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Asean Weekly; Week ending 3 Aug 2012
The Week That Was
Rights groups say targeted killings and discrimination of Rohingyas continue. International rights groups are expressing concern about continued targeted killings and discrimination of Muslim Rohingyas in Myanmar’s western Rakhine state. Amnesty International July 19 accused security forces and Rakhine Buddhists of conducting attacks against Rohingyas six weeks after the government declared a state of emergency to halt communal violence in the region. ASEAN and Islamic organizations, including the Organization for Islamic Cooperation (OIC) and Indonesia’s Muhammadiyah, have also called attention to the plight of the minority group.
Senior officials participate in historic business trip to Myanmar. The United States sent two senior officials to Myanmar to join a U.S.-ASEAN Business Council delegation to the country July 14–15. It was the highest-level economic and commercial delegation from the United States to visit Myanmar in more than 25 years. One of the officials, Undersecretary of State Robert Hormats, spoke at CSIS July 23 on the U.S. suspension of investment sanctions against Myanmar and his impressions from the trip. Audio of his remarks is available here.
Myanmar president visits Thailand. Myanmar president Thein Sein met with Thai prime minister Yingluck Shinawatra and inked several economic agreements during a twice-postponed visit to Thailand July 22. The agreements reaffirmed the two countries’ cooperation on the development of a deep-sea port at Dawei, Myanmar. Thailand also pledged to help Myanmar prepare for its upcoming ASEAN chairmanship in 2014.
New regulations result in dramatic drop in mineral exports. A preliminary report revealed that new regulations issued May 6 on the export of minerals from Indonesia dramatically reduced exports. Copper exports fell 90 percent in June, nickel fell 80 percent, and bauxite fell nearly 100 percent. The regulations include a 20 percent export tax and require companies to obtain “clean-and-clear” status indicating that activities are in line with government regulations and that the company has met its tax and non-tax financial obligations. Japan, Indonesia’s biggest nickel purchaser, said it will file a complaint with the World Trade Organization over the regulations.
South China Sea
China to deploy military garrison in disputed islands. China’s Central Military Commission (CMC) July 21 approved the creation of a military garrison command at Woody Island in the South China Sea’s disputed Paracel Islands. The establishment of the military command to oversee operations in the South China Sea mirrors the creation in June of a new prefecture-level city, Sansha, at Woody Island to administer the Spratlys, Paracels, Macclesfield Bank, and Scarborough Shoal. The CMC’s announcement drew immediate criticism from Vietnam and the Philippines, both of which filed formal protests with Beijing and called the plan a serious violation of international law.
Philippines to deploy ships to Thitu Island. The Philippine Navy July 26 announced that it would deploy ships to Thitu Island as soon as weather permits. Commander Rustom Peña said the deployment is meant to warn 20 Chinese fishing boats currently operating near the island to leave the Philippines’ 12-nautical-mile territorial waters. President Benigno Aquino on the same day said the country is always ready to defend its territories. Thitu is the only feature in the disputed Spratly Islands fortified by the Philippine military.
Taiwan to reinforce weapons deployment on Itu Aba. Taiwan’s Ministry of National Defense said July 24 it is ready to deploy mortars and anti-aircraft guns on Itu Aba Island, the largest of the Spratly Islands. The military has completed the logistics preparations for the weapons and will deploy them in the near future, though it will not disclose the exact date. Taiwan fortifies Itu Aba Island, one of two features it occupies in the South China Sea, with more than 100 members of its Coast Guard Administration.
U.S. senators urge China and ASEAN to make progress on code of conduct. Six U.S. senators July 26 introduced a resolution urging China and the members of ASEAN to make progress toward developing a legally binding code of conduct for the South China Sea. The resolution emphasizes that all parties should observe the 2002 Declaration on the Conduct of Parties in the South China Sea and avoid activities that could escalate tensions—a reference to China’s recent creation of Sansha City and a military garrison on a disputed island. Senators James Inhofe, John Kerry, Joseph Lieberman, Richard Lugar, John McCain, and Jim Webb cosponsored the bill.
Court rules charter amendments not treason, but require vote. The Constitutional Court released its final verdict on petitions filed to stop amendments to Section 291 of the Thai constitution, which would pave the way for rewriting the constitution as a whole. The court said that attempts to alter Section 291 must first be approved through a voter referendum but disagreed with the petitions’ charge that the amendments constituted treason. If the amendments had been found treasonous, the ruling Pheu Thai Party could have been dissolved.
