May 30, 2012

Cambodia - ‘Restraint’ watchword at ASEAN meet

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The planned theme of yesterday’s ASEAN defence ministers roundtable was military co-operation between countries, particularly in times of natural disaster, but it was a theme invariably pushed to the background by other regional developments.

Among them was what appeared to be a cooling-off period in the dispute between the Philippines and China over sovereignty in the South China Sea, as well as this week’s visit by China’s minister of defence, the timing of which raised some eyebrows.

ASEAN members the Philippines, Vietnam, Malaysia and Brunei, along with China and Taiwan, claim portions of the resource-rich body of water.

Last month, China and the Philippines each sent boats to a disputed reef that both countries claim.

But that standoff seems to have turned into a waiting game, based on remarks by the minister of defence for the Philippines, Voltaire Gazmin.

He said that as of yesterday afternoon, only two vessels remained around the reef, which the Philippines calls the Scarborough Shoal.

Gazmin also told reporters he met with his Chinese counterpart, Lian Guanglie, on Monday at Guanglie’s hotel.

“It was agreed that we exercise restraint in our statements and in our actions, and continue an open dialogue,” he said following the closed-door meeting.

A day before last night’s meeting between Guanglie and his ASEAN counterparts, China pledged about $19 million in defence aid to Cambodia as part of a military agreement signed between the two countries.

The stated purpose of the meeting was for the Chinese official to explain his country’s stance on the South China Sea yesterday, but Defence Minister Tea Banh denied yesterday that Guanglie’s visit was intended to influence the ASEAN talks.

The visit, he said, simply “coincided” with the ministers’ meeting.

Separately, the defence ministers accepted an initiative floated by Prime Minister Hun Sen to look at how Cambodia successfully assimilated Khmer Rouge guerrillas into the government in 1998.

The so-called “win-win” policy put an end to years of civil war.

“Cambodia is proposing a concept paper on the ASEAN Civil War Free Zone, by using our experiences in civil war termination to contribute to peace and stability in the region,” Tea Banh said in opening remarks.

Joseph Freeman and Vong Sokheng
The Phnom Penh Post

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Thailand - How can Asean solve its energy trilemma?

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As global leaders descend on Bangkok for the World Economic Forum on East Asia, the focus will be squarely on "Shaping the Region's Future through Connectivity".

With Asean countries gearing up for the formation of an Economic Community in 2015, an important part of this agenda will be driving greater energy integration.

The Asean Plan of Action for Energy Cooperation (APAEC) 2010-15 covers the energy component of the Economic Community Blueprint 2015. At its heart is creating a solution for the energy "trilemma" _ delivering on energy security, and economic growth and development, in an environmentally sustainable way.

This will not be a straightforward task. By 2020 Asean will be the world's eighth-largest economy and have the world's third-largest population, next only to China and India. This will bring with it bumper energy demand, and create a fundamental challenge in securing supplies. According to the Institute of Energy Economics Japan, Asean's final energy consumption will grow at a 4.4% average annual rate from 375 million tonnes of oil equivalent (MTOE) to 1,018 MTOE.

This near tripling of demand will require huge investments to expand the region's energy infrastructure _ everything from power generation, to pipelines and grids. The International Energy Agency estimates this investment will need to reach US$1.1 trillion by 2030.

This expansion of energy supply infrastructure will not only come at an economic cost, but an environmental one. If current trends continue by 2030 Asean's share of global energy-related, carbon-dioxide emissions reaches 5%, up from 3.5% today. Without drastic reductions in global CO2 emissions, the earth's temperature could rise by as much as six degrees Celsius by the end of the century. While Copenhagen recognised the case for keeping global temperature rises below 2 degrees, it failed to produce a binding agreement. This means that solutions to tackling climate change will need to come at the regional level, highlighting the importance for Asean countries to pursue a more sustainable path.

By tackling energy challenges at a regional level, as opposed to unilaterally, the Asean countries will be able to draw on one another's strengths, in order to overcome their own indigenous weaknesses. The planned components of the APAEC will therefore play an important role in tackling the energy "trilemma" and the challenges highlighted above.

The Trans-Asean Gas Pipeline will boost prospects for gas exploration and production, improving market access for otherwise stranded resources. By linking suppliers and customers in long-term relationships it will reduce political risks, contributing to a more consistent supply. In the oil sector, it is assumed that moves to reduce legal and regulatory uncertainties and to improve the tax environment will boost prospects for investment. For additional sources, negotiating with international oil and gas suppliers from the Middle East and elsewhere, on a regional basis, will also put in the region in a position of strength.

The formation of an Asean Power Grid will offer a variety of geographic predisposition, and therefore a diverse area of high potential for renewable sources _ while Laos and Myanmar can provide sustainable sources of hydro, the Philippines, which has high levels of solar radiation, can provide renewable fuels for the power generation sector. Combining regional demand curves in electricity markets will help reduce volatility. This will facilitate peak demand shaving, reducing requirements for base-load power generation, and therefore enabling a more efficient and economic power generation sector. Equally, nations with a large agricultural base, such as Thailand, can supply the region with low-carbon, second-generation biofuels for the transportation sector.

