CSIS: Southeast Asia from Scott Circle – Oct 1, 2015

Washington Debut: A Strategic Jokowi?

By Ernest Z. Bower (@BowerCSIS), Senior Adviser and Sumitro Chair for Southeast Asia Studies (@SoutheastAsiaDC), CSIS

October 1, 2015

Indonesian president Joko (Jokowi) Widodo will make his debut in Washington as president of the world’s fourth-largest country from October 26 to 28. Following recent trips to the United States by President Xi Jingping of China and Prime Minister Narendra Modi of India, the scene is set for Jokowi to seize the occasion to tell the world what Indonesia’s role will be and demonstrate his strategic thrust as a leader.

To achieve this goal, his trip will need to be thoughtfully planned and carefully executed. There is a compelling case for him to demonstrate vision and leadership, including conveying an understanding of the political and economic context for his visit.

The world needs an Indonesia with a sense that its time has come, and that it can play a significant role in the Asia-Pacific and global security, economic integration, and foreign policy. To ante up and get in the game, Indonesia can no longer afford to play games with its own economy. Instead, it must recognize that there is a foundational link between economics and security, particularly in Asia.

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Biweekly Update

  • Justice says Grace Poe is not natural-born citizen
  • FBI launches investigation into 1MDB
  • Singapore prime minister reshuffles cabinet
  • U.S. senators urge Navy to assert freedom of navigation

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Looking Ahead

  • Thai Speaker Series with Kavi Chongkkittavorn
  • Banyan Tree Leadership Forum with Antonio Carpio
  • A New Narrative on Hydropower Development in Southeast Asia

Read more…| Read Newsletter in PDF

Washington Debut: A Strategic Jokowi?

By Ernest Z. Bower (@BowerCSIS), Senior Adviser and Sumitro Chair for Southeast Asia Studies (@SoutheastAsiaDC), CSIS

October 1, 2015

Indonesian president Joko (Jokowi) Widodo will make his debut in Washington as president of the world’s fourth-largest country from October 26 to 28. Following recent trips to the United States by President Xi Jingping of China and Prime Minister Narendra Modi of India, the scene is set for Jokowi to seize the occasion to tell the world what Indonesia’s role will be and demonstrate his strategic thrust as a leader.

To achieve this goal, his trip will need to be thoughtfully planned and carefully executed. There is a compelling case for him to demonstrate vision and leadership, including conveying an understanding of the political and economic context for his visit.

The world needs an Indonesia with a sense that its time has come, and that it can play a significant role in the Asia-Pacific and global security, economic integration, and foreign policy. To ante up and get in the game, Indonesia can no longer afford to play games with its own economy. Instead, it must recognize that there is a foundational link between economics and security, particularly in Asia.

Indonesians deserve to be proud of their country’s incredible journey. Indonesia has come a long way since asserting its independence as World War II ended in 1945. Now Indonesia should rightly assert itself again. It should tell its story and define its future in ways that will be historic—if somewhat uncomfortable—for a nation that has long considered itself nonaligned and neutral in global affairs.

For Jokowi, the stakes are high, both domestically and internationally.

A year into his presidency, Jokowi needs his U.S. trip to redefine Jakarta’s strategic narrative. He will want to position himself as a statesman and visionary, in the same league with the leaders of the other largest countries in the world. To do so, he and his team will need to break away from the type of foreign trips he has done so far as leader of Indonesia. Jokowi’s visits to Japan, China, and Singapore earlier this year lacked a consistent strategic focus and were not backed up with real deliverables based on Indonesia’s long-term economic and national security objectives.

Jokowi has the ability to change this pattern. Doing so will help him politically at home and put Indonesia in the right place geopolitically and economically. He can use his stops in New York, Washington, and Silicon Valley to describe his vision for his country’s security and economic well-being.

Jokowi’s election, the first time an Indonesian president was chosen from outside traditional power structures, was expected to be transformational. To date, that has not been the case, and Jokowi’s public approval ratings have dropped to 40 percent from around 70 percent when he took office last October. The economy has slowed to a 4.7 percent growth rate, a significant drop from 6 percent growth when he assumed office.

