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                                                                                                                       Asean Affairs  April 4, 2014 

Biweekly Update


Aid organizations, UN agencies attacked in Sittwe. About 300 ethnic Rakhines on March 26 attacked the offices of the international relief organization Malteser International in Sittwe, the capital of Rakhine state. The violence started after a Malteser employee removed a Buddhist flag—used in Rakhine as a sign of protest against Myanmar’s ongoing census—from outside of the organization’s office. Attacks quickly spread to the offices of other aid organizations and UN agencies in the city, as well as the homes of foreign aid workers. A Rakhine girl was killed by a stray police bullet during the violence. Aid workers were forced to seek police protection and many have been evacuated from Sittwe.

National census kicks off as government bans Rohingya self-identification. Myanmar’s first national census since 1983 kicked off on March 30, with nearly 100,000 census takers going door-to-door in a process that will last until April 10. Presidential spokesperson Ye Htut announced on March 29 that Muslim Rohingya would not be allowed to identify themselves as such on the census. The government and the UN Population Fund, which is assisting with the census, had repeatedly promised that Rohingya would be allowed to self-identify as “Rohingya.” Buddhists in Rakhine state have protested that possibility for weeks.

Government grants licenses to 20 offshore oil and gas fields. Myanmar’s Ministry of Energy announced the winners of exploration licenses to 20 offshore oil and natural gas blocks on March 26, with most licenses going to western companies. Royal Dutch Shell, France’s Total, Norway’s Statoil, and U.S.-based Chevron and ConocoPhillips were among those granted licenses. Meanwhile Chinese bidders PetroChina, China National Offshore Oil Corporation, and Sinopec did not win any blocks despite significant investment in the past. Ten blocks were not awarded due to a lack of bids and will be relisted in the future.

Most of Myanmar’s lumber exports have been illegally smuggled. The United Kingdom-based Environmental Investigation Agency released a report on March 25 indicating that more than 70 percent of Myanmar’s timber exports between 2000 and 2013 were illegally smuggled out of the country. Those illegal exports were worth nearly $6 billion—more than the national health and education budgets combined. The report was released just before a national ban on log exports went into effect on April 1, indicating that Myanmar officials recognize forest loss as an important challenge.

Parliament approves electricity price hike. Myanmar’s parliament passed a price hike on March 19 that will substantially raise electricity rates across the country based on usage starting in April. Authorities attempted to raise electricity rises in November 2013 but reversed their decision in the face of public opposition. The new price hike is expected to spark protests from both consumers and businesses, which fear that it will lower competitiveness. The government says the increased prices are needed to fuel expansion of the electrical system and boost quality of service.


Constitutional Court overturns February 2 election. Thailand’s Constitutional Court on March 21 nullified the February 2 general election and ordered that new polls be held. The court overturned the election because protesters blocked the registration of candidates in 28 districts, violating a constitutional provision that national polls be held on the same day nationwide. The Election Commission has said that new polls could take up to 90 days to organize. Whether the opposition Democrat Party will boycott a new election as it did on February 2 remains unclear.

Yingluck defends herself before Anti-Corruption Commission. Caretaker prime minister Yingluck Shinawatra defended herself on March 31 before the National Anti-Corruption Commission against charges of negligence linked to a government scheme to purchase rice from farmers at prices above market rates. Yingluck submitted documents in her defense and delivered a brief statement. The commission on April 1 agreed to give Yingluck’s legal team an unspecified amount of additional time to gather evidence in her defense. If the commission forwards the case to the Senate for impeachment proceedings, Yingluck will be immediately suspended from her position. Three-fifths of the Senate would have to vote to impeach her.

Preliminary senate election results favor ruling party. Thailand’s Election Commission on March 31 released preliminary results from the national Senate elections held a day earlier that suggested candidates connected to the ruling Pheu Thai Party won throughout the north and northeast. The elections proceeded peacefully and official results are expected by mid-April. Only 77 of the 150 seats in Thailand’s Senate are popularly elected. Appointed senator Paiboon Nititawan said April 1 that the preliminary results indicate that caretaker prime minister Yingluck Shinawatra is safe from impeachment, which would require a vote by three-fifths of the Senate.