Economists slam government rice purchases for creating market distortions. Leading economists and exporters said July 24 that the government’s plan of purchasing rice above market value has resulted in at least 10 million tons of rice sitting in warehouses. Korbsook Iamsuri, chief of the Thai Rice Exporters Association, said the government must sell off the rice and accept losses due to low global prices. The U.S. Department of Agriculture announced July 27 that Thailand will likely lose its spot as the number-one rice exporter this year.
Hand, foot, and mouth disease death raises alarm. A Cambodian toddler living in Thailand died of suspected hand, foot, and mouth disease in Rayong province July 27, triggering a province-wide “cleanup” effort and awareness campaign and a campaign to discourage travel to Cambodia. Provincial governor Seni Jittakasem has set up a “war room” to coordinate efforts to combat the spread of the disease. A child who died in Bangkok July 18 was confirmed to have the deadly disease, which is believed to have killed more than 50 children in Cambodia since April. Lab results are still pending.
Malaysia and the United States sign agreement to combat transnational crime. Malaysia’s home minister Hishammuddin Hussein and U.S. attorney general Eric Holder July 17 signed an agreement to combat the proliferation of weapons of mass destruction, terrorism, money laundering, human trafficking, and cybercrime. The agreement pledges the two countries’ enforcement agencies to cooperate in joint training and investigations.
Malaysia closes embassy, evacuates citizens from Syria. Prime Minister Najib Razak July 23 announced that the Malaysian embassy in Syria would be closed and all Malaysians evacuated amid the escalating armed conflict in the country. One hundred seven out of 138 Malaysians living in Syria had returned home on chartered flights as of July 26.
Malaysia gives payout to civil servants and retirees ahead of elections. Prime Minister Najib Razak July 26 announced that the government would give a $693 million payout to Malaysia’s 1.27 million civil servants and 660,000 retirees by the end of the Muslim fasting month of Ramadan in August. Critics called the payout a tactical move by the ruling coalition to buy votes ahead of general elections anticipated late this year or early next. The elections are widely expected to be the most competitive in Malaysia’s history.
Senate approves military agreement with Australia. The Philippine Senate July 24 ratified a Status of Visiting Forces Agreement with Australia. The agreement will allow Australian troops to engage in training and joint exercises with their Filipino counterparts inside the country, which constitutionally prohibits the permanent basing of foreign troops. The office of Philippine president Benigno Aquino welcomed the agreement’s passage, describing it as an important step in strengthening Philippine security. The agreement was originally signed in Canberra in May 2007, but implementation has been pending ratification.
Philippines accepts bids for three energy blocks, including two in disputed waters. The Philippine Department of Energy July 31 accepted bids for the final 3 of 15 oil exploration blocks that make up the country’s fourth energy contracting round taking place now. Only six local firms’ bids were accepted, including Helios Petroleum, Philex Petroleum, and Philodrill. Two of the blocks in question—Areas 3 and 4—fall within China’s “9-dash line” claim in the South China Sea. Philippine energy officials rebuffed criticism from China, saying that they would evaluate the bids within 100 days and that President Benigno Aquino will sign service contracts with the winning firms.
Former president Arroyo obtains bail. A Philippine court July 25 granted former president Gloria Arroyo bail due to weak evidence presented by the Commission on Elections to prove her involvement in electoral sabotage. Arroyo has been detained in an Army hospital since December 2011while facing charges stemming from alleged vote-rigging during the 2007 mid-term elections. The anti-graft court also said July 27 it would not issue an arrest warrant for Arroyo over separate allegations that she misused state lottery funds.
Vietnam steps up restructuring of state sector. The Vietnamese government July 11 voiced its support for the Ministry of Finance’s proposal to establish a super-ministry in charge of overseeing state-owned enterprises (SOEs). The government also ordered SOEs to divest from all non-core investments by 2015. Although the existing State Capital Investment Corporation has been managing state capital at SOEs since 1997, it has difficulty reaching large state-owned conglomerates. SOEs that hold moderately risky investments can divest more gradually.
