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 ANALYSIS BIWEEKLY

                                                                                                                       Asean Affairs  September 5, 2014 



Biweekly Update


Thailand

Junta leader becomes prime minister, names new cabinet. King Bhumibol Adulyadej on August 25 appointed junta leader General Prayuth Chan-ocha as Thailand’s prime minister. Prayuth is the first active-duty military officer to serve as prime minister in 22 years. He quickly announced appointments for a new 32-member cabinet, including 12 current and former military and police officers. Prayuth is expected to retire from his military post and step down as head of the junta’s National Council for Peace and Order on September 30.

Junta ends ban on satellite TV stations. The National Broadcasting and Telecommunications Commission on August 25 lifted a ban on 12 satellite television stations that were prohibited from broadcasting after the May military coup. Details of the conditions placed on the stations in exchange for lifting the ban were not released. The junta’s media head, Major General Suchart Pongput, previously said the stations would have to cooperate with the military and remove all political bias from their reporting in order to continue operating.

Government to provide struggling farmers with over $300 million in loans. Thailand’s Bank for Agriculture and Agricultural Cooperatives on August 26 revealed plans to help alleviate household debt by disbursing $312 million in loans to farmers. Debt to loan sharks accounted for 49 percent of household debt in Thailand, according to a University of the Thai Chamber of Commerce survey. That high-interest debt weighs heavily on consumer spending. Loan sharks often charge as much as 60 percent interest, while the newly announced loans will be offered for just 12 percent interest for 10 years.

Court rejects murder charges against Abhisit and Suthep. Thailand’s Criminal Court on August 28 dismissed murder charges against former prime minister Abhisit Vejjajiva and his former deputy, Suthep Thaugsuban, after determining that it did not have jurisdiction to hear the case. The two were charged with murder for authorizing soldiers to use live ammunition during street protests in 2010, resulting in more than 90 deaths. The two still face separate charges before the National Anti-Corruption Commission.

Myanmar

Parties agree to joint peacekeeping force in cease-fire agreement. Negotiators involved in peace talks between rebel groups and the Myanmar government struck an agreement on August 21 to form a joint peacekeeping force to maintain a planned cease-fire. A member of the Nationwide Ceasefire Coordination Team, Salai Lian H Sakhong, said the agreement was a major breakthrough, claiming a cease-fire without a force to monitor it would be meaningless. The two sides hope to reach a cease-fire agreement sometime in September.

Authorities confiscate $17 million in ecstasy tablets. Authorities in southern Myanmar on August 25 announced the arrest of 15 individuals and the seizure of more than two million ecstasy tablets from a ship in the biggest drug bust in the nation’s history. Police estimate the drugs are worth over $17 million. The ship appeared to be on its way to Malaysia and eventually the United States, where the shipment would be sold. In addition to the ecstasy, police seized over 90 tons of illegal lumber.

Buddhist leaders in Rakhine propose moving Rohingya to detention camps. Buddhist leaders from Sittwe, the capital of western Myanmar’s Rakhine state, said August 22 that they were considering a plan to move all undocumented Rohingya to detention centers around the country until their citizenship statuses could be determined. An estimated one million Rohingya Muslims live in Rakhine state and very few have undergone citizenship verification. Many, if not most, lack the paperwork to prove their legal status, especially because they were forced to flee their homes during anti-Muslim riots in 2012.

U.S. announces new solar power initiative, labor rights program. United States Trade Representative Michael Froman on August 28 announced that a new U.S.-funded solar power project worth $480 million would soon be under way in central Myanmar’s Mandalay region. The project will include two 150-megawatt solar plants that will use at least some U.S.-made solar panels. U.S.-based Convalt Energy will manage the plants’ construction, which is expected to be completed in 2016. Froman also announced a new U.S. program to help improve labor rights in the hopes of allowing closer economic ties with Myanmar.

