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                                                                                                                       Asean Affairs  September 6,  2013  

The Biweekly Update


U.S. military lawyers hold meeting in Naypyidaw. The U.S. Defense Institute of International Legal Studies (DIILS) and members of the Myanmar armed forces cohosted a two-day legal affairs exchange in Naypyidaw on August 28. The exchange focused on international legal norms and practices in military affairs. DIILS is the United States’ lead educational resource to help build partner legal capacities in the defense sector. U.S. ambassador to Myanmar Derek Mitchell said the exchange was an important step for both the United States and Myanmar to build mutual understanding on human rights.

Parliament considers amendment prohibiting noncitizens from politics. Aye Maung of the Rakhine Nationalities Development Party proposed a constitutional amendment on August 26 that would ban noncitizens from forming political parties, running for public office, or voting in Myanmar elections. The move is seen as an attempt to make it more difficult for the minority Muslim Rohingya population to participate in politics. The current constitution allows Rohingya to participate in politics as long as they possess a government-issued temporary identification card.

Ruling party, military-appointed lawmakers battle over election commission bill. Lawmakers with the ruling Union Solidarity and Development Party (USDP) engaged in a heated debate with military-appointed parliamentarians on August 23 over a bill that would allow Myanmar’s election commission to strip lawmakers of their seats if they receive complaints from at least 1 percent of their constituents. Speaker of the parliament Shwe Mann and his fellow USDP lawmakers opposed the bill, saying 1 percent is not sufficient to warrant removal from office. The military representatives, meanwhile, joined President Thein Sein in calling for the bill to be discussed and passed.

Telecommunications bill passes parliament. Myanmar’s parliament passed a bill on August 27 that seeks to improve the country’s telecommunications sector by allowing foreign companies to invest for a minimum of 5 years and a maximum of 20. Norway's Telenor and Qatar's Ooredoo became the first foreign companies to be granted mobile operating licenses in Myanmar on June 27. The country plans to extend landline coverage to 10 million citizens by 2014 and increase cellphone coverage to 80 percent of the population by 2015.

Buddhist mob torches Muslim homes in Sagaing District. Around 1,000 Buddhists torched Muslim-owned homes and shops in northwestern Myanmar’s Sagaing District on August 24. The unrest began following rumors that a Muslim man tried to sexually assault a young Buddhist woman in the village of Htan Gone. The rioters sang Myanmar’s national anthem as they burned and destroyed about 42 homes and 15 shops in the village. There were no reported fatalities. Sectarian violence in the country has killed more than 250 people and displaced 140,000 others since 2011.

Japan’s ANA invests in Myanmar airline. Japan’s largest carrier, All Nippon Airlines (ANA), announced on August 27 that it would pay $25 million for a 49 percent stake in Myanmar’s Asian Wings Airways. The deal makes ANA the first foreign company to invest in Myanmar’s airline industry. ANA will also begin operating daily flights from Tokyo to Yangon starting September 30. Toshiaki Nonaka, director of strategic planning at ANA, says that the airline plans to continue expanding to other Asian nations in the foreseeable future.


Government proposes amendments to mining export ban. Industry Minister Muhammad Sulaeman Hidayat said on August 28 that several amendments have been proposed to a ban on the exportation of unprocessed minerals set to take effect in 2014. Under the new amendments, mining companies that already have local smelters under construction would be allowed to continue exporting unprocessed minerals but would face a progressive export duty. U.S.-based Freeport McMoran’s and Newmont Mining’s Indonesian operations would still be subject to the ban because, despite having signed agreements to do so, they have not begun construction of local smelters.

Jokowi doubles lead over strongest opponent in public survey. Nearly a third of respondents to a national survey published by Kompas on August 27 said they would vote for Jakarta governor Joko “Jokowi” Widodo if he ran for Indonesia’s president in 2014. A previous poll indicated Jokowi would receive about 18 percent support. The latest poll, which was performed in June, gives Jokowi more than double the support of his closest competitor, former general Prabowo Subianto, who received about 15 percent. Jokowi, a member of former president Megawati Sukarnoputri’s political party, has not indicated whether he will run.

U.S. to sell eight Apache helicopters to Indonesia. Secretary of Defense Chuck Hagel announced on August 26 that the United States has agreed on a $500 million Foreign Military Sales Agreement to provide Indonesia with eight AH-64 Apache combat helicopters. A delegation of Indonesian defense officials expressed interest in buying the helicopters after visiting a Boeing factory in Mesa, Arizona. The helicopters will allow Indonesia to conduct counterpiracy missions and other military operations that will significantly advance its military capabilities.