The pace of implementation will hinge on the willingness of individual nations to reform and liberalise their energy sectors. This involves action on cost-reflective fossil fuel pricing, and opening energy-supply industries to greater market competition. A multi-country market will require harmonised standards, common policies and pricing regulation. To facilitate this requires collaborative partnerships to be built across the region. This applies to both the public and private sectors, and between the two.

The World Economic Forum, through its work with the Ministry of Energy, is helping to build these multi-stakeholder partnerships, bringing together industry, government and civil society to help shape a New Energy Architecture for the Asean region. It is our hope that by building a united Asean, we can create a more secure, affordable and sustainable Asean energy supply.

Busba Wongnapapisan


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ASEAN - Asean mulls energy path

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Imports too much oil for regional security

Asean is being urged to speed up construction of gas pipelines and power grids to enhance energy security.

Greater collaboration is needed, as 40-50% of the region relies on oil imports, said Busba Wongnapapisan, head of the World Economic Forum's renewable energy industry.

"Countries could cooperate in a way to leverage their own strength such as Laos trading electricity to other countries, while Indonesia has hydro potential," she said.

Asean has an energy cooperation plan, with its first phase running from 2010-15 in terms of a regional plan to build trans-Asean pipelines and power grids connecting countries for the purpose of trade.

Currently, there are pipelines between Myanmar and Thailand, Malaysia and Singapore and Indonesia and Singapore, but they are not connected regionally to allow gas-rich countries to export to poorer ones, said Ms Busba.

The pipeline linking Myanmar and Thailand is still only one-way, but Thailand should be able to send back some gas if there is an oversupply, she suggested.

To cope with rising demand, Asean _ which has only about 1% of proven global oil reserves _ needs to invest US$1.1 trillion to build energy infrastructure by 2030, with more than half spent on the power sector. This would result in the region's share of global carbon emissions rising to 5% from 3.5%.

By 2020, Southeast Asia will have the world's third-largest population at more than 650 million, trailing behind China and India.

This offers a big potential for companies to invest in the region, but Ms Busba said there is a lack of progress being made for the region to be fully integrated, and the first phase of the plan will go beyond 2015.

She said the government needs to come up with a joint investment plan with other national and foreign oil companies.

"Different countries have different regulations. How can Asean countries harmonise their regulations, as it makes private companies reluctant to invest. They are waiting for a clear policy," she said.

Meanwhile, Thailand like other countries needs to work on energy efficiency, with plans to increase the country's energy production from renewable resources by 25% by 2020.

"Energy efficiency is the most challenging policy because Asean countries still need to grow economically," said Ms Busba.

Thailand needs more engineers and needs to decide on a biofuel policy that prevents competition between sectors.

The government will also have to come up with incentives for people to use less energy. In Europe, for instance, those who consume less energy can sell it back to the government.

Meanwhile consumers themselves have to be more aware of how much energy they consume per day, she said.

"The challenge is how to make sure the public understands the energy challenge they have to face. In some countries you have a blackout once in a while so you know the real value of electricity, but in Thailand and many other countries you don't know the real value," said Ms Busba.

Thailand has been a net import country with imports worth 800 billion baht per year, while energy demand is rising by 5% per year.

The country's import dependence is expected to increase to 80% in 2030, up from the current 60%. Thailand spent 6.8% of its GDP on oil imports in 2008, which is expected to increase to 8.5% by 2030.

"In terms of energy, we need to come up with a policy to allow Thailand to become the energy leader in the region. With a pipeline constructed, we can export our products," she said.

Bangkok Post


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Cambodia - ASEAN Defense Ministers Meet as South China Sea Dispute Continues

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On the second day of the ASEAN Defense Ministers' meeting in Phnom Penh, Asia's defense ministers worked on resolving the South China Sea dispute.


















This comes during an ongoing dispute between China and the Philippines over the Scarborough Shoal, known in Chinese as Huangyan Island.
          
At the meeting, Philippine Defense Secretary Voltaire Gazmin said he met with China's Defense Minister, who is on an official visit to Cambodia, on Monday.
                        
[Voltaire Gazmin, Philippine Defense Secretary]:

"Well, the reaction of the Chinese Defense Minister was a welcome gesture because I sat down with him and talked about the issues concerning both countries and, like I said, we agreed on three points -- to restrain our action, to restraint our statement so that it stops escalating and then we then continue to open lines of communication until we come up with a peaceful resolution to the case."             

In a month-long standoff between China and the Philippines over the disputed shoal, the Chinese regime has deployed patrol vessels from its expanding fleet of paramilitary ships.
  
Scarborough Shoal is believed to be rich in natural resources.

The South China Sea is an important sea route with about two-thirds of shipping transits running through it.



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Thailand - Suu Kyi tells Myanmar migrants she will "try my best"

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MAHACHAI, Thailand: Democracy icon Aung San Suu Kyi on Wednesday told an ecstatic crowd of Myanmar migrants in Thailand she would do all she could to help them, on the first stop of her first trip abroad in 24 years.

"I can give you one promise -- I will try my best for you," Suu Kyi told a crowd of hundreds who packed a narrow street in Samut Sakhon province south of Bangkok to see the opposition leader, who had not left her homeland since 1988.

