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AseanAffairs Weekly ending 14 Sep 2012
The Week That Was
Buddhist monks protest Rohingya, echo calls for deportation. Hundreds of Buddhist monks, joined by thousands of local residents, marched through Mandalay September 1–3 in support of President Thein Sein’s suggestion in July that the Rohingya minority be deported to end the conflict in Rakhine state. The Rohingya, a Muslim minority in western Myanmar, are not recognized by the government and are denied citizenship. Since May, riots and violent clashes between Rohingya and Rakhine Buddhists have resulted in nearly 90 deaths. Human rights groups criticized the monks’ stance.
Myanmar passes long-delayed investment law. Myanmar’s parliament September 7 passed a much-anticipated law to manage foreign investment as the economy opens. The new law, which faced months of debate about how much of a role foreign companies should be allowed in the economy, lets investors own up to a 50 percent stake in joint ventures, with exemptions for certain sectors, such as advanced technology, where foreign ownership can reach 100 percent. President Thein Sein has not said whether he will sign the legislation or pass it back to the parliament when it sits in October to urge lawmakers to consider including more incentives for foreign investors. The law comes amid growing interest from major global corporations, which are considering entering Myanmar’s rapidly opening market.
Constitutional Tribunal judges resign en masse following impeachment. All nine judges on Myanmar’s Constitutional Tribunal resigned September 6 following a vote to impeach them by the lower house of the parliament. The motion was coauthored by opposition leader Aung San Suu Kyi and passed by two-thirds of the chamber, with military appointees, who occupy a quarter of the seats, abstaining or voting against impeachment. Myanmar’s upper house in August voted overwhelmingly for impeachment. The call for impeachment followed a ruling by the tribunal that parliamentary bodies do not enjoy the same standing as cabinet ministers, which would have limited the legislature’s power to call ministers for questioning and oversee the activities of the executive branch.
Defense Committee finalizes military leadership reshuffle. Thailand’s Defense Committee, consisting of seven top leaders of the Ministry of Defense and branches of the military, on September 5 named Thanongsak Apirakyothin the new permanent secretary for defense and Prajin Jantong the new chief of Thailand’s air force. The decision follows a public dispute between outgoing permanent secretary for defense Sathian Permthong-in and the minister of defense, Sukumpol Suwanatat, over who would succeed Sathian. The new appointments, pending approval by King Bhumibol Adulyadej, will take effect October 1.
Finance minister says some economic forecasts were “white lies.” Finance Minister and Deputy Prime Minister Kittiratt Na-Ranong admitted August 23 that he exaggerated growth forecasts for 2012, saying the finance minister has the right to tell “white lies” to boost investor and consumer confidence. Kittiratt said the export growth forecast for the year, which the government projected at 15 percent, was actually closer to 9 percent. Former finance ministers and members of parliament sharply criticized the statement, while Prime Minister Yingluck Shinawatra defended Kittiratt, saying he had good intentions.
Philippines considering joint sea patrols with Indonesia and Malaysia. Philippine defense secretary Voltaire Gazmin said August 30 that his government is considering establishing joint patrols with neighboring Indonesia and Malaysia to guard against piracy, smuggling, and Al Qaeda-affiliated insurgent movements. Gazmin raised the proposal with his Malaysian and Indonesian counterparts during a meeting to discuss Muslim guerrilla movements operating in the southern Philippines. He said the joint naval patrols, coupled with real-time information exchange, could help to address any emergencies of cross-border crimes in the region.
Del Rosario visits Syria, expedites repatriation of Filipino workers. Philippine foreign affairs secretary Albert del Rosario visited Damascus September 4–5 to seek assistance from the Syrian government to expedite the repatriation of nearly 4,000 Filipino workers stuck in the war-torn country. These include 250 people sheltered in the Philippine Embassy, 1,300 others who have asked to return home, and another 2,400 who have not officially asked to leave Syria. The Syrian foreign minister assured del Rosario that he would facilitate the repatriation of the workers in a timely manner.
Government forms committee to seek permanent solution to Papua violence. Indonesia’s House of Representatives September 3 created a working committee to seek a permanent solution to recurring violence in Papua. The western province is home to a decades-long low-level insurgency seeking independence from Indonesia. House member Mahfudz Siddiq said the committee was formed in response to the government’s failure to resolve the issue. Violence broke out again in the restive province September 4, resulting in two deaths.
Bakrie Telecom stock trading suspended as company fails to pay on bonds. The Indonesia Stock Exchange (IDX) September 5 suspended trading on PT Bakrie Telecom, a telecommunications company owned by Aburizal Bakrie, the billionaire head of the Golkar Party and 2014 presidential hopeful. The IDX suspended the trading of shares after receiving a letter from the Indonesian Central Securities Depository stating that the company delayed the payment of bonds that were issued in 2007 and matured September 4. Another of Bakrie’s companies, Bumi Resources, recently saw its share prices drop after reporting a loss of $322.1 million in the first half of 2012.
