CSIS – Southeast Asia from Scott Circle – March 31, 2016


Foreign Minister Aung San Suu Kyi Has China, Myanmar’s Military Watching

By Phuong Nguyen (@PNguyen_DC), Associate Fellow, Chair for Southeast Asia Studies (@SoutheastAsiaDC), CSIS

March 31, 2016

Myanmar experienced a number of firsts over the past week. The Union Parliament—which now counts former political prisoners, doctors, businesspeople, and poets among its ranks—on March 24 approved a new cabinet to serve under the incoming National League for Democracy (NLD) government, the first civilian government to rule the country in over 50 years. In a speech on Armed Forces Day on March 27, Commander-in-chief General Min Aung Hlaing urged Myanmar’s military to cooperate with the incoming government to help fulfill “the country’s fundamental needs of stability, solidarity, and development.”

In the clearest sign that a new era has dawned in Myanmar, NLD chair and former opposition leader Aung San Suu Kyi, who spent years under house arrest during military rule, will play an outsized role in the new government. She will be in charge of the foreign affairs, education, and energy and electricity portfolios, while also serving as a minister in the President’s Office. Lawmakers have started a push to pass legislation that would give her the title of “state counselor.” Aung San Suu Kyi, who is constitutionally barred from becoming president, will need to resign from her parliamentary seat and party leadership post to serve in the cabinet. Yet she will call the shots with the cabinet members—all but three of whom she nominated—and a large swath of the legislature, where her party holds a supermajority.

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Biweekly Update

  • Myanmar parliament approves new NLD cabinet
  • U.S., Philippines announce five bases under EDCA
  • Indonesia summons Chinese envoy over fishing boat in South China Sea
  • U.S. Pacific Fleet commander, Marines Pacific commander pay joint visit to Vietnam

Read more…| Read Newsletter in PDF

Looking Ahead

  • World Energy China Outlook 2016
  • U.S. Policy in Myanmar: Perception vs. Reality
  • Domestic Dimensions of China’s Foreign Policy

Read more…| Read Newsletter in PDF

Foreign Minister Aung San Suu Kyi Has China, Myanmar’s Military Watching

By Phuong Nguyen (@PNguyen_DC), Associate Fellow, Chair for Southeast Asia Studies (@SoutheastAsiaDC), CSIS

March 31, 2016

Myanmar experienced a number of firsts over the past week. The Union Parliament—which now counts former political prisoners, doctors, businesspeople, and poets among its ranks—on March 24 approved a new cabinet to serve under the incoming National League for Democracy (NLD) government, the first civilian government to rule the country in over 50 years. In a speech on Armed Forces Day on March 27, Commander-in-chief General Min Aung Hlaing urged Myanmar’s military to cooperate with the incoming government to help fulfill “the country’s fundamental needs of stability, solidarity, and development.”

In the clearest sign that a new era has dawned in Myanmar, NLD chair and former opposition leader Aung San Suu Kyi, who spent years under house arrest during military rule, will play an outsized role in the new government. She will be in charge of the foreign affairs, education, and energy and electricity portfolios, while also serving as a minister in the President’s Office. Lawmakers have started a push to pass legislation that would give her the title of “state counselor.” Aung San Suu Kyi, who is constitutionally barred from becoming president, will need to resign from her parliamentary seat and party leadership post to serve in the cabinet. Yet she will call the shots with the cabinet members—all but three of whom she nominated—and a large swath of the legislature, where her party holds a supermajority.

Being the foreign minister gives Aung San Suu Kyi more than a seat on the supreme decision-making National Defense and Security Council. It also gives her a powerful platform on the international stage from which to voice her views on Myanmar’s priorities and national strategy, and shape the outside world’s evolving views of a country still emerging from decades of international isolation and slowly embracing its regional identity as a member of the ASEAN grouping.

Of particular interest to international observers will be how Aung San Suu Kyi will handle Myanmar’s often difficult relations with China. As one of her first tests on the job, Aung San Suu Kyi will confront two of the most contentious issues in Myanmar’s foreign relations. One concerns the stalled $3.6 billion Chinese-backed Myitsone dam in northern Myanmar. The other is a $14 billion special economic zone concession recently granted to a Chinese-led consortium; the project is strategically located in western Myanmar overlooking the Bay of Bengal.

Outgoing president Thein Sein decided in 2011 to suspend construction on the controversial dam in response to a public backlash against what many in Myanmar saw as China’s economic exploitation of a then-isolated Myanmar under junta rule. The decision angered Beijing, which opted to subsequently give Thein Sein a cold shoulder and place its bet on the next government. Chinese leaders are believed to have raised the prospect of resuming the Myitsone project with Aung San Suu Kyi when she visited China last year, and Chinese Foreign Minister Wang Yi reemphasized as recently as March that China hopes to resolve the current impasse with the incoming government.

