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Asean Affairs 22 June 2012
Asean Weekly : Week ending 22 June 2012
Sectarian strife grips Myanmar. Buddhists and Muslim Rohingyas in Myanmar’s western coastal Rakhine state have engaged in more than two weeks of clashes and rioting. The violence was sparked June 3 when a crowd of Buddhist Rakhines attacked a bus carrying Rohingya pilgrims and killed 10 men. The attack was in retaliation for the rape and murder of a Buddhist girl in May, allegedly by three Rohingya men. More than 50 people have been killed and about 90,000 displaced by the violence, according to the World Food Program. President Thein Sein declared a state of emergency June 10, and the military and security forces had imposed an uneasy calm by June 18.
Aung San Suu Kyi on Europe tour. Myanmar democracy icon Aung San Suu Kyi embarked on a 17-day tour of Europe June 13 that will see her visit Switzerland, Norway, Ireland, Britain, and France in only her second overseas trip in 24 years. Among the highlights of the trip, Suu Kyi stopped in Oslo June 17 to receive the Nobel Peace Prize she was awarded in 1991 and returned to her former home of Britain June 19 to reunite with her family and address the parliament.
Coca-Cola to operate in Myanmar. Coca-Cola announced June 14 that it plans to start selling its drinks in Myanmar for the first time in 60 years once the U.S. government suspends investment sanctions against the country. Myanmar is one of only three countries in which Coca-Cola does not currently do business.
The others are Cuba and North Korea. The United States has announced plans to suspend investment sanctions against Myanmar, but has not yet issued a general license to implement that decision.
McConnell introduces Burmese Freedom and Democracy Act renewal. U.S. Senate Republican leader Mitch McConnell June 13 introduced a bill to renew the Burmese Freedom and Democracy Act of 2003. The act, which must be renewed annually, bans all imports from and financial services to Myanmar, and includes sanctions against targeted individuals within the country. McConnell said because of the reforms in Myanmar, the bill would renew only a handful of the act’s sanctions, including the import ban, and would preserve the administration’s flexibility to use its waiver authority.
Presidents Aquino, Obama pledge to strengthen U.S.-Philippine relationship. U.S. president Barack Obama met with his Philippine counterpart, Benigno Aquino, in the White House for the first time June 8. The two discussed economic issues, people-to-people exchanges, and the U.S.-Philippine security alliance. Obama said it is critical to avoid escalating conflicts over strategic waterways and shipping routes, an apparent reference to ongoing maritime disputes in the South
China Sea. He also thanked Aquino for his cooperation on bilateral issues and pledged to deepen bilateral relations.
Philippines signs agreement with U.S. Department of Labor. The Philippine government and the U.S. Department of Labor June 11 signed a partnership agreement to guarantee the welfare of Filipino migrant workers. The agreement seeks to ensure that Filipino migrant workers are aware of their rights to full payment of wages owed and to a safe workplace as guaranteed by U.S. law. The number of workers in the United States who identified as “Filipino in any combination” on the U.S. Census increased from 2.4 million in 2000 to 3.4 million in 2010.
House Committee approves bill to create sugarcane industry development fund. Members of the Philippines’ House Committee on Agriculture June 12 unanimously approved the Sugarcane Industry Development Act of 2012. The act orders the creation of a sugarcane industry development fund to shield domestic sugarcane companies against fallout from the implementation of the ASEAN Free Trade Agreement (AFTA), which calls for lifting sugar tariffs by 2015. Representative Alfredo Benitez said the implementation of AFTA is expected to trigger a plunge in sugar prices that must be countered.
Cabinet reshuffling includes new health minister and head of investment board. Indonesia’s government swore in four new ministers June 14, including new health minister Nafsiah Mboi, Investment Coordinating Board chief M. Chatib Basri, deputy energy and mineral resources minister Rudi Rubiandini, and deputy National Land Agency head Hendarman Supandji. Nafsiah replaces Endang Rahayu Sedyaningsih, who died of lung cancer May 2. Nafsiah previously headed
Indonesia’s National AIDS Commission. Chatib is a leading economist and was most recently deputy chairman of the National Economic Committee.
