CSIS Southeast Asia from Scott Circle – July 21, 2016

Singapore-U.S. Relations to Set Pace for Twenty-first Century U.S. Engagement in Southeast Asia

By Phuong Nguyen (@PNguyen_DC), Associate Fellow, Southeast Asia Program (@SoutheastAsiaDC), CSIS

July 21, 2016

Singapore prime minister Lee Hsien Loong will pay an official visit to Washington, complete with a state dinner in his honor hosted by President Barack Obama, on August 1-2. The visit comes as the two countries celebrate the 50th anniversary of their diplomatic relations. Lee will be the first leader from Southeast Asia hosted for a state dinner at the Obama White House, a privilege enjoyed by only four other Asian leaders—from China, Japan, India, and South Korea—during Obama’s two terms.

The importance with which the administration accords the visit is evidence of the recognition in Washington that Singapore is an indispensable U.S. strategic partner and an anchor for U.S. engagement with the Southeast Asia region.

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Biweekly Update

  • UN arbitral tribunal invalidates China’s nine-dash line
  • U.S. sends senior diplomat to meet Duterte’s cabinet members
  • Indonesian SOEs issue shares to raise funds for infrastructure projects
  • Aung San Suu Kyi holds talks with ethnic rebel leaders
  • McConnell says TPP passage unlikely this year

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Singapore-U.S. Relations to Set Pace for Twenty-first Century U.S. Engagement in Southeast Asia

By Phuong Nguyen (@PNguyen_DC), Associate Fellow, Southeast Asia Program (@SoutheastAsiaDC), CSIS

July 21, 2016

Singapore prime minister Lee Hsien Loong will pay an official visit to Washington, complete with a state dinner in his honor hosted by President Barack Obama, on August 1-2. The visit comes as the two countries celebrate the 50th anniversary of their diplomatic relations. Lee will be the first leader from Southeast Asia hosted for a state dinner at the Obama White House, a privilege enjoyed by only four other Asian leaders—from China, Japan, India, and South Korea—during Obama’s two terms.

The importance with which the administration accords the visit is evidence of the recognition in Washington that Singapore is an indispensable U.S. strategic partner and an anchor for U.S. engagement with the Southeast Asia region.

While the two countries have over the decades built a close and robust partnership spanning from trade and investment to defense and regional security and development cooperation, both sides know that the bilateral relationship is a mature one, with little low-hanging fruit left to pick. Ensuring the strength of the Singapore-U.S. partnership for decades to come hence requires continuous investment by both countries to identify new critical areas of cooperation and, increasingly, consult one another on a host of emerging trends and challenges under way in the wider Asia-Pacific region.

The United States and Singapore have recently begun to do so in cyber defense and biosecurity—two areas in which Singapore is well-positioned to become a leading regional U.S. partner—but more can be done. Of equal importance, the two partners should be creative in thinking about the structure and utility of bilateral dialogue mechanisms in future years.

As Washington works to bolster its economic footprint and engagement in Southeast Asia, it is crucial for the U.S. government to understand and appreciate how its closest economic partner in this region views the forces driving regional integration and economic development in twenty-first century Asia.

Since 2012, Washington and Singapore have conducted an annual Strategic Partnership Dialogue, an avenue for senior officials to review progress in ongoing areas of cooperation and discuss regional and global issues of mutual interest. Future U.S. administrations could expand the dialogue to include a consultation mechanism covering trade, economics, and innovation for government agencies and officials with relevant portfolios from both sides.
The bulk of U.S. investment in Asia is concentrated in ASEAN economies, and Singapore, home to over 5,000 U.S. companies operating in the region, serves as the logistical, research and development, legal, and judicial backbone for many of these companies.

Understanding this perspective—whether it be the role Singapore plans to play in the new China-led Asia Infrastructure Investment Bank (AIIB), or what it sees as emerging areas in which the United States needs to lead or help improve the rules of the road—will be critical to Washington’s ability to prepare for and respond to the economic landscape of an increasingly interconnected Asia.

