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Asean Weekly: Ending the week of 6 July 2012
Umar Patek given 20 years for 2002 Bali bombings. The West Jakarta District Court sentenced Hisyam bin Ali Zein, widely known as Umar Patek, to a 20-year sentence June 22 for his role in the 2002 bombing of a Bali nightclub that killed 202 people. The trial lasted three months. He avoided a life sentence because the court found he was not a mastermind of the bombings. Patek’s lawyer, Asludin Hanjuni, said June 28 that Patek would not seek to appeal.
Pertamina purchases Venezuelan oil assets for $725 million. Pertamina, Indonesia’s state-owned oil company, agreed to pay Harvest Natural Resources $725 million for its stake in a joint venture with Venezuela’s state-owned oil company. The deal is subject to the Venezuelan government’s approval. This marks a growing trend of Asian oil companies developing assets and agreements abroad. China, Japan, South Korea, and Vietnam all have recently signed oil deals with Caracas. Pertamina said it hopes to “aggressively develop” its overseas business as Indonesian oil reserves begin to taper off.
Indonesia pledges up to one billion dollars to IMF. Indonesia announced June 28 it will provide up to one billion dollars to boost the resources of the International Monetary Fund (IMF), following similar moves by other emerging economies. Deputy Foreign Minister Mahendra Siregar initially said June 20 that Indonesia would not commit any funds as leaders of Brazil, Russia, India, China, and South Africa increased their contributions in exchange for a greater voice in the institution. The IMF is seeking contributions in light of the continuing financial crisis in Europe.
Smog from Sumatra clouds skies over Malaysia, Singapore. Smog engulfed the skylines of Kuala Lumpur and Singapore in the past two weeks, largely due to fires from land clearing on Sumatra and Indonesian Borneo. Indonesia's National Meteorological, Climatology, and Geophysics Agency June 17 reported 163 hot spots on Sumatra, more than double the number the day before. Indonesian authorities are attempting to regulate the burning, but enforcement is difficult given the size of the affected area and limited policing capabilities. Singapore's National Environment Agency said June 17 that hazy conditions would likely continue for the next two weeks.
Voter rolls for Jakarta gubernatorial race called into question as campaign begins. Campaigning for Jakarta’s governor race officially began June 24, with elections to be held July 11, but five of the six candidates refused to endorse the voter rolls. One candidate, Joko Widodo, filed a class action suit against the Jakarta election commission, while others have called for delaying the election until the problems can be fixed. Joko’s lawyer said June 25 that there are hundreds of thousands of irregular and duplicate names on the rolls. The winner of the election will control the Indonesian capital and its $4.9 billion budget, and will likely be highly influential in the 2014 presidential race.
Golkar nominates Bakrie as 2014 presidential candidate. Indonesia’s second-largest political party, Golkar, announced June 29 that Aburizal Bakrie will be party chairman and its candidate for the 2014 presidential election. Golkar, the party of ousted dictator Suharto, is the most popular party in Indonesia in recent polling. Bakrie, a controversial and extremely wealthy figure, lags behind other potential candidates, including former president Megawati Sukarnoputri, in recent polls. Golkar deputy chairman Agung Laksono said the party will not decide on a vice presidential candidate until 2013, when it will have a better sense about whether a coalition will need to be formed.
U-Tapao decision delayed, NASA cancels climate study. A U.S. embassy spokesperson announced June 28 that NASA had cancelled a planned climate study due to the delay and controversy over its request to use Thailand’s U-Tapao airbase. Thailand’s army commander, Gen. Prayuth Chan-ocha, said he regretted the outcome and hoped that it could be revisited next year. NASA previously said it would need approval by June 26 to go forward with the study, scheduled to take place in August. The same day the Thai cabinet announced it would send the issue to the parliament for review. Several opposition legislators opposed NASA’s use of the base, saying it could impact Thailand’s sovereignty.
“Red shirt” leader’s bail revoked. Thailand’s Constitutional Court filed a petition June 21 to revoke “red shirt” co-leader Jatuporn Prompan’s bail, claiming that he violated the terms of his parole when he criticized the court at a rally. When asked for clarification, the court announced it would hold a press conference on the issue June 25, but the press conference was subsequently canceled. Jatuporn said the court overstepped its bounds, as it is not a witness or plaintiff in the case. He is charged with terrorism for his actions during the 2010 political violence that swept Bangkok leaving more than 90 people dead.
Derek Mitchell confirmed as U.S. ambassador to Myanmar. The U.S. Senate June 29 confirmed Derek Mitchell as the first U.S. ambassador to Myanmar in more than two decades. Mitchell most recently served as the first special representative and policy coordinator for Myanmar, a position created by U.S. president Barack Obama in 2011. Myanmar is expected to send an ambassador to the United States as well.
