Wedgwood IT Group

Volume V | Issue 7| April 3, 2014

Southeast Asia from Scott Circle

Inside This Issue

biweekly update

• Aid organizations, UN agencies attacked in Myanmar

• Thai Constitutional Court overturns February 2 election

• Philippine government signs historic peace deal with Moro separatists

looking ahead

• Discussion of bipartisanship in U.S. foreign policy

• Discussion on the South China Sea and Trans-Pacific Partnership

• Seminar on ASEAN centrality

The Philippines’ South China Sea Memorial: Sailing into the Windgregory poling

April 3, 2014

Gregory Poling is a fellow with the Sumitro Chair for Southeast Asia Studies at the Center for Strategic and International Studies in Washington, D.C.

Sumitro Chair for Southeast Asia Studies

1616 rhode island avenue nw, washington dc 20036 | t. 202.775.3211 | f. 202.775.3199 | www.csis.org

On March 30 the Philippines submitted a memorial detailing its arguments and evidence against China’s nine-dash line and other aspects of Beijing’s South China Sea claims to an arbitration tribunal at The Hague. The 10-volume, nearly 4,000-page document marks a bold step by Manila, and one that Beijing seems to have believed never would actually happen. The Philippines chose the right course. Now the international community must weigh in and convince China of that fact.

China has refused to take part in the case since it was first brought by the Philippines in January 2013. It has also exerted considerable pressure on Manila to abandon the arbitration proceedings. As the deadline for the memorial approached and pressure failed to alter the Philippine position, Beijing switched to the carrot. It reportedly offered Manila incentives to drop the case, including trade benefits and a mutual withdrawal of ships from Scarborough Shoal, which China occupied in April 2012. But the Philippines did not budge. An incident near a reef in the Spratly Islands on March 29 helps explain why.

Second Thomas Shoal is a submerged reef, part of which breaks the waterline at low tide. It lies on the Philippines’ presumed continental shelf but, like every feature within the nine-dash line, is claimed by China. The Philippine Navy intentionally grounded the BRP Sierra Madre on the reef

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The Philippines’ South China Sea Memorial: Sailing into the Wind (continued)


Southeast Asia from the Corner of 18th & K Streets November 9, 2011 | 2

Two Models for Integrating Asia: A Must Win for President Obama (continued)

Southeast Asia from Scott Circle April 3, 2014 | 2


in 1999 to garrison troops as a deterrent to further Chinese expansion in the area.

Every few months for 15 years, the Philippine Navy has sent fresh troops and supplies to Second Thomas Shoal. Last year, with memories of the Scarborough Shoal seizure still fresh, Chinese ships began regularly patrolling near Second Thomas and harassing Philippine ships that approached. It escalated these provocations in early March by running off a vessel carrying supplies and, allegedly, construction materials, for the Filipino garrison. Manila responded by dropping supplies to its troops from the air.

On March 29, the Philippines sent another ship, but this time it invited foreign press along to document the Chinese response. The resupply ship was harassed by a Chinese Coast Guard vessel that demanded it leave the area and repeatedly turned across

the smaller boat’s path, forcing it to veer away to avoid a collision—all while foreign journalists watched. Eventually the Philippine ship entered shallower waters and escaped, delivering long-overdue supplies and troops to replace the garrison at Second Thomas Shoal.

The incident underscored a lesson that the Philippines learned well after Scarborough Shoal: China has no intention of compromising on its claims, restricting them to the bounds of international law, or treating fellow claimants as equal parties to the disputes.

Despite frequent insistence from Beijing that its claims in the South China Sea are based on international law and encompass only the “islands and adjacent waters” within the nine-dash line, Chinese actions tell a different story. Second Thomas Shoal is not an island or even a rock. It is a low-tide elevation that is not subject to any independent territorial claim under the UN Convention on the Law of the Sea or customary international law. The shoal belongs to whomever has sovereignty over the continental shelf on which it rests—by all indications the Philippines.

