Southeast Asia from Scott Circle: In Laos, a Strategic Opening the United States Cannot Miss

Volume 6 | Issue 7 | April 2, 2015

A remarkable yet little-noticed development in the U.S. rebalance to the Asia Pacific has been Washington’s overtures to Laos, a country long isolated and often overlooked by U.S. officials. Shifts in geopolitical and regional economic trends in recent years have led the Lao government, which traditionally turned to Beijing or Hanoi for support, to explore opportunities to engage new partners and tap into the United States’ renewed attention to the region.

While recent changes in U.S.-Lao relations are hopeful, much remains to be done to consolidate U.S. interests in a country that has become more crucial in the battle for hearts and minds in Southeast Asia.

Until recently, China seemed set to establish a dominant position in Laos. In 2013, it displaced Thailand and Vietnam to become Laos’s biggest foreign investor, with Chinese companies holding large economic concessions ranging from energy and mining to agriculture and manufacturing. The Lao economy has expanded at an average rate of 8 percent in recent years, but maintaining this level of growth requires the government to attract annual foreign investment of at least $1.7 billion. Chinese companies invested over $1.3 billion in Laos in 2013 alone, the major portion of which funded land-based projects.

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Biweekly Update

  • Government, ethnic armed groups sign draft ceasefire text
  • Jokowi visits Japan, China
  • Prayuth lifts martial law in Thailand

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Looking Ahead

  • Program on developments in Cambodia
  • Panel discussion on ASEAN economic integration
  • Financing Growth in the Asia Pacific

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In Laos, a Strategic Opening the United States Cannot Miss

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

April 2, 2015

A remarkable yet little-noticed development in the U.S. rebalance to the Asia Pacific has been Washington’s overtures to Laos, a country long isolated and often overlooked by U.S. officials. Shifts in geopolitical and regional economic trends in recent years have led the Lao government, which traditionally turned to Beijing or Hanoi for support, to explore opportunities to engage new partners and tap into the United States’ renewed attention to the region.

While recent changes in U.S.-Lao relations are hopeful, much remains to be done to consolidate U.S. interests in a country that has become more crucial in the battle for hearts and minds in Southeast Asia.

Until recently, China seemed set to establish a dominant position in Laos. In 2013, it displaced Thailand and Vietnam to become Laos’s biggest foreign investor, with Chinese companies holding large economic concessions ranging from energy and mining to agriculture and manufacturing. The Lao economy has expanded at an average rate of 8 percent in recent years, but maintaining this level of growth requires the government to attract annual foreign investment of at least $1.7 billion. Chinese companies invested over $1.3 billion in Laos in 2013 alone, the major portion of which funded land-based projects.

While its economic footprint has afforded China added leverage with Laos’s top leaders, an overdependence on Chinese investment in northern Laos has caused friction between local populations and authorities over land and environmental issues.

More importantly, China has overplayed its hand. Beijing insists on pushing through a railway project in Laos, which would be connected to the planned China-ASEAN railway running from Kunming to Singapore, at financing terms that are unviable for Laos. On top of that, the railway will provide few tangible benefits for Laos. This has caused concern among not just officials in Vientiane but also Laos’s neighbors. In particular, Vietnam, which has been battling Chinese assertiveness in the South China Sea, has found it increasingly difficult to match China’s growing footprint in Laos. Hanoi worries that Chinese influence in its next-door neighbor, if left unchecked, could have geopolitical ramifications down the road.

As a result, Vientiane, at the encouragement of Hanoi, has begun to seriously explore its options in cooperating with partners such as Japan, South Korea, and the United States. Laos has emerged as a critical ground in Japanese prime minister Shinzo Abe’s efforts to boost his country’s regional leadership profile. Tokyo and Vientiane in 2013 agreed to expand their bilateral security ties, while Japanese companies, including Toyota and Nikon, have tapped into Laos’s manufacturing potential and its location at the center of the East-West Economic Corridor, an ambitious Japanese-backed project that runs through Vietnam, Laos, Thailand, and Myanmar.

This shift is happening as Laos prepares for a leadership transition in 2016 that is expected to see 5 out of 11 Politburo members of the ruling Lao People’s Revolutionary Party retire, including a few known to be extremely close to China. Although the old guard is ambivalent about the West, the rising cadre of Lao leaders is much more exposed and open to engaging with the outside world. This changing attitude is coupled with a desire by Vientiane to turn Laos from an impoverished, landlocked economy to one that is land-linked with larger regional economic players in the context of greater economic integration within ASEAN.

