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Asean Affairs 16 December 2011
Asean Weekly: Week Ending 16 December 2011
Thai government reissues Thaksin’s passport and completes draft amnesty bill. The Thai government has reissuedfugitive former Thai prime minister Thaksin Shinawatra’s passport, and Deputy Prime Minister Chalerm Yubamrung finished drafting an amnesty bill for him, paving the way for his eventual return to Thailand. The previous government revoked Thaksin’s passport in 2009, accusing him of promoting protests from exile. Thaksin was not among the 26,000 who were pardoned December 3 for the king’s birthday. Thaksin is a divisive figure in Thai society, and opponents of his return argue that it will spark new protests and a political crisis.
Friendship bridge between Myanmar and Thailand reopened. The Myawaddy-Mae Sot friendship bridge, which serves as the main border route for trade between Myanmar and Thailand, was reopened December 5. The bridge was closed by Myanmar on July 17, 2010, in reaction to purported Thai incursions along the Moei River. Thai businesses have said that the bridge closure cost them around $3 million per month. Thailand is Myanmar’s second-largest trading partner after China.
Flash floods during Typhoon Washi kill hundreds. Heavy rains from Typhoon Washi caused flash floods and mudslides in the southern Philippines December 16–17, killing more than 650 and leaving 800 missing and 20,000 homeless. Relief supplies, including clean water and body bags to prevent the spread of disease, are being rushed to the affected area. Donations to support relief efforts can be made to the Philippine Red Cross.
Former official arrested for election fraud. Philippine police arrested former chief election official Benjamin Abalos on December 13 for alleged electoral fraud. Abalos insisted he had no hand in rigging the 2007 congressional elections in former president Gloria Macapagal-Arroyo’s favor. Many observers tout the arrest as part of President Benigno Aquino’s effort to purge vestiges of corruption from the Arroyo era. Others say that the anti-corruption crackdown is targeting only Aquino’s political detractors and those aligned with the former president.
Philippine legislature impeaches Supreme Court chief justice. The Philippine House of Representatives voted to impeach Supreme Court Chief Justice Renato Corona on December 12 for alleged corruption and favoritism toward former president Gloria Macapagal-Arroyo. Corona’s court is criticized for improperly ruling in the former president’s favor when she tried to leave the country for medical treatment in November. Corona, the first chief justice in Philippine history to be impeached, was appointed by Arroyo at the end of her term in 2010. Corona must now be tried by the Philippine Senate and, if convicted, will be removed from office.
Manila appoints new leader to resurrect battered military. Philippine Army Lt. Gen. Jessie Dellosa was named head of the Philippine military on December 12 amid rising tensions in southern Mindanao and in the South China Sea. He said during the handover ceremony that developments in the South China Sea compel the Philippines to modernize and upgrade its military capabilities. President Benigno Aquino is expected to visit Washington next year to request modern fighter jets and a third naval warship from its longtime ally.
Philippine lawmaker to serve as ICC judge. Philippine senator Miriam Santiago is set to become one of the International Criminal Court’s 18 judges after she won 79 out of 104 votes in the first round of elections by ICC officials on December 13. Santiago will be the first Filipino, and the first Asian from a developing country, to sit on the court. The nine-year term in The Hague will require her to resign from the Senate before assuming her new responsibilities.
Myanmar president orders end to attacks on Kachin. Myanmar’s president, Thein Sein, ordered the military on December 10 to end its offensive against the Kachin Independence Army (KIA). While the order was welcomed by observers, isolated firefights reportedly continue and nongovernment organizations are still being denied access to KIA-controlled areas. In a surprising sign of its independence, Myanmar’s recently established Human Rights Commission warned on December 14 that thousands of children from the country’s north have been psychologically traumatized by the ongoing conflict.
Authorities accept NLD party registration. Myanmar’s state-run media announced December 13 that the country’s electoral commission had accepted the National League for Democracy’s (NLD) application to register as a legal political party. The party’s leader, opposition leader Aung San Suu Kyi, is expected to run for parliament in upcoming by-elections expected around March or April. Granting legal status to the NLD bolsters President Thein Sein’s push for reform.
Myanmar eases restrictions on censorship for some media outlets. Myanmar’s government announced December 9 that it was loosening censorship and restrictions on 54 business and crime publications. The announcement follows a series of media reforms, including relaxing restrictions on websites and on sports and recreational magazines in recent months. The government still subjects news outlets to strict restrictions.
