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                                                                                                                       Asean Affairs  October 32014 

Biweekly Update


Parliament abolishes direct elections of local leaders. Indonesian lawmakers aligned with the coalition of defeated presidential candidate Prabowo Subianto on September 26 passed a law eliminating local elections for governors, district chiefs, and mayors. The bill’s success was made possible by the last-minute decision by nearly all members of President Susilo Bambang Yudhoyono’s Democratic Party to walk out of the parliament when amendments they demanded in exchange for voting down the law were not included. Yudhoyono said September 30 that he would issue a presidential decree overturning the law, but whether he has the power to do so remains unclear.

World’s largest palm oil companies sign Indonesia Palm Oil Pledge. The CEOs of the four largest palm oil producers in Indonesia—Cargill, Asian Agri, Golden Agri-Resources, and Wilmar—and the Indonesian Chamber of Commerce and Industry signed a pledge on September 24 to commit to sustainable industry practices. The pledge commits signatories to forego slash-and-burn land clearing and commit to zero-deforestation palm oil production. The companies inked the agreement on the sidelines of a UN Climate Change Summit in New York.

ADB lends Indonesia $400 million to boost investment, infrastructure. The Asian Development Bank on September 25 announced the approval of a $400 million loan program to back government initiatives to expand infrastructure financing and help Indonesia improve its investment climate. For the latter, Indonesia will seek to raise the limit on foreign ownership in public-private partnerships and reduce the number of steps and time required to establish a business. German development bank KfW Bankengruppe has agreed to provide $200 million in cofinancing for the program.

Indonesian lawmakers reduce fuel subsidy spending. Indonesia’s parliamentary budget committee on September 22 announced that it would trim the budget for fuel subsidies for 2015 to $28.8 billion from $30.3 billion. President-elect Joko Widodo has said that reducing the costly fuel subsidy more drastically will be a priority for his administration, but attempts to do so in the past have proved very unpopular with both lawmakers and the public. Cutting the subsidy is considered essential to free funds for infrastructure, agriculture, health, and education spending.

Aceh lawmakers criminalize gay sex. Aceh province’s 69-member legislature on September 27 unanimously passed a law introducing caning as a punishment for gay sex. The shari’a-based legislation will apply to both Muslims and non-Muslims in the province. Those found guilty of engaging in gay sex may be caned up to 100 times. Human rights groups have decried the law, which will likely be appealed to Indonesia’s Constitutional Court. The Indonesian government granted Aceh significant local autonomy and the right to implement shari’a in 2006 as part of a deal to end a separatist insurgency.


Cease-fire talks grind to halt as generals refuse to discuss federal army. Government negotiators and representatives of ethnic armed groups on September 23 ended a second day of cease-fire talks after military officials refused to discuss the formation of a new federal army. The proposed military force would consist of both government troops and ethnic armed rebels with separate command structures. Negotiations were further stalled over the issue of soldier recruitment, which the government insisted rebels discontinue after signing the cease-fire. With this delay, both sides expressed doubts that a cease-fire would be signed by an October deadline.

Government grants citizenship to 209 displaced Muslims. Authorities in western Myanmar’s Rakhine State on September 22 granted citizenship to 209 Muslims displaced by communal violence since 2012. The majority of those granted citizenship appeared to be members of the Kaman ethnic group, which is recognized by the government as native to Myanmar. But officials confirmed that an unknown number of Rohingya were included as well after identifying themselves as Bengali. No immediate explanation was given as to why this particular group was granted citizenship over others.

Government announces 32 new hydropower projects. The Ministry of Electric Power on September 22 announced plans for 32 new hydropower projects, most of which will be joint ventures with Chinese firms. Current agreements allow Chinese companies to operate the planned hydropower plants for up to 40 years before handing control over to the government. At a recent Global Investment Forum, the International Finance Corporation’s representative for Myanmar praised hydropower over traditional coal-based power as more likely to garner support from organizations like the World Bank.

