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 ANALYSIS BIWEEKLY

                                                                                                                       Asean Affairs  May 30, 2014 



Biweekly Update

Thailand

Hundreds protest military coup as army clamps down. Protests have sprung up around Bangkok and in Thailand’s north and northeast since the military, led by Gen. Prayuth Chan-ocha, seized power in a May 22 coup. The protesters have generally numbered in the hundreds, combining everyday Thais critical of the coup and “Red Shirt” supporters of the ousted government. The military has banned gatherings of more than five people, cracked down on online and print media, and closely censored broadcasters. It has also demanded that nearly 300 politicians, academics, and journalists present themselves for questioning. Most of those detained, including former prime minister Yingluck Shinawatra and Red Shirt leader Jatuporn Prompan, have been released.

Washington condemns coup, cuts off military assistance. Secretary of State John Kerry issued a statement condemning the coup within hours after Thailand’s military seized power on May 22. Washington suspended about $3.5 million in military assistance two days later and indicated more cuts could follow. The United States also started withdrawing assets from the ongoing Cooperation Afloat Readiness and Training exercises with the Thai navy, canceled a police training program, and pulled the plug on a planned visit to Thailand by Adm. Harry Harris, commander of the U.S. Pacific Fleet.

Bomb attacks kill three, injure dozens in southern Thailand. More than a dozen grenades and bombs exploded in Thailand’s southern provinces of Pattani and Narathiwat on May 24, killing 3 and injuring 73, according to the Public Health Ministry. At least four 7-11 convenience stores were targeted, as well as two gas stations and a navy patrol ship on the Pattani River. So far no one has claimed responsibility for the attacks. More than 5,000 people have been killed by insurgents in southern Thailand since 2004.

Political unrest slows demand for automobiles. The Automotive Industry Club of the Federation of Thai Industries expressed concern on May 23 about plunging automotive sales in the country, citing political unrest as the cause of decreased consumer confidence and spending. Production has fallen 28 percent in recent months and sales are down 43 percent compared to the same period in 2013. The club plans to adjust its yearly forecast for auto sales sometime in June, but sales are not expected to rise above 1 million units in 2014.

Tourism down about 400,000 in 2014. The number of tourists visiting Thailand is down by at least 400,000 compared to the same period in 2013, when Bangkok was ranked the top tourist destination in the world, according to the MasterCard Index of Global Destination Cities. Tourism officials in Thailand are predicting a 12 percent drop in visitors in May, and the $35 billion industry is expected to suffer more bad news as political unrest continues. One Bangkok hotel reported an immediate 20 percent drop in occupancy following the May 19 declaration of martial law.


Indonesia

Coalitions, candidates crystallize ahead of July 9 presidential election. Two presidential candidates, Joko “Jokowi” Widodo of the Indonesian Democratic Party of Struggle and Prabowo Subianto of the Great Indonesia Movement Party, crystallized their presidential tickets ahead of the May 20 deadline to register coalitions for Indonesia’s July elections. Jokowi selected popular former vice president Jusuf Kalla as his running mate, while Prabowo selected former coordinating minister for economic affairs Hatta Rajasa. Four parties joined Jokowi’s coalition and will face off against the six parties in Prabowo’s. The ruling Democrat Party remained unaligned.

Indonesia, Philippines reach agreement on overlapping maritime boundary. Indonesia and the Philippines on May 23 signed a maritime border accord that ends 20 years of negotiations to delimit their overlapping exclusive economic zones. The agreement redraws borders in the Mindanao and Celebes Seas, which are critical trade routes for both countries and contain rich fisheries and possible oil and gas deposits. Presidents Susilo Bambang Yudhoyono and Benigno Aquino hailed the agreement as a model for settling maritime disputes in the region.

Religious minister steps down after being implicated in corruption case. Religious Affairs Minister Suryadharma Ali resigned from his post on May 27, five days after the Indonesian Corruption Eradication Commission named him as a suspect in a $20 million graft case involving funding for Indonesian Muslims to travel to Saudi Arabia for the annual hajj pilgrimage. Suryadharma is the highest-ranking official to be implicated in the investigation into the 2012–2013 hajj pilgrimage fund and housing facilities project. He is the head of the United Development Party, which recently formed a coalition with presidential hopeful Prabowo Subianto.