Jokowi recognizes the need for economic stimulus and reform, but he has yet to find the right formula to unlock Indonesia’s massive potential. Despite his focus on attracting foreign direct investment, successive economic stimulus packages announced over the past month have missed the mark. This is because they are not comprehensive and do not address the core issues, including the need to substantially reduce the negative investment list that restricts foreign investors from certain sectors.

The world’s top investors want to be in Indonesia. They want to understand and align with Jokowi’s vision for building infrastructure, creating jobs, and fueling innovation. Leading U.S. companies are all looking for new growth in Asia outside of China, and Indonesia and India are obvious choices. However, Indonesia’s performance in attracting foreign direct investment has lagged behind its regional competitors. In 2014, foreign investment was only 2.3 percent of Indonesia’s gross domestic product, lagging behind neighboring Malaysia at 4.2 percent and Vietnam at 6 percent.

In preparation for his U.S. trip, Jokowi could send a strong message to U.S. investors by resolving a few high-profile cases, such as the case of jailed Chevron employees, and announce a major reduction in the negative investment list. He could also reduce barriers to foreign investment and cumbersome rules about local content requirements, paving the way for significant new investments in manufacturing in Indonesia.

Getting its economy right is critical if Indonesia wants to play the role of anchor of the Association of Southeast Asian Nations (ASEAN), and therefore the foundation for the emerging security and economic architecture across the Indo-Pacific region. Indonesia cannot assert itself properly if its economy is limping and suboptimal.

From the U.S. perspective, ASEAN cannot be strong without a strong Indonesia. If ASEAN is weak, the fulcrum for regional security and economic integration based on international law—as opposed to new ideas from Beijing for a Sinocentric economic and political order in Asia—will be undermined.

On the security front, Jokowi will likely be ready to talk about Indonesia’s new strategic paradigm with the United States. His security advisers are rightly worried about the threat of domestic terrorism, which stems from the radicalization of small parts of Indonesian society. Indonesia believes it has as many as 400 citizens fighting with the Islamic State (IS) in Syria and Iraq and more than 3,000 IS sympathizers, many of whom would like to go to the Middle East or wage war at home.

Recent bilateral defense discussions between the two countries were engaged and productive. Indonesia has a maritime consciousness that defines twenty-first -century geopolitics. It needs and wants U.S. help in enhancing its capacity and ability to protect its coastline from piracy and enhance its maritime domain awareness. Indonesians are deeply concerned about China’s perceived aggressive posture in the South China Sea and its new assertiveness in Indonesian waters, including the Lombok and Sunda Straits.

Jokowi will in turn find President Barack Obama interested in a new strategic modality for the two countries. This should come in the form of a new level of sustained strategic engagement and discussion of security and defense issues, underscored by better economic ties. The stage is set for augmenting the existing U.S.-Indonesia comprehensive partnership with a strategic dialogue, which could include a strong track-two component.

Jokowi’s inaugural visit to Washington is a historic opportunity for both countries. A thoughtful plan for this trip would link pre-trip policy moves in Jakarta to a trip narrative that describes Indonesia’s economic and security interests and how it wants to work with the United States and U.S. companies. Deeper and more meaningful relations with Washington will not be in lieu of enhancing Indonesia’s relations with other countries; in fact, Indonesia-U.S. ties would benefit from a more proactive Indonesian security and foreign policy regime.

Jokowi’s meetings with key members of the U.S. cabinet and Congress, private sector leaders, and policy thought leaders should have clear objectives that Indonesians can understand and appreciate. The trip should bring home new business, deeper economic engagement, enhanced security ties, and a strategic dialogue based on mutual respect, confidence, and a growing recognition of shared goals.

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Biweekly Update


U.S., Indonesia hold strategic dialogue, discuss Jokowi’s October visit. Minister of Foreign Affairs Retno Marsudi on September 21 met with Secretary of State John Kerry for the U.S.-Indonesia strategic dialogue and to lay the foundation for President Joko Widodo’s visit to the United States, expected in late October. Retno and Kerry discussed ways to strengthen the U.S.-Indonesia comprehensive partnership, including through cooperation in maritime security and trade and investment. They also discussed Indonesia’s role in promoting moderate Islam globally and its leadership role in ASEAN.