Suu Kyi praised the strong "spirit" of workers from Myanmar, also known as Burma, "in spite of the many troubles they have been through" in comments to journalists.

"All of them say one thing -- they want to go back to Burma as soon as possible. That of course is part of our responsibility," she said, adding that her visit to Mahachai was like being "back in Yangon".

Cheering Myanmar migrants held up banners with Suu Kyi's picture and signs in Burmese and English that read "Free Burma" and "We want to go home".

"I am very happy and I want to cry. I feel that we will get democracy in Myanmar," said Phyu, who has been in Thailand for six years.

Suu Kyi's foray beyond Myanmar's borders is a significant show of confidence in dramatic changes that have swept her homeland since a near 50-year military government was replaced with a quasi-civilian regime last year.

The former political prisoner, who won a seat in parliament in historic April by-elections, is expected to meet Thailand's prime minister and attend the World Economic Forum on East Asia during several days in the country.

Her decision to begin the trip by meeting some of the hundreds of thousands of Myanmar migrants who work in low paid jobs in Thai homes, factories and fishing boats, shines a spotlight on a group that has long been marginalised and prone to exploitation.

Thailand's workforce is heavily reliant on low-cost foreign workers, both legal and trafficked, with Myanmar nationals accounting for around 80 percent of the two million registered migrants in the kingdom. There may be a further one million undocumented foreign workers.

"Most of the workers here want to go back home, but we can't afford that. There are no jobs back there and it's difficult to eat, difficult to live," said Aung Htun, 28, a rice mill worker.

Suu Kyi met several migrant workers as part of her visit, hearing stories that conveyed a range of experiences and promised to discuss the issues with the Thai authorities.

Pavin Chachavalpongpun, of the Centre for Southeast Asian Studies at Japan's Kyoto University, said the veteran activist was looking to "reconnect her lost connection with those who live outside the country".

"There are a lot of Burmese exiles in Thailand, Burmese dissidents and immigrant workers, that is why she chose to go there," he said.

Suu Kyi's ventures overseas, which also include a European tour in June, are seen as the completion of her transformation from prisoner to global politician.

The 66-year-old, who spent 15 of the past 22 years under house arrest, refused to travel abroad in the past even when the former military government denied her dying husband a visa to visit her, because of fears she would never be allowed to return.

Suu Kyi also said she would meet refugees in northern Thailand, where roughly 100,000 people live in camps after being displaced by ethnic conflict in Myanmar's eastern border areas.

She is scheduled to speak at an open discussion with World Economic Forum founder Klaus Schwab and appear on Friday at a session on the role of Asian women.

Suu Kyi's European travel plans include an address to an International Labour Organization conference in Geneva on June 14.

After that she will make a speech in Oslo on June 16 to finally accept the Nobel Peace Prize she was awarded in 1991 for her peaceful struggle for democracy.

She also intends to travel to Britain, where she lived for years with her family, and will address parliament in London on June 21.

Myanmar President Thein Sein, who is credited with a string of reforms that have prompted the international community to ease sanctions, has postponed an official visit to Thailand which would have clashed with Suu Kyi's trip.

He will now travel to the country on June 4 and 5, according to the Thai foreign ministry.

- AFP/al



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Cambodia - ASEAN defence ministers sign joint declaration

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SINGAPORE: ASEAN defence ministers on Tuesday signed a joint declaration reaffirming their commitment to enhance regional peace and security.

The signing took place at the 6th ASEAN Defence Ministers' Meeting (ADMM) in Phnom Penh, Cambodia, which was attended by Singapore's Defence Minister Ng Eng Hen.

The gathering saw the region's defence ministers discussing security issues.

They welcomed the good progress in practical cooperation among member states and also noted the success of the inaugural ASEAN humanitarian assistance and disaster relief exercise, conducted in Indonesia and Singapore in 2011.

The ministers also adopted the concept paper reviewing the frequency of ADMM-Plus Meetings, which shortens the interval of ADMM-Plus meetings from once in three years to once in two years.

Separately, the ministers jointly called on Cambodian Prime Minister Hun Sen.

Dr Ng held bilateral meetings with Cambodia's Deputy Prime Minister and Defence Minister General Tea Banh, Brunei Minister of Energy Yasmin bin Haji Umar and Vietnam Defence Minister General Phung Quang Thanh.

Dr Ng also had a bilateral meeting with the Chinese Defence Minister Liang Guanglie, who was visiting Cambodia at the same time.

- CNA/wm


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Philippines - Philippines-EU trade bucks ASEAN uptrend

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TRADE BETWEEN the Philippines and the European Union dipped last year, bucking an uptrend for the wider Southeast Asian region as firms "did not benefit as much" from opportunities.

"[T]he Philippines was the only ASEAN (Association of Southeast Asian Nations) country to experience a fall in exports to the EU ... At the same time, the Philippines recorded the second lowest growth rate of EU exports to ASEAN countries, only slightly ahead of Malaysia (5.9%)," a fact file from the EU Delegation in Manila showed.

