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Southeast AsiaProgram

Volume II | Issue No. 14 | August 17, 2011

Southeast Asia from the Corner of 18th & K Streets

Congress Must Ratify Trade Deals Soonestmurray hiebert

August 17, 2011

Inside This Issue

the week that was

looking ahead Murray Hiebert is senior fellow and deputy director of the Southeast Asia Program at the Center for Strategic and International Studies in Washington, D.C.

Inside This Issue

the week that was

• ASEANeconomicministersmeetinIndonesia

• Chinaannouncesfirstaircraftcarrier

• PrimeMinisterDung’snewcabinet

looking ahead

• BanyanTreeLeadershipForumfeaturingSriMulyaniIndrawati

• PIFtobeheldinAuckland

• AUSMINtobeheldinSanFranciscoonSeptember15

InAsia,particularlySoutheastAsia,aforward-deployedtradepolicyisacoreelementofarobustforeignpolicy.AssessmentsofU.S.powerandtheUnitedStates’commitmenttotheregionneedspeedyapprovalofthefreetradeagreements(FTAs)withSouthKorea,Columbia,andPanamawhenCongressreconvenesinSeptember.Thisnotonlywouldhelpcreatemomentumforeconomicrecoveryandmorehigh-qualityAmericanjobsathome,butcouldbethefirststepinreversingthewidespreadperceptioninASEANthattheUnitedStatesisfallingbehinditscompetitorsintradeandinvestmentintheregion.

Onpoliticalandsecurityrelations,SoutheastAsiangovernmentsgenerallygivetheUnitedStateshighmarksforitseffortstoboosttieswiththeregionduringthepastfewyears.SeveralAsiancountries,includingIndonesia,wereontheitineraryofSecretaryofStateHillaryClinton’sfirsttripoverseasandshehasencouragedASEANwithherforward-leaningLowerMekongInitiativeandcommentsaboutprotectingthefreedomofnavigationinthedisputedSouthChinaSea.

PresidentBarackObamahashadtwosummitswithhisASEANcounterparts,andWashingtonhasaccededtoASEAN’sTreatyofAmity,joinedtheEastAsiaSummit(EAS),whichhasASEANatitscore,andsentanambassadortoASEANbasedinJakarta.

Butontradeandinvestment,theUnitedStatesiscedingtoomuchleadershiptoChina,Japan,Korea,andIndia,accordingtoseveral


SoutheastAsiafromtheCornerof18th&KStreets August17,2011 | 2

Congress Must Ratify Trade Deals Soonest (continued)

SoutheastAsianleaders;thatiswhatthoseleaderstoldadelegationofcommissionersadvisingCSISonrelationswithASEANwhovisitedtheregioninJuly.TheASEANleaderssaidtheUnitedStatesneedstostepupitscommercialengagementwiththeregiontoprevent“alinedownthemiddleofthePacific”thatcouldundercutanarrativeofvigorousU.S.engagementandhobblethelong-termeconomicroleofU.S.corporations.

ItiscriticalforCongresstopassthethreeexistingFTAsinSeptember.Theseagreementswereessentiallycompletedmorethanthreeyearsago.CongressmustacttosignalthattheUnitedStatesintendstoremainfullyengagedgloballyontradeandinvestmentaheadoffourcriticalsummitsinwhichthepresidentwillparticipateinNovember.WithoutthoseFTAdealsinhand,theU.S.commitmenttotradewillbeseverelyquestionedwhenObamaattendstheG20summitinCannes,hoststheAsiaPacificEconomicCooperation(APEC)leadersinHawaii,andparticipatesinhisfirstEASandthirdASEANleaders’summitinBali.

Acontinuedcongressionalstalemateoverthetradeagreementswillalsohamperseriousprogressonthecutting-edgeTrans-PacificPartnership(TPP)agreementontradeliberalization,whichincludesfourASEANcountries(Brunei,Malaysia,Singapore,Vietnam),theUnitedStates,andfourotherpartnersandwillallowotherAsiancountriestojoinovertime.OfficialsofthecountriesinvolvedintheagreementsaythelackofprogressontheexistingagreementsinWashingtonundercutsthemarket-openingoffersU.S.negotiatorsbringtothetableoutofconcernthatthesecouldalienateaconstituencyinCongressneededtoensuresupportofthreeFTAsunderconsideration.

Tobesure,U.S.tradewithandinvestmentinASEANremainsimpressive.In2010,ASEANrankedastheUnitedStates’fifth-largesttradingpartnerwithtwo-waytradereaching$178billion,up132percentoverthepreviousdecade.WithlessthanhalfofChina’spopulation,ASEANmanagedtoattractalmostthesamevolumeofU.S.exports,whichareconservativelyestimatedtosustainabout269,000relativelyhigh-payingAmericanjobs.Further,U.S.foreigndirectinvestmentstockinASEANreached$153.3billionin2008(thelastyearforwhichcumulativefiguresareavailable),$74.1billionmorethantoJapanand$107.6billionmorethantoChina.