Government accuses two publications of defamation. The Ministry of Information said September 23 that it would file charges against the Myanmar Herald and Daily Eleven papers for two articles it claims constitute defamation. The Herald in August published an interview with an opposition party researcher criticizing President Thein Sein for comments relating to his possible reelection in 2015. It later issued an apology, which was rejected by the ministry. Daily Eleven in June published an article alleging misuse of funds by the Ministry of Information in the purchase of a printing press.

Central bank awards foreign bank licenses. The Central Bank of Myanmar on October 1 awarded licenses for nine foreign banks to operate in the country, including banks from Australia, China, Japan, Malaysia, Singapore, and Thailand. Foreign license holders now have 12 months to prepare before they can open a branch in Myanmar. The licenses are a step forward but remain very restrictive—each foreign bank can open just one branch in Myanmar, and each can only provide banking services to foreign corporations in foreign currency. The licenses are expected to increase access to capital for foreign companies looking to invest in Myanmar.


China’s travel warning hurts Philippines’ tourism industry. Representatives of the Philippine tourism industry on September 23 released figures showing the number of tourists from China plummeted following a September 12 travel warning issued by the Chinese government. At least 20,000 Chinese tourists canceled flights to the Philippines in the first five days after the announcement, resulting in $11 million in losses from canceled bookings alone. The travel warning is seen by many observers as retaliation for ongoing disputes in the South China Sea. China is the third-largest source of tourists to the Philippines.

Philippines recalls peacekeepers from Golan Heights. The Philippine military on September 19 recalled its peacekeepers from the Golan Heights nearly two weeks before scheduled. Two groups of the Filipino peacekeepers who had become surrounded by the Syrian rebel Nusra Front on August 28 refused to obey UN orders to surrender and instead escaped three days later after an hours-long fire fight. The Philippines has been involved in the Golan Heights for the past five years, but Manila now says it will not send any more peacekeepers to the mission.

Tropical storm batters Philippines, affecting 500,000. Tropical Storm Fung-Wong made landfall on the northern tip of the Philippines on September 19, killing five. As many as 500,000 people were affected by flooding, according to the Department of Social Welfare and Development, after nearly a month’s worth of rain fell in one night. Fung-Wong was the second deadly storm to hit the northern Philippines in a single week after Typhoon Kalmaegi made landfall on September 14, killing eight and displacing 18,000.

Abu Sayyaf threatens to kill kidnapped German tourists. The terrorist group Abu Sayyaf, based on the southern Philippine island of Mindanao, on September 24 threatened to kill two captured German tourists unless Berlin pays a $5.6 million ransom and agrees to withdraw support from the U.S.-led mission against the Islamic State of Iraq and Syria by October 10. The kidnapped men, a 71-year-old and a 55-year-old, were kidnapped in April while sailing off the coast of Palawan province in the southern Philippines. Germany confirmed the kidnappings but said it will not give in to blackmail.

House to pass emergency powers for Aquino in October. Philippine House of Representatives majority leader Neptali Gonzales II said September 24 that the lower house will approve emergency powers requested by President Benigno Aquino to address a looming energy shortage when lawmakers return to session in the third week of October. Aquino raised the alarm about the energy crisis in September, calling on Congress to approve an increase in the country’s energy capacity to fill a projected 400 to 1,000 megawatt gap in the northern Philippines by March 2015.


Murder of British couple hurts Thailand’s tourism reputation. Fears are high in Bangkok that the September 15 murder of British tourists David Miller and Hannah Witheridge could further damage Thailand’s already-weakened tourism industry. Authorities continue to investigate the murders on the resort island of Koh Tao but have made no arrests. Thailand’s tourism industry has yet to recover from the six months of instability that started with street protests in November 2013. Tourist arrivals for August were down 11.9 percent from 2013.

Prayuth appoints members of reform council. Prime Minister Prayuth Chan-ocha on September 26 chose 250 individuals to make up a new National Reform Council that will draw up plans for political reform and a new constitution ahead of elections planned for late 2015. Prayuth declined to reveal the names of those selected until they are approved by King Bhumibol Adulyadej, but he said they are academics, lawyers, and members of social organizations. Lawmakers had previously requested greater transparency in the council’s selection amid fears that its members would be chosen based on cronyism.