Total trade between the Philippines and the EU was said to have dropped by 0.6% to 9.1 million euros in 2011, with the country’s exports to the 27-nation bloc dropping by 5.4% to 5.1 million euros and imports gaining 6.3% to four million euros.

The EU’s total trade with the 10-member ASEAN, in comparison, grew by 9% to 162 billion euros in 2011. ASEAN exports to the EU also continued to expand last year, exapnding by 7% to 93 billion euros, while imports increased by a larger 12% to 68 billion euros.

Guy Ledoux, head of the EU delegation to the Philippines, said the decline was due to "a very significant slowdown of Philippines IT (information technology) products export of more than 20% globally."

Philippine exports of IT products to the EU declined by 10% to three billion euros.

"For 2012, the IT industry in the Philippines is picking up again which will boost Philippines export to the EU. As a result it is very likely that we will see an increase of EU-Philippines trade," Mr. Ledoux said.

According to the fact file, the Philippines also slipped to being the EU’s 46th largest trading partner last year, from 42nd in 2010.

In supplier terms, the country’s ranking slipped to 45th from 41st. In contrast, Vietnam rose three places to 27th and it now exports to the EU more than twice as much as the Philippines.

"However, as an export market for the EU, the Philippines’ ranking improved two places to rank 44, but its share remained at 0.3% of total EU exports, far behind most of its ASEAN neighbors, although similar to Vietnam’s share (rank 39)," the fact file states.

Sought for comment, Philippine Exporters Confederation, Inc. President Sergio R. Ortiz-Luis said the country lagged behind because "many of the ASEAN countries have strong relations with the EU as former ... territories."

"ASEAN countries enjoy special preferences from the EU. On the other hand, EU is not a natural market for the Philippines."



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Malaysia - Indonesia bank ownership rule change bad for ASEAN: M'sia PM Najib

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KUALA LUMPUR: Malaysian Prime Minister Najib Razak on Tuesday urged Indonesia not to lower the foreign equity ownership ceiling for its banking institutions.

Speaking at an investors conference in Kuala Lumpur, Mr Najib said the proposed move to limit foreign shareholding in Indonesian banks and financial institutions to not more than 50 per cent was regressive and would undermine ASEAN's integration process.

"I don't like seeing ASEAN countries changing rules. ... If they do that, other coutnries will do the same and retaliate and that's going to undermine ASEAN integration," he said.

Two of Malaysia's largest banking groups, Maybank and CIMB - with interests spanning across Indonesia - have also expressed their concerns.

CEO of Maybank Investment Bank Tengku Zafrul Aziz said the bank currently holds 99 per cent of Maybank BII and 80 per cent of Maybank Kim Eng, both of which exceed the proposed ownership ceiling.

Mr Najib said Malaysia has been taking steps to further liberalise its financial and banking sectors and the government would review its current 30 per cent cap on foreign equity ownership for domestic banks.

However, some industry players are warning that the banks may not be ready.

"Definitely, opening for foreign competition is good but liberalising share holding structure is another thing," Tengku Zafrul Aziz said.

"We do want to see Malaysian banks strengthening their position in this region, if not globally. But first, Malaysian banks must be able to compete on a level playing field."

Malaysia allows foreigners to own up to 75 per cent in investment and Islamic banking institutions but has capped foreign equity ownership in other domestic banking institutions at 30 per cent.

- CNA/wm


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Philippines - ASEAN Sec-Gen underscores media’s role in ASEAN’s growth

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BANGKOK, Thailand, May 29 – The secretary-general of the Association of Southeast Asian Nations (ASEAN) has emphasized the contribution of media to the growth of ASEAN.

According to a statement posted ASEAN’s website, ASEAN secretary general Dr. Surin Pitsuwan said, “Like many people around the world, the media has become an inseparable aspect in our lives.”

“Everywhere we go, we see advertisements, magazines, television sets, radios, computers – and we perceive it as a source of entertainment, information, and communication,” he noted. “Asia Pacific, with its large Gen-Y population, has become the fastest growing region of social media users in the world. In fact, ASEAN member states such as Philippines and Malaysia have already achieved penetration rates of as much as 85 percent for popular social media sites.”

Speaking at the opening ceremony of the Asia Media Summit (AMS) 2012 in Bangkok, Thailand, Dr. Surin noted that “the AMS is an annual media gathering attended by decision makers, media professionals, scholars and stakeholders from Asia, Pacific, Africa, Europe, Middle East and North America, but it also stands for ASEAN member-states,” he said, followed by laughter from the audiences.

“Time has changed, and we should change with time,” he said, pointing out how fast the world has changed, and with it, the need to stay updated with the information exchange.

The rise of the middle class in ASEAN, and the increase of our purchasing power, point to our growing importance and our roles in the global economy, as well as the decision-making process.

“The media is the communicator for ASEAN, bringing the truth to the world and rolling out the news. Seen from a larger perspective, the media has contributed to ASEAN’s growth politically, economically, socially, culturally,” he said.

“Everyone in the world is watching us (the Asia Pacific and ASEAN), and we need you – the media's watchful eyes, your critical minds — to keep us on track," he added.

The ceremony also heard a written message from the Secretary General of the United Nations – Mr. Ban Ki Moon – who stressed the importance of scrutiny by a responsible media, in global affairs.