Chinese officials engage in flurry of diplomatic activity in Myanmar. Chinese premier Wen Jiao Bao will travel to Myanmar for the Greater Mekong Sub-Region summit that begins December 19 in Naypyidaw. State counselor Dai Bingguo, China’s highest-ranking foreign policy official, will visit the country during the same period for an economic cooperation forum. China’s ambassador to Myanmar held his first meeting with opposition leader Aung San Suu Kyi on December 8.
Kim Jong Il’s death creates questions for Myanmar. The death of North Korean leader Kim Jong Il and the succession of his son, Kim Jong Un, could destabilize the delicate process of severing military ties between Myanmar and North Korea. Myanmar is suspected of having received support from North Korea on nuclear weapons technology during the past decade. President Thein Sein told Secretary of State Hillary Clinton during her recent visit that his country would cut ties with North Korea as part of its larger effort for rapprochement with the international community.
Judge to issue Anwar Ibrahim verdict January 9. The politically charged sodomy trial of Malaysian opposition leader Anwar Ibrahim came to a close on December 15, with the defense and prosecution delivering their closing arguments. Judge Mohamad Zabidin Diah told the courtroom that he will deliver his verdict on January 9. Sodomy is illegal in Malaysia and, if convicted, Anwar faces up to 20 years in jail and would be ineligible to run in upcoming national elections. Anwar was sentenced to prison in 1998 on similar charges, which were eventually overturned by a higher court.
UMNO faces slowing economy, strengthened opposition ahead of elections. Malaysia’s ruling United Malays National Organization (UMNO) is facing some of the most serious challenges in the party’s history ahead of elections that are widely expected around April next year. A weakened economic outlook and a strengthening opposition threaten to challenge the party’s half-century-long grip on power. Malaysia’s economy is expected to expand by 3 percent next year, down from this year’s estimated 4.7 percent, according to Nomura International. Rising debt levels resulting from increased government spending have compounded Malaysia’s dampened economic outlook.
Malaysia appoints new king. Sultan Abdul Halim Mu’adzam Shah of Kedah state took the oath of office December 13 to become Malaysia’s new agong, or king. Malaysia’s nine sultans take turns as king in rotating five-year terms. This will be Sultan Abdul Halim’s second term as king, after previously serving as head of statefrom 1970 to 1975. He will also be Malaysia’s oldest agong at 84.
Firms’ merger will create the world’s fifth-largest oil and gas company. Malaysia’s Kencana Petroleum and SapuraCrest Petroleum announced December 15 that they are on track to finalize negotiations on a $3.7 billion merger deal, pending shareholder approval. The deal would make the conglomerate the world’s fifth-largest oil and gas provider, employing 9,000 staff in more than 20 countries. According to Kencana, the deal should be completed by February 2012, pending regulatory approval.
General Motors seeks to revive partnership negotiations with Proton. General Motors announced December 8 that it has begun negotiations with Proton, Malaysia’s largest automaker, to form a manufacturing venture. A deal with Proton would expand General Motors’position in an auto market that has long been highly protected and expand the company’s existing manufacturing capacity in Southeast Asia by locating additional factories outside of Thailand.
Freeport-McMoRan reaches deal with union. The nearly three-month strike at the Grasberg gold and copper mine is set to end after Freeport-McMoRan reached a deal with union leaders December 14 ensuring a 40 percent wage hike over two years. The strike led to some violent incidents between workers and local security forces in Indonesia’s already restive Papua province. The U.S.-based United Steelworkers accused Freeport of violating the Foreign Corrupt Practices Act by providing benefits to local police moonlighting as security officers at the mine.
Indonesian government embroiled in disputes with RIM. Two executives of Canada-based Research in Motion (RIM), the maker of BlackBerry mobile devices, were barred from leaving Indonesia on December 5 as police investigate their role in a promotional event that led to a stampede that resulted in several people being hospitalized. The Indonesian Telecommunications Regulations Body threatened December 9 to block data and messaging on RIM’s Indonesia network in retaliation for RIM’s decision to locate a data center in Singapore instead of Indonesia.
New land law and bond upgrade could set stage for infrastructure push. Indonesia’s parliament approved a law December 16 making it easier for the government to acquire privately held land for critical infrastructure projects. The Fitch credit rating agency upgraded Indonesia’s debt rating to investment-grade status on the same day, marking the first time an international credit agency had done so in 14 years. This allows the government to restructure outstanding bonds at a lower interest rate and float future bonds more cheaply. Both developments could help attract more investment in Indonesia’s overextended infrastructure, which is often cited for creating bottlenecks that suppress growth.