Despitethisstrongfoundation,U.S.tradeandinvestmentcouldhavebeenevenhardier.Overthepasttwodecades,theAmericanshareofAsia’sinternationaltradehasdeclinedby9percent.Inpartthisisduetothefactthatproductionsupplychainsforelectronicshave



Congress Must Ratify Trade Deals Soonest (continued)

mushroomedinAsiainrecentyearsasASEAN’smoredevelopedeconomieshaveprovidedcomponentstoassemblyplantsinChina.ThisphenomenonhasbeenstimulatedbytheAsianeconomicintegrationfueledbytheexplosionofFTAsbetweenAsiancountries—fromamere6to70—inthepast15years.TheUnitedStates,meanwhile,hasonlytwoFTAsintheregion—withSingaporeandAustralia.

PassageofthethreeexistingFTAsandprogressontheTPParecriticalaheadofthefourNovembersummitsandthebeginningofwhatlookstobeadivisivepresidentialcampaignnextyear.ByapprovingtheFTAs,CongresswillgiveTPPnegotiatorsaboostsothattheycantrytodeliverthebroadoutlinesofanambitiousagreementbeforetheAPECsummitandtherebytakeanothersteptostrengthenU.S.exportstothedynamicAsia-Pacificmarkets.

CongresshadbeenexpectedtopassthetradedealsinearlyAugustbeforeitleftWashingtonforarecess,buttheseplanswerederailedbymonthsofbrinksmanshipintheshowdownoverraisingthegovernment’sdebtceiling.Inrecentweeks,congressionalleadershavesaidtheyreachedabipartisanagreementthatwillallowthemtorenewfundingforajob-retrainingprogramandpassthethreetradeagreementswhentheyreturntoWashington.

IftheUnitedStateshopestocontinuetobeamajorpowerinthePacific,CongressandtheWhiteHouseneedtoworktogethertoinkthethreeexistingagreementsquicklyandmovetosubstantiallycompletetheTPPoverthenextfewmonths.Thesedealswillopenmarkets,createmorehigh-payingjobs,andhelpconvinceASEANthattheUnitedStatesiscompetingintheregionnotonlypoliticallyandstrategically,butcommerciallyaswell.

The Week That Was


note to our readers: Pacific Partners Newsletter forthcoming end of august

FollowingCSIS’sannouncementofitsnewPacificPartnersInitiative,newsaboutAustralia,NewZealand,andthePacificIslandcountrieswillbereportedinournewPacific Partnersnewsletter.TheinauguraleditionwillbepublishedattheendofAugust.ForthosewishingtotrackPacificpolicyissuesandtrendsonaregularbasis,pleasejoinCSIS’sPacificPartnersFacebookhere andfollowusonTwitter@CSISPacPartners.

ASEAN

• ASEANeconomicministersmeetinIndonesia.The43rdASEANEconomicMinistersmeetingswereheldinManado,Indonesia,August10–14.Theministersdiscussedtheircountries’progressonachievingeconomicintegrationby2015undertheASEANEconomicCommunityblueprintandtheASEANFrameworkAgreementonServices(AFAS),whichaimstoremoveobstaclestoservicesindustriesintheregion.Theministersagreedthattheglobalfinancialturmoilcoupledwithrisingfoodandcommoditypricesposedchallengestoeconomicgrowththisyear.Theyprojectedregionalincreasesof5.7percentto6.4percentin2011,downfrom7.5percentlastyear.

Theministersmetwiththeirforeigndialoguepartners,includingChina,Japan,Australia,andtheUnitedStates,onthemarginsoftheASEANmeeting.WithDeputyU.S.TradeRepresentativeDemitriosMarantis,theministersdiscussedtheU.S.-ASEANTradeandInvestmentFrameworkAgreementandwaystostrengthentradeandinvestmentrelationswiththeUnitedStates.WithChina,theASEANministersagreedtoutilizeabilateralcurrencyswaparrangementtofacilitatetheuseofChineseandASEANcurrenciesfortrading.

• CSIS’sU.S.-ASEANStrategyCommissionvisitsSingaporeandPhilippines.FivecommissionersofCSIS’sU.S.-ASEANStrategyCommission,ledbyMaurice(“Hank”)Greenberg,visitedSingaporeonJuly15–16,andsixmembersvisitedManilaJuly17–19.TheobjectiveofthevisitwastoexplorewithSoutheastAsianleaderstheirideasandrecommendationsfordeepeningU.S.strategicengagementwithSoutheast Asia.

InSingapore,thecommissionersmetPrimeMinisterLeeHsienLoongandLeeKuanYewaswellasadeputyprimeministerandtheministers

Indonesia’s trade minister Mari Pangestu, who chaired the ASEAN Economic Ministers Meeting in Manado, Indonesia. http://www.flickr.com/photos/worldeconomicforum/5822985833/

http://http://www.facebook.com/csispacificpartners

CSISPacPartners

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offoreignaffairsanddefense.InManila,thedelegationhadmeetingswithPresidentBenignoAquino,thevicepresident,andthesecretariesoffinance,trade,transportandcommunications,anddefense.