For China, leaving the Myitsone question unresolved not only hurts its standing and economic interests in Myanmar, but will also set a bad precedent for future Chinese infrastructure investments in the region and potentially dampen the reputation of its planned ambitious One Belt One Road initiative. Aung San Suu Kyi is in a delicate spot; in 2013, she backed a parliamentary decision to allow a Chinese-invested copper mining project in northwestern Myanmar to go ahead despite widespread local opposition over land conflicts and environmental concerns. She said this message was necessary to reassure potential investors looking to do business in Myanmar.

Meanwhile, the outgoing government’s decision in late 2015 to grant the rights to develop a deep-sea port and manufacturing complex in Kyaukphyu in western Myanmar to Chinese conglomerate CITIC attracted criticism from civil society and the local population, primarily over land and governance concerns. Many who questioned the motivation behind the rush by the military-backed government to award the project have asked whether the NLD government will take steps to either scrutinize or review the concession.

Aung San Suu Kyi has said in public forums that she welcomes the right kind of foreign investment in Myanmar; it remains to be seen how she will walk the fine line between reassuring foreign investors and managing popular anti-China sentiment.

Another area in which China could be expected to step up its involvement is Myanmar’s uncertain peace process. China was an observer to—and crucial stakeholder in—the cease-fire talks that began in 2011 between the government and more than a dozen ethnic armed groups. Although the Thein Sein government inked a cease-fire agreement with seven ethnic armed groups last October, it now falls to the NLD government to configure the next concrete steps for the process. This is especially important as the government-backed and internationally funded Myanmar Peace Center—which was responsible for handling cease-fire negotiations with ethnic rebels—has been dissolved, and future funding for the peace process from the European Union remains an open question.

Chinese foreign minister Wang, in a recent speech articulating the tasks of Chinese diplomacy, highlighted Myanmar’s armed conflict as a test case in which Beijing could play a role in helping resolve international conflicts peacefully through dialogue. It will be important to watch whether Beijing aims for a larger and more official role in supporting the political dialogue that is supposed to take place between cease-fire signatories and the government, and whether it seeks to broker talks between combatant groups on the China-Myanmar border with the military and new government.

It would be remiss to discuss Myanmar’s foreign policy outlook without bringing up Myanmar’s military, or the tatmadaw. While the generals may no longer be in the limelight, they continue to hold considerable military power and administrative control over the bureaucracy as well as vast economic interests across the country, making it extremely difficult to deal with most internal and external issues without their consent or cooperation.

Military commander Min Aung Hlaing has struck a constructive public tone on the democratic transition, but he left little doubt in his address just days before the power handover to the NLD on April 1 that it is the responsibility of the armed forces to “take the lead in the national politics in the same way that the tatmadaw has stood ready in the face of critical situations throughout the history of the country.” It was indeed Myanmar’s long fight against colonization and exploitation by foreign powers that gave birth to the modern principles of Myanmar’s “independent, active, and non-aligned” foreign policy.

While Aung San Suu Kyi is not expected to veer from these principles, the military cannot help but wonder how much leeway it will have with the newly minted foreign minister in shepherding the country’s foreign affairs.

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Biweekly Update


Parliament votes to approve new NLD cabinet. The Union Parliament on March 24 approved the National League for Democracy’s 18 nominees for ministerial posts in the incoming government. The nominee to be minister of national planning and finance, Kyaw Win, has attracted media attention for reportedly having a fake doctoral degree. Other incoming cabinet officials include Aung Ko as religious and cultural affairs minister and Dr. Myint Htwe to head the Ministry of Health.

Parliament approves president’s proposal to streamline government ministries. Lawmakers on March 21 voted by a 95 percent margin in favor of president-elect Htin Kyaw’s proposal to reduce the number of government ministries from 36 to 21. The proposal merged 10 ministries into 5 and created a new Ethnic Affairs Ministry. The president-elect said the plan would save over $4 million over the next five years and give the government additional funding for health, education, and rural development.

Aung San Suu Kyi to hold four ministerial posts. National League for Democracy (NLD) chair Aung San Suu Kyi will lead the ministries of foreign affairs, education, and energy and electricity while also serving as a minister in the President’s Office under the new government, which takes office April 1. As foreign minister, Aung San Suu Kyi will have a seat on the 11-member National Defense and Security Council responsible for military and security policies. She will have to give up her seat in Parliament and resign as NLD chair to serve in the cabinet.

Ethnic Mon politician to lead newly created ministry for ethnic affairs. Parliament on March 24 approved the nomination of Nai Thet Lwin, an ethnic Mon politician, to lead the newly created Ethnic Affairs Ministry. Nai Thet Lwin is a successful businessman and currently the vice chairman of the Mon National Party. He has spent decades supporting the struggle for equal rights for Myanmar’s ethnic minorities. He is believed to have good relations across ethnic Mon political parties.

Myanmar approves license for fourth telecoms operator, opens stock exchange. Deputy Minister of Communication and Information Technology Win Than announced on March 25 that the government had awarded a fourth telecommunications operating license to a joint venture between Vietnam’s Viettel, owned by the Vietnamese military, and a group of local companies, including a Defense Ministry company. The three existing telecommunications operators are Telenor, Ooredoo, and state-owned Myanma Posts and Telecommunications. Separately, the Yangon Stock Exchange opened for business on March 25 with only one listing by local conglomerate First Myanmar Investment.