Yangon lawmakers vote to disenfranchise 98.5 percent of city voters. Lawmakers from the Yangon City Development Committee on August 29 approved a law restricting voting in city elections to only 1.5 percent of the eligible population, claiming the measure is being taken to cut costs. The new law would allow the city government to handpick those who could vote and would make government employees (including dismissed former employees), police, and anyone with a criminal record ineligible. The Union Parliament in Naypyidaw will have 90 days to consider whether to overturn the law.

Yangon authorities reverse decision on $8 billion development contract. Yangon’s regional government on September 2 reversed a decision to award Myanmar Say Ta Nar Myothit Public Company an $8 billion contract to build thousands of homes, bridges, and other projects in the commercial capital. The company’s ownership remains unclear and it was awarded the contract without a competitive bidding process. Authorities decided to cancel the contract and resubmit the development project to open bidding after widespread criticism about the lack of transparency.

Indonesia

Indonesia, Australia sign intelligence agreement. Indonesian foreign minister Marty Natalegawa and his Australia counterpart, Julie Bishop, met in Bali on August 27 to sign a code of conduct on intelligence. The agreement seeks to set limits on espionage activities between the two neighbors to end a spat that erupted in late 2013 amid revelations that the Australian Embassy in Jakarta was engaged in widespread intelligence gathering in Indonesia. The details of the new accord remain unclear, with Bishop saying only that it calls on the two countries to not “harm each other’s interests.”

State fuel company lifts limits on supply of subsidized fuel. PT Pertamina, Indonesia’s state-owned oil and gas company, on August 26 lifted limits it had placed earlier in the month on the supply of subsidized fuel to gas stations. The limits were meant to reduce consumption, as Indonesia is set to use far more than the 12 billion gallons of subsidized fuel that the parliament budgeted for 2014, but complaints about long lines at gas stations forced a reversal. The government expects the cost of fuel subsidies for 2014 to approach $21 billion, or 2.5 percent of national gross domestic product, up from 2.3 percent in 2013.

Parliament passes new geothermal energy law. Indonesia’s House of Representatives on August 26 passed a new law under which the development of geothermal energy will no longer be treated as a mining activity, thereby eliminating a number of legal and regulatory barriers to its expansion. One result is that geothermal fields can now be developed in forest conservation areas. Indonesia has some of the world’s greatest geothermal potential but currently utilizes only about 5 percent of its potential.

Trials open in Jakarta International School abuse case. Trials opened on August 26 and 27 against five janitors accused of sexually abusing children at the prestigious Jakarta International School, which mostly serves the children of expatriates and wealthy Indonesians. Four of the suspects signed confessions but now plan to recant, alleging that police extracted the confessions through torture. A prominent human rights lawyer, Patra Zen, has joined their defense team and insists that the evidence does not support the charges. Two staff members from the school have also been arrested as suspects.

Newmont reaches deal to restart operations in Indonesia. The Indonesian Energy Ministry on September 2 announced that it had reached a deal with U.S.-based Newmont Mining to allow the company to resume exporting copper from Indonesia. Newmont will pay an export tax of 7.5 percent on its copper exports—the same rate accepted by Freeport McMoran in an August deal—and will increase its royalties on gold, copper, and silver. Ahead of the deal, Newmont withdrew an arbitration case it had filed against Indonesia alleging that a ban on raw mineral exports that took effect in January violated its contract.

Philippines

Peacekeepers escape Syrian rebels in Golan Heights. A group of 40 UN peacekeepers from the Philippines escaped rebel forces in the Golan Heights on the Syria-Israel border on August 31 after being trapped and under fire for several days. They joined 35 Philippine troops from a nearby camp who had made their escape shortly beforehand. The two camps were surrounded by militants from the Syrian rebel group Nusra Front on August 28 after the rebels had captured as many as 45 Fijian peacekeepers; those peacekeepers still remain in captivity.