TheCSISCommissionwillprovideideastoU.S.policymakersintheadministrationandCongressaheadofaseriesofimportantmeetingsinNovember,includingtheU.S.-hostedAPECLeaders’Summit,thefirstEastAsiaSummittobeattendedbyaU.S.president,andthethirdU.S.-ASEANLeaders’Summit.

Global Equity Markets Volatility

• SoutheastAsianstockmarketsvolatileduetoEurope,U.S.crises.SoutheastAsianstockmarketssharedinthefluctuationsoftheglobalmarketintheweekfollowingtheUnitedStates’August5creditratingdowngradeandamidsttheEurozone’scontinuingdebtcrisis.AsianmarketsralliedonAugust12,however,aftertheU.S.Treasuryannouncedinterestrateswillremainclosetozero,andtheyrosefurtheronAugust15amidtheannouncementofbetter-than-expectedGDPgrowthinJapanandretailsalesintheUnitedStates,aswellascautiousoptimismaboutAugust16talksbetweenFranceandGermanytotackleEurope’sdebtcrisis.

People on the Move

• U.S.SenateconfirmedDavidShearandDerekMitchell.TheSenateconfirmedDavidShearasthenewU.S.ambassadortoVietnamonAugust2.SenatorsMarcoRubioandMaryLandrieuwithdrewtheirholdsontheconfirmationafterShearlaidouthisplanstoexpeditethecasesof16U.S.familieswhoseadoptionsofVietnamesechildrenhanginlimbo.DerekMitchellwasalsoconfirmedasthefirstU.S.specialenvoytoBurma.Theposition,whichholdsarankequivalenttoambassador,hadbeenvacantsinceitscreationbytheJADEActsponsoredbythelatecongressmanTomLantos(DemocratofCalifornia)in2008.

• PentagonappointsnewAsiateam.ReportsindicatethatPeterLavoy,aSouthAsiaexpertandformerPentagonandNationalSecurityCouncilofficial,willsucceedDerekMitchellasprincipaldeputyassistantsecretaryforEastAsiaandthePacificattheDepartmentofDefense.SourcesconfirmtheWhiteHousewillnameformernationalsecurityadvisortoPresidentBarackObamaMarkLippertasthenomineeforassistantsecretaryforEastAsiaandthePacific,fillingapostvacatedbyChipGregsoninMaythisyear.LippertwouldneedtobeconfirmedbytheSenate.

Members of the CSIS U.S.-ASEAN Strategy Commission meet with Philippine president Benigno Aquino and other officials at Malacanang on July 19. Photo courtesy of Philippines delegation.



• NSCandStatenamenewofficials.ColinWillettreplacedDesmondWaltonasdirectorforSoutheastAsiaattheNationalSecurityCouncilinJune.Ms.Willetthasanintelligencebackground.Mr.WaltonwillmovetotheU.S.EmbassyinThailandandbeassociatedwiththeJointUnitedStatesMilitaryAdvisoryGroup(JUSMAG).

TheStateDepartment’sJimLoiwaspromotedtodeputyassistantsecretaryforAustralia,NewZealand,andthePacificIslandsinJuly.HewasformerlyaspecialassistanttoAssistantSecretaryofStateforEastAsiaandthePacificKurtCampbell.Loiwillcoordinatethelargest-everU.S.delegationtothePacificIslandsForum(PIF)inAucklandSeptember6–8,2011.DeputySecretaryofStateThomasNideswillleadtheU.S.delegation.

Thailand

• YingluckShinawatraannouncesnewcabinet.YingluckShinawatra,thesisterofoustedPrimeMinisterThaksinShinawatra,formallybecameThailand’sfirstfemalepremieronAugust8.Yingluckannouncedanew35-membercabinetlineupinwhichherPueaThaiPartygot29positionswhilecoalitionpartiesgot4posts.Theremainingtwopositionswenttooutsiders.Noneoftheministerscomefromthe“RedShirt”movement,whosesupportduringthecampaignwascriticalforYingluck’selection.

CSISsenioradviserErnieBowerandThailandresearcherRizalSiddikanalyzedthenewcabinetlineupandoutlinedissuesitwillneedtomanage.TheseincludethepoliticalcrisisthatcouldbecreatedwhenandifThaksinattemptstoreturntoThailand,thehealthoftheking,judicialandconstitutionalchallengesbyestablishmentpoliticalforces,themilitary’snextmoves,andactionsbyhard-line“YellowShirts”opposedtoYingluck’sgovernment.ReadBowerandSiddik’s“CriticalQuestions”here.