Indonesia will strengthen screening of imports. Indonesian trade minister Gita Wirjawan, who earlier prompted concern among some observers by limiting rattan imports, described future plans to increase safety and health standards applied to imports in a December 7 article in the Jakarta Post. The new measures, which are viewed by many foreign companies as possible nontariff barriers to trade, will be submitted to the World Trade Organization for approval. Wirjawan, who replaced free-trade advocate Mari Pangetsu as trade minister in an October cabinet reshuffle, also heads the Investment Coordinating Board, which directs Indonesia’s foreign investment policy.
Vietnam launches banking reform. Vietnam’s state bank announced December 6 that three small banks that faced liquidity problems would merge with the state-owned Bank for Development and Investment. Many banks in Vietnam face liquidity difficulties caused in part by a credit boom for state-owned enterprises in the run-up to the January Communist Party Congress and the May National Assembly elections. The credit boom helped fuel inflation, which is running at about 19.8 percent, and a land and stock market bubble. Many banks face high rates of nonperforming loans; these threaten many smaller banks with insolvency and have prompted the government to press smaller banks to merge with larger state banks as part of larger finance sector reforms.
Human Rights Watch raises concern about Hoa Hao activists sentenced to prison. Two Hoa Hao adherents, 71-year old Nguyen Van Lia’s and a codefendant, were sentenced to five and three years in prison, respectively, December 12 for possessing materials critical of Vietnam’s human rights record. Hoa Hao is a Buddhist sect founded in the early twentieth-century that is popular among farmers in the southern Mekong Delta. Human Rights Watch Asia characterized the sentences as religious persecution and said Hoa Hao adherents outside of the state-sponsored Hoa Hao organization are frequent targets of government pressure.
U.S.-based hedge fund sues Vinashin. U.S.-based hedge fund Elliot Advisers has filed a lawsuit against Vietnam’s state-owned Vinashin due to the shipbuilder’s default on a $600 million syndicated loan payment, according to a December 12 Wall Street Journal article. Prime Minister Nguyen Tan Dung faced questions from the National Assembly on November 25 about the company’s near-bankruptcy. An explicit state guarantee of the company’s debts led Standard & Poor’s to rate the company’s debt as secure as that of the government, but Hanoi now denies responsibility for paying the company’s debts of more than $3 billion.
South China Sea
Defense meeting achieves “no new ground” on South China Sea. A high-level U.S.-China defense officials’ meeting December 8 achieved “no new ground” on issues surrounding the South China Sea, according to U.S. undersecretary of defense Mich?le Flournoy. Flournoy said the United States hopes that “high-level visits as well as a number of joint exercises in areas such as humanitarian assistance and counter-piracy” in 2012 will advance discussions on regional maritime security.Chinese president Hu Jintao told China’s Central Military Commission December 13 that the Chinese Navy should ready itself for combat.
Philippines adds refitted U.S. cutter to South China Sea fleet. The Philippines launched a refitted U.S. Coast Guard cutter as its newest navy frigate, the BRP Gregorio del Pilar, December 14. The U.S.-donated warship is the most developed vessel in the Philippine Navy and will be used to protect Philippine maritime claims in the South China Sea. In launching the ship, President Benigno Aquino cited the difficulty of monitoring claims “with dilapidated vessels and old and faulty equipment.”
U.S. ambassador touts success of U.S.-Singapore FTA. U.S. ambassador to Singapore David Adelman said U.S. exports to the city state have surged more than 75 percent and total two-way trade has grown more than 47 percent since the U.S.-Singapore Free Trade Agreement (FTA) was ratified in 2003. The agreement marked the first FTA between the United States and an Asian country. Supporters of a larger U.S.-ASEAN FTA tout the success of the U.S.-Singapore agreement to argue that the United States should establish similar agreements with other countries in the region.
Subway disruptions lead to widespread criticism. Thousands of passengers were trapped and 127,000 affected on Singapore’s subway system December 15 when four trains stalled during evening rush-hour traffic. A similar but smaller disruption occurred a day earlier during the morning rush hour. The back-to-back incidents have highlighted the stress that immigration-fueled population growth has put on Singapore’s aging infrastructure. The incidents also led angry citizens to express unusually strong online criticism of the Transportation Ministry and subway operator SMRT Corp., both of which have pledged to investigate the incidents.
Google invests $120 million in Singapore Data Center. Google Inc. is looking to expand its operations and meet user demand in Asia by building a $120 million data center in Singapore. Google’s three new Asia-based data centers in Singapore, Taiwan, and Hong Kong are expected to boost reliability and access to the most used Internet search engine. Google also expects the centers will improve on-ground satellite capabilities to facilitate disaster relief as happened during the natural disasters that hit Japan in March. Google expects the new Singapore data center to be completed in 2013.