Meanwhile, bilateral defense cooperation has made significant strides in recent years with rotational deployments of four U.S. Navy littoral combat ships through Changi Naval Base, the signing of an enhanced defense cooperation agreement last December, and regular flights over the South China Sea conducted by U.S. P-8A maritime patrol aircraft from Paya Lebar Air Base beginning in 2015. The two sides last year also agreed to establish high-level defense dialogue mechanisms.

In addition to areas in which the two governments have agreed to expand cooperation such as military technology and non-traditional security challenges, the United States can encourage Singapore to gradually play a bigger role in U.S.-led regional exercises, including in trilateral drills of the annual Cooperation Afloat Readiness and Training exercise in Southeast Asian waters and the biannual Rim of the Pacific exercise in Hawaii.

At the same time, the popular narrative in Washington about what has come to be known as the “Singapore model” fostered by its founding father, Lee Kuan Yew—authoritarian and effective—needs to evolve if U.S. officials and policy analysts are to keep abreast of Singapore’s political trajectory. The landslide victory of the ruling People’s Action Party last September, along with Lee Kuan Yew’s death, has allowed Prime Minister Lee to propose a number of concrete changes to the political system designed to give the opposition a little more presence and influence in parliament in order to make the system “more open and contestable” in the future. Singaporeans both in and outside the government have been vigorously debating how their society ought to adapt at the current juncture, whether it is about the function of the civil service or the effectiveness of the education system.

But while the strength of the relationship gives Washington confidence, future U.S. policymakers may want to remember that Singapore is also a deft diplomatic balancer. Singapore policymakers have been strong believers in the strategic utility of U.S. leadership globally, and in the Asia Pacific in particular. Singapore leaders have consistently advocated for the United States to write the rules of trade and investment in Asia in the twenty-first century, and for China to abide by international rules and norms.

Yet they also see the importance of accommodating China’s rise and regional aspirations. Singapore, for instance, has been very supportive of both the AIIB and the planned “One Belt, One Road” initiative, and was one of the first countries in Asia to set up cooperation mechanisms with Beijing in response to these initiatives. It has also begun working with China to research the process for the internationalization of the renminbi. Singapore knows that it needs to be prepared to live in a region in which China may become the uncontested leader.

It is critical, therefore, for Washington to actively court Singapore, no matter how close and established the relationship, and at the same time tap into the perspectives gained from this partnership to calibrate U.S. strategy toward and engagement with the Southeast Asia region in the coming years.

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Biweekly Update

Indonesia

Indonesia accelerates economic, military development programs in Natuna Islands. Coordinating Maritime Affairs Minister Rizal Ramli on July 13 said Indonesia needs to accelerate economic activities and development in the Natuna Regency in order to maintain Indonesia’s sovereignty over the area. The government has called for a “comprehensive” development program encompassing fishing, tourism, and oil and gas exploration. Indonesia is set to increase its military personnel stationed in Natuna from 800 to 2,000 troops this year.

Jokowi swears in new police chief, calls for a united police force. President Joko Widodo on July 13 inaugurated General Tito Karnavian as Indonesia’s new police chief. Widodo urged Karnavian to focus on “uniting the Indonesian police force and building solidarity among its personnel” and fighting corruption in the justice system, and to be willing to work with the Corruption Eradication Commission, Indonesia’s respected anti-graft agency. The appointment was Karnavian’s second promotion this year, after he was made head of the national counterterrorism agency in March.

Government allows four SOEs to issue shares to raise funds. The government on July 12 said it will let four state-owned enterprises issue shares on the stock exchange in an effort to raise at least $1 billion in funds. The four companies are highway developer and operator PT Jasa Marga, construction company PT Wijaya Karya, steelmaker PT Krakatau Steel, and real estate developer and builder PT Pembangunan Perumahan. The funds raised will go toward supporting infrastructure projects such as toll roads, power plants, ports, and housing projects.