• Thailand’snewfinanceministertopushpopulistpolicies.FinanceMinisterThirachaiPhuvanatnaranubalasaidthathewillpushaheadwiththegovernment’spopulistpolicies,despitewarningsthattheywillcauseinflation.Hearguedthatraisingtheminimumwagefromapproximately$7to$10adaywillincreasedomesticdemandanddecreaseThailand’srelianceonexports.Healsoclaimedthatanyresultinginflationwouldbetemporary.Payingforthosepolicieswhilebalancingthebudgetwillbeachallengefortheneweconomicteam.

• GermanyreleasesThaiprince’simpoundedjet.GermanauthoritiesreleasedCrownPrinceVajiralongkorn’sjetaftertheThaigovernment

The Throne Hall in Bangkok. King Bhumibol officially appointed Yingluck Shinawatra prime minister. http://www.flickr.com/photos/pnp/1705431760/

http://csis.org/publication/thailands-new-government

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issueda$54millionbankguarantee.GermanyseizedtheplaneduetoadisputebetweentheThaigovernmentandaGermanconstructioncompanythataccusedthegovernmentofnotpaying$42.4millionforaroadconstructionprojectmorethan20yearsago.

Philippines

• AquinopromisespeacewithMILFrebelsby2016.AtasecretmeetinginTokyoonAugust4,PresidentBenignoAquinoandMoroIslamicLiberationFront(MILF)chairAlHajMuradIbrahimpromisedtoimplementapeaceagreementbefore2016.ThetalksrepresentedthefirsttimeaPhilippinepresidenthasmetwiththeMILFchairsincenegotiationsbegan14yearsago.MILF,whichhadformerlycalledforanindependentMuslimstateinthesouthernPhilippines,saysithasgivenupitsplanforsecessionfromthePhilippines.

• GloriaandMikeArroyoplacedonimmigrationwatchlist.FormerpresidentGloriaArroyoandhusbandMiguel“Mike”ArroyohavebeenputonanimmigrationwatchlistpendingcorruptionchargessurroundinghelicoptersalestothePhilippinepolice.MikeArroyoallegedlysoldfivehelicopterstothepoliceinviolationofanordertopurchaseonlynewunits.ThecoupleisrequiredtonotifytheDepartmentofJusticeeverytimetheyleavethecountry;however,thebanmaybetemporarilyliftedinorderforMrs.ArroyotoundergospinalsurgeryoutsidethePhilippines.

• U.S.SenatefilesresolutionurgingcontinuedsupportofthePhilippines.Incelebrationofthe60thanniversaryoftheU.S.-PhilippinesMutualDefenseTreaty,SenatorsRichardLugar,JohnKerry,andJamesInhofeonAugust2sponsoredaresolutionreaffirmingthePhilippines’importanceasoneoftheUnitedStates’majorpartnersinAsia.Theresolution,whichwasreferredtotheCommitteeonForeignRelations,callsforenhancingthebilateralrelationshipintheareasofmaritimesecurity,communications,economics,andculturalexchange.Thefulltextoftheresolutionisavailablehere.

Burma

• AungSanSuuKyicommemorates1988uprisingandbeginstourofcountry.OppositionleaderAungSanSuuKyitookpartinaceremonyataRangoonmonasteryonAugust8tocommemoratethe23rdanniversaryofthe1988uprisingagainsttheBurmesejunta.Duringtheceremony,SuuKyivoicedoppositiontoBurma’snominallyciviliangovernmentandurged

A protest marking the 1988 Burmese uprising. Aung San Suu Kyi took part in a ceremony marking the 1988 uprising against the Burmese government. http://www.flickr.com/photos/totaloutnow/2772788906/

http://www.gpo.gov/fdsys/pkg/BILLS-112sres252is/pdf/BILLS-112sres252is.pdf

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unityamongoppositionforces.ShealsobeganatriptothecountrysidebyvisitingatownnorthofRangoononAugust14.Thegovernmentdidnotimmediatelyrespondtoeitherevent.WhenSuuKyiattemptedtotravelthroughthecountryafterherearlierreleasein2002,hermotorcadewasattackedandshewasplacedbackunderhousearrest.

• Womensenatorsdecryuseofrapeagainstethnicminorities.ThirteenmembersoftheSenateWomen’sCaucusonBurmasentalettertoSecretaryofStateHillaryClintononAugust10urgingtheadministrationtocondemntheBurmesearmy’suseofrapeasaweaponofwar.ThelettercitesfiguresfromtheKachinWomen’sOrganizationofThailandandtheShanWomen’sActionNetworkshowingongoinggovernment-sponsoredrapeofciviliansinethnicminorityvillages.ThesenatorsalsocalledfortheestablishmentofaninternationalCommissionofInquiry.