Constitutional Court divests itself of authority over regional elections. The Indonesian Constitutional Court on May 19 delivered a verdict divesting itself of all authority to take on complaint cases from regional elections. The court ruled that it has authority to determine if laws issued by the government are constitutional, but not to hear complaints from regional polls. The decision comes eight months after the arrest of former chief justice Akil Mochtar for receiving bribes from local politicians involved in cases regarding local elections.


Myanmar

Obama extends sanctions against Myanmar. President Barack Obama on May 15 extended by one year the sanctions authorized by a 1997 executive order banning U.S. citizens and businesses from doing business with those involved in the repression of pro-democracy movements in Myanmar. The administration has lifted or suspended most sanctions against Myanmar since 2012, but the 1997 ban on business dealings with “specially designated nationals” and a 2008 ban on the importation of precious stones remain in place.

Lawmakers endorse removing military veto over constitutional amendments. A parliamentary committee responsible for studying amendments to Myanmar’s constitution will endorse altering an article requiring 75 percent of lawmakers to approve most major amendments, according to a May 21 statement from committee member Tin Maung Oo. The article in question gives the military, which fills a quarter of the seats in the parliament, an effective veto over major charter changes. The opposition National League for Democracy and the 88 Generation Peace and Open Society group have been holding rallies across the country in recent weeks to promote constitutional reform.

World Bank, Three Millennium Development Goal Fund commit about $100 million each to Myanmar. The World Bank on May 21 approved $100 million in aid to improve the quality of education for about 8.2 million Myanmar schoolchildren and extend direct financial assistance to 100,000 underprivileged students. The program, which will financed by the International Development Association and the Australian government, is the bank’s first to support education in Myanmar. The Three Millennium Development Goal Fund on the same day announced $91 million in new assistance to help Myanmar fight HIV, tuberculosis, and malaria through 2016.

Two Chinese workers abducted at controversial mine. Activists and monks on May 18 kidnapped two Chinese workers from a contentious copper mine in Monywa, central Myanmar. They released the workers the following evening after negotiations with local authorities. Residents have been protesting the Chinese-owned mine since 2012, saying they have never been properly compensated for thousands of acres of land illegally confiscated for its expansion. A panel led by opposition leader Aung San Suu Kyi studied the mine’s impact and in March 2013 recommended that the project go ahead.

Ethnic groups, government negotiators hold peace talks. Negotiators from the government’s Union Peacemaking Work Committee and the Nationwide Ceasefire Coordination Team (NCCT), which represents 16 ethnic armed groups in Myanmar, said they reached a new draft cease-fire agreement during May 21–23 talks in Yangon, which improved on an earlier document drawn up in early April. The two sides plan to meet again in late June to clarify the draft’s language. The NCCT said that ahead of the latest negotiations, military officials agreed that any deal would be based on a federal system, a key demand of the ethnic groups.


South China Sea

Vietnamese ship sinks following collision with Chinese vessel. A Vietnamese fishing boat capsized and sank on May 26 following a collision with a Chinese ship about 17 nautical miles from the location of a drilling rig Beijing has placed in disputed waters in the South China Sea. Vietnam accused Chinese vessels of purposely surrounding and ramming the fishing boat, while China’s Foreign Ministry said the Vietnamese ship collided with a Chinese fishing boat while trying to interfere with the drilling rig. All 10 fishermen on board were rescued by Vietnamese vessels.

Vietnamese, Philippine leaders jointly condemn Chinese actions in South China Sea. Vietnamese prime minister Nguyen Tan Dung and Philippine president Benigno Aquino on May 21 jointly condemned China’s recent actions in the South China Sea following a bilateral meeting on the sidelines of the World Economic Forum on East Asia in Manila. Dung said the two shared their concerns about “China's many actions that violate international law.” Philippine secretary of foreign affairs Albert del Rosario said after the meeting that Vietnam is considering participating in Manila’s arbitration case at The Hague against Chinese claims.

Philex to drill in Reed Bank with or without foreign partner. The chairman of Philippine firm Philex Petroleum Corp said on May 21 that one of its units, Forum Energy, will start drilling two wells in at the Sampaguita gas field in Reed Bank, which is claimed by both Beijing and Manila. The Philippine government originally gave Philex permission to drill the wells in 2010. The company had been in talks with the state-owned China National Offshore Oil Corporation regarding potential joint exploration in Reed Bank, but those discussions have stalled amid growing tensions between the two countries.