Myanmar delays foreign investment laws. Myanmar indicated on June 23 that fresh economic legislation critical for investment could be pushed back another few months. Officials said a new version of the foreign investment law could be delayed by another five weeks, while a law on special economic zones could take up to four months to be finalized. Only around $133 million of the $4.7 billion in foreign investment to Myanmar approved last year has actually materialized.
Candidates to submit campaign expenditures in 2013 midterm elections. The Philippine Commission on Elections announced June 27 an anticorruption resolution that will require candidates in the 2013 midterm elections to file their statements of election contributors and expenditures before assuming office. Elected officials who fail to file their statements will initially face fines of $25 to $1,400. A second offense will result in being permanently disqualified from holding public office. The resolution is part of President Benigno Aquino’s larger anticorruption movement.
Asian Development Bank approves $350 million loan to enhance Philippine competitiveness. The Asian Development Bank (ADB) June 26 approved a loan of $350 million to fund a Philippine program designed to improve the country’s business environment. The program focuses on the development of youth labor skills, including a project called “My First Job.” The project aims to provide 1,600 youth with career counseling services and internship opportunities. The Philippines was one of the ADB’s top 10 loan recipients in 2011.
U.S. submarine visits Subic Bay. A U.S. nuclear-powered attack submarine, the USS Louisville, docked June 26 at the Philippines’ Subic Bay. The visit was a routine port call to replenish supplies and allow rest for the crew. The U.S. embassy in the Philippines said the mission highlights the strong historic and military connections between the two countries. The USS Louisville is the second U.S. attack submarine to visit the Philippines since the United States announced plans last year to rebalance toward the Asia-Pacific region.
South China Sea
Vietnam passes maritime law reiterating claim to Paracel and Spratly Islands. Vietnam’s National Assembly June 21 passed a new Law on the Sea, reiterating its sovereignty over the Paracel and Spratly Islands. The law immediately drew criticism from Beijing, which summoned Vietnam’s ambassador to China, Nguyen Van Tho, and called the law a serious violation of China’s territorial sovereignty. China’s State Council responded by approving the establishment of a new prefecture-level city, Sansha ("Three banks"), to administer the islands of the Spratlys (Nansha or "South Banks"), the Paracels (Xisha, or "West Banks"), and Macclesfield Bank and Scarborough Shoal (Zhongsha, or "Middle Banks").
China’s state-owned oil firm opens nine blocks in disputed waters to foreign bids. China National Offshore Oil Corporation (CNOOC) June 23 invited international bids for nine oil-exploration blocks within the 200-nautical-mile exclusive economic zone claimed by Vietnam under the United Nations Convention on the Law of the Sea. The announcement drew strong protests from Vietnam, which asked China to stop the “erroneous” bid. Chinese Foreign Ministry spokesperson Hong Lei said June 27 the bidding is a “normal business activity” in line with Chinese laws and international practices. About 200 Vietnamese demonstrators marched through downtown Hanoi July 1 shouting “Down with China!” The nine blocks overlap with several blocks already leased to foreign oil companies by Vietnam.
Prime minister approves urban development project in Greater Mekong Subregion. Vietnamese prime minister Nguyen Tan Dung June 18 approved a $147 million development project in the Greater Mekong Subregion. The Asian Development Bank will supply close to 90 percent of the required funds. The project is set to begin in 2013 and is due for completion in 2018. It focuses on expanding roads, improving water supply and treatment systems, and urbanization. Vietnam aims to transform the region from a transport corridor into a vibrant economic zone.
Vietnam, United States hold fifth Political, Security, and Defense Dialogue. U.S. assistant secretary of state for political-military affairs Andrew Shapiro attended the fifth U.S.-Vietnam Political, Security, and Defense Dialogue (PSDD) June 20 in Hanoi. The two sides discussed cooperation in nonproliferation, counterterrorism, maritime security, humanitarian assistance and disaster relief, law enforcement and information sharing, and legacy issues such as the remaining effects of the tactical herbicide Agent Orange used by the U.S. military during the Vietnam War. The two countries agreed to strengthen their bilateral partnership and emphasized the importance of cooperation in regional organizations. The sixth PSDD will take place in Washington next year.
Vietnam to tighten control on foreign direct investment loans. Vietnam’s central bank June 23 asked lending institutions to exercise stricter control of foreign direct investment (FDI) loans. This includes, among other measures, reporting regularly to the central bank on the status of FDI loans. Many businesses set up as part of FDI projects, especially those in remote provinces, have operated inefficiently in recent years and have negatively affected the country’s investment environment. Banks have said supervision of FDI loans is difficult because the capital is often used to purchase imported raw materials.