The Peace Palace in The Hague. The Philippines has submitted its official memorial against China’s South China Sea claims to a tribunal meeting in the Permanent Court of Arbitration within the Peace Palace. http://www.flickr.com/photos/47873224@N06/8099889841/

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China has not restricted its underwater claims to the continental shelf of the Philippines. In January three Chinese ships patrolled James Shoal, a completely submerged feature on Malaysia’s continental shelf, and held a ceremony swearing to defend Chinese sovereignty over it. Where Beijing makes tenuous legal arguments for its claims to Scarborough Shoal and disputed islets in the Spratlys, it offers none for its claims to Second Thomas or James Shoal.

Such claims, along with increasingly aggressive tactics by Chinese maritime forces, have pushed more complacent nations closer to the Philippine position. Malaysian officials have grown increasingly vocal in meetings with ASEAN counterparts since the Chinese patrols at James Shoal. Even in Indonesia, which had previously tried to distance itself from the dispute, officials appear to be growing concerned. On March 12, an official with the office of the coordinating minister for political, legal, and security affairs acknowledged that the nine-dash line does in fact illegally overlap Indonesia’s exclusive economic zone north of the Natuna Islands. Foreign Minister Marty Natalegawa tempered that statement a week later, but reiterated that Indonesia considers the nine-dash line unacceptable. Officials in Jakarta seem to be recognizing that, if allowed, Beijing will stake claim to everything within the nine-dash line—islands, waters, and the seabed beneath.

Negotiations have failed so far to make much progress on managing, much less resolving, the South China Sea disputes. No other claimant has the military capabilities to resist determined Chinese aggression, the Philippines least of all. And the United States will not intervene militarily except in the case of an outright act of war. That leaves the Philippines only one recourse—the law. Manila is paying a cost for its case, but it has correctly determined that the cost of complacency would be higher.

Many of the Philippines’ neighbors, including Indonesia, Malaysia, and Vietnam, have vouched for Manila’s right to pursue legal action but have shied away from more forthright support for the arbitration case. Extraregional players have been more vocal, especially Japan and the United States. The U.S. government grew more explicit in its criticism of the nine-dash line this year, with Assistant Secretary of State Daniel Russel calling it illegal during testimony before Congress. On the same day that the Philippines filed its memorial, the State Department issued a press statement supporting the effort for “greater legal certainty and compliance with the international law of the sea.”

Assistant Secretary of State for East Asia and the Pacific Daniel Russel. In recent congressional testimony, Russel declared China’s nine-dash line illegal—the first time a U.S. official has publicly done so. http://www.flickr.com/photos/chathamhouse/11949517774/

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Southeast Asia from the Corner of 18th & K Streets November 9, 2011 | 4

Two Models for Integrating Asia: A Must Win for President Obama (continued)



U.S. support for the Philippines’ case against China is about more than supporting a treaty ally or curbing the atavistic tendencies of a rising power. It is about defending an international system of law and norms. Nearly every nation, including China, is a signatory to the Law of the Sea. Even those that have not ratified it, including the United States, operate under its rules. And the most fundamental of those rules have been recognized by the International Court of Justice and others as customary international law.

Nations large and small have restricted their maritime claims to the bounds of international law, even in those areas where they consider themselves to have a special prerogative, such as the Caribbean for the United States and the Arctic for Russia. If China, by virtue of size or force of arms, is free to ignore that framework, then the entire edifice risks being discredited. And no nation, China included, would find its security and prosperity better served by a return to the pre-twentieth-century system of might-makes-right relations.

Whether the arbitration tribunal will find that it has jurisdiction in the Philippines’ case is uncertain. But if it does, the judges will rule at least partially in the Philippines’ favor. That ruling will not restrict China’s claims to above-water features in the nine-dash line, but it will likely invalidate its claims, such as to Second Thomas Shoal, that clearly violate customary international law.

Beijing maintains that it will not abide by any such ruling. The Philippines can only hope to protect its interests by pursuing the case anyway. That leaves the international community, and the United States in particular, to convince China that preserving the international rule of law and playing the part of a responsible power will serve its interests better than will thumbing its nose at the community of nations. ▪

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Biweekly Update


myanmar

• 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.