Bank of Indonesia maintains interest rate in response to weak rupiah. The Board of Governors for the Bank of Indonesia decided June 12 to maintain the benchmark interest rate at 5.75 percent. According to central bank spokesman Difi Johansyah, the governors hope the rate will maintain pressure on the rupiah’s exchange rate to prevent further inflation. There are growing concerns that the debt crisis in Europe will affect economies in Southeast Asia, but Johansyah said Indonesia is capable of weathering the crisis.
Tensions and violence mount in Papua; soldiers to be investigated. Riots broke out across Indonesia’s Papua province following the June 14 police shooting of independence activist Mako Tabuni, reportedly for resisting arrest. The riots were only the most recent spate of violence in Indonesia’s easternmost province, home to a decades-long independence movement. President Susilo Bambang Yudhoyono said June 12 the military and police “overreacted” to recent events, including by burning a village after locals beat a soldier to death for nearly running over a child with a motorbike. The president called for an investigation into the actions of security forces in the region.
Regent orders church closures in Aceh. Aceh Singkil acting regent Rizali AR in a letter signed April 30 ordered the closure and demolition of 19 churches in his regency. A regency is an administrative unit in Indonesia, below a province but above a district. The letter said the buildings would be bulldozed June 8, though no action has been taken so far. The letter was issued following protests by the hardline Islamic Defenders Front. Church officials sent letters to President Susilo Bambang Yudhoyono as well as several ministries and the police in response. The Ministry of Law and Human Rights sent an investigative team to the area June 7 and will report its findings.
Civil servant sentenced to 30 months for atheist post on Facebook. Alexander Aan, a civil servant in West Sumatra province, was sentenced June 14 to three months in prison and fined $10,600 for creating a Facebook page that proclaimed he was an atheist. Aan was arrested in January after Islamic groups reported the page to police. Human rights groups decried the ruling, with Amnesty International calling it a sign of increasing intolerance in Indonesia. The sentence came just a day after publishing company Gramedia oversaw a book burning in front of its Jakarta offices of Five Cities that Ruled the World, which Islamic groups allege insults the Prophet Muhammad.
Cabinet to end current parliamentary session for political cooldown. The Thai cabinet June 12 completed a draft royal decree to end the current session of parliament June 19. The session has been plagued by high political tension as lawmakers debated a controversial amnesty bill for participants in recent political violence that would allow exiled former prime minister Thaksin Shinawatra to return home without serving prison time. Prime Minister Yingluck Shinawatra promised “Red Shirt” members of parliament that she will move ahead with charter amendments paving the way for redrafting the constitution, but said the government needs to wait for the right time.
Thailand and the United States move to strengthen alliance. U.S. secretary of state Hillary Clinton and Thai foreign minister Surapong Tovichakchaikul concluded the fourth U.S.-Thailand strategic dialogue in Washington June 14. The two agreed to improve political, economic, and security relations between their two countries. The dialogue followed the first visit to Thailand by General Martin Dempsey, chairman of the U.S. Joint Chiefs of Staff, which concluded June 5. Dempsey met with Thai officials, including Prime Minister Yingluck Shinawatra, and suggested the joint development of a humanitarian assistance and disaster relief center at the U-Tapao air base in Thailand.
Bank of Thailand holds interest rates steady, predicts impact from crisis in Europe. The Bank of Thailand voted June 13 to maintain the current repurchase rate of 3 percent for the third month in a row. The governor of the bank, Prasarn Trairatvorakul, held a special meeting June 15 to discuss altering monetary policy in response to the debt crisis in Europe. He said the bank was closely monitoring international trade and exports, financial institutions and fund movements, and currency exchange rates and liquidity to respond rapidly to any impact of the crisis on Thailand.
Deputy prime minister violates criminal code in land sales. Thailand’s National Anti-Corruption Commission (NACC) has found that Deputy Prime Minister Yongyuth Wichaidit violated Article 157 of the country’s Criminal Code when he sold 289 acres of land to a real estate and golf club in 2002. The land in question was considered part of a temple and therefore could not be sold. The NACC will forward the case to the Office of the Attorney General for further investigation. Yongyuth has not commented on the case.