Philippines

U.S. State Department counselor visits the Philippines, meets Duterte’s cabinet. U.S. State Department counselor Kristie Kenney visited the Philippines from July 9 to 12, where she met with members of President Rodrigo Duterte’s cabinet, civil society leaders, and Philippine members of the Young Southeast Asian Leaders Initiative. Kenney met with Foreign Secretary Perfecto Yasay, Defense Secretary Delfin Lorenzana, and National Security Adviser Hermogenes Esperon. Kenney, who was a former U.S. ambassador to the Philippines, was the first high-level U.S. official to visit the Philippines since Duterte took office. She reiterated the United States’ commitment to friendship and partnership with the Philippines.

Police say 55 Abu Sayyaf militants killed in latest offensive. Authorities said a military operation in Basilan Province in the southern Philippines on July 12 killed another 15 Abu Sayyaf militants. The operation was part of an offensive that started on July 7. Twenty-two militants were killed in Sulu and another 18 in Basilan over the previous week, according to government figures. Military chief Lt. Gen. Ricardo Visaya on July 4 said the military would employ a “shock and awe” tactic against Abu Sayyaf.

Philippines, Japan hold coast guard exercise. The Philippine and Japanese coast guards on July 13 held the sixth iteration of their joint maritime law enforcement exercise in Manila Bay. The exercise involved ships and aircraft coordinating on a piracy and lawlessness-at-sea scenario. Philippine Coast Guard spokesman Commander Armand Balilo said Japan has been assisting the Philippines with coastal patrols. Australia, Malaysia, and the United States sent observers to the exercise.

Myanmar

U.S. ambassador visits Rakhine State, meets Muslim community and Rakhine political party. U.S. ambassador to Myanmar Scot Marciel on July 6 made his first visit to Rakhine State, where he met with members of the Arakan National Party (ANP), which represents Rakhine Buddhists living in the state, and members of the Muslim community in Aung Mingalar, a segregated area in the state capital of Sittwe. Marciel discussed the ANP’s relationship with the ruling National League for Democracy and said he will bring up concerns raised by the local Muslim community with State Counselor Aung San Suu Kyi.

Aung San Suu Kyi holds talks with ethnic rebel leaders. State Counselor Aung San Suu Kyi on July 17 met in Yangon with leaders of the United Nationalities Federal Council (UNFC), an alliance of ethnic armed groups that did not join eight other groups that signed a cease-fire agreement last October. UNFC leaders raised concerns about the military’s continued offensive against several groups in northern Myanmar. Aung San Suu Kyi said she wants to involve non–cease-fire groups, including those still engaged in fighting against government troops, in the 21st Century Panglong Conference planned for August.

State Buddhist authority denounces radical Buddhist group Ma Ba Tha. The state Buddhist authority, the Sangha Maha Nayaka Committee, on July 12 disavowed radical Buddhist group Ma Ba Tha. The committee, which had previously kept silent on the issue, said it does not recognize the Ma Ba Tha, and denied Ma Ba Tha’s claim that the group was an offshoot of the sangha. Minister for Religious Affairs Aung Ko on July 14 cautioned Ma Ba Tha supporters against inciting further communal conflicts in Myanmar.

Vietnam

Foxconn to acquire Microsoft’s Vietnam plant for $22 million. Taiwanese electronics manufacturing giant Foxconn Technology Group agreed to buy Microsoft’s mobile unit in Vietnam via a subsidiary for $22 million, according to a July 11 report by Digitimes. Under the deal, Microsoft will hand over all of its plants in Vietnam to the Taiwanese firm. Foxconn will use Microsoft’s facilities and other assets to produce feature phones and smartphones in Vietnam, currently one of the world’s leading smartphone manufacturers.

Vietnam demands investigation after Thai navy shoots at fishing crew. Vietnam’s Ministry of Foreign Affairs has demanded a probe into the Thai navy’s July 10 attack on three Vietnamese fishing boats, according to a report in Tuoi Tre News on July 11. The incident occurred in the Gulf of Thailand, where a Thai navy ship pursued and fired at the Vietnamese boats, wounding two fishermen. Two of the Vietnamese vessels sank after colliding with the Thai boat, causing one helmsman to go missing. The apprehended crew was charged with trespassing and detained in Thailand. Thai authorities rescued the missing helmsman and are investigating the incident.