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Electrical wires in Yangon. Myanmar’s parliament is increasing electricity prices to help spur upgrades and expansion of the country’s outdated electrical system. http://www.flickr.com/photos/sugarmeloncom/5142496633/

• 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.

thailand

• 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.

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Jatuporn Prompan, a hardline government supporter, was recently appointed as leader of the pro-government “red-shirts.” http://www.flickr.com/photos/52391993@N04/5341654387

• 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

• 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

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U.S. and Indonesian navy ships during a joint drill in 2011. Ships from 17 nations took part in the biannual Exercise Komodo near Indonesia’s Natuna Islands. http://www.flickr.com/photos/56594044@N06/6376942715

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.

philippines

• 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.

Ninoy Aquino International Airport, which services Manila, is regularly ranked as one of the worst international airports in the world. San Miguel Corporation plans to build a new $10 billion airport outside Manila to remedy that situation. http://www.flickr.com/photos/76454377@N00/189512202/

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The USS Pinckney assists with the search for Malaysia Airlines flight 370. The Malaysian government has declared that the plane crashed in the Indian Ocean, but has vowed to continue the search. https://www.flickr.com/photos/56594044@N06/13061624825/

• 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

• 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 voiced 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.

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Railway workers in Quang Ngai province in Vietnam, where railway officials are embroiled in a corruption scandal with a Japanese railway contractor. http://www.flickr.com/photos/68515440@N07/9789273185

vietnam

• 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

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A Vietnamese fisherman inspects the damage done to his ship when it was set on fire by a flare from a Chinese Coast Guard vessel in the Paracel Islands in March 2013. Vietnam has demanded that China compensate Vietnamese fishermen who have been attacked in the Paracels. http://www.flickr.com/photos/94141246@N05/8656044457/

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.

cambodia

• 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

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ANZ Royal Bank advertisements on water towers in Siem Reap, Cambodia. ANZ wants to exit its joint venture in Cambodia and instead establish a wholly owned business there. http://www.flickr.com/photos/30484029@N00/855331805

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.

asean

• 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.

The ASEAN People’s Forum in Thailand in 2009. Participants at the 2014 forum in Myanmar called on the government to lead the way on sustainable development, democratization, and peace. http://www.flickr.com/photos/klaikong/3294251985/in/set-72157614101193465

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singapore

• 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.

brunei

• 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

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AFL-CIO headquarters in Washington, where the labor union is working closely with members of Congress on a Trade Promotion Authority bill. http://www.flickr.com/photos/72958083@N00/4335736992

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.

laos

• 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 National 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.

timor-leste

• Timor-Leste preselects competitors for large port project. Timor-Leste’s government announced in mid-March that it had preselected companies from Dubai, France, the Philippines, Portugal, and the United Kingdom to compete for a contract to build and operate the Tibar Port in Dili. The port will be constructed through a public-private partnership and is expected to cost $300–$400 million. The winning bid will be announced in May. Authorities expect the port to significantly boost the local economy and employment if opened by 2017 as planned. ▪

Port construction in Dili. The Timor government has preselected several foreign companies to compete for a contract to construct and operate the planned $300–$400 million Tibar Port project. http://commons.wikimedia.org/wiki/File:Port_construction_in_Hera,_Dili,_Timor_leste_2008.jpg

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http://commons.wikimedia.org/wiki/File:Port_construction_in_Hera,_Dili,_Timor_leste_2008.jpg



Looking Ahead


• Lecture on East Germany’s role in the Vietnam War. The Elliott School of International Affairs at George Washington University will host the Wilson Center’s Martin Grossheim on April 8 for a lecture on the influence of East Germany’s Ministry for State Security on Vietnam’s security apparatus during the Vietnam War. The talk will focus on the tensions between solidarity and distrust between the two communist countries. The event will take place from 12:30 p.m. to 1:45 p.m. at 1957 E St., NW, Room 602. To RSVP, please click here.