State-owned Pertamina accumulates $1 billion in losses this year. A spokesperson for Indonesia’s state-owned energy company Pertamina said on September 25 that the company’s fuel distribution unit has incurred over $1 billion in losses this year as a result of selling fuel below market prices. Pertamina said it had to bear the difference in costs since the government cut the majority of fuel subsidies earlier this year but still wants it to keep fuel prices artificially low. This raises concerns among economists that the government is backtracking on its policy of scrapping fuel subsidies.

ADB, World Bank to provide $4.2 billion to fund government deficit. The Finance Ministry on September 22 announced that Indonesia would take out $4.2 billion in multilateral loans from the Asian Development Bank (ADB), the World Bank, France’s Agence Française de Développement, and Germany’s KfW Development Bank to cover the government’s budget deficit. The government said it plans to seek foreign funds because the domestic market has been increasingly volatile. The ADB on September 22 lowered its 2015 growth forecast for Indonesia to 4.9 percent from its previous 5 percent.

Presidential approval now required for criminal investigations into legislators. The Constitutional Court on September 22 ruled that law enforcement officers will need to secure permission from the president before probing legislators in criminal investigations. The court also ruled as unconstitutional a previous law that required investigators to secure approval from the House of Representatives’ Ethics Council before investigating legislators.

Government plans seven new light-rail transit systems. Cabinet Secretary Pramono Anung on September 23 announced government plans to build light-rail transit networks in seven major cities across Indonesia, including Jakarta, Surabaya, Semarang, Makassar, Medan, and Palembang. President Joko Widodo has said he also wants to develop railway infrastructure in eastern Indonesia, including on the island of Sulawesi and in the province of Papua. Indonesia on September 30 announced that China had won the bid to build Indonesia’s first high-speed rail line connecting Jakarta to the city of Bandung, after years of delay.


U.S. Coast Guard commandant visits Vietnam to boost security ties. The commandant of the U.S. Coast Guard, Admiral Paul E. Zukunft, met on September 21 with Deputy Chief of the General Staff of the Vietnamese military Lt Gen Vo Van Tuan in Hanoi to discuss enhancing information sharing, education and training, and high-level exchanges between U.S. and Vietnamese defense forces. Tuan said the two militaries should roll out joint cooperation activities in accordance with the memorandum of understanding on advancing bilateral defense relations signed in 2011.

Vietnam releases political prisoner into U.S. exile. Vietnamese authorities on September 20 released high-profile blogger Ta Phong Tan, a former police officer who was charged with publishing anti-state propaganda in 2012 and sentenced to 10 years in prison. Tan was exiled to the United States immediately after her release. Vietnam has released two other high-profile political prisoners at the request of the U.S. government in the past year, both of whom were exiled to the United States.

Vietnam, Japan to strengthen ties following party chief’s visit. Communist Party general secretary Nguyen Phu Trong visited Japan from September 15 to 18 to advance bilateral defense and economic ties. Trong and Japanese prime minister Shinzo Abe announced that Japan will provide Vietnam’s coast guard with two patrol vessels this year and over $800 million for infrastructure development. Vietnam and Japan have stepped up strategic cooperation amid rising tensions in the South China Sea, and Vietnam is currently the largest recipient of Japanese official development assistance.

Government repatriates remains of two possible U.S. servicemen. The Vietnam government on September 23 repatriated what it believed are the remains of two U.S. servicemen who were categorized as missing in action during the Vietnam War. The issue of U.S. servicemen missing in action was once a sensitive area in U.S.-Vietnam relations, but the two governments have gradually expanded cooperation on the issue over the past two decades.

Vietnam faces risk of deflation for the first time. Vietnam experienced zero inflation for the first time since records began being kept 10 years ago, according to a statement by the General Statistics Office on September 24. Consumer price inflation rose by only 0.8 percent in September. Vietnam struggled with double-digit hyperinflation in recent years, before posting 4.1 percent inflation last year. The drop in inflation is mostly the result of the fall in global oil prices.