Quotas, price ceilings prevent cheap soybean imports. Price ceilings and quotas on soybeans that were set by Indonesia’s government in June to stabilize prices are now preventing the country from enjoying lower global prices, according to an August 26 Wall Street Journal report. Domestic traders are not allowed to sell soybeans above a certain price and companies are given quotas on how much they are allowed to import based on the proportion of locally produced soybeans they purchase. Global consumers pay about $0.27 per pound for soybeans, while Indonesian consumers pay about $0.35 cents per pound.

Bank Indonesia hikes benchmark interest to 7 percent. Bank Indonesia announced on August 29 that it was increasing the benchmark lending rate by 50 basis points to 7 percent in an effort to bolster the slumping rupiah and restore market confidence. International investors who have become wary of Indonesia, especially considering its large current account deficit and unwillingness to make much-needed reforms, reacted positively to the rate increase.


Aquino vows to abolish pork barrel fund. President Benigno Aquino announced on August 23 that he will abolish the Priority Development Assistance Fund, a highly controversial discretionary fund that provides Philippine lawmakers with money for small-scale development projects. His decision came amid large-scale demonstrations against misuse of the fund, popularly known as the pork barrel fund. Dozens of members of Congress have been accused of laundering funds through a scam run by businesswoman Janet Lim-Napoles, who surrendered to Philippine authorities on August 29. Aquino has tasked the Department of Justice and the Inter-Agency Anti-Graft Coordinating Council with investigating and prosecuting those involved.

A protest against the Priority Development Assistance Fund. President Benigno Aquino vowed to abolish the controversial pork barrel fund.
Hagel visits Manila, pushes for increased U.S. military presence. U.S. secretary of defense Chuck Hagel visited Manila on August 29–30 to discuss increasing the U.S. troop presence in the Philippines. In a press conference with Philippine defense secretary Voltaire Gazmin, Hagel emphasized that the United States is not seeking new permanent bases in the Philippines, but instead permission to rotate more U.S. forces into the country for military exercises and in times of humanitarian crises. Officials have had two rounds of negotiations, on August 14 and 29, in search of a framework agreement.

Philippine economy surprises with high growth. The Philippine National Statistical Coordination Board announced on August 28 that the Philippines posted a higher-than-expected 7.5 percent economic growth rate in the second quarter. Market analysts had earlier predicted growth of 7.2 percent, as most Asia Pacific nations are experiencing a slowdown. The Philippines and China, both of which posted 7.7 percent growth in the first quarter of 2013, have tied for the fastest-growing Asian economy two quarters in a row.

U.S senior official to discuss counternarcotics efforts in Philippines. Assistant Secretary of State for International Narcotics and Law Enforcement Affairs William Brownfield visited the Philippines from September 1 to 4 to discuss counternarcotics efforts with Philippine officials. He discussed bilateral cooperation with Undersecretary Arturo Cacdac, director general of the Philippine Drug Enforcement Agency. Brownfield also delivered remarks at the opening ceremony of a training exercise for the Philippine National Police Maritime Group Special Boat Unit.


Anwar suggests he will work with ruling party on some issues. Malaysian opposition leader Anwar Ibrahim indicated during a pre-independence day speech on August 30 that he would put aside differences with the ruling Barisan Nasional coalition to work on specific problems facing the country. But he reiterated that he does not accept the results of May's general elections and is not ready to cooperate broadly with the government. Anwar said that Prime Minister Najib Razak should convene a roundtable discussion with Anwar's opposition Pakatan Rakyat coalition to solve problems with public finance, slowing economic growth, corruption, and rising crime. Some voices in Pakatan Rakyat have criticized Anwar’s proposal, preferring to avoid working with the government at all.

Malaysia may impose goods and services tax to address fiscal deficit. Malaysia may impose a goods and services tax (GST), according to an August 29 statement by Secretary-General of Treasury Mohd Irwan. Irwan stated that the tax could be included in the country's 2014 budget proposal and would take 14 months to implement. The proposed GST comes amid a widening fiscal deficit and is intended to help broaden the tax base and reduce reliance on dividends from state oil company Petronas.

Hagel visits Malaysia; affirms bilateral partnership. U.S. defense secretary Chuck Hagel affirmed the United States’ commitment to building and strengthening the U.S.-Malaysia partnership and praised the Malaysian military's contributions to regional and global security while on a visit to the country on August 25. Hagel met with Defense Minister Hishammuddin Hussein and Prime Minster Najib Razak during his visit and confirmed that the United States will continue assisting Malaysia's military with humanitarian assistance and disaster relief, peacekeeping, maritime security, and counterterrorism efforts.