Government rejects appeal to halt Lynas rare earths refinery project. The Malaysian government has rejected an appeal to revoke the operating permit of Australian-owned Lynas, which is building the world’s largest rare earths processing plant in Kuantan province. The rejection sparked fresh protests June 25 by local residents and activists concerned about the environmental and health effects of the plant. Prime Minister Najib Razak has said the plant will attract other large projects and help Malaysia realize its goal of attaining industrialized status by 2020. Opposition leader Anwar Ibrahim has made closing the plant a key part of his political platform for the upcoming general election.
Malaysians protest presence of Singaporean diplomats at Bersih rally. Three hundred Malaysians participated in a half-hour demonstration June 26 outside the Singapore High Commission in Kuala Lumpur. The protestors demanded an official apology and the recall of three Singaporean diplomats who attended the April 28 Bersih 3.0 rally for electoral reform in Kuala Lumpur. Singapore's Foreign Affairs Ministry said the officials came to the rally as observers and had no intention of interfering in Malaysian politics.
Laos, Vietnam exchange high-level visits. Lao People's Revolutionary Party secretary Chansy Phosikham visited Hanoi June 14 and stressed the special relationship between his party and the Vietnamese Communist Party. The two parties agreed to cooperate closely in personnel training and party building. Lao vice president Bounnhang Vorachit June 18 hosted his Vietnamese counterpart Nguyen Thi Doan in Vientiane. Vorachit reaffirmed Laos’s support for Vietnam’s foreign policy and pledged to strengthen bilateral and party ties despite internal challenges facing both countries.
Laos may not reach Millennium Development Goals. Laos’s Ministry of Planning and Investment said June 21 that Laos may not achieve its Millennium Development Goals by 2015 as planned. Laos has made little progress in eradicating extreme poverty and hunger and in improving maternal health. More than 20 percent of the population still live below the poverty line despite 8 percent annual economic growth. Laos estimates it will need $990 million in development assistance and $27 million in private investment to achieve its target goals.
Laos halts new investment, land concessions until 2015. Laos announced June 26 it will freeze mining licenses and land concessions until 2015 at the earliest in response to complaints about land encroachment and environmental problems. The government is scheduled to conduct land surveys, review existing investment policies, and inspect all approved development projects. Most projects approved since 1998 are foreign–funded and concentrated in the mining, hydropower, and agricultural sectors.
World Bank launches new aid strategy for Laos. The World Bank June 26 launched a new aid program for Laos to help it achieve three development objectives by the end of 2016. The objectives are greater competitiveness and connectivity, sound management of natural resources, and inclusive development. The World Bank expects to mobilize $60 million in development assistance to Laos per year, contingent on the performance of the program. The program’s larger goal is to help Laos position itself as a transit hub and investment destination in the planned ASEAN Economic Community, which seeks to boost economic integration in the region by 2015.
Singapore and Malaysia sign agreement on antinarcotics cooperation. Singapore’s minister for home affairs, Teo Chee Hean, and his Malaysian counterpart, Hishammuddin Hussein, signed an agreement June 26 to combat cross-border drug crimes. The agreement pledges the two countries’ enforcement agencies to cooperate in joint training and investigations.
United States exempts Singapore from sanctions for Iran oil imports. The United States June 28 exempted Singapore and China from Washington’s unilateral sanctions on countries that purchase Iranian oil, citing their efforts to significantly reduce their imports. U.S. secretary of state Hillary Clinton said 20 countries have qualified for an exemption to the sanctions. All 20 have decreased their oil imports from Iran enough to help pressure Iran to stop enriching uranium and open its nuclear program for inspection.
Cambodia releases Boeng Kak protesters. A Cambodian court June 27 released 13 women who were arrested in May for demonstrating against the forced eviction of their community from the area surrounding Phnom Penh’s Boeung Kak Lake. The women have vowed to continue their protests. Their case made international headlines and elicited condemnation from human rights groups and foreign officials, including U.S. secretary of state Hillary Clinton. Amnesty International and Human Rights Watch, among others, welcomed the women’s release.
Campaign season for parliamentary elections begins. Twenty parties are competing for 65 seats in Timor-Leste’s parliamentary elections, set to take place July 7. The two most viable parties are the revolutionary FRETILIN, which has seen declining support since Timor-Leste gained independence in 2002, and the Congresso Nacional de Reconstrução de Timor-Leste, or CNRT Party, which is headed by current prime minister Xanana Gusmão and leads the majority coalition.
There has been relatively little violence in the campaigning so far, further indicating Timor-Leste’s transition to a stable democracy.
Mass grave found on grounds of prime minister’s office. Workers June 20 found a mass grave containing more than 50 bodies on the grounds of the prime minister’s office. The workers were digging to lay pipes for a water fountain when the bodies were discovered. The grave is believed to be from the era of Indonesia’s occupation of Timor-Leste, possibly from the initial invasion in 1975 or the violence stemming from Indonesia’s withdrawal in 1999. Timorese investigators said the bodies do not appear to be Timorese. An Australian forensics expert will assist with the identification of the bodies.
