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Asean Weekly ending 24 Jan 2013
Reports as of January 22 indicated that clashes continued in the area but were less severe than in recent weeks. Fighting between KIA and government forces escalated sharply in December and January, with the government employing air and artillery strikes. Shells, presumably from government artillery, landed inside Laiza on January 14, killing three civilians and injuring four others.
Thein Sein releases reform blueprint. President Thein Sein released a sweeping blueprint for future reforms during a donors’ conference in Naypyidaw January 19–20. The ambitious document outlines reform the Myanmar government hopes to implement by 2030, including financial sector reforms, transparency and good governance practices, and targets for telecommunications penetration and education. Aid agencies, diplomats, and multilateral organizations represented at the conference signed a non-binding agreement to help support the reforms.
Draconian public speech law repealed. President Thein Sein repealed a law on January 16 that allowed authorities to hand out 20-year prison sentences to those who criticized the government. The former military junta enacted the law in 1996 and frequently used it to imprison dissidents. Rights groups cautiously welcomed the repeal but called for further reform to protect free speech. Reporters Without Borders (RSF) issued a report January 17 on the state of media freedom in Myanmar following its first fact-finding mission to the country. The report welcomed the easing of media restrictions to date, but called on the government to do more.
Public tenders issued for telecoms, oil licenses. Myanmar’s government issued tenders for telecommunications and oil licenses on January 15 and 17, respectively. The tenders allow foreign investors to bid on two telecoms licenses and 18 onshore oil and gas blocks. Both industries are expected to prove profitable, but the tender process will offer an important opportunity to measure Myanmar’s openness to foreign investors. Large Western oil and gas companies are expected to wait for more lucrative offshore blocks to be offered before they begin bidding on Myanmar’s hydrocarbon resources.
Thousands flee homes amid escalating violence in Rakhine State. The UN High Commissioner for Refugees (UNHCR) reported January 11 that more than 2,000 Rohingya fled Myanmar’s Rakhine state or refugee camps in Bangladesh by boat in the first week of 2013. The agency estimated that 13,000 people were smuggled out of the area by boat in 2012, with at least 485 still missing or dead. The agency receives regular permission to access those who arrive in Malaysia by boat and urged all Southeast Asian governments to grant it the same access to possible refugees arriving from Myanmar.
Supreme Court removes government mining regulations; Chevron threatens to pull out investments. Indonesia’s Supreme Court clarified one of its 2012 rulings January 10, saying that it annulled government regulations forbidding the export of unprocessed mineral ores and removed federal authority to approve concessions for smelting projects. The decision, which should benefit local governments and mid-sized miners, stifles government efforts to reorganize the mining industry and boost domestic ore-processing capacity. Separately, Chevron issued a warning on January 11 that it might divest up to $3 billion of assets in Indonesia amid continued legal and regulatory uncertainty in the mining and hydrocarbon industries.
Preliminary Komnas investigation reveals state hand in Poso unrest. Indonesia’s National Commission on Human Rights (Komnas) accused the military on January 16 of purposely manipulating the level of tension in Poso, Central Sulawesi, in order to garner support for a controversial national security bill. The accusation followed Komnas’s preliminary investigation into the actions of security forces that have been combatting terrorist activities in the area. Komnas said that local authorities and security forces did not act on tip-offs until violence had already broken out. The national security bill would allow the military a greater role in addressing domestic national security threats, and is considered by activists to be a setback for Indonesia’s democracy.
Widespread floods bring Jakarta to a standstill. Jakarta governor Joko Widodo declared a state of emergency January 17 as days of flooding caused the deaths of 14 people and the evacuation of roughly 16,000 from Jakarta, according to the National Disaster Mitigation Agency. The death toll has since risen to 26. The Indonesian Employers Association estimates that business losses due to supply disruption and absent workers will likely approach $100 million. Jakarta contributes 10 percent of Indonesia’s gross domestic product, but poor infrastructure and urban planning make the capital vulnerable to seasonal flooding.