Vietnam cuts interest rates, struggles to revive growth. Vietnam’s central bank June 11 cut interest rates for the fourth time this year in an attempt to spur economic growth, slashing the discount rate to 9 percent, the refinancing rate to 11 percent, and the interbank rate to 12 percent. First-quarter economic growth stood at 4 percent, the lowest in three years and a far cry from the 2003–2008 average of 7 percent. The government has managed to halt rising inflation, which remains the highest in Asia, but has struggled to revive sluggish economic growth.
Party meetings, port deal underscore Vietnam-China relations. Vietnam’s Communist Party secretary general, Nguyen Phu Trong, took the opportunity of a June 6 meeting with visiting Chinese Politburo member Liu Yunshan to emphasize the strategic relationship between Hanoi and Beijing. The two met ahead of the eighth theoretical workshop between the Vietnamese and Chinese Communist parties. In another sign of close bilateral relations, the two countries signed a $180 million deal June 11 to develop a port in the Vietnam’s Tra Vinh province. The port will be used to transport oil and coal to power stations and is scheduled for completion in 27 months.
Vietnam to impose tighter controls on foreign investment projects. Vietnam’s Ministry of Planning and Investment June 10 announced the drafting of a legal document to tighten control over foreign investment projects. The ministry will strengthen the enforcement of legal regulations, including supervising the implementation of projects and requiring foreign enterprises to provide financing information. The move marks the beginning of the ministry’s plan to take back control from provincial authorities, which have been in charge of investment management since 2006.
Government to divest from small state firms. Vietnam’s Ministry of Finance June 10 announced plans to identify companies from which the government can divest. State-owned enterprises will be divided into four categories based on their roles in the economy. The government will then completely divest from one group of small firms and maintain ownership of 51 to 100 percent in others. The decision came in response to a series of scandals involving state-owned enterprises, the most recent involving the misuse of funds at shipping company Vinalines.
Banks pour cash into government bonds. The value of Vietnamese treasury bond sales has tripled over the last year to $2.9 billion or 60 percent of the government’s annual target. Small and medium-sized lenders who face slowing demand for funds and banks that need to conserve liquidity led the increased investment in government debt. The central bank requires lenders to hold government debt as collateral for loans in open market operations. Banks have been restructuring their capital and operations in response to weak credit growth and nonperforming loans.
Felda has the year’s second-largest initial public offering after Facebook. Malaysia’s state-owned palm oil producer Felda raised $3.13 billion for 2.19 billion shares in its initial public offering (IPO) June 14. The IPO was the year’s second largest after social media giant Facebook. The IPO is part of the Malaysian government’s ongoing efforts to divest state-owned enterprises and create a global powerhouse in palm oil. Felda attracted $1 billion from just 12 parties, including the Qatar Investment Authority, Hong Kong insurance company AIA Group, and four state-run funds.
South Korea proposes free trade agreement with Malaysia. South Korean prime minister Kim Hwang-sik June 13 proposed the negotiation of a free trade agreement with Malaysia. Kim said a free trade agreement would deepen the existing trade and investment links between the two countries. He also said Malaysia represents a huge opportunity for South Korea due to its stability, open economic policies, and lower costs compared to China.
Cambodia asks China to fund Cambodia-Vietnam railroad. Cambodia June 12 requested a $150 million loan from China to build a railroad from Cambodia to Vietnam. Cambodia’s minister of public works and transportation said the country is seeking Chinese funding because Beijing does not place conditions on funding and finishes projects more quickly. The opposition Sam Rainsy Party expressed opposition to the loan request, with lawmaker Son Chhay saying that China produces low-quality infrastructure projects at an interest rate—currently 1.83 percent—that is higher than that of any other lender.