State Department says Myanmar’s treatment of Rohingya is “persecution” but not “genocide.” State Department spokesman John Kirby told reporters on March 21 the United States has determined that the Myanmar government’s treatment of Rohingya Muslims has not reached the level of genocide, as claimed by several rights reports. The State Department said in a report submitted to Congress that the United States remains “concerned about current acts that constitute persecution of and discrimination against members of the Rohingya population in Burma.” The report asked the Myanmar government to address human rights violations and support the rule of law in Rakhine State, where most Rohingya live.


U.S., Philippines hold strategic dialogue, announce locations of five bases under EDCA. The United States and the Philippines on March 17-18 held the sixth Bilateral Strategic Dialogue and announced the agreed-upon locations of five bases under the Enhanced Defense Cooperation Agreement (EDCA). U.S. and Philippine officials said that U.S. forces will have rotational access to the Antonio Bautista Air Base, Basa Air Base, Fort Magsaysay, Lumbia Air Base, and Mactan-Benito Ebuen Air Base during the first phase of the EDCA’s implementation. Antonio Bautista Air Base is strategically located near the Spratly Islands in the South China Sea.

Philippines to charge individuals involved in $81 million international money laundering scandal. The Department of Justice on March 18 summoned Rizal Commercial Banking Corp. branch manager Maia Santos-Deguito and four others for a preliminary investigation after the Philippine Anti-Money Laundering Council (AMLC) filed charges against them for being involved in the illegal transfer of $81 million from an account of the Bangladeshi central bank in New York to four Philippine accounts. The AMLC accused Deguito of facilitating the money laundering by failing to verify the identities of depositors of bank accounts she helped open in 2015 and allowing them to withdraw the stolen money. Deguito denied the charges.

Government creates interagency task force on South China Sea. President Benigno Aquino on March 17 signed a memorandum creating an interagency task force that will orchestrate national efforts on the South China Sea issue, amid rising tensions in the disputed sea. The new task force, chaired by National Security Adviser Cesar Garcia, includes representatives from the foreign affairs, national defense, justice, energy, environment and natural resources, and transportation portfolios. In the latest incident between China and the Philippines, Philippine media reported that Chinese Coast Guard vessels harassed Filipino fisherman near Scarborough Shoal, while China accused Filipino sailors of throwing fire bombs at Chinese law enforcement vessels.

Elections commission urges Supreme Court to reexamine ruling on Poe’s eligibility. The elections commission on March 22 asked the Supreme Court to reexamine its ruling on Senator Grace Poe’s eligibility to run in the upcoming presidential elections. The commission insists that Poe does not meet the citizenship and residency requirements. Separately, four disqualification petitioners on March 18 filed a motion for reconsideration of Poe’s case in the Supreme Court. The Integrated Bar of the Philippines also said that the legal issues surrounding Poe’s candidacy remain unresolved.

U.S.-Philippine Balikatan exercise to deploy mobile rocket and missile platforms. The spokesman for the annual U.S.-Philippine Balikatan exercise, Capt. Celeste Frank Sayson, said the U.S. military will deploy its M142 High Mobility Artillery Rocket System in the live-fire phase of the joint military training. This is the first time that mobile rocket and missile platforms will be used in the Balikatan exercise. The Philippine Air Force will also deploy its two newly acquired FA-50s light attack fighter jets during the joint exercise, which will be held from April 4 to 16.


Indonesia summons Chinese envoy after incident with Chinese Coast Guard near Natuna Islands. Indonesian authorities on March 21 summoned a senior representative of the Chinese Embassy in Jakarta after a Chinese Coast Guard vessel reportedly rammed into a seized Chinese fishing boat off the Natuna Islands to free it from Indonesian authorities. Indonesia and China have had similar incidents in the past. Foreign Minister Retno Marsudi said Indonesia feels “sabotaged” in its efforts to help resolve the South China Sea dispute by the incident, but stressed that Indonesia wants to maintain good ties with China.

U.S. puts Santoso on list of Specially Designated Global Terrorists. The U.S. Department of State on March 22 put Indonesia’s most-wanted terrorist, Santoso, who is also a backer of the Islamic State in Iraq and Syria militant group, on the list of Specially Designated Global Terrorists. This allows U.S. authorities to block all properties subject to U.S. jurisdiction in which Santoso has any interest, and allows U.S. law enforcement agencies to take action against Santoso. Indonesia’s police force and military are currently conducting a joint operation in Poso in Central Sulawesi Province to capture Santoso.

Indonesia, Australia renew talks on bilateral trade agreement. Australian trade minister Steven Ciobo and Indonesian trade minister Thomas Trikasih Lembong on March 16 said in a joint statement that negotiations on a bilateral trade agreement will resume in May. The talks have been on hold due to strained diplomatic relations between the two neighbors for about two years. Two-way trade between the two countries was less than $9 billion in 2015.