Police detain hundreds of migrants believed to be Chinese Uighurs. Thai authorities arrested 409 illegal migrants in March who are believed to be ethnic Uighurs from northwest China’s restive Xinjiang province, according to a March 24 Human Rights Watch statement. The migrants identified themselves as Turkish. Thai authorities are working to identify the migrants and, if they are confirmed to be Uighurs, are expected to deport them back to China despite human rights groups’ objections that they could face harassment and violence.

“Red shirts” select more radical leadership. The pro-government United Front for Democracy against Dictatorship, commonly known as “red shirts,” appointed Jatuporn Prompan as its new chairman on March 16. Jatuporn is widely considered to be more militant than the red shirts’ previous leadership. He called for a massive demonstration to be held at an unannounced location on April 5 to support caretaker prime minister Yingluck Shinawatra. Jatuporn faces terrorism charges for his role in protests against the Democrat Party-led government in May 2010 that ended with a deadly military crackdown.


Indonesia among world’s best-performing markets. Indonesia’s stock market has rallied 20 percent in 2014, making it one of the world’s best-performing emerging markets, after ending 2013 as one of the worst-performing. The rupiah has also bounced back from a bad year, rising almost 7 percent so far in 2014. Analysts point to an improving economy, including the central bank’s raising of interest rates to stabilize the currency, for the renewed investor interest. Observers speculate that investors are hopeful that Indonesia will benefit with Jakarta governor Joko Widodo, the frontrunner in the 2014 presidential race, at the nation’s helm.

Finance Ministry considers scrapping tax benefit for low-cost green cars. Finance Minister Chatib Basri on March 25 ordered a cost-benefit analysis of the government’s 10-month-old low-cost green cars program and said he might scrap it based on the results. The program, which was intended to boost Indonesia’s auto exports, exempts automakers from paying a luxury goods sales tax if they manufacture low-cost green cars domestically. But critics say the tax breaks are only exacerbating traffic congestion and further burdening Indonesia’s costly fuel subsidy scheme.

Indonesia looking to cancel bilateral investment treaties. Vice President Boediono said on March 23 that Indonesia plans to cancel 67 bilateral investment treaties (BITs) that allow foreign investors to seek compensation for investor-state grievances from third-party tribunals. Several investors, including UK-based Churchill Mining, are using BITs to claim damages from Indonesia’s raw mineral export ban that went into effect on January 12. Investors whose treaties are canceled should still be protected by them for 15 years due to “sunset clauses” in the agreements.

Indonesia hosts Komodo naval exercises. Ships from 17 nations arrived in Indonesian waters around the Natuna Islands in the southern reaches of the South China Sea on March 28 to take part in the biannual Exercise Komodo. The series of exercises, which ended April 3, focused on multinational humanitarian assistance and disaster relief. All 10 ASEAN members, along with China, India, Japan, New Zealand, Russia, South Korea, and the United States, took part. Australia’s participation in the exercises was canceled in January amid disagreements with Indonesia over a spying scandal and Canberra’s efforts to combat asylum-seeker arrivals.


Government signs historic peace deal with Moro separatists. The Philippine government on March 27 signed a historic peace accord with the country’s largest Muslim separatist group, the Moro Islamic Liberation Front. The agreement seeks to establish an autonomous political entity, called the Bangsamoro, to replace the current Autonomous Region of Muslim Mindanao in the southern Philippines. The government plans to submit a draft law to implement the agreement to the Philippine Congress in early April. Senate president Franklin Drilon said on March 31 that he expects lawmakers to approve the law by the end of 2014.

San Miguel seeks to build $10 billion Manila airport. San Miguel Corporation, the Philippines’ largest and most diversified conglomerate, will ask President Benigno Aquino to approve plans for the company to build a new $10 billion airport to serve Metro Manila, according to a March 25 Businessweek report. The airport will cover nearly 2,000 acres and will take five years to complete. San Miguel, which also manages flag carrier Philippines Airline, first proposed the airport plan in 2012.

