of elections, has pledged her support to Lu-Olo. Several major political players, including current president José Ramos-Horta, have yet to announce support for either candidate.
U.S. official expresses greater interest in lower Mekong region. Under Secretary of State for Economic Growth, Energy, and the Environment Robert Hormats said March 22 during a two-day visit to Thailand in late March that the United States is keen to participate in the development of the Lower Mekong subregion, particularly in the areas of education, environment, power grids, smart power, and connectivity. Hormats added that U.S. officials will participate in a meeting on Lower Mekong development in Hanoi in July, accompanied by representatives of U.S. companies to familiarize them with the region.
“Red tide” puts fishing on hold. Waters off Brunei and the western coast of Malaysia’s Sabah province are experiencing a “red tide,” or algal bloom, which results in elevated toxins in shellfish and fish, rendering them unsuitable for human consumption. “Red tides” have occurred off Brunei’s coast with some frequency since 1976, causing economic hardship for the area’s fishermen. Levels of harmful toxins are monitored by agencies in Sabah and Brunei.
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