The panel also expressed their appreciation to the sponsors, as well as to the Thai Public Broadcasting Service (Thai PBS), for the tireless support of the two-day summit. (ASEAN)

Christine Joy Sarmiento


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Thailand - Novel SME programme targets higher AEC exports

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Project helps firms improve marketing

Tariffs no longer pose much of an obstacle for Thai small and medium-sized enterprises (SMEs) wanting to export to other Asean countries, but impediments remain in the form of foreign regulations, local culture and consumer behaviour.

For this reason, the "SME Ton Kla to Goal" project has been designed to help entrepreneurs improve their marketing, specifically those exporting food, beverages and crafts.

The programme, which is free of charge, is aimed at helping participants sharpen business plans and revamp packaging designs to improve sales in the Asean region, said Jirapaphan Malithong, director of the International Trade Promotion Department's Office of SME Support Solutions.

The department has developed the programme in cooperation with Thammasat University's Research and Consultancy Institute.

Some 3 million Thai SMEs are involved in exports, last year accounting for 2 trillion baht in export revenue or 30% of the total value of Thai exports.

Exports to other Asean countries have been growing, both in terms of volume and as a proportion of overall exports.

Last year, exports to Asean markets totalled 1.64 trillion baht or 24% of total exports.

With the help of academics and specialists, the Ton Kla to Goal project selects a handful of SMEs to attend intensive workshops about Asean Economic Community (AEC) import procedures.

The experts then provide individual companies with market analysis and help them plan their marketing strategies and develop packaging.

"Experts will give advice such as how to make their packaging more appealing to consumers in particular countries _ for instance, advising which colours would do well in Malaysia," said Ms Jirapaphan.

The third stage involves business field trips in Thailand and abroad. Then development prototypes are showcased at trade fair, such as the recent Thaifex _ World of Food Asia held at Impact Muang Thong Thani.

The programme began last year, and prototypes were showcased this past February. More than 100 SMEs applied.

"What makes this project different from other government-sponsored ones is we don't help SMEs develop their products from scratch but instead require companies to have already developed their products to some extent. We then help them with their marketing strategies and product matching in the real market," said Ms Jirapaphan.

This fiscal year, 55 SMEs will be selected, with the number increasing to 150 companies next year.

"SMEs don't usually have very clear business strategies when it comes to exports. We have been lucky to join the programme, as it means we're not alone in our endeavour," said Thitiwat Sirapantukul, the business development and marketing manager for Nithi Foods Co.

Nithi Foods makes fried-rice seasonings and was among the 20 SMEs selected in the first year.

Exports to Myanmar, China, Singapore and Japan account for less than 5% of the company's total sales.

"We hope this initiative will help us increase our exports to be equal to or more than domestic sales in the near future," said Mr Thitiwat.

Monthon Sattanon, general manager of The Waffle Supply Co, said the project was a helpful first step for SMEs preparing for the AEC in 2015.

The company has 200 kiosk franchisees in Thailand, and talks are being held to enter Singapore, the Philippines, Vietnam and Malaysia.



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Indonesia - Indonesia president warns of Europe impact on Asia

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JAKARTA, May 30, 2012 (AFP) - Indonesian President Susilo Bambang Yudhoyono said Europe's economic woes could hit Southeast Asia and warned the region against copying the integrated eurozone model, in comments printed Wednesday.

Yudhoyono told the Wall Street Journal that the slowdown in China's economic growth, stoked by weak demand from Europe, will "impact directly on the economy in this region".

The 10-member Association of Southeast Asian Nations (ASEAN) has set 2015 as the target for creating a single regional economic market, known as the ASEAN Economic Community.

But Yudhoyono, whose country has the biggest economy in ASEAN, said the region "has to learn from what happened in Europe".

"I have a strong belief that we shouldn't and we cannot imitate this structure, the character, of the European Union," he added.

"We prefer to have, of course, more structure" and more closely coordinated policy, he said, "but we should not copy the eurozone model".

Southeast Asian economies weathered a slowdown caused by the 2007/2008 financial crisis and are booming as the eurozone struggles to climb out of debt and contain rising unemployment.

Southeast Asia has a population of around 600 million and a gross domestic product of around $2 trillion, bigger that India's.

Analysts have forecast Indonesia's economy to grow more than six percent this year, as strong domestic demand buffers the nation of 240 million people from external shocks.

But the resource-rich country sells commodities such as coal and metals worth billions of dollars each year to China, whose slowdown has weakened global commodity prices.



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Malaysia - Maybank seeks banking licence in Laos while HLB hopes to raise stake in China’s Bank of Chengdu

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KUALA LUMPUR: Malayan Banking Bhd (Maybank) is eyeing a banking license in Laos while Hong Leong Bank Bhd (HLB) is hoping to raise the bank's stake in the soon-to-be-listed Bank of Chengdu Co Ltd.

Maybank president and chief executive officer Datuk Seri Abdul Wahid Omar said that the bank had applied to open a branch in Laos and this would complete the group's presence in the Asean region.

He said the bank was still awaiting approval from the relevant authorities and had not set a target when it would commence operations in Laos.