These factors mean that the United States now has a strategic opportunity to build a new type of relationship with Laos. While the United States and Laos have worked to address longstanding war legacy issues such as unexploded ordnance left over from the Vietnam War, U.S. economic and investment ties with Laos have been lackluster. While companies from France, Japan, and South Korea have been playing catch-up with their Chinese, Thai, and Vietnamese counterparts, the United States is nowhere to be seen in the list of top foreign investors in Laos.

Granting Laos access to the U.S. Generalized System of Preferences (GSP) could give a significant boost to Lao exports to the U.S. market, which were a mere $31 million in 2013. Since signing a bilateral trade agreement with the United States in 2005 and acceding to the World Trade Organization in 2013, the Lao government has implemented a number of reforms in its trade regime, policymaking process, and customs rules.

U.S. government agencies in recent years have done a commendable job of assisting Laos on health and environmental issues. Yet education and vocational training should be a key priority in U.S.-Lao engagement going forward. Due to its small population of about 7 million and the consequences of years of conflict, Laos suffers from a serious lack of skilled labor. This hampers foreign companies’ ability to fill their factories with qualified employees and expand their operations in Laos. As cooperation in education has played a central role in improving U.S. relations with another former battlefield foe, namely Vietnam, Washington should explore ways to better engage rising Lao leaders and shape the country’s future generations.

Washington and Vientiane should also work to increase high-level visits and exchanges. These visits are necessary to persuade Lao officials that they should not be anxious about greater engagement with the United States and to affirm that Vientiane’s decision to diversify Laos’s diplomatic relations makes strategic sense. Former secretary of state Hillary Clinton was the most recent high-level U.S. official to visit Laos, in 2012, and because Laos will chair ASEAN next year, President Barack Obama and other senior U.S. officials are expected to travel to Laos in 2016. In the meantime, Washington should invite more Lao leaders to visit the United States and tour its institutions.

As the United States and Laos look to improve ties, they will need to hold frank discussions on human rights issues. The disappearance of respected agronomist and community leader Sombath Somphone in 2012 alerted the international community to Vientiane’s problematic rights record. But without forging a level of trust with Laos’s leaders, U.S. officials will find it hard to broach their human rights concerns.

Vientiane’s strategic autonomy is in the interest of the United States and its allies and partners in the region. Washington cannot miss the opportunity afforded by the historic winds of change in Laos.

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Biweekly Update


Government, ethnic armed groups sign draft cease-fire text. Representatives of the government and the Nationwide Ceasefire Coordination Team (NCCT), an alliance of 16 ethnic armed groups, on March 31 signed a draft nationwide cease-fire accord. No details of the agreement were released, but NCCT leader Lian Sakhong said the government’s refusal to recognize some groups in the NCCT could be a sticking point in signing a nationwide peace agreement. Meanwhile, government troops on March 21 launched attacks against the Kachin Independence Army, a member of the NCCT, to thwart the group’s involvement in illegal logging, though reports indicate fighting has since abated.

President says military’s role will not change, defends police’s actions. President Thein Sein on March 20 said in an interview with the BBC that the military will continue to play a key role in Myanmar’s politics. Thein Sein noted that the military had initiated Myanmar’s reform process and its role will decrease only gradually as democracy matures. When asked about the violent crackdown by police on student protesters on March 10, Thein Sein said the police only acted in self-defense.

Myanmar to invite western observers for general election. Minister of the President’s Office Soe Thein on March 23 said that the Myanmar government will invite representatives of the Carter Foundation and the European Union to independently observe the country’s general elections later this year. It will be the first time the government has invited the international community to observe voting in Myanmar since the beginning of the reform process in 2010.

Upper house approves amendments to education law. The upper house of Myanmar’s parliament on March 26 voted to amend the controversial National Education Law after students in early March took to the streets to protest the legislation. The amendments include an increased allocation of public funding for education, permission for local schools to instruct in ethnic languages native to Myanmar, and the freedom to form student and teacher unions. Authorities released 20 students who were arrested in a police crackdown on March 10, but charged 70 others with unlawful assembly and rioting.