Vietnam, China hold strategic defense dialogue. Vietnam and China stressed their long-standing defense ties during the third Vietnam-China strategic defense dialogue held September 3 in Hanoi. Officials discussed measures to boost understanding between the two countries’ armies despite ongoing tensions in the South China Sea. Vietnamese deputy defense minister Nguyen Chi Vinh and his Chinese counterpart, Ma Xiaotian, cohosted the dialogue.
U.S. Trade Representative Kirk visits Vietnam. U.S. Trade Representative (USTR) Ron Kirk September 3 paid a visit to Hanoi where he met with Vietnamese president Truong Tan Sang. Kirk stressed the importance of trade in the United States’ Asia-Pacific policy and reaffirmed the U.S. commitment to deepening trade relations with Vietnam. Sang lauded U.S. efforts to promote bilateral economic ties, but urged the United States to recognize Vietnam as a market economy so the country can avoid certain trade restrictions, including large tariffs in trade disputes with the United States.
Vietnam to prohibit bankers from owning other companies. Vietnam’s National Finance Supervisory Council, an advisory body in the prime minister’s office, announced new bank ownership rules September 3 that will prohibit major shareholders of commercial banks from setting up backdoor companies. The council concluded that loose bank ownership regulations have led to conflicts of interest and resulted in mounting bad debts in the economy. The new policy was announced two weeks after the arrest of banking tycoon Nguyen Duc Kien on fraud charges.
Fugitive ex-shipping executive arrested. Vietnamese authorities on September 5 extradited Duong Chi Dung, a former executive at state-owned shipping firm Vinalines, from an unspecified Southeast Asian country. Dung, who was being investigated on corruption charges at Vinalines, had been on the run since March. Under Dung’s leadership, Vinalines allegedly misused $5 billion of state funds to purchase a floating dock and racked up over $1 billion in bad debt. Dung will likely face a long prison term if convicted.
Malaysia, Brunei leaders discuss economic cooperation. Prime Minister Najib Razak and Brunei’s Sultan Hassanal Bolkiah met September 4 in Malaysia to discuss the implementation of several agreements designed to strengthen bilateral economic relations. The two discussed progress on a recently signed agreement to boost cooperation in developing regional energy infrastructure, information and communications technology, and agriculture projects. Najib encouraged Brunei to invest in projects around Kuala Lumpur that seek to propel the Malaysian city into the ranks of the world’s top 20 metropolises in terms of economic growth and livability.
Laos upgrades border security with Myanmar. The Lao Ministry of National Defense August 20 announced the construction of a new road along the Myanmar-Lao border that will help strengthen border control in the Golden Triangle area. The 180-mile-long road, which will be financed by soft loans from China, will link Luang Namtha and Bokeo provinces in northwestern Laos. Upgrading cross-border security in the Golden Triangle area is of strategic importance to Laos, Myanmar, Thailand, and China.
South Korea to set up diplomatic mission to ASEAN. South Korea announced August 28 that it will open a diplomatic mission and name an ambassador to the ASEAN Secretariat in Jakarta. ASEAN and South Korea are looking to further bilateral ties in political, economic, and cultural cooperation. ASEAN is already South Korea’s second-largest trade partner and second-largest investment destination. The Korean mission will allow ASEAN to engage South Korea more effectively in regional affairs and foster ASEAN-South Korea relations.
Hillary Clinton visits ASEAN Secretariat. Secretary of State Hillary Clinton met September 4 with ASEAN secretary-general Surin Pitsuwan and permanent representatives from ASEAN member countries at the ASEAN Secretariat in Jakarta. Clinton discussed the South China Sea dispute with Surin and expressed the U.S. commitment to helping all sides resolve the issue. She urged the adoption of a binding code of conduct for the South China Sea ahead of the East Asia Summit in November.
ASEAN business outlook survey released. Ninety percent of senior U.S. executives surveyed expect U.S. trade and investment in Southeast Asia to increase in the next five years, according to the ASEAN Business Outlook Survey for 2012–2013 released August 29 by the U.S. Chamber of Commerce and the American Chamber of Commerce in Singapore. Twenty percent of U.S. companies surveyed said they plan to diversify their investments from China to ASEAN in the next two years.
South China Sea
Taiwanese legislators land on Itu Aba, observe live-fire drill. A group of Taiwanese legislators September 4 inspected the defense capabilities of Taiwan’s forces on Itu Aba Island in the disputed Spratly Islands and observed a series of live-fire exercises. The legislators’ visit, coupled with an August 30 trip to the island by Hu Wei-chen, secretary-general of Taiwan’s National Security Council, seemed aimed at asserting Taiwanese sovereignty over the island. Vietnam’s government condemned the visits as a violation of its sovereignty. Itu Aba is the largest of the Spratlys and, along with a nearby shoal, is Taiwan’s only presence in the chain of islands.
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