Government decides to build Masela gas project onshore, rejects bid by Shell and Inpex. President Joko Widodo on March 23 rejected a $14.8 billion bid by Royal Dutch Shell and Japan’s Inpex to build a massive offshore refinery to develop the Masela gas field in the Maluku Islands. Widodo said that the facilities would be built onshore instead, which will force the gas to be piped to land approximately 370 miles away. The onshore option, championed by Coordinating Maritime Affairs Minister Rizal Ramli, will add roughly $7.5 billion to the costs to the project.

Authorities to require app-based Uber and Grab to register cars after protest by taxi drivers. Indonesian authorities on March 24 said that app-based Uber and Grab must register their cars by May 31, either by partnering with a legal public transportation operator or by establishing their own legal companies. The agreement was reached during a meeting between Uber, Grab, and Indonesian authorities two days after thousands of cab drivers held a protest rally in Jakarta. Both companies are temporarily banned from recruiting new drivers and cars.

Indonesia sees continued uptick in anti-LGBT attacks. Indonesia has come under increasing scrutiny since inflammatory articles attacking Indonesia’s lesbian, gay, bisexual, and transgender (LGBT) community surfaced online in January. A number of senior government officials have jumped into the fray, speaking harshly against the LGBT community, with many online sites with LGBT content being blocked. The Indonesian Broadcasting Commission on February 23 issued a notice forbidding male actors from dressing or behaving effeminately on television.


Outgoing National Assembly meets to vote on lineup of new government leaders. The outgoing 13th National Assembly began its final session on March 21 and is expected to nominate Deputy Prime Minister Nguyen Xuan Phuc as prime minister and Minister of Public Security Tran Dai Quang as president. National Assembly vice-chairwoman Nguyen Thi Kim Ngan was elected chairwoman of the new legislature on March 30. This breaks from the convention of having top leaders chosen after a new legislature is elected following a Communist Party congress, a decision the government says was designed to shorten the transition period between the outgoing and incoming governments.

U.S. Pacific Fleet commander, Marines Pacific commander pay joint visit to Vietnam. Admiral Scott Swift of the U.S. Pacific Fleet and Lt. Gen. John Toolan of the Marine Corps Forces Pacific visited Hanoi and Hai Phong on March 17-19 to discuss expanding U.S. naval cooperation with Vietnam. They met with Rear Admiral Pham Hoai Nam of the Vietnam People’s Navy, among other high-level officials. This marks the first joint visit to Vietnam by Pacific commanders of the U.S. Navy and Marines since the end of the Vietnam War.

Singapore Navy pays first visit by foreign warship to new Cam Ranh Bay seaport. A Singaporean naval vessel, the RSS Endurance, became the first warship to dock at Cam Ranh International Seaport since its opening on March 8. Carrying a crew of 81, it remained at Cam Ranh from March 17 to 21. The crew conducted training and met with representatives from the provincial People’s Committee. The visit comes on the heels of the 7th Vietnam-Singapore Defense Policy Dialogue in Singapore on February 29.

Apple eyes $1 billion data center in Vietnam. Apple plans to invest $1 billion in a data center in Vietnam, according to press reports on March 16 citing the Vietnam Chamber of Commerce and Industry. This would be Apple’s first investment in Vietnam, and potential sites are being scouted, with Hanoi as the likely location. The facility would host data operations for all of Asia. Samsung, Apple’s primary competitor, has invested $13 billion in Vietnam, including a recently announced planned $300 million research-and-development center. The timeline for Apple’s facility has not been made public.

World Bank to stop preferential loans to Vietnam beginning in mid-2017. A Vietnamese official from the Ministry of Finance, Truong Hung Long, on March 22 announced that Vietnam would cease receiving preferential loans as official development assistance as of July 2017 and instead will have to borrow at market rates. Vietnam has already been subject to stricter concessionary loans after graduating to middle-income status in 2010, with an average repayment period of 10 to 20 years and borrowing costs of at least at 2 percent annually.

Court sentences blogger to five years for subversive articles. A well-known blogger in Vietnam, Nguyen Huu Vinh, was sentenced on March 23 to five years in prison for publishing antigovernment content. He has been in detention since his arrest in 2014. His assistant, Nguyen Thi Minh Thuy, received a sentence of three years. Vinh, more commonly known as Anh Ba Sam, insisted on his innocence, and his trial has attracted widespread attention from international rights groups.


Defense minister says Malaysia will discuss “pushback” plan against China with regional counterparts. Defense Minister Hishammuddin Hussein on March 14 told reporters that Malaysia will take stronger measures to push back against China’s activities in the South China Sea if the reports on China’s military buildup in the Spratly Islands are true. Hishammuddin met his Australian counterpart, Marise Payne, on March 21 to discuss shared concerns about the militarization of features in the South China Sea, and said he will meet with counterparts from Vietnam and the Philippines in the future.