Authorities arrest two top communist rebels. Philippine security forces arrested Benito Tiamzon, chairman of the underground Communist Party of the Philippines, and his wife, Wilma, on March 22 in the central province of Cebu. The two were taken to a nearby military camp and are being charged with 15 counts of murder. Officials hailed the arrests as a serious blow to the Communist Party and its armed faction, the New People’s Army, which has pursued one of the world’s longest-running communist insurgencies.

Military buys more fighter jets, choppers worth over $500 million. The Philippine military on March 28 signed contracts worth $528 million to buy 12 fighter jets from South Korea and 4 helicopters from Canada. The 12 FA-50 fighter jets were bought from Korean Aerospace Industries, while the 4 Bell 412 combat utility helicopters were purchased from the Canadian Commercial Corporation. The Philippines is seeking to upgrade its naval and air capabilities to better monitor and defend disputed waters in the South China Sea.


Malaysia announces Malaysia Airlines flight crashed over Indian Ocean. Prime Minister Najib Razak announced on March 24 that Malaysia Airlines flight 370 crashed in a remote part of the southern Indian Ocean west of Perth, Australia. Inmarsat, a UK satellite company, used new tracking technology to determine that the plane must have gone down in the Indian Ocean. Australia is leading the search in that area, which has so far come up empty. Najib said on March 30 that the search would continue until the plane has been found.

Malaysia criticized for jet crash announcement. Critics of Malaysia’s handling of the search for Malaysia Airlines flight 370, including the families of passengers, have criticized Kuala Lumpur’s March 24 announcement that the plane went down over the Indian Ocean as premature. Family members of the 154 Chinese citizens on board protested outside the Malaysian Embassy in Beijing on March 25, demanding proof that the plane had crashed. Malaysia Airlines also drew criticism for informing the families of some passengers via text message that the plane had gone down.

Former opposition lawmaker charged with insulting Islam. Authorities on March 26 arrested Kassim Ahmad, an 81-year-old activist and former member of Parliament for the opposition People’s Justice Party, on charges of insulting Islam. The Sharia High Court in Putrajaya, Malaysia’s administrative capital, charged Kassim with criticizing Islamic practices in a paper presented at a public seminar in February. He was released on bail. Opposition figures have decried Kassim’s arrest as government overreach and have demanded the charges against him be dropped.

Malaysia voices support for Timor-Leste’s ASEAN bid. Prime Minister Najib Razak pledged his support for including Timor-Leste in ASEAN during a March 31 meeting with his Timorese counterpart, Xanana Gusmão, who was making a three-day visit to Malaysia. The Malaysian government also hosted a business forum in Kuala Lumpur with 200 Malaysian companies to explore business opportunities in Timor-Leste.


Vietnam’s state-owned IPOs struggle. Initial public offerings (IPOs) for Vietnam’s state-owned enterprises were disappointing in the first quarter of 2014, according to an April 1 Wall Street Journal article. The companies offering IPOs, which are involved in public works and real estate, failed to attract as much foreign investment as authorities had hoped. Instead, local investors have purchased most of the shares. Economists credit a struggling property market and slow economic recovery for the poor sales. Partially privatizing state-owned enterprises is a key part of Vietnam’s drive to reform the economy following several years of economic malaise.

Four railway officials suspended in graft scandal. Vietnamese officials announced on March 25 that four railway officials had been suspended over allegations they received bribes from Japan Transportation Consultants (JTC) to grant the company a rail contract in Hanoi. The head of JTC admitted the company paid bribes worth $1.3 million to public employees in Vietnam to secure contracts for projects funded by Japan’s development agency. The Vietnamese government has been aggressively prosecuting corruption cases in an effort to improve its image and attract foreign investment.

Vietnam’s exports lead region. Vietnam’s exports grew 15 percent in 2013, outperforming other ASEAN countries, according to a March 25 article in the Wall Street Journal. Vietnam’s low wages, skilled workforce, and stable political environment are attractive to manufacturers looking for alternatives to increasingly expensive China and unstable Thailand. The presence of foreign manufacturing companies like Samsung and Intel in Vietnam has also contributed to increased exports as demand for electronics increases.