Bangsamoro law to be submitted to Congress. An official with the office of President Benigno Aquino said September 2 that a draft of the Bangsamoro Basic Law that will establish a new autonomous political entity on the southern island of Mindanao is in the final stages of review and will be submitted to the Philippine Congress in early September. The previous deadline to submit the draft was August 31, but Aquino postponed it to finish incorporating recent input from the Moro Islamic Liberation Front. The law is an integral part of the peace deal the government and the Moro rebels signed in March.

Palace denies Filipinos have been recruited by ISIS. Presidential spokesperson Edwin Lacierda on August 25 denied claims that Filipinos had been recruited by the militant group Islamic State of Iraq and Syria (ISIS). Former president Fidel Ramos previously said that as many as 100 Filipinos were fighting for ISIS, and Rodrigo Duterte, mayor of Davao in the southern Philippines, told reporters that some of his constituents had been recruited. The Philippine military has yet to substantiate those claims. Large numbers of citizens of nearby Australia, Indonesia, and Malaysia have joined ISIS.

Philippines is fastest-growing rice producer in Asia. The Philippines’ rice production grew by an average of 4 percent annually from 2010 to 2013, the fastest in Asia, including top rice exporters India, Thailand, and Vietnam, according to the Philippine Rice Research Institute. The country produced over 12 million tons of rice in 2013, up from 10.8 million tons in 2011. The Philippines has been quickly moving toward rice self-efficiency and has not imported rice in the last two years.

Authorities foil Manila airport bombing attempt. Justice Secretary Leila de Lima on September 2 announced that the National Bureau of Investigation had arrested three members of a previously unknown anti-China group called Usaffe who had plotted to bomb Manila’s international airport using an improvised explosive device. An informant who led authorities to the arrests revealed other targets, including the Chinese Embassy in Manila’s business district of Makati, and SM Mall of Asia and DMCI Holdings, both of which are owned by Chinese-Filipinos.

Malaysia

Government announces arrest of 19 suspected terrorists. Malaysian authorities on August 19 announced that police arrested 19 suspected terrorists between April and July after uncovering plans to attack bars, nightclubs, and a brewery in Malaysia. The government has not released the identities of all 19, but said they are all Malaysians. Several were arrested at airports while attempting to travel to Syria via Turkey to train and fight with the Islamic State of Iraq and Syria.

Police arrest 49 foreigners after riot at export factory. Malaysian police arrested 49 mainly Nepalese migrant workers after a series of riots at hard disk drive factories between August 22 and 26. The riots were sparked by anger over poor conditions at Malaysian manufacturer JCY HDD’s plants. No serious damage or injuries were reported. JCY HDD temporarily suspended operations to hold talks with workers and unions over their grievances. Many Malaysian exporters rely on low-cost foreign workers to remain internationally competitive.

Opposition parties refuse Selangor sultan’s demand for multiple chief minister candidates. The opposition People’s Justice Party (PKR) and Democratic Action Party (DAP) on August 28 refused a demand from the sultan of Selangor that each submit at least two candidates for the position of chief minister in the western state. The parties have said they will only nominate PKR president Wan Azizah Wan Ismail to replace current chief minister Khalid Ibrahim over the objections of their coalition partner, the Pan-Malaysia Islamic Party, which has nominated two as-yet-unknown candidates for the post.

Malaysia Airlines plans revival; set to cut staff and routes. Prime Minister Najib Razak on August 27 approved a radical restructuring of state-owned Malaysia Airlines, including firing a quarter of the airline’s 19,500 staff and cutting the number of long-haul flights to focus on profitable routes in Asia. The airline, already facing financial troubles, entered dire financial straits after the tragic loss of Flight 370 in March and Flight 17 in July. The government recently bought out all the airline’s shares and plans to privatize it after restructuring.

Authorities charge opposition politician, academic with sedition. Malaysian authorities on September 2 filed sedition charges against University of Malaya lecturer Azmi Sharom for an article he wrote questioning the legality of the 2009 collapse of an opposition-led state government. Six days earlier, prosecutors had charged Sanisyara Nethaji Rayer, a lawmaker in the northern state of Penang, for cursing the ruling United Malays National Organisation. His was the fifth sedition case brought against an opposition lawmaker in 2014, despite a 2011 pledge by Prime Minister Najib Razak to repeal the colonial-era Sedition Law.