Mahathir sues Najib in latest effort to remove embattled prime minister. Former prime minister Mahathir Mohamad and two former members of the ruling United Malay National Organization (UMNO), Khairuddin Abu Hassan and Anina Saadudin, on March 23 filed a lawsuit against Prime Minister Najib Razak for corruption and misfeasance in public office. Mahathir accused Najib of impeding the investigations regarding the graft scandals related to state investment fund 1Malaysia Development Bhd. Mahathir also launched a campaign, dubbed Save Malaysia, to collect a million signatures calling for Najib’s resignation by the end of the year.

Malaysian Bar Council takes 1MDB case to high court. The Malaysian Bar Council on March 15 filed a judicial review at the high court over the attorney general’s decision to clear Prime Minister Najib Razak of wrongdoing related to $681 million transferred into his personal account. The bar on March 19 collectively passed a motion at its annual gathering calling for the resignation of Attorney General Apandi Ali over his handling of the 1Malaysia Development Bhd case. The Judicial and Legal Service Officers Association on March 17 said it will hold a meeting to deliberate the bar’s motion.

Malaysia, UNHCR to cooperate on overcoming problem of fake UNHCR cards. Malaysia and the United Nations High Commissioner for Refugees (UNHCR) will immediately set up a joint task force to address the issue of fake UNHCR cards issued by human trafficking syndicates. The agreement was reached between Deputy Prime Minister Ahmad Zahid Hamidi and UNHCR Assistant High Commissioner Volker Turk on March 22. New measures will include re-registering all UNHCR card holders and improving the security features for new cards to prevent forgery.

Attorney general suggests caning those revealing state secrets. Attorney General Apandi Ali proposed the use of caning for people who violate Malaysia’s Official Secrets Act (OSA) in the latest effort by the government to limit public scrutiny over the 1Malaysia Development Bhd scandal, according to March 24 Wall Street Journal report. Under the OSA, officials can declare any document or information to be classified. Ali had previously proposed raising the penalties for breaking secrecy laws to life imprisonment and prosecuting journalists who refuse to disclose their sources.

China Railway Group plans regional headquarters in Malaysia. China Railway Group will spend $2 billion to build a regional headquarters in Malaysia, according to a March 21 Xinhua report. The new headquarters will be situated in Bandar Malaysia, an urban housing project located nearby Kuala Lumpur’s financial district. Bandar Malaysia is also the proposed terminal for the planned high-speed rail link from Kuala Lumpur to Singapore, which a number of Chinese companies have expressed interest in bidding on. China Railway Group said the new headquarters will be a base for its expansion into Southeast Asia.

Authorities detain 15 suspected ISIS members planning terror attacks. Police chief Khalid Abu Bakar on March 24 said authorities have detained 15 suspected members of the Islamic State in Iraq and Syria who planned to launch attacks and attempted to obtain chemicals to make bombs. The arrests in Kuala Lumpur and six other states were made beginning March 22 following the bomb attack on Brussels’ airport and subway. The group allegedly received orders from a Malaysian man who joined the militant group in Syria.


Defense minister visits India; Thailand, India to set up joint security commission. Defense Minister and Deputy Prime Minister Prawit Wongsuwan paid a visit to India on March 17-18, during which the two governments agreed to establish a nonmilitary joint security commission. Prawit met with Indian Minister of Defense Monohar Parrikar, Vice President Mohammad Hamid Ansari, and National Security Adviser Ajit Doval. Discussions included cybercrime, terrorism, drugs, defense-industry cooperation, and maritime security. Thailand’s prime minister, Prayuth Chan-ocha, is scheduled to visit India in April.

Constitutional drafting committee accepts government proposal for fully appointed senate. Thailand’s Constitution Drafting Committee acceded on March 22 to a government proposal to appoint a temporary senate, ostensibly to safeguard Thailand’s transition back to civilian rule. The senate would consist of 250 members, of whom 200 would be selected directly by a government-appointed panel and 50 from a list of candidates nominated by professional groups. The senate would remain in place for five years after the official adoption of the constitution. The government unveiled the draft constitution on March 29.

Groups campaign for political reforms. A group opposed to Thailand’s draft constitution, the Red Path, intensified its campaign on March 20 by engaging with pedestrians in Bangkok. Meanwhile, a group that supports the current government, the Green Politics Group, continued its own campaign, exhorting the government to complete reforms before any elections are held. The latter group is an offshoot of the Yellow Shirts who supported the People’s Alliance for Democracy and opposed former prime ministers Thaksin and Yingluck Shinawatra.

Government ramps up investment in infrastructure, hopes to attract private sector. Minister of Transport Arkhom Termpittayapaisith announced on March 21 that the government would initiate significant infrastructure projects in 2016 and 2017, exceeding $100 billion. The projects would cover national railways and proposed international rail links to Kunming, Singapore, Yangon, and Ho Chi Minh City. The plan is expected to add 1 percent to annual growth over the next two years, and the government hopes that it will entice more private sector investment.

Reform council proposes law on conflicts of interest. Thailand’s National Reform Steering Assembly on March 17 announced a proposed bill to bar politicians and civil servants from exploiting their offices for the benefit of parents, children, and spouses. Violators could face three years in prison and a fine of $1,700. The bill is a reformulation of one originally proposed and rejected in 2008. After endorsement from the assembly, the bill will go to the cabinet for deliberation.