Yahoo countersues Singapore Press Holdings over copyrights. Yahoo Inc. accused Singapore’s largest newspaper company, Singapore Press Holdings (SPH), of copyright violations in a December 13 countersuit. Yahoo’s countersuit said that on “at least two known occasions over the last year, SPH . . . reproduced Yahoo content on its citizen-journalism site.” SPH, which publishes the Straits Times, originally filed a suit in November claiming Yahoo breached its copyright on 23 articles.
William E. Todd nominated as U.S. ambassador to Cambodia. President Barack Obama announced December 1 his intention to nominate William E. Todd as the new U.S. ambassador to Cambodia. Todd, a career foreign service officer, was the U.S. ambassador to Brunei from 2008 to 2010 and has previously worked in various roles at the State Department’s Bureau of International Narcotics and Law Enforcement Affairs. The U.S. Embassy in Phnom Penh has been led by charg? d’affaires Jeff D’Agle since the previous ambassador, Carol Rodley, completed her three-year mission in September.
First hearings in Khmer Rouge trial adjourn. The first round of hearings in the long-awaited trial of three former Khmer Rouge leaders adjourned November 23 after two days, providing little satisfaction to Cambodians hoping for justice. The three defendants, Nuon Chea, Khieu Sampha, and Ieng Sary, are charged with crimes against humanity for their role in atrocities during the Khmer Rouge rule in the 1970s. During the proceedings, the regime’s chief ideologist, Nuon Chea, defended his actions as a patriotic act to defend the state from colonization by Vietnam.
Cambodia to be affected by Global Fund freeze. The Geneva-based Global Fund, a major donor of projects combating HIV/AIDS, tuberculosis, and malaria in Cambodia, announced on November 30 that it will freeze new grants for two years due to “substantial budget challenges.” Money from Global Fund pays for medicine for 37,000 HIV/AIDS patients in Cambodia. Cambodia aims to reduce the number of people in the country who die from HIV/AIDS from 2,500 in 2011 to 2,300 in 2012, but the funding freeze by Global Funds is expected to hurt further progress.
Cambodia hosts global anti-landmine summit. About 1,000 delegates participated in a five-day annual meeting of members of the Anti-Personnel Mine Ban Convention, also known as the Ottawa Treaty, which was adopted in 1997. According to United Nations data, Cambodia, which signed the treaty in 1999, has cleared 270 square miles of landmines and other unexploded ordinance and intends to clear an additional 251 square miles by 2019. About 160 countries have agreed to stop using and producing anti-personnel mines as part of the Ottawa Treaty.
International petition calls for Lao and Thai governments to cancel Xayaburi dam project. Environmental group International Rivers said December 1 that 22,580 people from more than 100 countries had signed a petition calling for canceling the controversial Xayaburi dam project. Environmentalists claim the 1,280 megawatt Thai-financed dam project in Laos will negatively affect fish stocks and Vietnam’s prime rice growing area. The Mekong River Commission countries—Laos, Thailand, Cambodia, and Vietnam—agreed in April to suspend the dam’s development pending further studies, but continued reports of construction on the dam have worried Vietnam and Cambodia.
Mekong Delta receives flood aid from Australia and Germany. The Australian Agency for International Development pledged $510,000 November 25 to help address flood issues in the Mekong Delta region, which was followed by a $3.2 million donation from the German government on November 29. According to Vietnam’s flood and storm preparedness committee, flooding by mid-November had affected nearly 154,000 houses, caused 85 deaths, and destroyed more than 26,000 acres of rice paddies.
Goh Chok Tong urges region to respond to nuclear accidents. Former prime minister of Singapore Goh Chok Tong stressed the importance of building regional early warning capabilities and consolidating responses to nuclear accidents during a meeting of the Nuclear Security Summit Eminent Persons Group (EPG) meeting in Seoul November 29. The EPG was formed to advise South Korean president Lee Myung-bak before Seoul hosts the 2012 Nuclear Security Summit. Although there is no active nuclear power plant in region, six Southeast Asian countries have expressed their interest in developing nuclear power.
Singapore puts new submarine into operation. Singapore’s defense minister, Ng Eng Hen, declared on December 2 that the first of Singapore’s most advanced pair of submarines had entered active service after two years of sea trials. He said that the RSS Archer would reinvigorate regional peace and stability operations by building “confidence with other militaries.” A second Archer-class submarine, the RSS Swordsman, is still conducting trials in Sweden and will join the Republic of Singapore Navy fleet once completed.