Justice says presidential candidate Grace Poe is naturalized citizen and not eligible to run as presidential candidate. Supreme Court justice Antonio Carpio, who chairs the Senate Electoral Tribunal, on September 21 said that Senator Grace Poe, who declared her presidential campaign on September 16, is a naturalized, but not natural-born, Philippine citizen. According to the Philippine constitution, candidates seeking the highest political office must be natural-born citizens. Carpio said that Philippine laws do not treat children abandoned at birth, which Poe was, as natural-born citizens, although Poe can prove her citizenship by showing that her birth parents are Filipino. Poe’s lawyer said that DNA results proving her Filipino lineage will be available in two weeks.

Draft Bangsamoro Basic Law delayed again to December. Lawmakers on September 24 set December 16 as the new deadline for passing the draft Bangsamoro Basic Law (BBL). The proposed BBL, which would implement the peace agreement between Manila and the rebel Moro Islamic Liberation Front, continues to face resistance in the Philippine Congress, especially after a botched operation early this year in the southern Philippines that resulted in the death of 44 Philippine commandos. Congress will start deliberations on the BBL in November after it returns from its October 10-November 3 recess.

Foreigners abducted from Mindanao resort. Three foreigners—two Canadians and a Norwegian—and a Filipino woman were kidnapped from a resort near Davao City on Samal Island in the southern Philippines on September 21. The group of armed kidnappers reportedly seized the victims from yachts anchored in the resort marina late at night. The kidnappers are still unidentified, but there have been speculations that the Abu Sayyaf terrorist group, which has a history of kidnapping for ransom, may be involved.

Filipino politicians accused of murdering journalist arrested in Thailand. Thai authorities on September 20 arrested Philippine fugitives Joel and Mario Reyes, a former governor of Palawan Province and a former mayor, respectively, in Phuket after a three-year manhunt. The brothers are accused of contracting the killing in 2011 of prominent environmental activist Gerry Ortega, who used his radio show to accuse them of corruption and siphoning funds from a gas project. Thai authorities arrested them for overstaying their visas and deported the two back to the Philippines on September 25.


Myanmar launches first phase of Thilawa special economic zone. Myanmar on September 23 officially launched the first phase of the Thilawa special economic zone, a joint project by Myanmar and Japan located southeast of Yangon. Firms are so far adopting a wait-and-see approach to the zone, building modest-sized factories before potentially expanding their operations in the future. Investors have been slow to move into Thilawa due to skepticism about the government’s ability to provide reliable infrastructure and political stability.

Tensions rise after monk’s death in Rakhine. Tensions have risen in western Myanmar’s Rakhine State after a Buddhist monk was found dead on September 24. Local residents and political parties have expressed concern that as the November election nears, violence could break out in the restive state where intercommunal riots left more than 100 mostly Muslim Rohingya dead in 2012. Meanwhile, the Ministry of Foreign Affairs denounced a joint statement of concern by nine embassies on the role of religion in the election. The Union Election Commission on September 25 reinstated 11 Muslim candidates it previously disqualified from contesting the election.

Police seize almost 6 million stimulant tablets. Myanmar police seized 2 million stimulant tablets on September 23 and another 3.8 million on September 26 in raids on a Yangon drug ring believed to be the same one targeted in a July raid that netted $100 million of methamphetamines. Authorities have issued warrants for 11 suspects in connection with the two raids. President Barack Obama on September 18 identified Myanmar as one of 22 major producers of opium, heroin, and methamphetamines based on an annual State Department report, but requested a waiver to avoid placing new sanctions on the country as a result.

Nationwide peace agreement uncertain as government pushes for October deadline. Government officials have invited senior ethnic leaders to meet on October 3 in the hope of signing a nationwide cease-fire in mid-October, but the chances of reaching an agreement remain uncertain. President Thein Sein invited 15 ethnic leaders to a September 15 meeting, but only 8 attended. Many ethnic leaders continue to demand that three groups actively fighting the army in the northern Kokang region be included in the cease-fire, but the Myanmar government has so far refused.