Former Democrat Party official convicted of graft. Former beauty queen and Democrat Party deputy secretary-general Angelina Sondakh was sentenced January 17 to four and a half years in prison for accepting kickbacks during preparations for the 2011 Southeast Asia Games. Angelina’s graft cost the state $3.6 million in losses. Meanwhile, President Susilo Bambang Yudhoyono appointed Roy Suryo to replace Andi Mallarangeng as youth and sports minister following the latter’s ouster over related corruption charges. Angelina’s and Andi’s problems are just the latest in a string of high-level corruption scandals involving Democrat Party officials.
Thailand, Malaysia sign pact to ease conflict in southern Thailand. Thai deputy prime minister Chalerm Yubamrung and Malaysian home minister Hishammuddin Hussein pledged closer cooperation on transnational issues that they said fuel the insurgency in southern Thailand, according to a January 10 Malay Mail report. The agreement covers cross-border crime, illegal labor migration, extradition, information sharing, and a proposed prisoner exchange. Hishammuddin noted that the prisoner exchange could be the first of its kind in Southeast Asia.
Thailand increases minimum wage. Thailand officially boosted its minimum wage to $10 per day on January 1. Prime Minister Yingluck Shinawatra made the wage hike a major priority during her campaign for office. Critics warn that the popular move will undermine Thailand’s regional competitiveness, especially as the economies of neighboring Cambodia and Myanmar grow. Proponents argue that Thailand’s low inflation can accommodate the wage hike and that increased disposable income among laborers will boost economic growth.
Activist’s conviction broadens scope of lèse-majesté laws. A Thai court convicted Somyot Prueksakasemsuk, former editor of the Voice of Thaksin magazine, to 10 years in prison on January 23 for running two articles considered critical of the Thai monarchy. Somyot edited but did not author the articles. His conviction came six days after a court sentenced “red shirt” activist Yossawarit Chuklom, also known as Jeng Dokchik, to two years in prison for insulting the king. The charges stem from a speech Yossawarit gave during an antigovernment rally in March 2010 during which he placed his hands over his mouth, as if being muzzled. Yossawarit made the gesture while listing the names of those who supported the government of then-prime minister Abhisit Vejjajiva, and the court ruled that it was obvious he was referring to the king. Critics have lambasted the rulings, saying that they broaden the interpretation of Thailand’s already wide-ranging lèse-majesté laws.
Emmanuel Bautista named military chief. President Benigno Aquino appointed Lt. Gen. Emmanuel Bautista the chief of staff of the Armed Forces of the Philippines effective January 20. Bautista is the son of a general killed by Moro rebels in 1977. The incoming military chief says he wants to tackle communist insurgents and render their struggle “irrelevant” during his term. Bautista is credited with spearheading the creation of the government’s national security strategy, the Internal Peace and Security Plan (IPSP) Bayanihan.
Supreme Court begins cybercrime law hearings. The Supreme Court of the Philippines began hearing oral arguments January 15 on the constitutionality of the Cybercrime Protection Act of 2012. The act, which aims to protect individuals from cyber-bullying and sex trafficking, is seen by much of the public as a threat to freedom of expression. It introduces an extremely broad definition of online libel, which has angered journalists and political activists, and makes it easier for authorities to obtain personal information online.
Philippines jumps in ranking of the freest economies worldwide. The Philippines moved up 10 spots in the Heritage Foundation’s 2013 Index of Economic Reform, reflecting the country’s improving investment climate and booming economy. The Philippines ranked as the world’s 97th freest economy of 177 countries. The government’s anticorruption efforts and legislative reforms were cited as reasons for the improved rank.