Thailand's rice exports to decrease over next decade. Thailand’s share of international rice exports will continue to drop over the next 10 years due to high production costs, according to the findings of a University of Thai Chamber of Commerce (UTCC) study released September 23. The study found that the cost of producing rice in Thailand reached $840 an acre in 2013, more than double the $380 per acre it cost in 2004. The size of yields, meanwhile, has remained constant. UTCC’s Att Pisanwanich is urging the Thai government to subsidize 20 percent of the cost of production to keep the country’s rice exports competitive.

Junta observes elections in Scotland, Sweden. The Election Commission of Thailand sent an 87-member delegation to Europe to observe September 15 local elections in Sweden and the September 18 Scottish independence referendum. Some members of the delegation also visited other parts of the United Kingdom as well as Denmark to study their election systems. Thai officials claimed the trips were intended to help learn lessons for Thailand’s planned elections in late 2015. The latest trip ignited controversy in Thailand over allegations of lavish overspending.


Vietnam to reform petroleum market in lead-up to entry of foreign distributors. The Vietnam Petroleum Association on September 23 announced that the country will introduce new rules on November 1 to make the retail petroleum market more competitive. The reforms are part of preparations to open the market to foreign firms in 2018. The new rules will broaden the type of businesses, including independent merchants and franchisees, allowed to sell petroleum, and will allow sellers to set their own prices.

World Bank sees Vietnam’s economy at critical juncture. Vietnam’s economy is at a critical juncture in its efforts to become an industrialized economy within a generation, according to a September 18 article by the World Bank’s vice president for East Asia and the Pacific, Axel van Trotsenburg. Vietnam will graduate from the ranks of industrializing economies only if it is able to undertake reforms to boost annual growth from its recent average of 5 percent to its previous peak of 9 percent. Reforming state-owned enterprises and the banking sector, and boosting the level of value-added exports, will be key to achieving this goal.

Vietnam’s economic growth accelerates due to rising exports. Vietnam’s General Statistics Office on September 26 announced that the nation’s economic growth accelerated in the third quarter of 2014 due to growing exports. Economic growth reached 6.2 percent in the third quarter, up from 5.1 percent in the first quarter. Riots targeting Chinese factories and workers in May temporarily drove down exports and reduced growth in the second quarter. Weak domestic demand and a high volume of bad debts in the banking sector have slowed economic growth in recent years.

Vietnam restricts home ownership by foreigners. Vietnamese lawmakers are debating an amendment to the nation’s housing law that would keep strict requirements on foreign home ownership, according a September 22 Thanh Nien News article. Prime Minister Nguyen Tan Dung in December 2013 proposed reforming Vietnam’s housing regulations in an attempt to boost a struggling property market. The current bill would restrict home ownership to foreigners who are studying, working, and living in Vietnam. Only 126 foreigners bought apartments in Vietnam in 2013, according to government statistics.

Vietnam’s largest apparel manufacturer and exporter raises $58 million in share sale. Vietnam’s largest apparel manufacturer and exporter, Vinatex, raised $58 million in a September 22 initial public offering. The sale represented 24.4 percent of the company’s total stock, with the government retaining a 51 percent stake. Corporate and individual foreign investors accounted for half of the buyers. The shares are not readily tradable, as the company does not plan to list on the stock exchange for another three years.


New Selangor state governor sworn in. People’s Justice Party (PKR) deputy president Mohamed Azmin Ali was sworn in as governor of the western state of Selangor on September 24 after months of opposition infighting. The Pan-Malaysian Islamic Party nominated multiple candidates, including Azmin, despite the insistence of its partners in the opposition coalition that they should only nominate PKR president Wan Azizah Wan Ismail. The acrimonious process has strained the coalition’s unity and its popularity with many voters.

Opposition leader Anwar Ibrahim charged with sedition. Authorities on September 24 charged Malaysian opposition leader Anwar Ibrahim with sedition for comments he made at a political rally in 2011. Anwar is the latest and most high-profile person to be charged under the colonial-era Sedition Act in recent weeks. Two student activists were recently convicted of sedition and sentenced to prison terms of ten months and one year, respectively. Anwar is also set to argue his final appeal in October against a conviction for sodomy that is widely seen as politically motivated.