Deputy Prime Minister Hor Namhong speaks at CSIS. Deputy Prime Minister and Foreign Minister Hor Namhong spoke June 12 at the CSIS Southeast Asia Program’s Banyan Tree Leadership Forum. His remarks focused on Cambodia’s development progress, its improved relationship with the United States, and its goals as the 2012 chair of ASEAN. A video of the event is available here. Hor Namhong also met with Secretary of State Hillary Clinton at the State Department during his visit to Washington.
Cambodia’s banking sector grows in the first five months of year. Deposits at Cambodian commercial banks surged 12 percent, from $3.3 billion to $3.7 billion, in the first five months of 2012. Loans grew 8 percent, from $2.5 billion to $2.7 billion, according to the National Bank of Cambodia. These improvements are an indicator of the rapid strides the Cambodian economy has made in recovering from the global recession. Garment exports, tourism, and agriculture have been reinvigorated since 2011, but the real estate sector remains weak.
Ministry of Justice reexamines Boeung Kak case. Residents evicted from the village of Boeung Kak June 12 protested against a two-and-a half year sentence given to 13 women arrested during a May 22 demonstration against their eviction. The women were charged with defying authority and trespassing on land confiscated by the firm Shukaku at Boeung Kak. Six of the women are taking part in a hunger strike that started June 10.
Rights groups express concern over drafting of ASEAN charter. The Jakarta Post reported June 11 that a coalition of human rights groups has expressed concern over the drafting of the ASEAN Human Rights Declaration, which is being led by the ASEAN Intergovernmental Commission on Human Rights (AICHR). The groups said the drafting process lacks transparency and is not inclusive enough. The finalized declaration is to be discussed at the ASEAN Ministerial Meeting in Cambodia July 8.
ASEAN holds meeting to boost legal and judicial cooperation. ASEAN judges and representatives from judicial ministries met in Cambodia June 12 and 13 to discuss ways to boost legal and judicial cooperation. The meeting was sponsored by the ASEAN Secretariat, the U.S. government, and the Cambodian Ministry of Justice, and addressed issues including the ASEAN charter and international arbitration. In his welcoming remarks, U.S. ambassador to ASEAN David Carden said that ASEAN’s ability to accomplish its goals depends on a strong rule of law.
ASEAN eyes social media to boost “One ASEAN Community” initiative. An ASEAN working group agreed June 8 to include the full utilization of all media channels, including social media, as part of its list of recommendations for how to inject more momentum into building a strong “One ASEAN Community” by 2015. The proposal was agreed upon during a three-day meeting of the ASEAN Ministers Responsible for Information working group in the Philippines.
Global Peace Index 2012 rankings of ASEAN countries. The Institute for Economics and Peace released its Global Peace Index (GPI) rankings for 2012, citing the Asia-Pacific as the most improved region. Southeast Asia’s scores remain sharply divided, with three countries ranked high on the list – Malaysia (20th), Singapore (23rd), and Vietnam (34th) – but several others, including Cambodia, Thailand,the Philippines, and Myanmar, failing to crack the top 100. Despite its poor score, the Philippines was cited as the fifth-most-improved country in the world compared to last year. The GPI ranks countries based on both internal and external indicators of violence.
Mexico and Canada join Trans-Pacific Partnership negotiations. Mexico and Canada were admitted into the Trans-Pacific Partnership (TPP) negotiations June 18 and June 19 on the sidelines of the G20 summit in Los Cabos, Mexico. The way was clear for their entry after the two countries gained the approval of the United States during recent talks. With the participation of the two new members, the 11-nation TPP, if completed, would represent a market of 658 million people and $20.5 trillion. Japanese prime minister Yoshihiko Noda and U.S. president Barack Obama also agreed to advance bilateral consultations toward Japan’s entry into the TPP during a brief chat June 18 on the sidelines of the G20.
Taiwan’s Trans-Pacific Partnership bid linked to beef issue with United States. The U.S.-Taiwan Business Council said that Taiwan’s chances of joining the Trans-Pacific Partnership were linked to progress on negotiations with the United States on a Trade and Investment Framework Agreement (TIFA). Rupert Hammond-Chambers, president of the council, said that the two sides had to find a way to resume the talks, which have been stalled since 2007 mainly over Taiwan’s restrictions on U.S. beef imports.