Central bank cuts 2013 growth forecast. The Central Bank of Malaysia cut its 2013 growth forecast on August 21 from between 5.5 and 6 percent to between 4.5 and 5 percent. The bank said that domestic demand in the country remains stable and blamed weak global demand for the reduced growth forecast. Fitch Ratings downgraded Malaysia’s credit rating in August due to high government debt and a lack of budgetary reform. The Malaysian currency has fallen 8 percent against the dollar in 2013.

Malaysia seeks to expand surveillance powers to combat graft. The Malaysian government may use electronic surveillance to fight corporate crime and government graft, according to an August 19 statement by Paul Low Seng Kuan of the Prime Minister's Department. Low said that corruption costs the country about $9 billion annually and that additional legislation is planned to appoint chief integrity officers to government ministries and make corporate directors liable for staff corruption. Malaysia ranked highest in a 2012 Transparency International survey of corporate executives who said they had lost contracts to competitors due to bribery.


Rubber farmer protests grow after talks with government fail. Tens of thousands of rubber farmers have joined road blockades and protests across southern Thailand that started on August 22. Negotiations between the government and representatives of Thailand’s rubber farmers broke down on August 28 after Agriculture and Cooperatives Minister Yukol Limlaemthong insisted that the government would not intervene with the rubber market and would buy rubber products at about $1.10 per pound instead of the $1.70 demanded by farmers. The farmers have since lowered their demand to $1.30.

Yingluck hosts reconciliation forum. Prime Minister Yingluck Shinawatra hosted a reconciliation forum on September 3 featuring former British prime minister Tony Blair and former Finnish president Martti Ahtisaari, among others. The forum was held to discuss possible solutions to the political divisions in Thailand. Blair and Ahtisaari made several suggestions, including respecting the opinion of the political minority and realizing that peace is a process, not an outcome. Meanwhile, opposition leader Abhisit Vejjajiva did not attend, citing a lack of sincerity on the government’s part in hosting the forum.

National Security Council chief blames separatist factions for hindering talks. National Security Council chief Paradorn Pattanatabut said on August 26 that one or two smaller factions of the insurgent group Barisan Revolusi Nasional (BRN) are hindering peace negotiations and have continued to engage in subversive activities since talks began in March. Peace negotiations between BRN and the government are currently in a deadlock, as Bangkok has not agreed to BRN’s demands to free detained insurgent suspects and revoke charges against those still at large.

ADB poised to cut growth projections for Thailand. The Asian Development Bank (ADB) may cut its 2013 GDP growth projections for Thailand from 4.9 percent to between 4 and 4.3 percent. Sluggish exports and a decrease in consumer spending are the main impediments to Thailand’s growth, according to the ADB. Jesus Felipe, an adviser to the ADB's Economics and Research Department, says that Thailand must improve its educational system to successfully transition from an agricultural economy to a service-oriented industrial economy.


Government considering restrictions on mobile chat apps. Prime Minister Nguyen Tan Dung said on August 16 that the Vietnamese government is considering a ban on free mobile messaging services because they create unfair competition for Internet and phone providers. The government said free mobile messaging apps such as Viber, Line, and Whatsapp take revenue from network providers that require payments, such as state-owned Viettel Telecom. Mobile providers are predicted to lose $32 billion in revenue to chat apps in 2013.Vietnam currently has 17 million smart phone users, according to a Google report.

President of South Korea to visit Vietnam. South Korean president Park Geun-hye will visit Vietnam from September 7 to 11 in her third trip to a foreign country and first to Southeast Asia since taking office. The visit will include discussions on the possibility of a South Korea-Vietnam free trade agreement, cooperation on nuclear power and industrial technologies, and the provision of development aid projects, according to South Korea’s presidential office. The office also said that the visit demonstrates the importance to Park of relations with ASEAN members.

Dissidents not included in mass amnesty. President Truong Tan Sang’s office on August 29 granted amnesty to 15,446 prisoners in recognition of Vietnam’s National Day but did not release any dissidents accused of spreading “propaganda against the state.” However, four prisoners accused of national security violations, including two Christians, were released. Annual prisoner releases following National Day are customary and have been enshrined in Vietnam’s constitution, its 2007 Law on Amnesty, and other legislation.