• Discussion of bipartisanship in U.S. foreign policy. The Wilson Center will host a roundtable discussion on April 9 to explore the successes and failures of efforts at bipartisan foreign policy making in Congress. American University’s Jordan Tama, the Johns Hopkins School of Advanced International Studies’ Charles Stevenson, and the Wilson Center’s Donald Wolfensberger will take part. The event will take place from 4:00 p.m. to 5:30 p.m. at the Wilson Center’s Fifth Floor Conference Room, Ronald Reagan Building, 1300 Pennsylvania Ave., NW. For more information and to RSVP, please click here.

• Discussion on the South China Sea and Trans-Pacific Partnership. The Wilson Center will host a talk by Australian journalist Hamish McDonald on April 10 about likely changes to the status quo in the South China Sea disputes, the roles of the United States and China in Southeast Asia, and the domestic difficulties in pushing the Trans-Pacific Partnership forward. The event will be held from 4:00 p.m. to 5:30 p.m. at the Wilson Center, Ronald Reagan Building, 1300 Pennsylvania, Ave., NW. For more information and to RSVP, please click here.

• Seminar on ASEAN centrality. The East-West Center will host a publication launch from their Policy Studies series April 10 on the role of ASEAN centrality in Southeast Asian nations’ relations with external powers. Peter Petri and Michael Plummer, both of the East-West Center, will also discuss U.S.-ASEAN economic relationships and offer recommendations for individual ASEAN member states. The event will take place from 12:00 p.m. to 2:00 p.m. at the East-West Center, 1819 L St., NW. Please click here to RSVP.

• Conference on chemical, biological, radiological, and nuclear defense in the Asia Pacific. Banyan Analytics will host a daylong conference on April 14 to discuss regional capabilities for responding to chemical, biological, radiological, and nuclear threats and obstacles for capacity building in the Asia Pacific. The discussion will focus on case studies of previous disasters,

http://www.csis.org

http://docs.google.com/a/email.gwu.edu/spreadsheet/viewform?formkey=dFlPMGVnSmFQVlI4dmNSV0YzaHNqblE6MQ

http://www.wilsoncenter.org/event/foreign-policy-bipartisanship-alive-capitol-hill

http://www.wilsoncenter.org/event/assessing-the-rebalance-the-evolution-us-interests-asia

http://www.eastwestcenter.org/3dr



considerations for developing regional responses, industry perspectives on remediation, and planning. The event will take place from 8:30 a.m. to 4:30 p.m. at the Capital Hilton Congressional Room, 1001 16th St., NW. For more information, please click here.

• Australia and New Zealand Army Corps Day. The Embassy of Australia will host a dawn service, “gunfire breakfast,” and church memorial service on April 25 in honor of Australia and New Zealand Army Corps Day. The dawn service will take place from 5:45 a.m. to 6:15 a.m. at the Korean Veterans War Memorial, 900 Ohio Dr., SW. The “gunfire breakfast,” an ANZAC Day tradition that consists of coffee with rum, will be served from 7:00 a.m. to 9:00 a.m. at the Embassy of Australia, 1601 Massachusetts Ave., NW. The church service will be held from 10:30 a.m. to 11:30 a.m. at Washington National Cathedral, 3101 Wisconsin Ave., NW. Please click here for more information. ▪

http://www.csis.org

http://www.anser.org/Signature_Event-CBRNe-Remediation-Asia

http://www.usa.embassy.gov.au/files/whwh/ANZACDay-2014.pdf

This newsletter is published by the Sumitro Chair for Southeast Asia Studies at the Center for Strategic and International Studies (CSIS) in Washington, D.C., a private, tax-exempt institution focusing on international public policy issues. CSIS’s research is nonpartisan and nonproprietary. CSIS does not take specific policy positions; accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

© 2014 by the Center for Strategic and International Studies. All rights reserved.

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southeast asia from scott circle CSIS Sumitro Chair for Southeast Asia Studies contributors:

Ernest Z. Bower, Senior Adviser and Chair Murray Hiebert, Senior Fellow and Deputy Director Gregory Poling, Fellow Phuong Nguyen, Research Associate Brian Kraft, Researcher Kyle Springer, Researcher Kathryn Tinker, Researcher Courtney Weatherby, Researcher

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