• BurmesegovernmentandNGOsdisagreeaboutdam’seffects.TheBurmesegovernmentsaidonAugust9thatthecontroversialMyitsonedamwillnotaffecttheflowoftheIrrawaddyRiverorthelivelihoodsofthosedownstream.VariousNGOsarguethatthedamwillsubmergeimportantsettlementsinthevicinity,especiallyamongtheKachinminority,andharmfishingandagriculturedownstream.TheKachinIndependenceArmy’sdeputymilitarychief,GunMaw,saidthattheKIAopposestheprojectbuthasnoneedtoattackitsinceongoingfightingintheareawilllikelyhaltconstruction.

• Burmaseekshelponforeignexchangereform.BurmeseofficialshaverequestedIMFhelptooverhaulthecountry’sforeignexchangesystem,localmediareportedonAugust8.Theofficialexchangerateissetat6kyatperdollar,butthecurrencytradesontheblackmarketat755perdollar.TheIMFannouncedthatateamwillbesenttoevaluatethesituationinOctober.OnAugust10,theUnitedStatessaidBurmawouldhavetoagreetoIMFconditionsbeforeanyhelpwouldbeprovided.

South China Sea

• Chinaannouncesfirstaircraftcarrier.ChinaannouncedonJuly27thatithadsuccessfullyrefittedaSoviet-eraaircraftcarrier.TheannouncementcameonlyafewweeksafterChinaformallyapprovednewguidelineswithmembersofASEANpromotingpeacefulresolutionofdisputesintheSouthChinaSea.Theguidelinesdonotincludeanybindingrules,butareseenasadiplomaticefforttodemonstratewillingnesstofurtherengageindiscussiononenforceableguidelines.ChineseDefense

The USS GeorgeWashington.Vietnamese officials were invited aboard as it transited the South China Sea on August 14. http://www.flickr.com/photos/us-pacific-command/5245274534/

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MinistryspokesmanGengYangshengdeniedanyconnectionbetweentheannouncementofthecarrierandtheterritorialdisputes,sayingthattherewouldbenochangeinChina’snationaldefensepolicy.Dayslater,onAugust14,VietnameseofficialsboardedtheUSSGeorge Washington,anAmericanaircraftcarriertransitingtheSouthChinaSea.

• AquinomeetsChina’sviceministerandreaffirmsChinavisit.OnAugust13,PresidentBenignoAquinoofthePhilippinesmetwithChina’sViceForeignMinisterLiuZhenmininManilaandreaffirmedhisplanstovisitChina.PlansforthevisitcomeamidindicationsthatChinawouldunveilafive-yeardevelopmentplanforthePhilippines,includingsignificantnewloansforinfrastructure.AquinoisexpectedtovisitBeijing,Shanghai,andXiamenfromAugust31toSeptember2.

• PeterDuttonspeaksatManilaconference.PeterDutton,whodirectstheChinaMaritimeStudiesInstituteattheU.S.NavalWarCollegeinProvidence,RhodeIsland,spokeinJulyataconferenceinManilaontheSouthChinaSea.HesharedhisinsightsonChina’sintentionsandthenewagreementonguidelinestomovetowardaCodeofConductforresolvingdisputesintheSouthChinaSeaina“DIALOG”interviewwithCSISsenioradviserErnieBower.ClickheretolistentoDutton’sviews.

Vietnam

• NationalAssembly’spowerstobereformed.Vietnam’snewNationalAssemblychairmanNguyenSinhHungtoldreportersonAugust7thatthelegislaturewillbereformedtogivelawmakersmoresupervisorypowersoverbothprovincialandcentralgovernmentdecisions.Hungsuggestedthatlawmakersmeetwithfellowcommitteemembersmonthlyinsteadofonlyatthelegislature’stwice-yearlysessions.

• PrimeMinisterDung’snewcabinet.PrimeMinisterNguyenTanDungannouncedhisnewcabinetlineupinthefirstweekofAugust.Thestreamlinedstructuresuggestedarenewedcommitmenttoefficiencyandbureaucraticreforms.CSISsenioradviserErnieBower’sanalysisofthenewministersandtheirimpactonVietnam’seconomicandforeignpolicycanbefoundonourAsiapolicyblogcalledcogitASIA,whichisexcerptedbelow.

http://csis.org/multimedia/video-what-stake-south-china-sea



Incumbent minister of defense General Phung Quang Thanh, 63, received the highest vote total in the National Assembly with a resounding 97.4 percent. Support for General Thanh underlines an institutional deference to the armed forces and a national resolve to take a strong stand on sovereignty issues in disputes with China in the South China Sea. Advancing defense and security ties with the Association of Southeast Asian Nations (ASEAN) and enhancing those linkages with the United States will be priorities. Last week Vietnam announced groundbreaking on a U.S. naval research facility, the first new American military facility in Vietnam since the war.

Continue reading this post on cogitASIA…

Vietnam’s Cabinet: Three Key Ministers Reveal Policy DirectionsBy Ernie Bower

A look at three key ministers elected by the Vietnamese National Assembly last week—Phung Quang Thanh at Defense, Vuong Dinh Hue at Finance, and Pham Binh Minh at Foreign Affairs—reveals the pillars of Vietnam’s core policies going forward.