At the same time, Wahid said it was looking to further strengthen its presence in the region, among others, by converting its representative office in Myanmar to a branch office, although he did not specify the timeframe as to when this would take place.

The banking group currently has more than 2,200 branches internationally. In Thailand, for example, he said it intended to pursue retail and commercial banking operations there, where it now had investment banking and equity brokerage businesses.

In the Middle East, he said the bank already had a branch in Bahrain and that it was in the midst of looking at increasing its stake in the Saudi Arabian investment banking associate Anfaal Capital from the current 18%.

In India, Maybank has operations via Maybank Kim Eng and was also in the midst of re-activating its PT Bank Internasional Indonesia Tbk's Mumbai branch.

Wahid said Maybank was targeting to derive 40% of its earnings from international operations by 2015.
Meanwhile, HLB is looking to raise its stake in its 20%-owned associate Bank of Chengdu. However, the government has a 20% limit on foreign banks' holdings in Chinese retail banks.

Hong Leong group managing director and CEO Yvonne Chia said: “As long as the government today allows only a maximum of 20%, I don't think we can do much about it. When we have a chance to increase our stake, of course we will.”

Chengdu is currently in the queue to file an initial public offering (IPO) on the Shanghai Stock Exchange's A-share market. “We have submitted applications for the IPO. I'll wait for the outcome. We can only take 20% of what the law allows,” Chia said.

One of the bank's key strategies to improve return on assets and return on shareholders' funds is in its strategy for consumer banking. “In particular, our strategy for consumer banking is to rebalance, remix yield management and at the same time also bring in efficiency through the e-banking channel wherever we can,” Chia said.

On business banking, she said the key opportunity for HLB was to grow global markets to cross sell and capture the competencies that it had in its trade customers, the trade flows and analytics it had in business banking and translate that into solutions for its customers.

“With the merger with Eon Bank, we have grown our market share in the segment to about 9%, where previously it was between 2% and 3.5%,” Chia said.

She said HLB aimed to move its Islamic bank from a consumer Islamic bank to a wholesale bank. The contribution there will be from transaction income in Islamic wholesale and investment banking, treasury and wealth management.

“Post the merger, the benefit that we have is the relationship with the Government. We hope to further bring that to the next level,” Chia said.

She also said that as part of its merger plans with Eon Bank, HLB aimed to raise more ringgit funding.

“We have raised US dollars funding for our normal working capital and we are in the midst of raising ringgit funding to boost our capital,” she said.

DALJIT DHESI and WONG WEI-SHEN


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Malaysia - M’sian firms investing abroad have something to offer, says Mustapa

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KUALA LUMPUR: Malaysian companies that invest in other countries are not losing confidence in Malaysia but have something extra to  offer, says Minister of International Trade and Industry Datuk Seri Mustapa Mohamed.

“Malaysian companies have not lost confidence in our country, many big  Malaysian companies have already put a lot of money here but our country’s limited market means it is important for us to export our talents and services  abroad,” he said.

Mustapa was speaking at the Malaysia: Asean’s Multinational Market place session in conjunction with Invest Malaysia 2012 here yesterday.

Some 600 Malaysian companies have spread their wings to Asean countries.

Mustapa said companies venturing abroad brought not only their talents but  also the processes which could promote the Malaysia brand name, indirectly helping  the government’s promotion efforts.

“At the end of the process, these companies would have well-established  products, like when SP Setia goes to China and Vietnam, they take along  Malaysian furniture, when Axiata and Maybank go to some part of Asean they take hardware and services to those countries.

“Hence, it is important for us to do both – to attract foreign direct investment and for more Malaysian companies to expand their footprints to other  regions.

“Although in two to three years there might be some issues in the balance of trade, for the medium and longer term these will bring many benefits to our country,” he said.

On Malaysia’s growth within Asean, Mustapa said with the good vision and  various plans by the government, the country’s strategic location as well as  political and economic stability, Malaysia was in a strong position to attract  more Asean and other investors.

Bernama


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Philippines - China welcomes appointment of Brady

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MANILA, Philippines - China has welcomed the Philippines’ appointment of a career diplomat as the new ambassador to Beijing.

Chinese Foreign Ministry spokesperson Liu Weimin said the appointment of Sonia Brady would help the Philippines and China enhance communication through diplomatic channels. “The Chinese side welcomes the Philippine side to send its ambassador to China as soon as possible. This will help the two countries enhance communication through diplomatic channels,” Liu said. President Aquino named Brady as ambassador to China amid the tense territorial row between Manila and Beijing over Panatag (Scarborough) Shoal.        

MalacaƱang has transmitted the nomination and designation letter for Brady subject to confirmation by the Commission on Appointments.        

In March, Chinese Ambassador Ma Keqing said China was hopeful that the Philippines would have an ambassador to Beijing to facilitate communication between the two countries. The President had decided not to reappoint family friend and businessman Domingo Lee, who withdrew his nomination to the post after Congress refused to approve his appointment.

In a bilateral meeting in Cambodia yesterday, Defense Secretary Voltaire Gazmin and his Chinese counterpart Liang Guanglie have agreed to keep their communication lines open and to exercise restraint in dealing with the prevailing security challenges amid the territorial dispute in the West Philippine Sea.