Vietnam

Vietnam sends senior official to China to ease tension, agrees to compensate victims of May protests. Communist Party of Vietnam Politburo member Le Hong Anh on August 26–27 visited Beijing in an attempt to smooth relations strained by a two-month standoff between Chinese and Vietnamese forces that began with China’s placement in May of an oil rig in disputed waters in the South China Sea. Anh told President Xi Jinping that senior leaders from both countries should work closely to ensure disputes are handled peacefully. Prior to Anh’s visit, Hanoi announced that it will compensate businesses and victims affected by anti-China protests in Vietnam in May, a decision Beijing welcomed.

Prominent rights activists sentenced to up to three years in jail. A court in southern Vietnam’s Dong Thap province on August 26 sentenced three activists to between two and three years in jail for obstructing traffic and causing public disorder by riding in a motorcycle convoy to visit a former political prisoner. The best-known of the three, social media activist Bui Thi Minh Hang, was sentenced to three years in prison. Nguyen Thi Thuy Quynh was sentenced to two years and Nguyen Van Minh to two-and-a-half. The U.S. Embassy in Hanoi said it was deeply concerned by the convictions.

Nokia shifting bulk of manufacturing to Bac Ninh province. Authorities in Bac Ninh province in northern Vietnam said on August 20 that Nokia has informed relevant government agencies it will close all or some of its factories in Hungary and China and relocate most of its phone manufacturing to Vietnam. Nokia’s Bac Ninh facility, which began operations in 2013, will upgrade from 6 to 39 production lines by the end of 2014. Microsoft acquired Nokia’s handset and services business in September 2013 for $7.2 billion.

Vietnam, EU expect to conclude free trade agreement before October. Prime Minister Nguyen Tan Dung and European Commission president José Manuel Barroso on August 25 announced that Vietnam and the European Union hope to conclude negotiations on a free trade pact before October. Barroso was in Vietnam for a two-day visit to discuss ways to deepen EU-Vietnam cooperation in politics, security, trade and investment, and science and technology. The European Union is Vietnam’s largest export market, and bilateral trade last year reached $36 billion.

Cambodia

Opposition party voted into parliamentary leadership positions. Cambodian lawmakers on August 26–27 voted on new leadership for parliamentary commissions as part of a power-sharing agreement reached by the ruling Cambodian People’s Party and opposition Cambodia National Rescue Party (CNRP) in August. Thirty-one opposition lawmakers took leadership posts in seven key parliamentary commissions, including those on anti-corruption, education, foreign affairs, and justice. CNRP deputy chairman Kem Sokha was elected first deputy president of the National Assembly, making him the most senior opposition figure in the parliament.

Principal deputy assistant secretary of state visits Cambodia. Principal Deputy Assistant Secretary of State for East Asia and the Pacific Scot Marciel visited Cambodia on August 27–28 to discuss strengthening bilateral ties and exchange views on regional issues of common interest. Marciel and Cambodian officials pledged to resume official bilateral dialogues, which have been suspended for several years, in 2015. Marciel said in an interview with local media that it is in the United States’ interest to see a successful, democratic, and prosperous Cambodia.

Civil society groups propose term limit for prime ministers. A group of prominent civil society representatives on August 20 proposed changes to the Cambodian constitution that would limit prime ministers to two five-year terms in office. Opposition Cambodia National Rescue Party deputy chairman and newly elected parliament deputy president Kem Sokha voiced support for the proposal, but National Assembly spokesperson Nhem Thavy said the issue was not part of the power-sharing deal between the country’s two main parties and will not be brought up for discussion in the legislature. Prime Minister Hun Sen has served in his post for almost three decades.