• Surginggoldpricescausedongdepreciation.GoldpricesinVietnamclimbed10percentinthefirsttwoweeksofAugust,causingthedongtodepreciateby0.3percentto20,802tothedollarbyAugust9.Inflationcontinuedtoaccelerate,reaching22.16percentinJuly.NewcentralbankgovernorNguyenVanBinhpledgedonAugust4tomaintainthegovernment’stightmonetarypolicytocurbinflation.

• CatholicsinVinhdemonstrateagainstabuses.Morethan5,000CatholicsmarchedthroughthecityofVinhonAugust7toprotestcasesofallegedmistreatmentbylocalauthorities.TheprotestorsdenouncedadecisiononJuly27tobuildamemorialparkonlandseizedfromtheCauRamparishduringtheVietnamWar,ratherthanreturnittothechurch.Demonstratorsalsoprotestedthearrest,withoutawarrant,ofeightcollegestudentsandlaypeoplebetweenJuly30andAugust3.

http://http://cogitasia.com/vietnams-cabinet-three-key-ministers-reveal-policy-directions/



Malaysia

• Anwartrialopeningdelayedforsecondtime.MalaysianoppositionleaderAnwarIbrahim’ssodomytrialissetforAugust22afterbeingpostponedforasecondtimeonAugust15.Anwar’sco-counselrequestedthepostponementinordertogivehisdefenseteamtimetointerviewsixremainingwitnesses.TheteamattemptedtoquestionPrimeMinisterNajibRazakandhiswifeonAugust12aspotentialwitnesses,butthecouplerefusedtotestify.

• AirAsiaandMalaysiaAirlinesagreetoshareswapagreement.AirAsia, a Malaysianlow-costairline,willtakea20percentshareofMalaysiaAirlines(MAS),whileKhazanahNasional,Malaysia’sstateinvestmentarm,whichowns70percentofMAS,willtakea10percentstakeinAirAsia.Undertheagreement,MASwillfocusonthepremiummarketandletAirAsiacontrollow-costroutes.AnalystsexpectthedealtoaidMAS,whichhasstruggledtomakeprofits,andtoallowAirAsiaaccesstointernationalroutes.

• NajibcomparesBersih2.0rallytoUKriots.PrimeMinisterNajibRazakonAugust12justifiedhisgovernment’scrackdownduringtheJuly9Bersih2.0RallybycomparingitwiththeUKgovernment’sactionsagainstLondonrioters.Hesaidthattherewerenoguaranteesstreetdemonstrationswouldremainpeacefulandregrettedthatorganizersdidnotacceptthegovernment’soffertoholdtherallyinastadium.NajibalsoannouncedonAugust15thattheparliamentwillestablishabipartisanelectoralreformcommittee,akeydemandofBersihprotestors,beforethenextgeneralelection.

Cambodia

• WorldBankstopsfundstoCambodiaoverlandevictions.OnAugust9,theWorldBankhaltedloanstoCambodiauntilthegovernmenthelpstheresidentsofanareainPhnomPenhwhoarefacingeviction.TheareaisthesiteofaluxuryrealestateprojectledbyChina’sInnerMongoliaErdosHongjunInvestmentCorp.LandownershipisamajorprobleminCambodia,aslegaldocumentsweredestroyedundertheKhmerRougeregime.

• ThailandandCambodiaagreetotalkontroopwithdrawalfromdisputedtemple.ThailandandCambodiaagreedtoholdtalksdiscussingtroopwithdrawalsfromtheareaaroundthedisputedPreahVihearTemple.BothsideswillattendaRegionalBorderCommitteemeetingonAugust23–24inThailand’sNakhonRatchasimaprovince.Thai-Cambodiarelationshave

An MAS plane at Kinabalu International Airport. MAS and AirAsia recently agreed to a share swap. http://www.flickr.com/photos/thienzieyung/2517798754/

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improvedsincethePueaThaiPartywontheelectionslastmonth.ThaksinShinawatra,brotherofPrimeMinisterYingluckShinawatraofThailand,isaneconomicadvisertoPrimeMinisterHunSenofCambodia.

• CambodiaadvisedtostopsendingmaidstoMalaysia.Tenagita,aMalaysianworkers’rightsgroup,urgedCambodiatostopsendingmaidstoMalaysiaduetorisingnumbersofabusecases.ACambodianmaidwasrecentlyfounddeadinMalaysia,andMalaysianpolicerescuedanotherallegedlyabusedmaidlastmonth.Tenagitasaidthattherearemorethan50,000CambodianmaidsinMalaysia,manyofwhomarrivedafterIndonesiastoppedsendingmaidsin2009duetoareportedpatternofabuses.