Thailand begins human trafficking trial against 92 defendants. Thailand’s largest human trafficking trial in history began on March 15, against 92 defendants. The trial was prompted by the May 2015 discovery of a grave containing more than 30 bodies along a known trafficking route in southern Thailand. Thailand has been ranked at the lowest level in the annual United States’ Trafficking in Persons report since 2014. Many of the victims of trafficking have been members of the Rohingya ethnic group from Myanmar, economic migrants from Bangladesh, and girls and women pressed into the sex trade.


Singapore releases budget for 2016; defense spending still tops list. Finance Minister Heng Swee Keat on March 24 announced Singapore’s 2016 budget, which will accrue a surplus of about $2.5 billion. The budget offers a wide range of economic and social initiatives that target small and medium-sized enterprises, charities, education and training, and technology. Singapore defense minister Ng Eng Hen told Bloomberg on the same day that defense spending will remain at a “fairly high” proportion of gross domestic product.

Authorities detain four under Internal Security Act for engaging in overseas armed conflict. The Ministry of Home Affairs on March 16 said it has detained four Singaporeans under the Internal Security Act for their engagement in violence and armed conflicts abroad. Mohammad Razif Yahya and Amiruddin Sawir were detained for voluntarily engaging in the sectarian conflict in Yemen, while Mohammed Mohideen Mohamad Jais performed armed sentry duties in Yemen. The fourth individual, Wang Yuandongyi, was en route to join the Kurdish militia group fighting against the Islamic State in Iraq and Syria.

Singapore, China renew bilateral currency swap. The Monetary Authority of Singapore (MAS) and the People’s Bank of China have renewed their existing bilateral currency swap agreement for another three years. The new arrangement, effective March 7, will help strengthen regional economic resilience and financial stability, according to a MAS statement on March 15. The Chinese central bank will provide up to $46 billion in liquidity to MAS, which will be made available to eligible Singaporean financial institutions.

Singapore launches new scheme for IP dispute mediation. The International Property Office of Singapore (IPOS) on March 21 launched a mediation scheme for intellectual property (IP) disputes in an effort to encourage cooperative approaches in IP dispute resolution. The new scheme, which starts on April 1, will offer parties who opt for mediation funding up to $3,562 per case. IPOS estimates that up to 30 IP disputes will benefit from the scheme over the next three years.

SDP secretary-general to contest Bukit Batok by-election. Dr. Chee Soon Juan, secretary-general of the opposition Singapore Democratic Party (SDP), on March 20 confirmed he will contest the Bukit Batok by-election, which was triggered by the resignation of Bukit Batok lawmaker David Ong on March 12 following revelations of an extramarital affair. The ruling People’s Action Party, of which Ong was a member, on March 28 announced it will field K Muralidharan Pillai, a lawyer, for the by-election, while other parties have said they will not enter the contest.

South China Sea

Top Chinese judge says China will establish an international maritime judicial center to safeguard Chinese interests. China’s chief justice, Zhou Qiang, on March 13 said China will launch an “international maritime judicial center” to safeguard its territorial claims and protect its maritime rights. While few details on the center have been released, Zhou noted that Chinese courts would work to ensure the country becomes a “maritime power.” The move could contribute to tensions in the South China Sea, as China has said repeatedly it will not accept the upcoming ruling on an arbitration case filed by the Philippines before the UN Permanent Court of Arbitration.

U.S. warns of Chinese reclamation activities around Scarborough Shoal. U.S. Navy chief Adm. John Richardson on March 17 confirmed the U.S. military had seen increased Chinese activity around Scarborough Shoal. The surface ship activity, Richardson warned, could signal further Chinese land reclamation activities and plans for the eventual announcement of an air defense identification zone (ADIZ). A Philippine Foreign Ministry official said he was unaware of increased Chinese activity in the area.

Australia says it will continue to deploy ships and planes to the South China Sea. Australian defense minister Marise Payne on March 21 told reporters in Kuala Lumpur that the government will continue sending ships and planes to defend freedom of navigation and overflight in the South China Sea. She said Australia’s position toward upholding the rule of law has been “extremely consistent” and will not change. Payne was in Kuala Lumpur for a bilateral meeting with Malaysian defense minister Hishammuddin Hussein.

China accuses U.S. of being involved in Philippines’ arbitration case. The Chinese Foreign Ministry on March 22 criticized the United States for being behind the South China Sea arbitration case lodged by the Philippines. Foreign Ministry spokesperson Hua Chunying made reference to “behind-the-scenes instigation,” calling the case “unlawful, unfaithful, and unreasonable.” The accusation came following remarks by U.S. assistant secretary of state Daniel Russel that the impending court ruling will be a crucial moment for ensuring the preservation of a rules-based regional order.