The meeting took place at the sidelines of the yearly Southeast Asian (ASEAN) Defense Ministers Meeting hosted by Phnom Penh. Gazmin and Liang also agreed to play a positive role, specifically by staying calm and making prudent remarks in dealing with the Panatag Shoal standoff. Meanwhile, Vice President Jejomar Binay yesterday urged the Malaysian government to lend its “wise counsel” to other countries claiming portions of Scarborough Shoal, including China, to come up with a peaceful and diplomatic solution to the conflict.

Binay, now in Malaysia attending the Philippine-Malaysia Investment Partnership Forum at the Royal Chulan Hotel in Kuala Lumpur, said peace and security in the South China Sea is critical to the Philippines, Malaysia and neighboring countries.

“In the South China Sea, a broad regional approach to the problem awaits the wisdom and creativity of those interested in the permanent tranquility and stability of our international sea lanes. Malaysia, although also a claimant to the Spratlys, has not been drawn actively into any maritime incident, and could probably lend its wise counsel to the other parties,” Binay said in a speech during the opening of the Philippine-Malaysia Investment Partnership forum.

“I am confident that Malaysia and the Philippines will continue to work together until the issues are satisfactory resolved in favor of peace and economic cooperation,” he said.

Jaime Laude, Pia Lee-Brago and Jose Rodel Clapano


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Indonesia - Yudhoyono: Still Lots to Do

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JAKARTA—Indonesian president Susilo Bambang Yudhoyono still has a long "to do" list for his remaining two years in office.


During Mr. Yudhoyono's more than seven years as president, Indonesia has proven it has a stable democracy and can record some of the highest economic growth in the world. Mr. Yudhoyono hopes he has set the stage for more stability, growth and democracy at home and in the region.

"By the time I leave my office, I wish that democracy, which has taken root in Indonesia, will continue to strengthen and improve," the two-term president said in a written response to some questions from the Wall Street Journal.

Mr. Yudhoyono's answers outlined the direction and tone he wants to take as he leads Southeast Asia's largest economy until elections scheduled for 2014.

Among the other areas in which Mr. Yudhoyono expects progress are: boosting average incomes, limiting corruption, improving governance and building infrastructure, all of which are expected to become key issues during the election.

Whether Mr. Yudhoyono and his Democratic Party can help the country evolve and grow over the next two years will help decide whether Indonesia becomes the next big Asian economic miracle or its next failure that overheats and flops.

Despite the global slowdown and troubles in Europe today, Indonesia, whose growth has outpaced India the last two quarters, is expected to expand more than 6% this year.

"As Indonesia aims to lift its per capita income from around $3,000 (per year) today to more than $14,000 in 2025, I hope that I will have built a strong enough foundation for accomplishing this objective," he said.

Below is the full text of the questions and answers:

The Wall Street Journal: As President Yudhoyono wraps up his second and final term in office, what legacy does he want to leave for the Republic of Indonesia?

Susilo Bambang Yudhoyono: By the time I leave my office, I wish that democracy, which has taken root in Indonesia, will continue to strengthen and improve. Hopefully, this will also be accompanied with the further strengthening of governance, upholding of the rule of law, and eradication of corruption.

On the economic and development side, I hope that the pro-growth, pro-poor, pro-job, and pro-environment strategy will create more tangible results. I also hope that Indonesia makes more progress in achieving the Millennium Development Goals.

As Indonesia aims to lift its per capita income from around $3,000 today to more than $14,000 in 2025, I hope that I will have built a strong enough foundation for accomplishing this objective. With this level of income, and having more than a quarter billion of population, Indonesia will need more products and services, including from other countries.

I would like to see that all these would contribute to the maintenance of peace and stability in Indonesia, and to greater prosperity of its people.

Of course, I have strong hope that as I complete my term, Indonesia's contribution to the realization of ASEAN Community will become more evident. We did a lot of things to ensure progress in achieving the ASEAN Community during our chairmanship in ASEAN in 2011.

WSJ: As Indonesia continues to raise its global profile, how does it want to be understood and what does it have to contribute to global geopolitical discussions?

Mr. Yudhoyono: Indonesia wants the global community to understand that we are a net contributor to the global peace and security. Indonesia is one of the largest troop contributing countries to the U.N. peace missions. Now we are aiming for 4,000 personnel target within those missions. Through global forums such as the U.N. and NAM [Non-Aligned Movement], we have been active to promote disarmament and non-proliferation.

We would also like the global community to understand that we are in the mainstream of the efforts to promote strong, balance, inclusive, and sustainable global growth. Through forums such as G20 and APEC, Indonesia has advocating this objective. And as a developing country, Indonesia seeks to raise issues on development and financial inclusion in the G20 forum. I believe that it is in the interest of all developing countries to have a strong, sustainable, balanced, and inclusive economic growth.

Coming from a disaster-prone country, I have been championing disaster awareness in international forums. Also, having the fifth-largest population in the world, with over 230 million inhabitants, Indonesia seeks to raise global awareness of the importance of food and energy security. The issue of food and energy security affects everyone in this world, as we face the pressing challenge of balancing the rapid growth of population and the soaring need for food and energy. It is the common, but differentiated responsibility of all nations to address this issue and others related to it, such as climate change and environmental protection.