Communist Party central committee debates new leadership, addresses leadership reform during third plenum. The Central Committee of the ruling Vietnamese Communist Party convened its third plenum from July 4 to 7, during which members discussed specific measures to tighten party discipline and drafted the candidate list for government leadership posts that have not been filled since a new government took office in April. The Politburo proposed, however, that the top three positions of state president, prime minister, and chair of the National Assembly, along with 34 leadership posts in state agencies, not be put up for re-election in the new legislature. The plenum also considered measures to foster transparency within the party leadership and set the basis for future reforms.

Thailand

Poll finds 77 percent of survey respondents plan to vote in referendum. In a July 9 nationwide telephone survey of more than 1,700 people, over three-quarters of respondents said they would vote in the August 7 referendum on the draft constitution, while 10 percent said they would not vote and 12 percent were unsure. Nearly half of respondents said they would vote in favor of the draft, with just 7 percent voting against. Thirty-seven percent were unsure how they would vote. Surveyors contacted respondents through the Bangkok Poll database.

Prime minister warns creators of “fake” constitution booklets could face jail time. A group of student activists on July 7 admitted to distributing booklets with misleading information about the draft constitution. The booklets, mimicking the Constitution Drafting Commission’s official materials for the referendum, were distributed around Chiang Mai in northern Thailand. The activists, who called themselves the New Democracy Movement, claimed that they were supported by donations and denied links to political groups. Prime Minister Prayuth Chan-o-cha on July 8 announced that “many people will be put in jail” as the investigations continue.

Malaysia

Central bank cuts interest rates for the first time in seven years. The central bank on July 13 cut its key interest rate to 3 percent, the first rate cut in seven years, in an effort to help Malaysia remain on a “steady growth path.” Malaysia, Southeast Asia’s third-largest economy, has had five quarters of slow growth due to a decline in global crude and commodity prices.

Islamic State militant threatens to kill Malaysia’s counterterrorism chief. The director of the Malaysian police’s counterterrorism unit, Ayob Khan, on July 13 received a death threat through a personal phone call by Muhammad Wanndy, a Syria-based Malaysian fighter with the Islamic State. Ayob was targeted for his involvement in combating terrorism and his arrest of Wanndy’s older brother in May. Malaysian police have detained 213 individuals, including 27 foreigners, for suspected links to terror groups over the past year.

Singapore

Government hopes to boost financial technology with first IBM innovation center. IBM announced on July 11 that it is working with the Singapore Economic Development Board and the Monetary Authority of Singapore to create a blockchain innovation center in the country, as Singapore looks to define itself as a financial technology hub in Asia. Blockchain technology creates public yet highly secure permanent ledgers of transactions that are not easily modified or removed. The first project will focus on using the technology to make multiparty trade finance processes more efficient.

Cambodia

Murder of prominent government critic shakes Cambodia. Anger reigned in Cambodia after Kem Ley, a prominent critic of the government, was shot dead on July 9 in broad daylight in Phnom Penh. The alleged murderer was identified as 44-year-old ex-soldier Oeut Ang. Ang cited a financial dispute as the motive for the murder, a claim immediately challenged by Ley’s supporters, who implicated the government in the killing. Ang faces a potential life sentence for premeditated homicide and illegal possession of a firearm. Prime Minister Hun Sen has promised a “vigorous investigation” into the incident.

House Foreign Affairs Committee resolution calls for improved human rights in Cambodia. The U.S. House Foreign Affairs Committee on July 14 passed Resolution 728, calling for progress on democracy, rule of law, and human rights in Cambodia. The resolution urges the Cambodian government to improve domestic political conditions leading up to the 2018 general elections and demands an end to the persecution of opposition lawmakers by the ruling Cambodian People’s Party. In December 2015, 16 U.S. congressional representatives sent a letter to Prime Minister Hun Sen reprimanding him for the political persecution of opposition leader Sam Rainsy, now in self-imposed exile to avoid arrest.