Indonesia fires warning shots at Taiwanese fishing vessels in Malacca Strait. Two Taiwanese fishing vessels on March 21 reported being shot at by an Indonesian patrol vessel in the Strait of Malacca. According to the ship’s captains, Lien I Hsing No. 116 was fired at four or five times, while Sheng Te Tsai had 12 bullet holes. The two vessels, carrying 25 crew members on board, were on their way to Singapore to unload their catches and restock. Indonesian officials admitted to shooting the vessels, but claimed it was self -defense when one of the fishing boats nearly rammed the Indonesian patrol boat after being ordered to stop.

Trans-Pacific Partnership

Trade associations uncertain about Vietnam’s labor plan. The American Apparel & Footwear Association, the Travel Goods Association, and the Fashion Accessories Shippers Association on March 8 issued a brief report on the impact of the Trans-Pacific Partnership (TPP) trade agreement on the U.S. economy. The report highlighted business concerns about provisions in the labor plan that the United States signed with Vietnam, including the ability for the United States to suspend future tariff phase-outs after year five of implementation if Vietnam fails to comply. Other concerns included long duty phase-outs that delay cost savings for businesses and restrictive rules of origin that discourage U.S. exports.


Laos, Vietnam sign agreement on overseas citizens. Laos and Vietnam have signed a memorandum of understanding to renew a five-year cooperation plan on their overseas citizens, according to a March 22 Vientiane Times report. The agreement calls for regular close coordination between the governments, the sharing of information on their citizens living abroad, and additional training and study tours. The goal of the agreement is to spur Vietnamese and Lao citizens to return to their countries and contribute to national development.

Laos, Vietnam complete border marker project. Prime Minister Thongsing Thammavong and Vietnamese prime minister Nguyen Tan Dung on March 16 hosted an event in Hanoi to commemorate the completion of a border marker project between Laos and Vietnam. The initiative, which began in May 2008, included the addition of new border stones, an upgrade of existing boundary markers separating Laos and Vietnam, and exchanges of legal documents related to border issues.

Gunmen kill truck driver and hurt six Chinese citizens in roadside attack in Laos. Militants in northern Laos shot a truck driver and a bus carrying Chinese nationals on a road north of Vang Vieng, according to a March 25 Radio Free Asia report. The Chinese passengers were riding a bus from Kunming City to Vientiane. The latest assault added to a growing number of shootings on roads in northern Laos and is the third attack on Chinese nationals in Laos since January.

IMF head urges Laos to implement economic reforms. Christine Lagarde, managing director of the International Monetary Fund, said on March 15 during her visit to Vientiane that Laos must implement reforms to achieve sustainable economic growth. Lagarde said the government should focus on raising living standards, spending more money on education, improving the financial system, boosting currency reserves, and producing better-quality statistics.


Hun Sen reshuffles cabinet. Prime Minister Hun Sen submitted a new cabinet lineup to the National Assembly on March 16. Three ministers will retire, with another eight changing roles. Minister of Posts and Telecommunications Prak Sokhonn will take over as foreign minister, while outgoing foreign minister Hor Namhong will retain his position as deputy prime minister. The announcement comes after Hun Sen criticized his ministers for being too slow and inefficient. The changes will take effect April 4.

U.S., Cambodia hold annual exercise on humanitarian assistance and disaster relief. The 7th annual Angkor Sentinel, a bilateral military exercise between the United States and Cambodia, began on March 14 in Kampong Speu Province, just outside the capital of Phnom Penh. The exercises focused on humanitarian assistance and disaster relief, military engineering, explosive-ordnance disposal, transport, and leadership development. The exercises involved more than 150 participants and concluded on March 25 with a situational exercise.

Anti-corruption body to investigate Kem Sokha’s alleged affair. Cambodia’s Anti-Corruption Unit (ACU) announced on March 24 that it would investigate Cambodia National Rescue Party vice president Kem Sokha for corruption involving his alleged mistress. Recordings have surfaced in which Sokha allegedly offered to buy the woman land and two apartments. The ACU claims to have determined beyond doubt that Sokha is the individual whose voice is heard in the recordings. Sokha has given no comment on the scandal or investigation.

UN rapporteur on human rights visits, calls for judicial reform. The United Nations’ special rapporteur on human rights, Rhona Smith, on March 21 began a 10-day visit to Cambodia, meeting with civil society representatives and government officials. A professor of international human rights law in the United Kingdom, Smith hoped to focus on women’s and indigenous rights. Local groups also complain about problems with freedom of speech, electoral fairness, and restrictions on nongovernmental organizations. The government’s Human Rights Committee has been dismissive of such complaints.


Central Bank of Timor-Leste signs MoU with Indonesia financial services authority. The Central Bank of Timor-Leste on March 22 signed a memorandum of understanding with Indonesia’s Financial Services Authority in Dili. The cooperation deal is focused on ensuring an efficient exchange of information and enhancing Timor-Leste’s financial surveillance capacity. Bank Rakyat Indonesia is set to begin offering services in Timor-Leste, while Bank Mandiri and Sinar Mas have already launched operations.