Australia assessing locations for resettling refugees. Cambodian opposition lawmaker Son Chhay told the Phnom Penh Post on August 22 that Australian government officials have visited sites on islands off the coast of Sihanoukville in southwestern Cambodia that could potentially house refugees currently held on Nauru. Australian and Cambodian officials reportedly met to discuss an agreement for refugee resettlement on August 25. Phnom Penh has insisted it will only take in refugees from Australia who voluntarily agree to resettle in Cambodia.

Government orders halt to anti-Vietnam protests. Foreign Minister Hor Namhong on August 19 asked the Khmer Krom ethnic community in Phnom Penh to halt anti-Vietnam protests in the capital. The protests, during which a Vietnamese flag was burned, erupted after a Vietnamese Embassy official claimed the Khmer Krom region in southern Vietnam had always belonged to the country. The region, whose inhabitants are ethnic Khmer, was historically part of the Khmer Empire, which once included most of present-day southern Vietnam. The leader of the protests said demonstrations will resume unless Hanoi issues an apology.

Singapore

United Engineers sells Wearnes luxury car dealership for $364 million. United Engineers, a Singaporean real estate and engineering company, on August 26 agreed to sell its Wearnes luxury car dealership for $364 million. The deal gives the buyer, Singapore’s StarChase Motorsports, a greater market position in the region. StarChase already owns luxury dealerships in Malaysia and China. The deal pushed the value of annual mergers and acquisitions in Singapore to a record high of $19.8 billion so far in 2014.

Lee, Najib open Agrobazaar Malaysia in Singapore. Malaysia’s prime minister Najib Razak and his Singaporean counterpart, Lee Hsien Loong, oversaw the August 27 launch of Agrobazaar Malaysia in Singapore. The bazaar aims to better promote Malaysian agricultural exports, $1 billion of which already head to Singapore each year, to international buyers. The opening highlights a new area of cooperation between the two countries, which are also discussing the construction of a metro line between Singapore and the Malaysia state of Johor Bahru and a potential high-speed train to Kuala Lumpur.

Trans-Pacific Partnership

Negotiators discussing remaining thorny issues at meeting in Hanoi. Negotiators from the 12 nations working toward the Trans-Pacific Partnership (TPP) are discussing outstanding sensitive issues in Hanoi from September 1 to 10 in their latest round of talks. Officials have indicated that the negotiations will attempt to grapple with disagreements over market access, intellectual property protection, environmental regulations, and state-owned enterprises. Meanwhile, unresolved issues between the United States and Japan on agricultural market access continue to stymie overall progress.

ASEAN

Asian currencies on the rise. Asian currencies are steadily rising against the U.S. dollar, according to a September 1 Wall Street Journal report. The Malaysian ringgit and Indonesian rupiah are both up about 4 percent, while the Philippine peso and Thai baht are up 1.9 and 2.3 percent respectively. This rise is being attributed to improving economies in Asia and a healthy manufacturing sector. But analysts continue to worry that the region may lose investors, as it did in 2013, when the U.S. Federal Reserve inevitably decides to raise interest rates.

Laos

Laos obtains financing for Nam Ngiep 1 hydropower project. The Lao government in mid-August obtained a $643 million loan agreement to finance the Nam Ngiep 1 hydropower project in Bolikhamxay province in central Laos. The Japan Bank for International Cooperation provided nearly a third of the total loan, and the Asian Development Bank and a number of Thai and Japanese banks provided the rest. More than 90 percent of the electricity generated will be exported to Thailand beginning in 2019.

Mekong River

Laos, dam developer contradict each other on Don Sahong status. Lao ambassador to Cambodia Prasith Sayasith on August 19 told Cambodian foreign minister Hor Namhong that Laos had suspended construction on the controversial Don Sahong dam on the mainstream Mekong River. But the dam’s developer, Malaysia’s Mega First Corporation Berhad, told the Phnom Penh Post the next day that construction at the site was going ahead as planned. Laos agreed in June to hold consultations with its neighbors on the Don Sahong project.



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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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