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Asean Weekly Ending 12 Oct 2012
Clinton says United States to lift ban on Myanmar imports. Secretary of State Hillary Clinton September 26 said the United States will ease restrictions on imports from Myanmar in recognition of its continued progress on reform. Clinton made the announcement while meeting Myanmar president Thein Sein on the sidelines of the UN General Assembly. Thein Sein addressed the general assembly the next day, praising opposition leader Aung San Suu Kyi and calling for support from the international community.
International organizations step up assistance to Myanmar. The World Bank September 26 announced plans to allocate $85 million in grants for rural development projects in Myanmar. The package will target communities in conflict areas and select townships in the country. The International Monetary Fund and the Japanese Finance Ministry meanwhile met in Tokyo October 10 to seek ways to relieve Myanmar’s debt to Japan. Japan is currently Myanmar’s largest creditor.
House passes law to boost defense industry. The Indonesian House of Representatives October 2 passed a law placing weapons and defense equipment producers under the authority of the Ministry of Defense and the Ministry of State Enterprises. The law aims to create a self-sufficient defense industry by providing fiscal incentives, technology transfer requirements for foreign companies, and capacity-building education programs to strengthen the country’s fledgling defense industry.
Parties refuse to lower threshold for presidential candidates. Indonesia’s three largest parties—the Democratic Party, Golkar, and Indonesian Democratic Party of Struggle—October 1 refused to support a move by the Gerindra party to lower the threshold for parties to nominate presidential candidates. Under the current law, only parties that garner at least 25 percent of the popular vote and hold 20 percent of the seats in the parliament can nominate presidents. Spokesmen from the three major parties denied allegations that they are deliberately attempting to block Gerindra’s presumed candidate and early favorite, retired former general Prabowo Subianto, from running in 2014.
Corruption Eradication Commission, legislature grapple with anti-graft law amendment. Indonesia’s House of Representatives October 3 abandoned plans to pass amendments to weaken the Corruption Eradication Commission (KPK) by removing its sole authority to prosecute corruption cases. Proposed changes also included the creation of an oversight body that could order the cessation of investigations and the removal of the KPK’s power to wiretap suspected corrupt officials. Democracy and human rights groups had called on legislators to preserve the power of the KPK, which has initiated a series of high-profile investigations of officials and legislators in recent years.
Former minister turned businessman under house arrest amid banking scandal. Vietnamese police September 27 announced that Tran Xuan Gia, former minister of planning and investment and former Asia Commercial Bank (ACB) chairman, is being kept under house arrest. Gia, along with three other ACB executives, will likely be prosecuted for “deliberate wrongdoing causing serious consequences.” Citing health problems, Gia resigned from the bank September 20, a day after authorities announced more severe charges against ACB cofounder Nguyen Duc Kien.
Vietnam to allow full foreign ownership of some financial services companies. Vietnam October 2 issued a draft measure that will allow full foreign ownership of securities firms and some joint-stock companies. Currently, foreigners can only set up wholly owned securities firms after two years of operations in the country and own only up to 49 percent of the registered capital of publicly listed joint-stock companies. The Vietnamese government seeks to attract more foreign investment in order to maintain high economic growth rates.
Deputy Prime Minister resigns, Yingluck denies talks of cabinet reshuffle. Rumors of an imminent cabinet reshuffle in Thailand are swirling after the September 28 resignation of Deputy Prime Minister Yongyuth Wichaidit following his conviction for malfeasance in the handling of a 2002 land case. Four days later, Yongyuth also stepped down from his position as Pheu Thai party leader and parliamentarian. Prime Minister Yingluck Shinawatra denied that a reshuffle is imminent, but a group of Pheu Thai parliamentarians threw fuel on the fire October 6–7, when they traveled to Hong Kong for a meeting with Yingluck’s brother, ousted prime minister Thaksin Shinawatra, reportedly to lobby for cabinet seats.
Thai government races to pass anti-money laundering bills. Thailand’s Anti-Money Laundering Office has presented two bills to the parliament to tackle money laundering and financial support for terrorism, which the office hopes will be enacted by February 2013. Europe’s Financial Action Task Force (FATF) in February downgraded Thailand to its watch list for failing to control financial misconduct. The FATF imposes restrictions on countries on the watch list, limiting their ability to complete financial transactions with foreign countries. Passage of the draft legislation will allow Thailand to ask to be removed from the list.