1MDB scandal spreads to U.S. The Justice Department has launched an investigation into allegations of money laundering that may be linked to state investment fund 1Malaysia Development Bhd (1MDB), according to a September 19 Wall Street Journal report. The department is investigating the transfer of nearly $700 million into Prime Minister Najib Razak’s personal bank account, which would have passed through the U.S. banking system, and real estate deals in the United States involving Najib’s stepson. Malaysian authorities on September 18 blocked Khairuddin Hassan, a former member of the ruling United Malay National Organization, from traveling to the United States, where he planned to submit documents alleging 1MDB’s money laundering to U.S. authorities. 1MDB has put up plans to sell more than $2 billion worth of energy assets to cut its massive debts.

China, Malaysia wrap up first joint military exercise. Malaysian and Chinese forces on September 22 wrapped up a six-day joint military exercise in western Malaysia’s Selangor State. The military exercise, which was the largest ever between China and an ASEAN country, featured joint search and rescue, hijacked vessel rescue, and disaster relief at sea. More than 1,000 Chinese personnel participated in the exercise.

Malaysia detains three after terrorism warnings; collaborates with Indonesia on anti-radicalization programs. Malaysian police on September 25 detained three men in connection with a possible terrorist attack in Kuala Lumpur, following security warnings issued by the U.S. and Australian embassies in Kuala Lumpur. The government has since increased patrols at public locations in the capital. Malaysia and Indonesia on September 18 agreed to step up counterterrorism cooperation through greater intelligence sharing and anti-radicalization programs. The two sides agreed to boost control of illegal cross-border immigration.

Australia, Malaysia, and others look to form MH17 tribunal. Australian foreign minister Julie Bishop on September 23 said that a number of countries whose citizens were aboard Malaysia Airlines Flight MH17, which was allegedly shot down over Ukraine by Russian-backed separatists in July 2014, may form their own tribunal to seek criminal accountability. They include Australia, Belgium, Malaysia, the Netherlands, and Ukraine. Russia vetoed a UN Security Council resolution on July 29 that would have established a tribunal to pursue the perpetrators.

Three opposition parties form new coalition. Three opposition parties—the People’s Justice Party, the Democratic Action Party, and the newly created Parti Amanah Negara—on September 22 formed a new coalition called Pakatan Harapan. The Pan-Malaysian Islamic Party (PAS), from which disgruntled members split to form Parti Amanah Negara and a member of the now-dissolved Pakatan Rakyat opposition coalition, has so far declined to join the new coalition. The coalition’s president, Mohamad Sabu, who was a former PAS member, said the coalition plans to work with opposition-controlled state governments in Penang, Selangor, and Kelantan.


Police say they have solved Erawan bombing case. Thai authorities on September 9 announced that two suspects already in custody had confessed to carrying out the August 17 bombing of the Erawan Shrine in downtown Bangkok that left 20 people dead. Police said Adem Karadag, whose nationality is unknown, is the man seen on security footage planting the bomb, while Mieraili Yusufu, identified as a Uighur from China, set off the blast. Thai authorities insisted the blast was in retaliation for a crackdown on human trafficking, but that motive has been greeted with widespread skepticism. Malaysian authorities meanwhile arrested eight more people on September 23 in connection with the Bangkok blast.

Thaksin tells Red Shirts to “play dead” for now. Former prime minister Thaksin Shinawatra on September 19 told his supporters, members of Thailand’s “Red Shirt” movement, to “play dead” until the next election, which the junta says will not be held until 2017. Parties supporting Thaksin have won every election since 2001 and are expected to do so again if the military allows a free election. Thaksin’s statement came as hundreds of activists defied a ban on protests and marched in opposition to the military junta led by Prime Minister Prayuth Chan-ocha.

Finance Ministry to ask Yingluck and cabinet ministers to pay $14 billion for rice-subsidy scheme. Thailand’s Finance Ministry on September 18 said it will ask former prime minister Yingluck Shinawatra and some of her cabinet ministers to pay up to $14 billion in damages for their ousted government’s costly rice-subsidy scheme. Deputy Prime Minister Wissanu Krea-ngam said individual penalties will be determined by September 30 and the former officials’ assets will be seized if they do not file countersuits within 30 days. Meanwhile, Yingluck has brought a case against the attorney general and others for negligence of duty related to her impeachment and subsequent criminal charges.