Second Russian-built submarine arrives in Vietnam. Vietnam on March 19 took possession of its second Russian-built Kilo-class submarine, which was delivered to Cam Ranh Bay in central Vietnam. The diesel-electric submarine is part of a $2 billion deal signed by Prime Minister Nguyen Tan Dung in 2009. Vietnam is expected to take possession of a third submarine in November. The agreement requires Russia deliver a total of six submarines by 2016, train Vietnamese navy crews to operate them, and provide spare parts and equipment.

South China Sea

Philippines submits memorial in South China Sea case. The Philippines on March 30 filed its memorial—legal arguments, witness testimony, and evidence—in its case against China to a UN arbitration tribunal in The Hague. The Philippine government has been preparing a 10-volume, nearly 4,000-page submission for several months, despite increasing pressure from China to drop the case. China will be given 30 days to submit a counter-memorial, but authorities in Beijing have decried the case and refused to participate. If the tribunal finds that it has jurisdiction, it could issue a ruling in 2015.

Philippine ship evades Chinese patrols to resupply Second Thomas Shoal. A Philippine civilian ship on March 29 delivered supplies and new troops to the Philippine garrison at Second Thomas Shoal in the Spratly Island despite attempts by a Chinese Coast Guard vessel to force it to turn back. The Philippine ship also carried a number of local and foreign journalists to document Chinese attempts to prevent it from resupplying its troops, as occurred in March when the Philippines was forced to air-drop supplies for the garrison after Chinese vessels turned back a Philippine supply ship.

Vietnam demands China compensate fishermen attacked in Paracels. Vietnam has asked Chinese authorities to investigate assaults by Chinese maritime surveillance ships on Vietnamese fishing boats in the Paracel Islands in recent years and compensate the victims, according to a March 24 report by Thanh Nien News. Vietnam has accused Chinese ships of regularly intercepting Vietnamese fishermen in disputed waters and confiscating their cargo and equipment before releasing them.


Opposition calls for leaders’ meeting on electoral reform. The opposition Cambodia National Rescue Party (CNRP) abruptly called an end to a March 24 meeting on electoral reform with the ruling Cambodian People’s Party, demanding a meeting of top party leaders instead. The CNRP says the current reform committee, which is composed of lower-level officials from both parties, is unable to agree on how to reform the National Election Committee, a key opposition demand. The CNRP drafted a joint resolution to officially postpone talks until top leaders from both sides can meet, but the ruling party has refused to sign it.

Opposition leaders hold rally at party offices after government blocks planned site. The opposition Cambodia National Rescue Party (CNRP) moved a planned rally to the party’s Phnom Penh office on March 30 after authorities refused to grant permission for it to protest in the capital’s Freedom Park. Security forces were deployed to the park to enforce the government’s ban. After meeting at CNRP headquarters, a few thousand opposition supporters marched through central Phnom Penh. It was the largest demonstration by the opposition since security forces drove protesters from Freedom Park in early January and instituted a ban on public gatherings.

Police attack protesters demanding TV license. Police in Phnom Penh assaulted a group of about 100 protesters who gathered on March 31 to demand the government grant a broadcasting license for government critic Mam Sonando to establish a television station. At least two demonstrators were seriously injured. It was the second protest in two months in support of Sonando, who has previously been jailed three times for criticizing the government on his independent Beehive Radio. Existing television stations are seen as sympathetic to the government, which has said there are no bandwidths available for Sonando’s use.

Australian bank wants to exit its holding in Cambodia. Australia and New Zealand Banking Group Ltd. (ANZ) announced on March 24 that it wants to sell its 55 percent stake in a Cambodian venture, ANZ Royal Bank. ANZ said it would prefer to have a wholly owned business in Cambodia—a strategy the bank pursued in Vietnam, where it sold its 10 percent stake in Sacombank in 2012. Among Australia’s top banks, ANZ has expanded the most aggressively in Asia.


Hagel hosts ASEAN defense ministers in Hawaii. Defense Secretary Chuck Hagel hosted all of his ASEAN counterparts except Thailand’s interim prime minister and defense minister Yingluck Shinawatra in a first-of-its-kind meeting in Hawaii on April 1–3. Discussions focused on increasing multilateral security cooperation, especially in humanitarian assistance and disaster relief, as evidenced by the inclusion of officials from the National Oceanic and Atmospheric Administration and the U.S. Agency for International Development. After the meeting, Hagel will travel to China, Japan, and Mongolia.