Cambodia and United States conduct joint exercises. U.S. Marines completed joint exercises with Cambodia's military police and armed forces in the Phnom Penh and Sihanoukville areas December 18. Jeff Daigle, charg? d'affaires at the U.S. Embassy in Cambodia, said the exercises serve “as another example of how U.S. and Cambodian forces can work together, increase each other's cultural understanding, enhance capabilities, and improve coordination, while providing services to areas and individuals in need."
Cambodia boosts ties through official visits from China and Vietnam. Cambodia’s National Assembly president Heng Samrin met with China's top foreign policy official, Wu Bangguo, December 5. The two pledged to further exchanges and cooperation between their parliaments. Three days later, Vietnamese Communist Party general secretary Nguyen Phu Trong visited Cambodia and in a joint statement with King Norodom Sihamoni declared 2012 “Vietnam-Cambodia Friendship Year” in commemoration of the 45th anniversary of diplomatic ties between the two countries.
Law allowing prison labor threatens Cambodia’s “sweatshop-free” reputation. Human Rights Watch (HRW) said December 11 that a new Cambodian law allowing prisoners to work in factories goes against international labor laws and risks tarnishing the country’s reputation. Phil Robertson of HRW said that prison labor represents a captive workforce that prison officials can use for a fraction of what normal companies pay their employees. Cambodia has set itself up as a “sweatshop-free” alternative to larger countries like China to attract the attention of Western socially conscious consumers.
Laos agrees to delay construction of Xayaburi dam pending further studies. Laos agreed to delay construction of the Xayaburi hydropower dam following a Mekong River Commission meeting December 8. The decision was in response to concerns voiced by Vietnam and Cambodia that the dam would disrupt fisheries and rice production downstream. Laos, Cambodia, Vietnam, and Thailand agreed to seek assistance from the Japanese government and international development agencies to further study the impact of planned hydropower dams on the Mekong. About 60 million people depend on the river for food, water, and transportation.
Three Myanmar soldiers killed by armed criminals during joint patrols. Three Myanmar soldiers were killed during a clash with a group of armed criminals on the Mekong River during an inaugural international joint river patrol December 12. The violence took place near the spot where 13 Chinese sailors were killed in October. That incident prompted China’s decision to send 300 armed police to help patrol the river in cooperation with Myanmar, Laos, and Thailand.
ASEAN telecommunication ministers call for broadband network. ASEAN ministers called on member-states to expedite the creation of the ASEAN Broadband Corridor and Internet Exchange at the Telecommunication and Information Technology Senior Officials Meeting (TELSOM) in Naypyidaw, Myanmar, December 5–7. The broadband corridor and Internet exchange are part of the larger ASEAN Information and Communication Technology (ICT) Master Plan of 2015. During the meeting, Japan pledged $150,000 to the ASEAN-Japan ICT Cooperation Fund, and China and South Korea have committed to providing assistance to develop the infrastructure.
Cambodia assumes ASEAN chair for 2012. The ceremonial handover of the ASEAN chairmanship from Indonesia to Cambodia took place at the ASEAN Secretariat in Jakarta on December 13. Cambodia is assuming the ASEAN helm for 2012 after Indonesia’s successful chairmanship. Cambodia previously held the chair in 2002.
ASEAN and China conduct dialogue to bolster defense ties. ASEAN and Chinese leaders met in Beijing December 12–14 for the second round of the ASEAN-China dialogue meetings on defense and security ties. In conjunction with the meeting, China organized a workshop on navigational freedom and safety on the Chinese island of Hainan. The workshop is part of the mechanism for implementation of the Declaration of Conduct (DOC) on the South China Sea.
Brunei signs deal for 12 Black Hawk helicopters. Brunei and Connecticut-based Sikorsky Aircraft signed a contract December 2 for the purchase of a dozen Black Hawk helicopters. Sikorsky beat out EADS subsidiary Eurocopter for the contract, which was originally announced on November 15, to provide support S-70i helicopters, spare parts, and training to Brunei’s armed forces. The purchase kicks off a Brunei military modernization initiative planned through 2015.
Public sector investment and agriculture help Timor-Leste return to double-digit growth. The World Bank said December 12 that Timor-Leste is expected to post double-digit growth in 2011, driven by public sector spending, particularly in construction, and agriculture growth following destructive weather in 2010. Oil revenues, which rose by 25 percent last year, continued to rise in 2011. Weather conditions in 2010 affected rice and coffee production, causing growth to slow to 8.5 percent after two consecutive years of 12-plus percent growth.
Chart prepared by CSIS Southeast Asia Program.