Vietnam

China sends ships to evacuate citizens. China sent multiple ships to central Vietnam on May 17–19 to evacuate more than 3,000 Chinese workers after demonstrations against Beijing’s placement of a drilling rig in disputed waters turned into anti-China riots on May 13–14. The violence destroyed many businesses believed to be owned by Chinese companies and left up to four Chinese workers dead; reports on the number killed have varied. China’s Foreign Ministry on May 17 issued a warning against travel for Vietnam.

Vietnam moves to restore investors’ confidence; Taiwan rejects compensation offer. Deputy Minister of Planning and Investment Dang Huy Dong on May 22 offered potential incentives to restore confidence among foreign investors spooked by the destruction of foreign factories on May 13–14. The incentives include tax exemptions, faster visa approvals, and compensation for companies affected by the violence. The announcement came a day after a Taiwanese steel company whose plant in central Vietnam was the site of the worst violence rejected Hanoi’s compensation offer and threatened to cancel ongoing construction unless the government provides further security assurances.

United States nominates new ambassador to Vietnam. President Barack Obama on May 14 nominated Ted Osius as the next U.S. ambassador to Vietnam. Osius is a career member of the Foreign Service who has served in multiple postings in South and Southeast Asia, including in India, Indonesia, Thailand, and Vietnam. He was the deputy chief of mission at the U.S. Embassy in Jakarta from 2009 to 2012 and a State Department visiting fellow at CSIS from 2012 to 2013.

South China Sea, internal stability top National Assembly agenda. Vietnam’s National Assembly issued a public statement on May 22 condemning China’s deployment of a drilling rig in the South China Sea in a rare step for the legislature, which usually restricts its public statements to the economy and domestic social issues. Lawmakers demanded that China withdraw the rig but also urged Vietnamese citizens to maintain internal stability for the sake of socioeconomic development, in a reference to recent attacks on foreign-owned businesses and Chinese workers in Vietnam.


Philippines

Former president Arroyo acquitted of graft charges. The Office of the Ombudsman on May 8 dismissed corruption charges against former president Gloria Macapagal-Arroyo relating to the misuse of a multimillion dollar fertilizer fund during her time in office from 2001 to 2010. It was the fourth corruption charge to be dismissed against Arroyo and her son due to lack of evidence, leaving the former head of state facing one more outstanding charge. Arroyo, who currently serves in the Philippine Congress, has been under hospital arrest since October 2012.

Typhoon Haiyan reconstruction efforts moving slowly. National Housing Authority general manager Chito Cruz on May 14 told the Philippine Congress’s joint oversight committee on public expenditures that only 50 houses have been rebuilt in communities devastated by Typhoon Haiyan in November 2013. Cruz also said the government has appropriated only about 300 of the 3,200 acres of land needed for additional homes. The joint committee also learned that the government has spent just $85 million of the $2.3 billion appropriated for relief efforts.

Philippines offers U.S. access to naval base near disputed islands. The Philippines on May 15 suggested it will offer the United States access to a small naval base on the western island of Palawan facing the South China Sea. Armed forces chief Gen. Emmanuel Bautista said he hoped the United States would rehabilitate the Oyster Bay base, which is only 100 miles from the disputed Spratly Islands, in order to give the Philippine armed forces a stronger foothold in the South China Sea. The offer follows on the heels of the signing of the U.S.-Philippines Enhanced Defense Cooperation Agreement in early May.

Manila hosts World Economic Forum on East Asia. The Philippines used the May 21–23 World Economic Forum on East Asia in Manila to highlight the so-called miracle of the country’s 7 percent annual economic growth rate despite the devastating effects of Typhoon Haiyan in November 2013. The forum also set the tone for the launching of the ASEAN Economic Community in late 2015 and offered a chance for regional leaders, including Philippine president Benigno Aquino and Vietnamese prime minister Nguyen Tan Dung, to hold bilateral discussions.