Singapore

• PresidentialelectionssetforlateAugust.Singapore’spresidentialelectionsaresetforAugust27.Theincumbent,S.R.Nathan,willnotstandforreelection.Severalcandidates,includingformerDeputyPrimeMinisterTonyTanandformerPeople’sActionParty(PAP)MemberofParliamentTanChengBok,havedeclaredtheirintentiontorun.Thepollswillbethefirstsince1993thatarecontested.Intheprevioustwoelections,Nathanranunopposed.

Brunei

• MinisterofForeignAffairsLimJockSengvisitsWashington.OnAugust5,Brunei’ssecondministerofforeignaffairsandtrade,PehinLimJockSeng,visitedWashington,wherehemetwithSecretaryofStateHillaryClinton.TheministerwasaccompaniedbyMinisterofEnergyPehinMuhammadYasminUmar.ThevisitfocusedonBrunei-U.S.cooperation,particularlyintheenergysector.Seethefullstatementhere.

• Bruneienactsnewanti-terrorlaw.OnAugust1,theAttorneyGeneral’sChamberintroducedtheAnti-TerrorismOrder(ATO)2011,whichcoversgapsinBrunei’sexistinglawsandenhancessanctionsforterrorism-relatedoffenses,whichinternationalobserversearlierhaddeemed“toolow.”Theactpunishesperpetratorsofterroristactsaswellasmembershipin,financingof,andassistancetoterroristgroups.

Indonesia

• GraftsuspectNazaruddinarrestedinColombia.FormerDemocraticPartytreasurerandgraftsuspectMuhammadNazaruddinwasarrested

Fireworks marking Singapore’s national day. The city-state celebrated 46 years of independence on August 9. http://news.m3n4.com/wp-content/uploads/singapore-national-day1.jpg

http://www.state.gov/secretary/rm/2011/08/169787.htm

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inCartagena,Colombia,onAugust8.Nazaruddin,whohadbeenontherunsinceMay,facesaccusationsovergraftworthhundredsofthousandsofdollarsconcerningprojectstodowiththeSoutheastAsianGamesathletes’village.

• BankIndonesia’sresponsetoU.S.creditratingdowngrade.BankIndonesiapredictedthattheU.S.creditratingdowngradebyStandard&Poor’swouldhavelittleeffectonIndonesia.Thebank’sdeputygovernor,HartadiSarwono,saidthatIndonesia’seconomyremainedresilientasthebank“couldmanagethefluctuationswell.”Economistssaidthedowngradecouldbea“blessingindisguise”forIndonesiaasglobalinvestorswouldnowturntoinvestinginemergingcountries.

• ExxonsellingassetsinIndonesia.ExxonMobilCorp.willsellnaturalgasassetsinIndonesiathatareatthecenterofanIndonesianhuman-rightslawsuitagainstthecompany.TheassetsincludetheArunandNorthSumatraOffshorefields,bothoffthecoastofAceh.ThelawsuitisbeingbroughtbyagroupofAcehnesevillagerswhoallegethatIndonesiansoldiers,servingasExxon’ssecurityforces,wereliableforhumanrightsabusesagainstthemduring1999–2001.

Mekong Delta

• GreaterMekongcommerceministersdiscusseconomiccooperation.CommerceministersfromBurma,Cambodia,China,Laos,Thailand,andVietnammetinPhnomPenhonAugust4forthe17thMinisterialConferenceofthesixGreaterMekongSubregion(GMS)countries.TheconferenceaimedtofinalizethenewGMSStrategicFrameworkfor2012–2022beforesubmittingittotheirleadersforendorsementattheFourthGMSSummitinBurmainDecember.Theplanaimsforan“economiccorridor”linkingGMScountriesandinvestmentinurbanandruralareasalike.

Laos

• PresidentChoummalyvisitsVietnam.LaoPeople’sRevolutionaryPartygeneralsecretaryandstatepresidentChoummalySayasonemadeanofficialvisittoVietnamAugust8–10.Thetrip,Choummaly’sfirstabroadsinceLaos’sNationalAssemblyelectionsonApril30,cameattheinvitationofVietnam’sCommunistPartygeneralsecretaryNguyenPhuTrongandthecountry’snewpresident,TruongTanSang.Duringhisvisit,ChoummalypraisedVietnam’seconomicgrowthandrisinginfluenceintheregion,andreaffirmedthetwonations’“specialrelationship.”

The Bank of Indonesia building. The bank predicted that the Standard & Poor’s credit rating downgrade of the United States would have little effect on Indonesia. http://www.flickr.com/photos/superciliousness/125257887/

A market on the Mekong Delta in Vietnam. Commerce ministers from the Greater Mekong Subregion countries met in Phnom Penh on August 4. http://www.flickr.com/photos/jensaar/4906440193/

http://www.flickr.com/photos/superciliousness/125257887/

http://www.flickr.com/photos/superciliousness/125257887/

http://www.flickr.com/photos/jensaar/4906440193/

http://www.flickr.com/photos/jensaar/4906440193/



• LaosbuystwojetsoriginallybuiltforLibya.LaoAirlineshassignedaMemorandumofUnderstandingtobuytwoA320sfromAirbus.TheplaneswereoriginallyintendedforLibya’sAfriqiyahAirlines,whichsuspendedoperationsafterNATOestablishedano-flyzoneoverthecountryonMarch19.TheplaneswillprovidedirectflightsbetweenVientianeandSingaporestartingNovember1.ThegovernmenthopesthedirectflightswillreduceLaos’srelianceonThailandasatransitpointfortravelerstoandfromthecountry.