Japan to provide Philippines with ships, equipment, and training. Japan’s foreign minister Fumio Kishida and his Philippine counterpart Albert del Rosario reached an agreement during the former’s January 9–10 visit to Manila for Japan to fund the acquisition of 10 multi-role response vessels, a communications system, and joint training for the Philippine Coast Guard. Fumio met with President Benigno Aquino to discuss the Philippines-Japan Strategic Partnership and then held talks on the South China Sea disputes with del Rosario.
Vietnam sentences 14 activists for subversion. A Vietnamese court on January 9 sentenced 14 activists, including bloggers and students, to up to 13 years in prison for subversion. The activists were arrested in 2010 on accusations of working with the U.S.-based exile group Viet Tan to try to overthrow the government. The sentencing drew sharp criticism from human rights groups and the international community.
Vietnam objects to U.S. investigation of shrimp exporters. The Vietnamese government on January 19 aired its disapproval of a recently-launched U.S. investigation into subsidies for shrimp exporters in seven countries, including Vietnam, Thailand, Indonesia, and Malaysia. The Department of Commerce’s International Trade Administration (ITA) launched the investigation due to claims by U.S. shrimp harvesters and producers that subsidized imports from have depressed prices and hurt the U.S. economy. The ITA says it will determine by February 11 whether foreign subsidies have been harmful to the U.S. shrimp industry and require further action.
Vietnamese stocks start the year with unexpected surge. Vietnam’s stock market rose 11 percent between January 1 and January 11, starting the new year strong after a rocky 2012. The government has relaxed rules on the stock market in order to attract investors and kick-start the economy in 2013. The Vietnamese State Securities Commission has pushed for reduced taxes on securities trading and the privatization of state-owned companies to create more shares on the market. A sharp decline in inflation and a strengthening of the currency have accompanied the improvements in the stock market.
Malaysia launches initiative to help start-up investors. Malaysia’s Cradle Fund, an agency within the Ministry of Finance, has launched the Malaysian Business Angel Network (MBAN) to help boost start-up investment in the country, according to a January 18 report by MIS Asia. The network will accredit and educate angel investors, who provide funding for start-ups, and formalize rules for such investment. MBAN follows other recent initiatives by Prime Minister Najib Razak to encourage entrepreneurship in Malaysia, including tax breaks for start-up investors announced on September 28, 2012.
Palm oil exports decline; government maintains zero crude palm oil export tax. Malaysia’s palm oil exports fell to approximately 230,000 tons in the first 15 days of January, compared to more than 790,000 tons for the same period in December 2012, according to a January 15 Bloomberg report. Plantation Industries and Commodities Minister Bernard Dompok announced the same day that the government will maintain a zero percent export tax for crude grade palm oil in February. He said that the effects of the zero percent tax rate in January have not kicked in, while competitor Indonesia has boosted its palm oil exports.
Malaysia’s nuclear ambitions delayed. Mohamad ZamZam Jaafar, chief executive of Malaysia Nuclear Power Corp., said January 15 that a feasibility study for the construction of two nuclear power plants would be delayed six months and may not be ready until late 2014. ZamZam attributed the delay to the public’s reactions to the 2011 Fukushima nuclear disaster in Japan and the ongoing fight over Lynas Corp.’s rare earths processing plant in Kuantan. The Malaysian government announced in May 2012 that it would build two nuclear plants in order to meet rising energy demand.
South China Sea
Chevron to explore in two oil and gas blocks in the South China Sea. U.S. oil giant Chevron signed production sharing contracts on January 17 with China National Offshore Oil Corporation (CNOOC) for two exploration blocks in the northern South China Sea. Chevron will own and operate the two blocks, which are not claimed by any of the Southeast Asian claimants. The terms of the contracts allow Chevron to conduct 3-D seismic data surveys and give CNOOC the right to participate in any commercial discoveries with up to a 51 percent stake.