Thailand belatedly approves NASA climate study at U-tapao. Defense Minister Sukumpol Sawanatat said October 4 that the Thai government belatedly approved NASA’s controversial request to use the U-tapao military airport to conduct a Southeast Asia climate study. NASA had abandoned the project after the government failed to approve its request before a June 26 deadline amid strong opposition from the opposition Democrat Party and other groups. The study was originally scheduled to take place over a three-month period in 2012. NASA has said it is unsure if it will be able to attempt the study again in 2013.
Government and Moro rebels reach peace deal. President Benigno Aquino announced October 7 that Manila had reached a framework agreement for peace with the Moro Islamic Liberation Front (MILF). The agreement is a critical step in ending the MILF’s decades-long insurgency in the southern Philippines. The agreement establishes a new political entity in the predominantly Muslim enclave of Mindanao that will have wide-ranging autonomy in local governance. The national government will preserve authority over defense, foreign affairs, and monetary policy. The deal also guarantees equitable revenue and resource sharing for the widely underdeveloped region.
Controversial cybercrime law suspended amid widespread protests. The Philippine Supreme Court October 9 suspended for 120 days a controversial new cybercrime law that took effect October 3 amid widespread opposition and daily viral protests from “hacktivists” shutting down government websites. Critics are lambasting the bill as a gross violation of constitutionally enshrined free speech rights and an overreaction by the government. The bill classifies as cybercrimes not only fraud and hacking, but also online libel, pornography, cybersex, and other unrelated activities. Several petitions have been filed challenging the act’s constitutionality and the Supreme Court said it will take up the case January 15, 2013.
Candidates register for 2013 midterm elections. Candidates traveled to offices of the Commission on Elections throughout the Philippines October 1–5 to register to run in national, regional, and local midterm elections in 2013. The elections are expected to be a critical litmus test of support for President Benigno Aquino’s reform agenda aimed at curbing corruption and poverty. Familiar registrants included ousted president Joseph Estrada and Imelda Marcos, widow of former dictator Ferdinand Marcos.
Former president Arroyo arrested for third time. Authorities October 4 arrested former president Gloria Macapagal-Arroyo on charges of corruption stemming from alleged misuse of public funds. The Philippines’ anti-graft court has accused Arroyo and nine others of embezzling $7.2 million in state lottery funds. The arrest marks Arroyo’s third indictment in a lengthy legal battle with the government of President Benigno Aquino, which has prioritized tackling corruption and promoting good governance.
South China Sea
China accelerates construction in South China Sea. The Philippines said September 30 its surveillance revealed increased Chinese construction in the Spratly Islands, and an official Chinese web portal reported the same in the newly formed Sansha City in the Paracel Islands. The construction includes a satellite dish and extension of platforms in the Spratlys, and housing, infrastructure, and water-supply projects in Sansha City. China and the four ASEAN claimants signed a declaration of conduct in 2002 promising to forego new construction on disputed features in the South China Sea.
ASEAN members circulate draft code of conduct during UN General Assembly. Indonesian foreign minister Marty Natalegawa September 27 circulated for the first time a draft code of conduct on maritime disputes in the South China Seaduring a sideline meeting between ASEAN ministers at the UN General Assembly. The ministers agreed to elevate Thailand, as a non-claimant, to the role of key “mediator” between ASEAN and China. Philippine foreign affairs secretary Albert Del Rosario on October 2 challenged the UN to intervene in the dispute and fulfill its mission of “protecting the weak from the strong.”
China defends use of surveillance drones in South China Sea. Yang Yujun, an official with China’s defense ministry, September 27 reaffirmed China’s plans to employ unmanned drones to monitor activity in disputed areas of the South China Sea. China plans to use the drones over Scarborough Shoal, the Spratly Islands, and their adjacent waters. The Philippines has said it may fire on drones that enter territory claimed by Manila. Yang countered with China’s oft-repeated claim to “indisputable sovereignty” in those areas.
Astro IPO continues trend of successful offerings by Malaysian companies. Cable TV-company Astro on October 4 priced its initial public offering at $0.97 per share, which would earn the company $1.52 billion when the stock lists October 19. Shares of the company are heavily oversubscribed, and analysts expect Astro to continue the trend of successful Malaysian IPOs in 2012. Astro is the third Malaysian corporation in recent months to buck the global trend of weak IPOs. Strong domestic demand, pump-priming by the central bank, and restrictions on large shareholders quickly selling shares appear to be major factors driving the success of Malaysian IPOs.