Hagel meets with ASEAN defense ministers. U.S. defense secretary Chuck Hagel on August 28–29 met with counterparts from the 10 ASEAN countries and their seven other dialogue partners—Australia, China, India, Japan, New Zealand, Russia, and South Korea—at the ASEAN Defense Ministers Meeting Plus in Brunei. Hagel said in a speech that countries in the region must refrain from provoking international confrontation and emphasized that any territorial disputes must be resolved peacefully. Meanwhile, the 10 ASEAN defense ministers accepted Hagel’s invitation to come to Honolulu in 2014 for an informal meeting—the first time all 10 will travel to the United States.

Indonesia announces naval exercise in South China Sea. The Indonesian navy announced on August 22 that it will host a first–of-its-kind naval exercise with the 10 ASEAN member countries and their eight dialogue partners. The exercise will focus on countering maritime threats as well as humanitarian assistance and disaster relief. It will take place off Indonesia’s Natuna and Anambas archipelagos in the South China Sea in April 2014.

South China Sea

Arbitral tribunal issues rules and timeline. The five-judge tribunal hearing the Philippine’s case against China’s claims in the South China Sea released a statement announcing that it has adopted formal rules and scheduled an initial timetable for proceedings, according to an August 27 statement from the Permanent Court of Arbitration (PCA), which serves as the registry for the case. The tribunal has ordered that Manila present its memorial—which includes the facts of the case, arguments for jurisdiction, and relevant evidence—by March 30, 2014. Beijing, in a diplomatic note written to the PCA on August 1, reiterated that it will not participate in the arbitration.

Taiwan to create warship dock at Itu Aba. Taiwanese lawmaker Lin Yu-fang said on August 29 that the country’s coast guard submitted a plan to Taiwan’s parliament for a $112.4 million upgrade to an existing dock on Itu Aba Island, the largest of the disputed Spratlys. The upgrade will allow the renovated dock to accommodate large supply ships and naval frigates. It will also extend the 3,800-foot runway on the island, according to Lin. The dock is scheduled to be operational in 2016.

Philippine, Vietnamese defense ministers discuss defense cooperation. Vietnamese defense minister General Phung Quang Thanh visited Manila from August 25 to 27 and met with Philippine defense secretary Voltaire Gazmin to discuss defense cooperation. During their meeting the two discussed a 2010 agreement between Vietnam and the Philippines on joint cooperation on defense capabilities and on humanitarian assistance and disaster relief initiatives. Their discussion focused on security concerns in the South China Sea, according to Philippine Defense Department spokesman Peter Paul Galvez.

China, ASEAN foreign ministers hold special meeting in Beijing. Chinese foreign minister Wang Yi and his 10 ASEAN counterparts discussed tensions in the South China Sea at an August 29 meeting in Beijing. Wang said that the ministers “did not shy away from any problems” during their meeting, which focused mainly on strengthening China-ASEAN relations. It was held in celebration of the 10th anniversary of the China-ASEAN strategic partnership. Chinese and ASEAN officials will meet on September 14–15 for official discussions on the South China Sea.


Court orders election body to unseal voting records in second province. The Constitutional Council of Cambodia forced the National Election Committee to open sealed packages containing ballot information in order to verify the results of the recent presidential election after the opposition party in Cambodia held a rally with 20,000 supporters on August 26. The opposition gave an ultimatum that the government investigate election irregularities or face even larger protests. The council ordered a similar investigation in Kratie Province following accusations from the opposition of electoral fraud.

Government signs $70 million loan agreement with Asian Development Bank. The government of Cambodia signed a loan agreement with the Asian Development Bank (ADB) worth $70 million on August 26 to expand the country’s rice sector and promote reforms in its finance sector. Deputy Prime Minister and Minister of Economy and Finance Keat Chhon signed the agreement with ADB country director Eric Sidgwick. Nearly 1 million low-income Cambodian farmers are expected to gain an additional $300 of income by 2020 thanks to the agreement, which will continue into 2019.

Chinese minister calls for peaceful resolution to electoral standoff. Chinese foreign minister Wang Yi urged Cambodian officials to resolve the electoral dispute following the July 28 national elections quickly and peacefully during a meeting on August 21. The visit by Wang signified how important China views its bilateral relations with Cambodia, and it could put positive pressure on both the ruling and opposition parties to accept the National Election Commission’s official ruling on the elections, expected on September 8.


Tightened measures on public housing decrease demand for real estate. The government announced on August 27 that mortgage terms for state-built homes would be tightened and that public housing eligibility for non-citizens would be delayed, further lowering demand in Singapore’s real estate sector. The tightening measures are intended to rein in increasing housing prices by removing a large portion of the demand in the market. But many experts argue the measures will have the opposite effect in the long run.