Laos

Top leaders visit Thailand, Vietnam. Lao prime minister Thongloun Sisoulith on July 6 met with his Thai counterpart, General Prayuth Chan-o-cha, in Thailand to discuss ways to boost bilateral economic ties. The two agreed to promote a joint tourism package that would allow foreign visitors to Thailand to extend their vacation in Laos and signed a memorandum of understanding on labor protection. In a July 12 meeting with top Vietnamese leaders in Hanoi, Lao vice president Phankham Viphavanh affirmed the wish for enhanced cooperation between the two countries on defense, security, trade, and technology, among other aspects of bilateral links.

Trans-Pacific Partnership

McConnell says TPP passage unlikely this year. U.S. Senate majority leader Mitch McConnell on July 12 suggested that it might fall on the next U.S. president to determine the direction of the Trans-Pacific Partnership (TPP) trade agreement. According to McConnell, “the chances are pretty slim” for ratification of the TPP this year, and that it would be virtually impossible to pass the TPP in the “lame duck” period after the November presidential elections in the current political climate. The two presidential candidates, Hillary Clinton and Donald Trump, have said they are opposed to the deal, which the United States signed with 11 Pacific Rim nations in February.

South China Sea

Arbitral tribunal rules in Philippines’ favor, invalidates China’s “nine-dash line” claim. The Permanent Court of Arbitration in The Hague on July 12 ruled unanimously in the Philippines’ favor in the South China Sea arbitration case against China. The court ruled that China’s “nine-dash line” claim had no legal basis under the UN Convention on the Law of the Sea, that no features in the Spratly Islands generate an exclusive economic zone, and that China breached Philippine sovereignty and damaged the sea’s ecosystem through its land reclamation and construction of artificial islands. Beijing, which boycotted the proceedings throughout, denounced the decision. It has since said that China will continue construction of facilities and conduct regular patrols in the South China Sea after the ruling.

Taiwan rejects Hague court ruling, sends patrol ship to Itu Aba. Taiwanese president Tsai Ing-wen on July 13 dismissed the verdict of the Permanent Court of Arbitration in the China-Philippines South China Sea maritime dispute case, which ruled that Taiwan-administered Itu Aba in the Spratly Islands is a rock and therefore not entitled to a 200 nautical mile exclusive economic zone under the UN Convention on the Law of the Sea. Tsai in response deployed a frigate to the area. Taiwan’s Ministry of National Defense has vowed to continue patrol missions in the South China Sea.

China denies sinking Vietnamese fishing boat, sends civilian aircraft to Spratly features. China’s Ministry of Foreign Affairs on July 14 denied Vietnam’s accusation that two Chinese Coast Guard ships on July 9 rammed and sank a Vietnamese fishing boat near the Paracel Islands, where Hanoi and Beijing have overlapping maritime claims. China claimed that the ships were sent to drive away the Vietnamese boat, which had infringed on Chinese waters. All five fishermen aboard the boat have been rescued. Separately, two Chinese civilian aircraft on July 13 landed at airstrips on Mischief Reef and Subi Reef, both of which were built into artificial islands by China. The planes promptly returned to China’s Hainan province, their point of departure.

ASEAN

ASEAN governments call for restraint after South China Sea arbitration ruling. A number of ASEAN governments on July 12 urged restraint in response to the ruling by the Permanent Court of Arbitration in The Hague on the case filed by the Philippines against China over the South China Sea dispute. Hours before the ruling was issued, the Thai Foreign Ministry released a statement calling for peace and stability, while the Indonesian Foreign Ministry called on all parties to exercise self-restraint. Singapore also called for self-restraint and respect for the use of legal and diplomatic processes in resolving disputes.

Mekong River

Vietnam receives $560 million loan to support urban development in Mekong Delta. Vietnam’s central bank on July 11 signed agreements with the World Bank for a $560 million loan to support two projects in the Mekong Delta, Vietnam’s rice-producing region. Of the loan, $250 million was earmarked for a project on urban development and flood control systems in Can Tho City, while the remaining $310 million will be used to safeguard sustainable livelihoods for the 1.2 million people living in nine Mekong Delta provinces that have been affected by flooding, drought, and salinity intrusion.

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For more on the Southeast Asia Program, 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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