WSJ: How is the recent rush of international trade and investing changing the country?

Mr. Yudhoyono: I must say that both international trade and investment have changed the dynamic of Indonesia's economy positively. For this reason, in various meetings that I have had with world and business leaders, I always encourage closer cooperation in these areas.

Although international trade is not necessarily the main drive of our growing economy, it remains as one of the main contributors. I am pleased to share with you that our total trade value with the world continues to increase. To give some numbers, from 2010-2011, our export value has increased by 30% from $157.8 billion to $203.5 billion. Following such a trend, our import has increased by 31% during the same period, from $135.66 billion to $177.43 billion.

For our domestic industry, this trend of international trade has opened up new markets and export destinations for Indonesian abroad. Nevertheless, at the same time, it also opens up Indonesia for foreign products. This challenges our domestic industry to remain competitive by being innovative, creative, and efficient. They have to uplift their capabilities to be on par with other global players.

For Indonesian consumers, the international trade gives them more choices in terms of products, be it in terms of quality or price. Surely this benefits the consumers. To ensure consumer safety, the government has the obligation to monitor and supervise the products circulating within the country.

With regards to investment, the total inflow of foreign direct investment into Indonesia has increased quite significantly by 20% from 2010 to 2011, from US$16.21 billion to US$19.47 billion. It is contributing to our economic development and produces spill-over benefits, such as providing more employment opportunities, and allowing transfer of technology.

To ensure more organized and evenly distributed FDI, I have also initiated the Master Plan for Acceleration and Expansion of Indonesian Economy ("MP3EI") in 2011. With it, Indonesia seeks to elevate its global economic performance by 2025. Through the master plan, we can better inform both foreign as well as domestic investors about investment opportunities in various sectors.

Many economic observers have identified infrastructure as a challenge to the growth of our economy. Thus, infrastructure projects have been included as one of the main prioritized sectors in MP3EI. We have lots of infrastructure projects, and I invite investors to play a role in them. This way, investment can better contribute to our economy, and investors will also be mutually benefited.

Indonesia also endeavors to "make life easier for investors": I have told my officials that we can no longer do business as usual. We seek to create a more conducive investment climate and address the inefficiency. For that, Indonesia has taken some measures to conduct serious bureaucratic reforms and streamline the process to start business in the country.

WSJ: What has Indonesia's evolution over the last decade taught the world about the process of becoming a democracy?

Mr. Yudhoyono: First lesson from our experiences in democratic transition is that democratization should be inclusive. It respects different perspectives and interests and involves various stakeholders.

Second, democratization needs patience and sustained commitment. Government and also the people of Indonesia have to adapt to a system that is based on democratic values. We all must embrace the diversity in expression as they are allowed under the principles of freedom of speech and freedom of association.

I personally have a strong commitment to democracy. I believe in it, and I believe that there must be a limit in power and duration for whomever holds a position of power. Power tends to corrupt; absolute power corrupts absolutely. So, like our experience after the crisis, we changed our constitution to limit the terms of presidency by two terms only.

Third, in the case of Indonesia, Islam and democracy can go hand-in-hand. Indonesia is the largest Muslim population in the world, but we are not an Islamic state. We have shown that Islam, democracy, and modernity can live together in harmony.

Lastly, there is no single model for democracy. Democracy must be home-grown and tailored to the needs of the respective countries. Indonesia's experience in democratization is its own, safe the best practices that we can share with the world, and vice versa.

WSJ: What is being done to address concerns that confusing regulations and corruption continue to make it difficult for both local and international companies to invest more in Indonesia?

Mr. Yudhoyono: First of all, I believe that the battle against corruption cannot be done as easily as turning your hand. And this is not an issue unique to Indonesia, but also evident in many other countries.

My government is determined and committed to eradicate corruption in this country. Therefore, I fully support the work of the Corruption Eradication Commission. Previously, we have seen increasing number of cases being handled by the commission, more people brought to justice, and also more people being charged for their wrong doings. This is simply unprecedented. It is also noteworthy that in respecting the principle of equality before the law, even high-ranking government officials have been charged as they were proven guilty. Recently, the commission has even detained a foreigner accused of bribery. I believe strict legal enforcement in this area is crucial to ensure complete eradication of corruption.

Additionally, for companies, I encourage them not to get involved in bribery or corruption. There is a proper legal procedure for conducting business, and if they encounter bribery or corruption, we also have a whistleblower system to report to the authorities.

With regards to regulations in Indonesia, government officials are obliged to disseminate the regulations to the public and also provide information when being requested by the public. If there is any confusing regulation, companies should not hesitate to consult with the relevant government officials. The dynamic development in the country also requires us to reformulate some regulations, also in the spirit of de-bottlenecking and streamlining. This could get confusing especially for older investors. Therefore, please bear with us because we are working towards the direction of ensuring clear and unambiguous regulations for companies. It is all done in the interest of the welfare and prosperity of the people of Indonesia.



Business & Investment Opportunities 
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