Malaysia

Malaysia releases satellite data as private sector prepares to continue search for missing plane. Malaysia on May 27 released a summary of satellite data used to track Malaysia Airlines flight 370’s location during its final hours on March 8, which seemed to confirm that the plane ran out of fuel over the southern Indian Ocean. Australia, China, and Malaysia will launch a public tender at the beginning of June for a private contractor to coordinate an expanded search. An Australian naval vessel returned home on May 28 after completing its search of a smaller area where signals believed to be from the plane’s black box were detected in early April. That leaves a Chinese vessel as the only ship currently continuing the search.

Najib visits China to commemorate 40th anniversary of ties. Prime Minister Najib Razak arrived in Xian, China, on May 27 for a six-day visit to commemorate the 40th anniversary of bilateral relations. Najib met with provincial and cabinet officials in Xian and opened a halal food festival. Najib briefly interrupted his trip to attend the May 29 funeral of the late Sultan Azlan Shau of Perak in western Malaysia. He then traveled to Beijing that same day, where President Xi Jinping hosted a private dinner for him. Najib’s visit has focused on China-Malaysia ties, avoiding mention of the South China Sea disputes or the search for Malaysia Airlines flight 370.

Special election sparks national debate on race, party affiliation. The candidacy of Dyana Sofya, a 27-year-old lawyer, as the opposition coalition’s candidate in a May 31 parliamentary by-election in western Malaysia has sparked a heated national debate on race and party in recent weeks. Dyana, a Malay Muslim, decided to run as a member of the predominately Chinese Democratic Action Party rather than the ruling United Malays National Organization (UMNO). Prominent UMNO figures, including former prime minister Mahathir Mohamad, have accused Dyana of turning her back on the party that has best protected Malay interests.

Najib courts Japanese investment in infrastructure, high-tech projects. Prime Minister Najib Razak courted greater Japanese investment in infrastructure development and economic cooperation with Malaysia during a May 22–23 visit to Tokyo. Najib met with Japan’s prime minister, Shinzo Abe, who expressed hopes that Japan will be chosen to build a high-speed rail line between Singapore and Kuala Lumpur. Najib also welcomed collaboration between the private sectors of both countries in green technology, water treatment, and development along the Malaysia-Thailand border.


Cambodia

Opposition gains moderately on ruling party in local elections. The opposition Cambodia National Rescue Party (CNRP) appeared to gain some ground on the ruling Cambodian People’s Party (CPP) during May 18 local elections, according to initial estimates from the two parties. The CNRP picked up an estimated 769 seats on the country’s provincial, municipal, and district councils—185 more than it won in 2009 elections. But the ruling party still garnered an overwhelming majority of 2,543 seats, with the rest going the royalist Funcipec party. Only the 11,400 commune councilors who were elected by popular vote in 2012 voted in the local elections.

Hun Sen confirms Cambodia will accept refugees from Australia. Prime Minister Hun Sen confirmed on May 20 that Cambodia will resettle refugees turned away from Australia. Cambodia is expected to receive millions of dollars in return for accepting the refugees, according to a May 20 Sydney Morning Herald article. Human rights and refugee advocates have condemned the agreement, questioning whether one of Asia’s poorest countries has the capacity to ensure refugee safety.

Cambodia to receive $150 million in infrastructure grants and soft loans from China. China pledged roughly $150 million in grants and concessional loans to Cambodia during a May 19 meeting between Prime Minister Hun Sen and Chinese president Xi Jinping in Shanghai. The money will be targeted at infrastructure development ahead of the 2023 Southeast Asia Games to be hosted by Cambodia. China is one of the largest providers of aid, military assistance, and investment in Cambodia.

International Trade Union Confederation ranks Cambodia among world’s worst places to work. The International Trade Union Confederation on May 19 issued a report ranking Cambodia among the world’s worst places to work, highlighting poor labor rights and unfair employer practices. The report mentioned Cambodia’s under-regulated garment industry, union discrimination, and brutal crackdowns on minimum wage protests. Cambodia joined neighboring Laos, Malaysia, and the Philippines in receiving a score of five, indicating no guarantee of rights.


Laos

Plane crash kills several senior Lao officials. A military plane carrying several top Lao security officials crashed in northern Laos on May 17, killing at least five passengers aboard. Deputy Prime Minister and Defense Minister Douangchay Phichit, his wife, Minister of Public Security Thongbane Sengaphon, Vientiane governor Sukhan Mahalad, and at least one other high-ranking official were killed, according to a statement from the permanent secretary of Thailand’s Defense Ministry. National Assembly President Pany Yathotou was also among the 18–20 passengers on board.