Catholic Church asks Malaysia’s top court to allow appeal of ruling on use of “Allah.” The Catholic Church on September 19 asked Malaysia’s highest court to allow it to appeal a lower court ruling that disallows the church in Malaysia from using the word “Allah” to refer to God in its Herald newspaper. The high court rejected the church’s last attempt to appeal in June. The Catholic Church filed the case in 2008 to nullify a government decision that prohibited use of Allah by non-Muslims.

Weststar Aviation seeks $500 million listing on Malaysia’s stock exchange. U.S.-based Weststar Aviation, a helicopter transport firm, plans to raise $500 million by listing on Malaysia’s stock exchange in 2015, according to a September 18 Wall Street Journal report. The firm is owned by U.S. private equity firm KKR and Syed Azman Ibrahim, one of Malaysia’s richest men. Weststar’s helicopters are used by the oil and gas industry in Southeast Asia, including by multinationals such as Chevron.

Human Rights Watch documents abuses against transgender people in Malaysia. Human Rights Watch released a report on September 25 documenting abuses faced by transgender people in Malaysia. The report is based on 45 interviews with transgender women and men and catalogs various abuses such as assault and extortion. Malaysia is one of the few countries that criminalizes transgender people, and Human Rights Watch is calling on Kuala Lumpur to repeal laws that deny transgender people basic rights.


Singapore’s stock exchange expects more listings from China after easing requirements. An official with Singapore’s stock exchange said September 17 that the bourse expects more listings from China after a recent easing of listing requirements. No Chinese firms have listed on the Singapore exchange in the last two years, due partly to a preference to list in Hong Kong. Of the 770 companies currently listed in Singapore, only 130 are from China. The exchange is battling a slump in new listings, which are down 53 percent in 2014.

Eighteenth person punished for role in Little India riots. Authorities on September 23 sentenced a 24-year-old Indian man to 31 months in jail and three strokes of the cane for his role in a December 2013 riot in Singapore’s Little India district. He is the 18th person punished for the violence—Singapore’s worst in decades. The man pleaded guilty to hitting a police car and helping to flip the vehicle onto its side.

Singapore increases number of resident billionaires. The number of billionaires residing in Singapore rose from 27 to 32 in 2013, according to September 17 Wealth-X and UBS Billionaire Census 2014. Their combined wealth was $65 billion and nearly two-thirds were born outside the city-state. Singapore has the third-largest billionaire population in Asia, behind Hong Kong and Beijing, and the ninth-largest in the world.


Garment workers renew strikes over monthly wages. Five hundred garment workers rallied in Phnom Penh on September 17 to demand a $77 increase in monthly wages from the current $100. Activists backed the protest by delivering petitions to Cambodian embassies and to stores selling Cambodian-made clothing around the world. Cambodia’s garment industry was last rocked by major protests over wages in January. Leading international fashion brands such as Zara, Primark, and H&M have indicated that they are willing to pay for an increase in garment workers’ salaries as the strike continues.

Hun Sen says he will not intervene in Parliament. Prime Minister Hun Sen on September 18 told Parliament that he will not interfere in its affairs. The prime minister came under considerable criticism following a September 10 threat to remove National Assembly vice president Kem Sokha from his position after the latter said he would seek to oust corrupt government officials. While pledging noninterference, Hun Sen warned Sokha’s opposition Cambodia National Rescue Party against publically criticizing the government.

Date for next Khmer Rouge trial announced. The UN-sponsored Extraordinary Chambers in the Courts of Cambodia announced on September 22 that the second and final phase of the trial of former Khmer Rouge officials Nuon Chea and Khieu Samphan would begin on October 17. Chea, 88, was the regime’s chief ideologist, while Samphan, 83, was its president. They are facing charges of crimes against humanity, war crimes, and genocide against Cham and Vietnamese minorities. Both were already convicted of separate war crimes in August.