Singapore pledges technical assistance to Myanmar. Singapore’s former prime minister and emeritus senior minister Goh Chok Tong led a high-level delegation to Myanmar June 10–15 to meet with top officials including President Thein Sein. Goh announced Singapore’s willingness to provide Myanmar with technical assistance in commercial banking, Internet infrastructure, and public housing. Goh said Singapore wants to help Myanmar achieve economic growth of 8–10 percent annually over the next 10 years in order to make ASEAN “a very powerful regional economy.”
Singapore’s economy expected to grow 3 percent in 2012. A survey by Singapore’s central bank released June 13 predicts the country’s economy will grow 3 percent in 2012, led by 6.2 percent growth in the construction sector and 3 percent growth in manufacturing. Inflation is expected to drop to 4.2 percent this year from 5.5 percent last year. The Singapore dollar will likely appreciate from 1.28 to 1.24 per U.S. dollar.
Singapore non-oil exports drop 2.1 percent in May. Singapore’s seasonally adjusted non-oil exports dropped 2.1 percent in May compared to a 6.4 percent increase in April. This month-on-month decrease in non-oil exports raises concerns about Singapore’s “weak” second-quarter growth rate, according to Credit Suisse economist Robert Prioer-Wandesforde.
152 arrested in 18-hour anticrime operation. Ninety-eight men and 54 women ages 17 to 54 were arrested in a joint operation by the Criminal Investigation Department, the Singapore Police Force, the Central Narcotics Bureau, and Singapore Customs that ended June 10. Investigations are ongoing, but the 152 are being charged with offenses including gang-related activities, illegal betting, and immigration offenses.
National minimum wage set at $115 dollars per month. Secretary of State for Professional Development and Employment Bendito Freitas announced June 11 that the national minimum wage would be set at $115 dollars per month, up from $80 dollars. Freitas said the business community was supportive of the change and was consulted throughout the determination process. The General Syndicate of Workers Timor-Leste, a worker rights group, supported the move, saying it would allow workers to better meet their daily needs.
Parliament unable to reach quorum to discuss anticorruption bill. Member of parliament Agostu Tara said June 5 that Timor-Leste’s legislature was unable to reach a quorum in order to discuss a much anticipated anticorruption bill. He said the bill is now unlikely to be discussed during the current session due to upcoming parliamentary elections in July. Much of the bill is already written and many members of parliament expressed their desire to vote for it soon. The bill would allow for investigations of public servants who become suddenly wealthy while in office.
Shortage of textbooks in Tetum raises concerns. The Syndicate of Teachers Timor-Leste (SPTL) raised concerns June 5 that too many textbooks used in the country are in Portuguese, which is not broadly understood by much of the country’s student body. Secretary General for SPTL Francisco Fernandes said the publication of more textbooks in Tetum should be encouraged. According to the constitution, Portuguese and Tetum are the official languages of Timor-Leste, while English and Indonesian are considered working languages.
Thailand approves loan for Lao infrastructure development. Thai prime minister Yingluck Shinawatra June 3 signed a $29 million loan to help Laos upgrade its infrastructure. The loan will be used for construction of a road linking northwest Thailand and Laos, and for an airport in the southern Lao city of Pakse. Yingluck also pledged support for the construction of a railway between the two countries. Laos is striving to become a transit hub for Southeast Asia ahead of the planned 2015 establishment of the ASEAN Economic Community.
Malaysia’s largest bank seeks license in Laos. Malaysia’s largest bank, Maybank, plans to open its first branch in Laos this year, pending approval by Lao authorities. The company is seeking a branch in Laos to strengthen its presence in mainland Southeast Asia. Maybank aims to make 40 percent of its earnings from international operations by 2015.
Laos clears hurdle to WTO membership. Laos cleared its last serious hurdle to membership in the World Trade Organization (WTO) June 7, reaching agreement with Ukraine to allow its entry. Ukraine was the last WTO member to give permission for Laos to join. The country first applied for WTO membership in July 1997. As a least-developed country by WTO standards, Laos was not expected to meet the same standards for entry as more developed countries. The WTO is expected to approve its membership terms in September or October.