Brunei to pursue binding code of conduct as ASEAN chair. Brunei foreign ministry officials reported on January 17 that the country’s top priority as 2013 ASEAN chair is to pursue a binding code of conduct among the claimants in the South China Sea. Brunei, the Philippines, Vietnam, Malaysia, China, and Taiwan all claim sovereignty over the contested territories. Past efforts to negotiate a binding code of conduct involving ASEAN and China have failed as Beijing refuses to negotiate with ASEAN as a bloc. Cambodia’s 2012 chairmanship of ASEAN was marred by sharp regional discord over the disputes.
Philex seeking partnership with CNOOC in South China Sea. Philippines-based Philex Petroleum announced on January 17 that it is in discussions with China National Offshore Oil Corporation (CNOOC) to jointly explore for oil and gas in the South China Sea’s Reed Bank. Philex chairman Manuel Pangilinan said a partnership with China is the only way to move forward with a planned gas project in Reed Bank. Philex was supposed to begin exploration in October 2012, but was forced to abandon its business plan and timetable amid Chinese objections.
Measures to cool property market take effect. A series of regulations aimed at cooling Singapore’s overheated property market went into effect January 12. Foreigners who buy property in Singapore must now pay 18 percent property taxes, while permanent residents’ rates rose to 8 percent. The government also banned permanent residents from subletting their public housing properties. Singaporean citizens’ property taxes remain unchanged, but they must pay more for additional properties. Analysts warn that the government’s measures will slow economic growth, according to a January 14 report by the Wall Street Journal.
Halimah Yacob becomes the first woman speaker in Singapore parliament. Members of Singapore’s parliament elected Halimah Yacob as the new speaker on January 14, making her the first woman to hold the post. Prime Minister Lee Hsien Loong nominated Halimah on January 8 to fill the post vacated when Michael Palmer resigned due to a scandal involving an extramarital affair. Halimah resigned as the minister of state for social and family development in order to become speaker.
Economy to grow 6.7 percent, but IMF warns of overheating. The World Bank predicts that the Cambodian economy will grow 6.7 percent in 2013, owing to strong exports and private investment. If realized, it would be the second-highest growth rate in Southeast Asia, behind only Laos. The International Monetary Fund, meanwhile, cautioned that Cambodia’s recent real estate boom and repeated interest rate cuts, while spurring growth, could lead to a credit bust. The country’s credit-to-GDP ratio of 37 percent stands well above the median for most low-income countries.
ADB, Cambodia sign agreement for $230 million in development assistance. The Asian Development Bank (ADB) agreed on January 17 to provide $230 million in loans to Cambodia. The assistance package will target six areas of growth and poverty relief—education, drought management, decentralization of service delivery, economic diversification, electricity infrastructure, and economic competitiveness in the country’s southern corridor.
Chinese investment in Cambodia skyrockets. China has become Cambodia’s largest investor, according to a January 16 Voice of America report. China invested $8.8 billion in Cambodia between 1994 and 2011, primarily in real estate and hydropower initiatives. More recent investment pledges, including a railroad, steel plant, and seaport, total another $11 billion. South Korea is Cambodia’s second-largest investor, followed by Malaysia, the United Kingdom, and the United States.
ASEAN-EU committee promotes regional connectivity. The ASEAN-European Union Joint Cooperation Committee (JCC) met January 17, emphasizing the importance of boosting regional connectivity through the ASEAN Regional Integration Support by the EU (ARISE) project. The group discussed other topics as well, and ASEAN secretary-general Le Luong Minh and EU ambassador Julian Wilson signed a $4 million grant contract to enhance the operational capacity of the ASEAN Secretariat. The committee will meet again in Hanoi in March.
Myanmar, Laos agree to build Mekong bridge. Laos and Myanmar agreed on January 15 to a long-awaited plan to build a friendship bridge across the Mekong River. The project, which was originally announced in March 2012, will link Luang Namtha Province in Laos with Myanmar’s Shan State. Logistical details have not yet been released to the public, but the project is tentatively scheduled for completion in 2018.
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