Defense points to flaws in investigation of British tourists’ murders. Lawyers defending two Myanmar migrants accused of the September 2014 murder of a British couple on the southern Thai island of Koh Tao argued on September 23 that the police investigation was deeply flawed and that authorities are attempting to frame their clients. The defense said a DNA sample police used as evidence did not match the suspects’ DNA. When the court asked for a reexamination, the police first claimed to have lost the sample before reversing their original statement. The case has received significant local and international attention, as the tourism industry is the lone bright spot in Thailand’s sluggish economy.


Prime minister reshuffles cabinet. Prime Minister Lee Hsien Loong on September 28 announced a major cabinet reshuffle, two weeks after the ruling People’s Action Party won overwhelmingly in the national elections. Vivian Balakrishnan became foreign minister, replacing K Shanmugam, who was appointed minister for law and minister for home affairs. Deputy Prime MinisterTharman Shanmugaratnam became coordinating minister for economic and social policies and handed over the finance portfolio to Heng Swee Keat. Deputy Prime Minister Teo Chee Hean was appointed coordinating minister for national security.

Filipino jailed for calling Singaporeans “losers” on Facebook. Singapore authorities on September 21 sentenced a Filipino nurse Ello Ed Mundsel Bello to four months in prison on sedition charges over comments he made on Facebook about Singaporeans. Bello, 28, wrote on Facebook in January that Singaporeans were “losers in their own country” and that Singapore would be a “new Filipino state.” A Singaporean judge called Bello’s comments a threat to the social stability and security of Singapore.

Consumer prices post biggest drop in five years. Consumer prices in Singapore dropped by 0.8 percent in August, the largest year-on-year fall since 2009, according to a joint news release on September 23 by the Ministry of Trade and Industry and the Monetary Authority of Singapore. Singapore’s road tax rebates and lower costs for cars, along with falling global oil prices, have led to the drop in consumer prices.

Singapore tops list of locations for expats. The latest HSBC Expat Explorer Survey, released on September 22, ranked Singapore first on the list of the best destinations for foreign businesspersons. The survey, which polled nearly 22,000 expatriates based in 39 countries, measured quality of life across three categories: economics, lifestyle and cultural experiences, and family. Thirty percent of the Singapore-based respondents surveyed work in the banking or financial services sector, with 28 percent earning more than $200,000 a year.

South China Sea

New Australia prime minister criticizes China’s reclamation activities. Australian prime minister Malcolm Turnbull on September 21 said that China is “pushing the envelope” with its reclamation activities and militarization of features in the South China Sea. Turnbull, who took office on September 15, said that managing the rise of China will be one of the greatest threats to global security. Turnbull has yet to outline his government’s policy toward China—Australia’s biggest trading partner—but said that China’s behavior will draw its neighbors closer to the United States.

Xi tells Obama China will not militarize islands. Chinese president Xi Jinping on September 25 said that China does not “intend to militarize” the islands it has reclaimed in the South China Sea. Speaking at the White House, Xi asserted China’s historical claims and sovereignty over islands in the disputed South China Sea, but maintained its commitment to freedom of navigation and overflight in accordance with international law. He did not specify what he meant by “militarization,” although recent satellite imagery shows China has made significant progress in building runways and helipads on several artificial islands.

U.S. senators urge Navy to assert freedom of navigation in South China Sea. Senator John McCain, chairman of the Senate Armed Services Committee, and several other Republican senators pressed the U.S. Navy to deploy ships within 12 nautical miles of artificial islands that China has been building in the South China Sea to exercise freedom of navigation, as guaranteed by the UN Convention on the Law of the Sea (UNCLOS), during a Senate hearing on September 17. Sending U.S. ships within 12 nautical miles of a reclaimed feature’s radius would reaffirm UNCLOS’ provision that man-made islands are not entitled to territorial claims.