Yale formally opens new liberal arts college in Singapore. Yale-National University of Singapore (NUS) College officially opened on August 27 as Singapore’s first liberal arts college despite criticism from Yale faculty members. The faculty members had discouraged the opening of the university because of Singapore’s tight rules on student protests and political activity. But supporters of the joint effort argued that despite the restrictions, there is a need for students to be trained at higher levels of education in the growing city-state. Yale-NUS accepted 157 students in its inaugural class and hopes to house 1,000 by 2015.

Report shows Singapore dollar least-affected currency in current Asian instability. The Singapore Exchange released a report on August 28 showing that the Singapore dollar has declined less than any other currency in Asia with the recent appreciation of the U.S. dollar. The Singapore dollar declined 1.3 percent in August against the U.S. dollar, compared to a 9.4 percent fall for the Indonesian rupiah, 10.2 percent for the Indian rupee, and 3.2 percent for the Malaysian ringgit and the Thai baht.
Trans-Pacific Partnership

Tariffs and yarn-forward rule key issues in latest TPP round. Officials traveled to Brunei for the 19th round of Trans-Pacific Partnership (TPP) negotiations from August 22 to 31. Rules of origin for apparel remained a key issue, with negotiators seeking agreement over the yarn-forward rule meaning that only textiles and apparel made with materials from TPP members would be exempted from tariffs under the agreement. Vietnam opposes that standard, which the United States supports. The talks, which saw Japan as a full participant for the first time, also tackled market access, state-owned enterprises, and tariffs, among other issues.


Flash floods kill 20, damage rice crops. Flash floods from heavy annual rains in Laos have left at least 20 dead and damaged about 5,400 square miles of rice crops as of August 28, according to Glenn Dodge, the head of the United Nations resident coordinator's office in Laos. The floods also left about 116,000 people in 7 of Laos’s 17 provinces without access to clean water, according to Dodge. The United Nations says that Laos is likely to have more natural disasters in the future due to climate change.

Students banned from riding motorbikes to school. Secondary schools in Laos’s Khammuan Province have banned students from riding motorbikes to school, according to an August 28 Vientiane Times report. The purpose of the ban is to encourage students to ride bicycles instead of motorbikes, which would reduce family expenses and road accidents and is better for the environment, according to the director of the province’s education department, Sihay Keokaithinh. The province had banned motorbikes for a trial period, following which 40 schools decided to implement the ban permanently after noticing a significant decrease in road accidents.

Lao Airlines to buy four new aircraft. Lao Airlines plans to acquire four new aircraft—two ATR72-600s in 2014 and two Airbus 320s in 2015—for its expanded flight routes, according to an August 26 Vientiane Times report. Phouthasone Vannachack, director general of the airline, says that the national carrier will increase flights between Vientiane and Oudomxay, Bokeo, and Luang Namtha provinces and will begin operating regular flights to Incheon, South Korea. The airline currently has a total of 14 aircraft.


Fourteen heads of state confirm attendance at October summit. U.S. president Barack Obama, Indonesian president Susilo Bambang Yudhoyono, Chinese president Xi Jinping, and Russian president Vladimir Putin have all confirmed their attendance at the upcoming APEC summit on October 7–8, along with 10 other heads of state. Leaders from Australia, Brunei, Canada, Hong Kong, Papua New Guinea, Taiwan, and Vietnam have yet to confirm their attendance to the event organizing committee. Xi has also confirmed that he will give the closing address at the summit.

USS Denver arrives in Timor-Leste. The amphibious transport dock ship USS Denver arrived in Dili on August 27 to provide assistance and training activities while visiting the country. Denver's medical staff will provide basic medical training in collaboration with staff from Australia's Royal Darwin Hospital, and the ship’s crew will organize a number of community service programs during the visit. U.S. sailors and marines will also conduct military exercises with the Timor-Leste Defense Forces.


Minister of foreign affairs and trade meets with Chinese counterpart in Beijing. Prince Mohamed Bolkiah, Brunei’s minister of foreign affairs and trade, met with his Chinese counterpart, Wang Yi, in Beijing on August 27. Wang praised Brunei’s role in enhancing China-ASEAN relations and added that China will look to further closer bilateral ties with Brunei. The prince welcomed Wang’s remarks and said that Brunei will similarly look to strengthen its cooperation with China on international and regional issues. His visit came as ASEAN defense ministers and dialog partners, including China and the United States, gathered in Brunei to discuss regional security issues.

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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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