ASEAN countries improve human trafficking rankings. The U.S. State Department released its annual Trafficking in Persons (TIP) report June 19. Among ASEAN countries, Brunei, Myanmar, Indonesia, and Vietnam all improved by one notch, with Indonesia reaching the first tier, signifying a government “fully complying” with the Trafficking Victims Protection Act’s minimum standards. Countries that fall to the third tier on the TIP report face automatic sanctions by the United States. With Myanmar moving to the tier-two watch list, ASEAN for the first time has no members with a tier-three ranking.
Peterson Institute releases Trans-Pacific Partnership report. The Peterson Institute of International Economics released a new policy brief June 16 arguing that the importance of Asia-Pacific integration calls for an “early conclusion of the TPP negotiations” without jeopardizing other future regional or global trade agreements. The report called for a new dialogue connecting the Trans-Pacific and Asian trade agreement tracks to reduce political tension between them. It also called on the United States and China to cooperate directly on trade and investment through forums such as their bilateral Strategic and Economic Dialogue.
Brunei signs oil and gas agreement with Russia. Brunei’s state-owned Petroleum Brunei and Russian state-owned company Zarubezhneft JSC signed an agreement June 24 to cooperate on oil and gas projects. The agreement seeks to expand existing joint ventures in the energy sector, including development of new power plants and renewable energy sources. Brunei’s energy minister, Mohammd Yasmin, and his Russian counterpart, Alexander Novak, attended the signing ceremony. They discussed inviting Russian experts to be part of the International Advisory Board at the Brunei National Energy Research Institute.
Lower Mekong Initiative meeting. The fifth Lower Mekong Initiative (LMI) Ministerial Meeting will take place July 12 in Phnom Penh. It will follow the Mekong-Japan and Mekong-Republic of Korea Ministerial Meetings that will be held July 10. The LMI is a U.S.-sponsored grouping of the United States, Thailand, Laos, Cambodia, and Vietnam that promotes sustainable development and conservation in the Mekong Delta. Myanmar was recently invited to join the organization. More information is available at www.lowermekong.org.
ASEAN Regional Forum and ASEAN Ministerial Meeting/Post Ministerial Conferences. The 19th ASEAN Regional Forum (ARF) and 45th ASEAN Ministerial Meeting/Post Ministerial Conferences will take place July 9–13 in Phnom Penh. The ARF Defense Officials Dialogue will also take place July 11–12 in Phnom Penh. The ARF features 27 member countries and is the largest regional security meeting of its kind. U.S. secretary of state Hillary Clinton will join fellow foreign ministers at this year’s meetings. Secretary Clinton will then join an ASEAN-U.S. business-to-business summit in Siem Reap on July 13.
U.S.-Indonesia TIFA talks with Craig Allen and Barbara Weisel. Deputy Assistant Secretary of Commerce for Asia Craig Allen and Assistant U.S. Trade Representative for Southeast Asia and the Pacific Barbara Weisel will address the Private Sector Consultations at the U.S.-Indonesia Trade and Investment Framework Agreement (TIFA) talks July 16 in Bali, Indonesia. U.S. commercial attaché David Gossack and Director General of Foreign Trade Deddy Saleh will also be on the panel. For more information, contact email@example.com.
Talk on the Australia-U.S. alliance in the Asia Pacific. The Heritage Foundation will host Tony Abbott, a member of Australia’s House of Representatives and leader of the opposition Liberal Party, July 17. Abbott will discuss the United States’ global role, the Australia-U.S. relationship, and the role of the Australia-U.S. security alliance in the Asia-Pacific region. The event will take place at the Heritage Foundation’s Lehrman Auditorium, 214 Massachusetts Ave, NE, from 2:00 p.m. to 3:00 p.m. Please RSVP here or call (202) 675-1752.
Discussion of U.S. naval and air power in the Asia Pacific. The CSIS Military Strategy Forum will host a discussion July 25 titled "Air-Sea Battle and the Asia-Pacific Re-Balance” with Norton A. Schwartz, chief of staff of the U.S. Air Force, and Admiral Jonathan W. Greenert, chief of naval operations. The event will take place from 9:00 a.m. to 10:30 a.m. in CSIS’s B1 Conference Room. For more information, contact MilitaryStrategyForum@csis.org.
Talk at CSIS on Hillary Clinton’s economic legacy. The CSIS Simon Chair in Political Economy will host an Economic Statecraft Series event July 25 on Secretary of State Hillary Clinton’s economic legacy. The event will feature Jake Sullivan, director of policy planning at the State Department. CSIS Simon Chair Matthew Goodman will moderate. The event will take place from 2:00 p.m. to 3:00 p.m. in CSIS’s B1 Conference Room. E-mail firstname.lastname@example.org to RSVP.
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