Civil society groups call on Myanmar to pursue sustainable development, peace, democracy. More than 3,000 representatives from civil society groups across ASEAN met in Yangon on March 21–23 for the annual ASEAN People’s Forum. They discussed ways to pursue sustainable development, democratization, and peace in the region. Participants called on Myanmar to lead the way as ASEAN chair for 2014 by halting construction of damaging hydropower projects, cutting military spending, investing in community development, and establishing mechanisms to better protect human rights.


Indonesia’s largest bank opens first branch in Singapore. Indonesia’s largest private financial institution, PT Bank Mandiri, opened its first branch in Singapore on March 26. The new branch is intended to provide more sophisticated products and financial services to Bank Mandiri clients in Indonesia who hold funds in Singapore. The Singapore branch is the bank’s fifth overseas. Singaporean banks have hundreds of branches in Indonesia, while Indonesian banks face high hurdles to entering the city-state. The contrast is a frequent point of contention in the relationship.

Seventeen South Asian migrant workers face charges. Singaporean authorities are charging 14 Bangladeshi migrant workers with rioting and 3 Indian migrant workers with fighting in public for their roles in a March 25 fight that broke out at a migrant worker dormitory. Police arrested 35 men during the brawl, which was sparked by a televised cricket match between Bangladesh and the West Indies. Those charged for rioting could face up to seven years in prison. The brawl was labeled as a riot by the police and comes almost three months after the Little India riot, Singapore's most violent outburst of public violence in 40 years.

Singapore looking into groundwater, underground reservoirs to meet demand. Singapore’s National Water Agency has launched the second stage of a study to examine the feasibility of extracting groundwater or using porous rocks as underground reservoirs to meet the city-state’s rapidly growing demand for fresh water, according to a March 25 Channel NewsAsia article. Singapore relies heavily on fresh water imports from neighboring Malaysia and is increasingly turning to alternative water sources, including desalination and wastewater treatment, to meet demand.


Sultan of Brunei orders citizens to stop criticizing sharia law. Sultan Hassanal Bolkiah delivered a speech on February 25 warning Brunei’s citizens to stop criticizing government plans to implement sharia law in April or else face punishment under that law. It is illegal to criticize the sultan in Brunei, but the country’s citizens have been unusually vocal, especially on social media, in their criticism of the pending implementation of sharia law. The sultan has previously called the Internet one of the greatest threats facing Brunei.

Brunei signs $1 billion deal with Export-Import Bank. The Energy Department in Brunei’s Prime Minister’s Office signed a $1 billion financing deal with the U.S. Export-Import Bank during the sultanate’s March 24–29 Energy Week event. The deal will provide funding for sustainable and renewable energy projects in Brunei and the wider Asia-Pacific region. It builds on financing objectives set in motion by the 2012 U.S.-Asia Pacific Comprehensive Energy Partnership. More than 70 companies from around the world participated in Energy Week, which aimed to promote awareness of sustainable energy sources and conservation in Brunei.
Trans-Pacific Partnership

Labor federation working with Congress to improve TPA bill. Richard Trumka, president of the American Federation of Labor and Congress of Industrial Organizations, said on March 25 that the union is working closely with Democratic members of Congress to improve the pending Trade Promotion Authority (TPA) or “fast-track” bill. He said his organization wants to improve the bill by making negotiating objectives for any trade deal, including the Trans-Pacific Partnership, more binding and giving Congress greater review powers before it approves an agreement. Trumka told reporters he did not expect the TPA bill to pass Congress before the November midterm elections.


Thai-Lao power plant gets $700 million loan. The Thai-Lao Xe-Pian Xe-Namnoy Power Company (PNPC) recently obtained a $700 million syndicated loan to build a hydropower plant in southwestern Laos’s Champasak province on the border with Thailand and Cambodia, according to a March 24 Nation report. The Lao government owns a 24 percent stake in the power company via its Lao Holding State Enterprise. The hydropower project is expected to begin commercial operations in 2018 and generate nearly 2,000 gigawatt hours of electricity per year.

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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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