APEC

• APECreleasesInvestmentReportfor2010.OnAugust2,theAPECPolicySupportUnitreleasedareportonforeigndirectinvestment(FDI)trendsinAPEC.FDIflowsintoAPECeconomiesamountedto$627billion,anincreaseof32percentfrom2009.SeveralAPECeconomieshaveencouragedinvestmentliberalizationandfacilitation,whichwasthemainreasonbehindtherebound.Youcanreadthefullreporthere.

Afriqiyah Airways plane. Lao Airlines will buy two planes from Airbus originally meant for Libya. http://www.flickr.com/photos/mauro_orlando/4209270313/

http://www.apec.org/en/Press/News-Releases/2011/~/media/Files/AboutUs/PolicySupportUnit/PSU_Work-Recent-FDI-Trends-APEC-Region.ashx

http://www.flickr.com/photos/mauro_orlando/4209270313/

http://www.flickr.com/photos/mauro_orlando/4209270313/

Looking Ahead


• BanyanTreeLeadershipForumfeaturingSriMulyaniIndrawati.OnSeptember30,CSISwillhostWorldBankmanagingdirectorSriMulyaniIndrawatiforapolicyspeechontrendsingovernance,finance,andtradeinSoutheastAsia.SriMulyani,oneofthreemanagingdirectorsattheWorldBank,wasformerlyIndonesia’sfinanceminister.ThespeechispartoftheBanyanTreeLeadershipForumseries.TheforumisthepremierWashingtonvenueforSoutheastAsianandU.S.leaderstosharetheirviewsonvitalissuesaffectingregionalandbilateralrelations.Pleasecontactsoutheastasiaprogram@csis.orgtofindoutmore.

• PIFtobeheldinAucklandonSeptember6–9.LeadersfromAustralia,NewZealand,and14PacificIslandcountrieswillmeetinAuckland,NewZealand,onSeptember6–9forthe42ndPacificIslandsForum(PIF)Leaders’Meeting.ThePIFprovidesasettingforleaderstodiscusspolitical,economic,anddevelopmentalchallengestotheregion.AmongthetopicsleadersareexpectedtoconsiderthisyearishowPacificIslandnationscandealwiththeuniquethreatposedbyclimatechange.

• AUSMINtobeheldinSanFranciscoonSeptember15.TheannualAustralia-UnitedStatesMinisterial(AUSMIN)willconveneinSanFranciscoonSeptember15.Thisyear’smeetingisofparticularsignificancebecauseitwillmarkthe60thanniversaryoftheANZUS(Australia,NewZealand,UnitedStates)Treaty.TheUnitedStatesisconsideringincreasingitsmilitarypresenceinAustraliandefensefacilities,andtheseplanscouldberevealedattheSanFranciscomeeting.

• APECSOMIIIandrelatedmeetingstobeheldinSanFrancisco.ThethirdAPECSeniorOfficialsMeeting(SOMIII)willbeheldinSanFranciscofromSeptember11toSeptember26.Themeetingswillinvolveworkinggroupandcommitteemeetings,public-privateforums,andahigh-levelmeetingoftransportandenergyministers.TheSOMmeetings,whicharethemainmeetingsofAPECasidefromtheAPECsummitinNovember,willbeattendedby1,000–1,500delegatesfromAPECmembereconomies.

• TheCloisterandSAISbooklaunchwithThantMyint-U.OnSeptember28,ThantMyint-U,aBurmesewriterandhistorian,willspeakataCloisterbriefingatCSIS.Thenextday,Thantwilllaunchhisnewbook,Where China Meets India: Burma and the New Crossroads of Asia,attheJohnsHopkinsSchoolofAdvancedInternationalStudies.ThebooklaunchwilltakeplaceattheBernstein-OffitBuilding,Room500,1717MassachusettsAve.,N.W.,Washington,D.C.,from5:30to7:30p.m.Furtherdetailswillbeavailablesoon.

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Thank you for your interest in U.S. policy in Southeast Asia and CSIS Southeast Asia. Join the conversation!

southeast asia from the corner of 18th & k streets CSIS Southeast Asia Program contributors:

Ernest Bower, Senior Adviser and Director Murray Hiebert, Senior Fellow and Deputy Director Lie Nathanael Santoso, Intern Scholar Kheng Swe Lim, Intern Scholar Greg Poling, Intern Scholar Rizal Siddik, Intern Scholar Alexander Vagg, Intern Scholar

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

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