Thousands protest outside Australian Embassy in Dili over maritime resource dispute. Thousands of people gathered outside the Australian Embassy in Dili on March 22 to protest the Australian government’s refusal to hold negotiations over a permanent maritime boundary. Activist group Movement against the Occupation of the Timor Sea accused Australia of illegally occupying Timor-Leste’s maritime territory to access a greater share of oil and gas reserves offshore. Protesters demanded an equal division of the disputed territory between the two countries.


Government looks to expand and regulate public transport sector. The Ministry of Communications is planning to establish a Land Transport Authority to manage the regulation and expansion of the country’s public transport system, according to a March 19 Brunei Times report. The public transport sector will undergo a $10 million transformation over the next three years, which will include bus route upgrades and the introduction of metered taxis. Communications Minister Haji Mustappa hopes the new body will enhance connectivity and improve reliability of the country’s public transport.

Legislative Council passes $5.6 billion budget, down 1.8 percent from previous year. Brunei’s Legislative Council on March 21 approved a $5.6 billion national budget for the 2016/17 fiscal year. The new budget, which will take effect on April 1, is down $100 million from the previous year. This year’s budget is focused on ensuring ease of doing business, improving the country’s productivity, increasing capacity for building human capital, and improving public welfare.

Brunei, U.S. discuss security partnership. Brunei and the United States are looking to establish a state partnership program that will connect Brunei’s military with the U.S. National Guard, according to a March 14 Brunei Times article. The program will seek to promote stronger bilateral defense ties and security cooperation to address challenges in the region. Maj. Gen. Mark Dillon, vice commander of the U.S. Pacific Air Forces, said Malaysia and Laos have also expressed interest in participating.

Mekong River

China to grant $11.5 billion in loans and credit to Lower Mekong countries. Chinese premier Li Keqiang said at the Mekong-Lancang Cooperation Summit in Beijing on March 23 that China will offer $1.54 billion in preferential loans and a $10 billion credit line to Cambodia, Laos, Myanmar, Thailand, and Vietnam. Li did not provide a timeframe for the funding, which is expected to go toward improving infrastructure in the five Lower Mekong countries.


Moody’s forecasts diverging growth outlooks for ASEAN countries. Moody’s Investors Service on March 22 released a report forecasting diverging growth outlooks for ASEAN member economies in 2016 and 2017, based on the relative importance of trade to each country’s gross domestic product. The major export-oriented economies—Malaysia, Singapore, and Thailand—will experience lower growth prospects than the more domestic-demand-driven economies of Indonesia and the Philippines. Meanwhile, Vietnam’s manufacturing activity and strong foreign direct investment flows make its growth outlook particularly robust.

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Looking Ahead

World Energy China Outlook 2016. The CSIS Energy and National Security Program and Freeman Chair in China Studies on April 5 will host Xiaojie Xu, chief fellow at the Institute of World Economics and Politics, Chinese Academy of Social Sciences, Beijing, at the World Energy China Outlook 2016. Xu will present a Chinese perspective on world energy trends with a focus on domestic energy development and global implications. Jane Nakano, senior fellow, CSIS Energy and National Security Program, will moderate. The event will take place from 10:00 a.m. to 11:30 a.m., 1616 Rhode Island Ave., NW. E-mail the Energy and National Security Program to register.

Global Military Spending and the Arms Trade: Trends & Implications. The Stimson Center on April 5 will host a discussion on military spending and international arms transfers and the potential implications on U.S. national security and foreign policy. The event will present major findings and key trends from the Stockholm International Peace Research Institute’s current data on global military expenditures and international arms sales. The event will take place from 10:00 a.m. to 11:30 a.m., 8th Floor, 1211 Connecticut Ave., NW. Click here to register.

U.S. Policy in Myanmar: Perception vs. Reality. The U.S.-ASEAN Business Council and the Young Professionals in International Affairs on April 6 will host a discussion on U.S.-Myanmar relations as Myanmar transitions to civilian rule for the first time in over 50 years. Speakers include Erin Murphy, former special representative and policy coordinator for Myanmar, U.S. State Department; Jack Myint, associate, U.S.-ASEAN Business Council; and Matt Solomon, manager for ASEAN, Myanmar, and Thailand, US-ASEAN Business Council. The event will take place from 6:30 p.m. to 8:00 p.m., Suite 411, 1101 17th Street, NW. Click here to register.

Domestic Dimensions of China’s Foreign Policy: How Internal Dynamics Shape China’s Actions Abroad. The United States Institute of Peace and Georgetown University on April 7 will host a day-long conference on how China’s internal economic, political, and security pressures are influencing its actions abroad. Speakers include Chris Johnson, senior adviser and Freeman Chair, CSIS; Scott Harold, associate director, RAND Corporation; Jessica Chen Weiss, associate professor, Cornell University; Melanie Hart, China policy director, Center for American Progress; Richard McGregor, public policy fellow, Woodrow Wilson Center for International Scholars; David Shambaugh, professor, George Washington University; and Phillip Saunders, distinguished research fellow, National Defense University. The event will take place from 9:00 a.m. to 4:30 p.m., 2301 Constitution Ave, NW. Click here to register.

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For more on the 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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