South China Sea
United States to help Philippines monitor coastal waters. The Pentagon said June 12 that it plans to assist the Philippines in monitoring its coastal waters as tensions with China continue to rise amid a territorial dispute over Scarborough Shoal in the South China Sea. The plans include establishing a National Coast Watch Center and the possible transfer of a ground-based radar system to boost the Philippines’ coastal monitoring and defense capabilities.
Vietnam to invite Japanese investment in South China Sea. Vietnam’s state oil and gas company, Petrovietnam, June 13 disclosed plans to invite Japanese firms to invest in joint development of about 20 oil and gas blocks in the South China Sea. Several Japanese firms, including JX Holdings and Idemitsu Kosan Company, are already invested in Vietnam’s energy industry. Petrovietnam plans to hold a briefing session for Japanese firms in early July.
Philippines to expand economics ties with Brunei. Philippine ambassador to Brunei Nestor Z. Ochoa said during a June 12 celebration of Philippine Independence Day that his country intends to strengthen its economic partnership with Brunei. Ochoa noted that due to geographic proximity, the Philippines is seeking to expand cooperation with Brunei in liquefied natural gas production, tourism, food products, sports, and education.
Energy Department, major oil and gas firms, launch apprenticeship schemes for unemployed graduates. Brunei’s minister of energy, Mohammad Yasmin Umar, held a dialogue June 12 with young unemployed graduates in the energy sector. He said the government is designing apprenticeship schemes for unemployed graduates majoring in energy, law, economics, and finance. Major oil and gas firms, including Brunei Shell Petroleum Company, also pledged an allowance of $100 a day to apprentices. These firms have already committed to providing 70 apprenticeships and are expected to create more to help address unemployment.
Mekong Tourism Forum meeting discusses Myanmar’s emerging role. The annual Mekong Tourism Forum began June 13 in Chiang Rai, Thailand. Participants discussed the emerging role of Myanmar in regional tourism following a year and a half of political reforms and the subsequent lifting of international sanctions. The meeting also addressed the legal status of the Mekong Tourism Coordinating Office, which is allegedly being operated illegally in Bangkok due to registration issues.
Mekong one of three areas most vulnerable to global climate change, says expert. The Mekong region is one of the three areas most vulnerable to global climate change, an expert told a two-day seminar in Vietnam June 7. Florian Forster, chief of mission of the International Organization for Migration, also said that the Mekong River would likely see a substantial increase in migration to other areas and massive flooding due to climate change.
Landslide prevention projects in Mekong Delta hampered by capital shortages. Vietnamese media reported June 8 that large capital shortages were putting landslide prevention projects on hold. The projects require around $144 million to go through, but only one-sixtieth of the required funding is available. Landslides constantly cause damage to sea dikes and riverbanks along the Mekong Delta, and countries along the river are considering ways to fortify dikes and adjust their routes to help solve the problem.
ASEAN Regional Forum
ASEAN Regional Forum meetings on disaster relief and maritime security. The National Defense University of the Chinese People's Liberation Army hosted the 3rd ASEAN Regional Forum (ARF) Seminar on Laws and Regulations on the Participation in International Disaster Relief by Armed Forces June 11–12 in Beijing. Indonesia and the United States were invited to cochair the workshop. The United States, Indonesia, and South Korea then cochaired the 4th ARF Inter-Sessional Meeting on Maritime Security June 14 in San Francisco. Nearly 20 meetings are held under the aegis of the ARF each year, capped by the ARF itself in July.
APEC members seek consensus on a list of green products targeted for tariff cuts. APEC leaders are working on a list of green products slated for tariff cuts of up to 5 percent over the next three years in an ongoing effort to combat environmental challenges. Fourteen APEC member economies including the United States have submitted their lists. Seven others including China have not. APEC leaders have agreed to finalize the list by the next APEC leaders’ meeting in Russia in September.
Courtesy: This post originally appeared on the Center for Strategic and International Studies cogitASIA blog