Champasak province to shut down 226 foreign-operated shops. The government of southwestern Laos’s Champasak province plans to shut down up to 226 foreign-operated shops, according to a May 21 Vientiane Times report. Provincial authorities accuse the foreign merchants operating the shops, most of whom are Vietnamese and Chinese, of taking jobs legally reserved for Lao people. Foreigners can legally operate only businesses that are valued at more than $124,000 and are not on the list of sectors reserved for Lao.

EU raises concerns over press freedom and NGO registration. Officials from the European Union raised concerns about media controls, registration of nongovernmental organizations, and other human rights issues in Laos during a May 19–20 meeting with Lao counterparts in Belgium. EU representatives highlighted in particular the case of missing Lao agronomist and civil society leader Sombath Somphone.

Government seeks $30 billion to keep growth on track. The Lao government has released a draft national socioeconomic development plan that stipulates it will need $30.6 billion between 2016 and 2020 to sustain economic growth of at least 8 percent annually, according to a May 21 Vientiane Times report. Authorities expect to attract 55 percent of the total needed from domestic and foreign investment, with the rest coming from state investment and foreign development assistance.


Singapore

Singapore reclaims overall competitiveness title in Asia. Singapore on May 22 reclaimed the lead in Asia for overall competitiveness in the 2014 International Institute for Management Development’s World Competitiveness Yearbook. The city-state took back the lead in Asia from Hong Kong and ranks third globally behind the United States and Switzerland. The institute’s rankings measure how well countries leverage their economic and human resources to increase prosperity.

Singapore bus sector increases competition to boost services. The Land Transport Authority on May 21 announced plans to restructure the bus sector in Singapore to reduce costs and boost competitiveness. The overhaul will give the government ownership of all the infrastructure, buses, and fleet management systems, which can then be contracted to private operating companies. The goal is to reduce overhead and capital costs in order to increase the number of bus operators in the city-state. The restructuring will begin before 2015.

Ranking puts Singapore universities on top in Southeast Asia. The National University of Singapore (NUS) and Nanyang Technological University have been ranked as the best two schools in Southeast Asia in the 2014 Quacquarelli Symonds Rankings. NUS was ranked first out of 300 universities in Asia. Among the top 10 universities in ASEAN, 8 improved their rankings while Thailand’s Chulalongkorn University remained unchanged and the University of Indonesia dropped.


ASEAN

ASEAN defense ministers meet in Myanmar. Defense chiefs from all of the ASEAN member states except Laos gathered in Naypyidaw on May 20 for the annual ASEAN Defense Ministers Meeting. The ministers agreed to set up a hotline to deal with regional crises and issued a joint statement that reaffirmed their commitment to boost defense cooperation as part of the ASEAN Community but avoided mentioning rising tensions in the South China Sea. Afterward the ministers joined their Chinese counterpart, Chang Wanquan, for an informal discussion at which the South China Sea reportedly topped the agenda.
Brunei

Brunei receives new patrol boat; signs up for first RIMPAC exercise. Brunei on May 13 received its fourth German-made Darussalam-class offshore patrol vessel. The new ships are meant to replace the sultanate’s fleet of 30–year-old fast attack craft as it quietly follows its neighbors in modernizing its maritime forces. Brunei’s government also announced plans to send two of the Darussalam-class vessels to participate in the Rim of the Pacific (RIMPAC) multilateral maritime exercises in Hawaii from June 26 to August 1—the first time the country will take part in the U.S. Pacific Fleet—hosted exercises.


Trans-Pacific Partnership

U.S., Japanese negotiators push for progress ahead of ministerial meeting. U.S. and Japanese negotiators held bilateral discussions in pursuit of a breakthrough ahead of May 21–22 negotiations among ministers from the 12 Trans-Pacific Partnership negotiating parties. Japan reportedly offered significant cuts to beef and pork tariffs, while the United States dropped calls for the complete elimination of tariffs by Tokyo. Negotiators said these bilateral concessions helped the 12 members of the full negotiations to make progress. Chief negotiators will meet again in July.

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ASEAN  ANALYSIS

This year in Thailand-what next?


AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More

 


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