Malaysian court rules that publishing is a basic right. A Malaysian court ruled October 1 that the right to publish is part of the fundamental guarantees of freedom of expression enshrined in the Constitution. The ruling was in response to a lawsuit by independent news website Malaysiakini, which had its application for a publishing license rejected by the government. The court ordered the government to reconsider the application. Critics hailed the decision as the first such classification of the right to publish as protected expression in Malaysia. Online and print newspapers and magazines in Malaysia must apply each year for a permit, which critics charge stifles press freedom.
Singapore may impose stricter controls on foreign labor. Singapore’s acting minister for manpower, Tan Chuan-Jin, unveiled a plan September 30 to set further limits on the inflow of foreign workers if needed to boost citizens’ wages, ease strains on infrastructure, and help assuage growing antiforeigner sentiment. Tan warned that Singapore must balance its attempts to combat these problems with the reality that its sizeable foreign workforce has proven vital to economic growth.
Singaporean, Philippine, Thai, and Myanmar firms form rice consortium. Singapore’s Radiant Stone Pte. Ltd signed an agreement in September with Philippines-based SL Agritech, Myanmar’s IBTC Group, and Thailand’s Capital Rice International to form a regional consortium to produce and export rice to growing markets in China and Indonesia, according to an October 2 announcement from Agritech. The Philippine corporation will contribute rice technology, Capital Rice will handle global marketing, and IBTC will provide land for production in Myanmar, where low costs and tax incentives will make it most profitable. The group expects to complete a feasibility study by December 2012 and begin production in 2013.
Cambodia aims for first offshore oil production in 2013. The Cambodian government and U.S. oil giant Chevron hope to finalize a contract for oil production in Cambodian waters in the Gulf of Thailand by the end of 2012, a government official said September 26. The agreement will mark Cambodia’s first attempt at oil production. Most of Cambodia’s oil and gas reserves are believed to be in offshore areas disputed with Thailand. Cambodia is likely to take in 70-80 percent of revenues generated by the endeavor.
ASEAN officials meet for maritime conference. Government officials and security experts from ASEAN member countries gathered in Manila October 3–5 for the opening of the annual ASEAN maritime security conference. The conference focused on protecting water resources, freedom of navigation, and measures to resolve differences in the South China Sea disputes among members ahead of the ASEAN Summit in November. A draft code of conduct for parties in the South China Sea is being circulated among ASEAN members.
United States, Timor-Leste begin joint military exercises. U.S. and Timorese military forces October 10 began a seven-day training exercise, Exercise Crocodilo 2012. Troops will cooperate to build joint operational capabilities in military police training, jungle warfare, aviation, and other fields. U.S. personnel seek to improve relations with Timorese communities by offering medical and dental services and collaborating on rehabilitation and construction projects.
Timor-Leste plans to become medium-income country by 2030. Prime Minister Xanana Gusmão September 25 unveiled a development plan at the UN General Assembly that aims to lift Timor-Leste from low to medium-high income status by 2030. Gusmão cautioned that, despite the plan, Timor-Leste would not meet its 2015 UN Millennium Development Goals to reduce poverty and hunger, and improve access to education and health care. He also lauded the United Nations for including Timor-Leste finance minister Emilia Pires in a high-level panel on global development.
ILO pushes Brunei to ratify labor convention. The International Labor Organization (ILO) October 3 encouraged Brunei to ratify the 2006 Maritime Labor Convention (MLC) during a workshop that included participants from government agencies and the shipping sector. The MLC consolidates labor standards outlined by the ILO and would help level the playing field between Brunei and 30 MLC-compliant countries. Bruneian ships will face possible detention and docking delays if the country does not sign the MLC before the convention takes effect August 20, 2013.
Chinese court convicts six for murder of Chinese sailors. Myanmar drug lord Naw Kham September 21 pleaded guilty in a Kunming court and offered financial compensation for the murder of 13 Chinese sailors on the Mekong in 2011. The court found six defendants guilty of murder, drug trafficking, and kidnapping in connection with the deaths of the sailors, who were found floating in the river in the notorious Golden Triangle region, known for drug production.
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