Cambodia signs agreement with Australia to resettle refugees. Interior Minister Sar Kheng and Scott Morrison, Australia’s minister for immigration and border protection, signed an agreement on September 26 to resettle refugees from Australian detention centers on Nauru to Cambodia. In exchange, Australia will provide Cambodia with $35.2 million in extra development assistance over the next four years. Morrison said resettlement should begin later in 2014 for asylum seekers who willingly choose to resettle. Civil society groups and the UN refugee agency have decried the agreement as a violation of Australia’s international commitments to protect refugees

Trans-Pacific Partnership

TPP members plan next round of high-level talks for mid-October. Trans-Pacific Partnership negotiators plan to hold their next rounds of talks in mid-October in Australia, according to September 19 media reports. Chief negotiators will meet in Canberra, followed immediately by a meeting of trade ministers in Sydney. The meetings comes amid strong pressure from the United States and other negotiating countries to deliver the outlines of a deal before early November, when heads of state will come together for the Asia-Pacific Economic Cooperation and East Asia Summit leaders’ meetings.

U.S., Japan reach stalemate after high-level bilateral negotiations. The United States and Japan reached a stalemate after September 24–25 meetings between United States Trade Representative Michael Froman and Akira Amari, Japan’s minister of state for economic and fiscal policy. U.S. officials criticized Japan for failing to make a market access offer on sensitive agricultural issues commensurate with those of other Trans-Pacific Partnership negotiating members. A larger agreement is hostage to a bilateral breakthrough between Washington and Tokyo.

South China Sea

Indonesia labels Beijing’s South China Sea claims a “real threat.” Vice Admiral Desi Albert Mamahit on September 22 told a maritime security focus group that China’s claims to the South China Sea posed a “real threat” to Indonesia’s security. China has yet to clarify whether its maritime claims include waters off Indonesia’s Natuna Islands that seem to fall within the nine-dash line. Indonesia intends to set up a sea security organization to act as an early warning system and coordination tool for its military in case of a confrontation in disputed waters.

Taiwan uses high-resolution imagery to survey the South China Sea. Taiwan’s Department of Land Administration has undertaken a $3 million project to map the entire South China Sea in high resolution using satellite imagery, according to a September 23 interview with the Christian Science Monitor. Taiwan is pursuing the project in order to back up its own maritime claims, which match those of China and are often overlooked by other disputants. Taiwanese officials claim they will complete their mapping of the entire South China Sea in one year.


Laos bans online criticism of government. The government of Laos on September 23 issued a decree making online criticism of the regime illegal. The new legislation forbids Internet users from disseminating any information or opinions deemed to undermine the government or the state. The decree also forces those on social media to use their real names, and it targets Internet service providers found to make available the conditions for users to criticize the government.

ASEAN lawmakers decry continued silence on Sombath disappearance. Southeast Asian lawmakers attending the September 23 meeting of the ASEAN Parliamentarians for Human Rights issued a statement accusing the government of Laos of “[erecting] a brick wall of silence” around the December 2012 abduction of agronomist Sombath Somphone. The civil-society leader disappeared after being stopped at a police checkpoint and driven away in a pickup truck. Sombath’s abduction and the government’s obstruction has sparked international condemnation and had a chilling effect on Laos’s embryonic civil society.


ASEAN energy ministers meeting in Laos. Energy ministers from the 10 ASEAN member states gathered in Vientiane on September 23 for their annual summit under the theme of mutual benefits from regional power integration. Ministers discussed the ASEAN Plan of Action on Energy Cooperation, a framework for regional energy integration. A pilot program to create a transmission grid connecting hydropower plants in Laos to Malaysia, Singapore, and Thailand is expected to save those countries $26 billion over the next 10 years, according to the Economic Research Institute for ASEAN and East Asia.

Mekong River

Severe erosion affecting thousands in Mekong Delta. The Mekong River’s annual rising water level, which is expected to peak in the first 10 days of October 2014, has resulted in moderate flooding but unusually severe erosion in Cambodia and Vietnam, according to Vietnam’s National Centre for Hydro-Meteorological Forecasting. More than 6,000 families living in Vietnam’s Mekong Delta provinces now require relocation because of safety concerns due to erosion. The Vietnamese Ministry of Agriculture and Rural Development has tasked research institutes to evaluate coastal erosion and find solutions to prevent such a severe recurrence in the future.

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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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