China to host ASEAN defense ministers amid South China Sea tensions. China Defense Ministry spokesperson Wu Qian on September 24 said that China will host the 10 defense ministers of ASEAN states for an informal summit on October 15–16 in Beijing. Wu did not elaborate on what will be discussed, but the meeting will come just weeks ahead of the annual ASEAN and East Asia Summits at which ongoing tensions in the South China Sea will feature prominently.

ADB projects lower-than-expected regional economic growth. The Asian Development Bank on September 22 released its updated Asian Development Outlook 2015, projecting that economic growth in Southeast Asia would reach 4.4 percent for the year, 0.4 percent lower than originally forecast. The bank said the region’s economic growth would not recover until 2016, when growth is expected to hit 4.9 percent thanks to improved exports and infrastructure investment. The region is expected to experience average inflation of 3 percent in 2015 and 3.3 percent in 2016.

New European ambassador to ASEAN to elevate relations. New EU ambassador to ASEAN Francisco Fontan Pardo on September 17 said the European Union is committed to elevating the EU-ASEAN relationship during his tenure. He noted that the European Union has pledged to double its financial support to EU-ASEAN cooperation to more than $190 million and said Europe remains committed to promoting ASEAN integration.


China-backed railway to go ahead this year. Lao deputy prime minister Somsavat Lengsavad on September 18 announced during the China-ASEAN Expo in Nanning, China, that construction on a controversial railway linking southern China’s Kunming to Vientiane and continuing on to other ASEAN member states will begin in late 2015. The rail line is being financed by a Chinese loan that critics say is unaffordable for the Lao government. Somsavat cited President Choummaly Sayavone, saying that the railway will be constructed in honor of the 40th anniversary of the founding of the Lao People’s Democratic Republic.

Mekong River

Lao government meets with potential developer for Pak Beng hydropower project. Lao officials met with representatives of developer China Datang Overseas Investment Company on September 21 to discuss the proposed Pak Beng hydropower project along the Mekong River, which Laos says it will ensure is sustainable and economically friendly. Once the project is approved, information about it will be submitted to the other countries on the Mekong River Commission and to international organizations for comments. Pak Beng will generate more than 4,700 gigawatt hours of electricity per year, with more than 90 percent of it exported to Thailand.


Major flooding hits several Cambodian towns. Heavy rains from tropical storm Vamco left several provinces in Cambodia swamped for several days. Rainfall was so heavy around Kampot Province that managers at the Komchay hydroelectric dam on September 16 discharged enormous quantities of reservoir water to prevent the dam from overflowing. Villagers living below the dam said they received minimal warning to prepare to evacuate.

International bar group slams Cambodian judiciary. The Human Rights Institute at the International Bar Association on September 17 released a study accusing the Cambodian judiciary of rampant corruption, bribery, and political influence. The study claimed that 90 percent of the judiciary’s day-to-day cases involved bribery, leading to calls for the International Bar Association to reexamine Cambodia’s membership in the organization.

Hun Sen says western nations “stingy” with aid. Prime Minister Hun Sen on September 19 complained that developed countries are “too stingy” with foreign aid donations. The prime minister said that wealthier nations should allot 0.7 percent of their gross national product to foreign aid, according to guidelines set by the UN Millennium Summit in 2000. The Cambodian government receives between 30 and 40 percent of its budget from foreign donors, totaling upward of $800 million annually.

Trans-Pacific Partnership

TPP opponents in New Zealand take battle to court. New Zealand opponents of the planned Trans-Pacific Partnership trade agreement appeared in court on September 28 to challenge Trade Minister Tim Groser to release details of the negotiations under the Official Information Act. Prime Minister John Key on September 22 told Radio New Zealand that the government has a right to withhold information because it helps protect New Zealand’s negotiating position.

Seven U.S. senators mount new push on currency manipulation. A group of seven U.S. senators on September 15 urged Treasury Secretary Jacob Lew and U.S. Trade Representative Michael Froman to include strict provisions against currency manipulation in the Trans-Pacific Partnership (TPP) trade negotiations. Leading the push were Republican Rob Portman and Democrat Sherrod Brown, both from Ohio, along with other senators who are either in favor of or opposed to the TPP. The White House earlier agreed to congressional demands to seek currency enforcement mechanisms in the TPP.