Sitting of the National Assembly scheduled for mid-October. The National Assembly Standing Committee met July 16–17 and agreed to convene its next sitting in mid-October. At its previous meeting, the committee discussed plans to establish a fishery management force to enforce maritime laws and ensure fishermen’s safety, and it administered an opinion poll on a draft law to address problems of land ownership and evictions. The committee will hold an opinion poll at its next sitting on proposed amendments to Vietnam’s 1992 Constitution.
Cambodian workers urge U.S. consumers to boycott Levi’s and Gap supplier. The president of the Cambodian Confederation of Unions, along with 100 workers, wrote a letter July 23 to the U.S. embassy in Phnom Penh calling on U.S. consumers to boycott products made by Tai Yang Enterprises, which supplies popular clothing brands Levi’s and Gap. About 4,000 workers have been on strike at Tai Yang’s factory west of Phnom Penh. The workers claim that the company avoided paying promised bonuses by secretly changing its name to Tai Nan in 2010. The company denies the allegations.
Cambodia closes schools to avoid spread of hand, foot, and mouth disease. Cambodia’s Ministry of Education July 18 closed all kindergartens and primary schools in the country to avoid the spread of hand, foot, and mouth disease (HFMD). The virus is blamed for more than 50 recent child deaths in Cambodia. HFMD is not uncommon in Southeast Asia, but the severity of the current outbreak has health officials worried. It appears to have spread to Thailand, where two children have died from HFMD.
Cambodia’s Ministry of Health and the World Health Organization (WHO) said they were not consulted about the closure. WHO voiced concern that the closings could cause public panic.
Cambodia’s two largest opposition parties merge to form the National Rescue Party. Cambodian opposition leader Sam Rainsy and Kem Sokha, leader of the second-largest opposition party, the Human Rights Party, announced July 16 that their organizations will merge to form a new Cambodian Democratic Movement of National Rescue to contest national elections in 2013. The move may reinvigorate an opposition reeling after Prime Minister Hun Sen’s ruling party won an overwhelming victory in local elections in June. Sam Rainsy will likely lead the new coalition party on much the same platform as his Sam Rainsy Party: anti-corruption, nationalism, and justice for the poor.
Government to create “one-stop shop” for entrepreneurs to start businesses. Maria de Fatima de Araujo, director of the Ministry’ of Justice’s National Directorate Registry and Notary, announced July 19 that Timor-Leste’s government will establish a new Services for Registration and Verification of Entrepreneurs (SERVE). The office will provide a one-stop shop for businesses and entrepreneurs to ease the process of opening a business in Timor-Leste. Once operational, SERVE will be able to process applications within five days. SERVE was modeled on the Companies Commission of Malaysia and supported by the World Bank Group’s International Finance Corporation.
Government meeting with domestic worker groups reveals low pay. The Secretariat of State for Employment and Professional Training (SEFOPE) met with civil society groups July 18 for a dialogue to understand workers’ problems and educate them on their rights under Timor-Leste’s labor code. The meeting revealed that most workers are not protected through contracts and are underpaid, with some receiving just $15–$30 per month. The national minimum wage is $115 per month. Many workers and employers were not aware of the labor code. Civil society groups encouraged SEFOPE, which devised the code, to disseminate labor rights information more widely.
Yale–National University of Singapore joint venture fuels debate. Yale-NUS College, a joint venture by Yale University and the National University of Singapore, has sparked growing criticism from Yale professors and rights groups. The school, which will be Singapore’s first liberal arts college, has said it will ban student political protests and partisan political societies. Yale-NUS College, which is being funded by the Singapore government and private donors, is expected to open in August 2013.
Singapore orders banks to review SIBOR. The Monetary Authority of Singapore (MAS) announced July 25 that all the country’s banks will be required to review the Singapore Interbank Offered Rate, or SIBOR. The SIBOR, the interest rate at which Singaporean banks borrow funds from one another, affects loan rates across the economy. The review follows revelations that banks in the United Kingdom coordinated to artificially lower that country’s interbank rate. The MAS is also probing into the swap offer rate, the rate that indicates the average costs of funds banks use for commercial lending.
Government wants more banks for small and medium-sized enterprises. The Lao government July 24 called for the establishment of commercial banks that deal exclusively with small and medium-sized enterprises. The 26 commercial banks currently in Laos tend to favor the construction and garment manufacturing sectors. Meanwhile, the government wants to strengthen the country’s exporting industries through credit expansion before Laos joins the World Trade Organization at the end of 2012.
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