Obama confident TPP will be done this year; final ministerial planned in Atlanta. President Barack Obama on September 16 said during an address to the Business Roundtable that he is confident of getting the Trans-Pacific Partnership (TPP) trade deal done this year. U.S. Trade Representative Michael Froman said later in a keynote address at CSIS’s Asia Architecture Conference on September 22 that TPP countries are close to finalizing an agreement. TPP ministers on September 30 began their meetings in Atlanta in hope of resolving outstanding issues in the negotiations, which include auto parts, dairy products, and drug patents.


Year-on-year exports for July down 48 percent. Brunei’s year-on-year exports fell by 47.8 percent in July, due to declining sales of oil and gas products, according to figures from the Department of Economic Planning and Development. The revenue of the oil and gas sector, which accounts for roughly 90 percent of Brunei’s exports, dropped 49.5 percent in July. The July price of crude oil dropped by over 60 percent compared to the same period last year.


Philippines hosts APEC senior officials’ meeting. Senior officials from 21 Asia Pacific Economic Cooperation (APEC) countries on September 21 began meeting in several locations in the Philippines to discuss this year’s APEC agenda, including disaster risk reduction and management and boosting small and medium-sized enterprises. The meetings are expected to last until October 6. The APEC Leaders’ Summit will take place in Manila from November 16 to 18.

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Looking Ahead

Thai Speaker Series with Kavi Chongkittavorn. The CSIS Sumitro Chair for Southeast Asia Studies will host Chulalongkorn University’s Kavi Chongkittavorn on October 2 as part of the Thai Speaker Series. Kavi will discuss Thailand’s relations with major powers, including ASEAN, China, and the United States, and how its role in ASEAN fits within new regional dynamics. The event will take place from 12:00 p.m. to 1:30 p.m. at CSIS, 1616 Rhode Island Ave., NW. Please RSVP to southeastasiaprogram@csis.org.

The Banyan Tree Leadership Forum with Antonio Carpio. The CSIS Sumitro Chair for Southeast Asia Studies will host Philippine Supreme Court senior associate justice Antonio Carpio on October 5 for a discussion on the South China Sea. Carpio will argue that China’s nine-dash claim and the steps it has taken to enforce it are the root causes of the South China Sea disputes. The event will take place from 2:00 p.m. to 4:00 p.m. at CSIS, 1616 Rhode Island Ave., NW. Please RSVP to southeastasiaprogram@csis.org.

Challenges, Opportunities, and a New Narrative on Hydropower Development. The Stimson Center’s Southeast Asia Program will host a panel discussion on October 9 on the emerging political and financial challenges for the hydropower sector and alternative development options for crucial transboundary rivers, focusing on the Mekong River. The event will take place from 10:00 a.m. to 12:00 p.m. at the Stimson Center, 1211 Connecticut Avenue NW, 8th floor. Click here to RSVP.

Producing More with Less through Partnerships. The CSIS Global Food Security Project and the Royal Danish Embassy on October 9 will host an interactive forum with leaders from business, nongovernmental organizations, academia, and government agencies focusing on how to produce more with less through partnerships in agricultural development. The event will take place from 9:00 a.m. to 11:00 a.m. at CSIS, 1616 Rhode Island Ave., NW. Click here to RSVP.

The Role of the U.S. Military in Cyberspace. The CSIS Strategic Technologies program will host Lt. Gen. James K. “Kevin” McLaughlin, deputy commander of the U.S. Cyber Command, on October 9 for a discussion on the integration of cyberspace operations into new ways of defending, fighting, and partnering against adversaries in the contested cyber domain. The event will take place from 10:00 a.m. to 12:00 p.m. at CSIS, 1616 Rhode Island Ave., NW. Click here to RSVP.

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For more the Sumitro Chair for Southeast Asia Studies, check out our website, follow us on Facebook and Twitter, visit our blog CogitAsia, and listen to our podcast at CogitAsia and iTunes. Thank you for your interest in U.S. policy in Southeast Asia and CSIS Southeast Asia. Join the conversation!

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