Government unveils first national export strategy. The Myanmar government on March 24 introduced its first national export strategy, which aims to add value to key sectors such as garments and rubber. It also seeks to give small and medium-sized enterprises greater access to export markets. The government developed the strategy with assistance from the International Trade Center and the German aid agency and in consultation with both public- and private-sector representatives.


Jokowi visits Japan, China. President Joko “Jokowi” Widodo traveled to Japan and China from March 22 to 30 where he secured several agreements for infrastructure cooperation in Indonesia, including $1.5 billion in Japanese loans for railway projects. In Tokyo, Jokowi and Prime Minister Shinzo Abe agreed to bolster joint military training, launch a high-level maritime security forum, and work to enhance Indonesia's coast guard and infrastructure capabilities. Jokowi and President Xi Jinping met in Beijing, where they pledged to develop a maritime partnership and signed an agreement on maritime search and rescue. Jokowi ended his trip with a stop at the annual Boao Forum in Hainan.

U.S., New Zealand request WTO dispute settlement over Indonesian agricultural import restrictions. The United States and New Zealand on March 18 filed a case with the dispute settlement body of the World Trade Organization (WTO) regarding import restrictions Indonesia imposed in 2012 on fruits, vegetables, and animal products. The restrictions are aimed at achieving food self-sufficiency in Indonesia. The United States and New Zealand failed in earlier attempts to convince Indonesia to lift the restrictions voluntarily. They requested formal dispute settlement just five days after Indonesia asked for consultations at the WTO over U.S. anti-dumping duties on coated paper.

Government postpones executions of drug offenders. Vice President Jusuf Kalla said March 18 that the planned executions of 10 people convicted of drug offenses, including foreign nationals from Australia, Brazil, France, Nigeria, and the Philippines, have been delayed indefinitely pending the resolution of their final court appeals. He said the delays could last months, though a week later a court rejected the appeal application of Filipina Mary Jane Fiesta Veloso, who was considered to have the best hope for a lengthy delay. The government plans to execute the 10 prisoners by firing squad simultaneously.

Jakarta fails to approve city budget for first time. Governor Basuki Tjahaja Purnama and the Jakarta city council on March 23 agreed to reuse the 2014 budget for 2015 after failing for the first time to reconcile their respective budget proposals. Basuki in February accused the council of adding nearly $1 billion in markups to his proposed budget for personal gain and instead submitted the original to the Home Affairs Ministry without the council’s approval. The move sparked outrage and the council launched an inquiry that could result in Basuki’s impeachment. The 2014 budget of $5.6 billion is 6.5 percent less than the governor’s original proposal.

Bakrie sues to prevent Golkar from switching sides. Tycoon and former Golkar party chair Aburizal Bakrie on March 24 announced he had filed suit against the Ministry of Law and Human Rights over Minister Yasonna Laoly’s decision to name Agung Laksono chair of Golkar. Yasonna declared Agung the rightful chairman instead of Bakrie after an internal party tribunal sought to end a months-long split in the party with a decision in Agung’s favor. Agung has said he intends to align Golkar with President Joko Widodo’s ruling coalition.

Lawmakers stall police commissioner’s confirmation as anti-corruption commission remains a target. The deputy chair of the parliamentary committee charged with overseeing law and security affairs said March 31 that his committee will not take up the confirmation of National Police chief nominee Badrodin Haiti until President Joko Widodo provides a more detailed explanation for why he dropped the nomination of his previous choice for the post, Budi Gunawan, amid a graft scandal. The National Police meanwhile continue to pursue criminal investigations into members of the Corruption Eradication Commission (KPK), which named Budi a graft suspect, and its allies.


Singapore mourns Lee Kuan Yew. World leaders including former U.S. president Bill Clinton traveled to Singapore for the March 29 funeral of Lee Kuan Yew, the city-state’s first prime minister. Lee, 91, passed away on March 23 from severe pneumonia. The city-state held seven days of mourning during which about 1.5 million Singaporeans paid tribute to the deceased founding father, according to the committee responsible for organizing his funeral. Lee’s public funeral was followed by a private cremation ceremony attended by his family.

Singapore experiences deflation for fourth straight month. Singapore’s consumer price index remained negative at -0.3 percent in February, marking the city-state’s fourth consecutive month of deflation, according to data released on March 23 by the Department of Statistics. The Ministry of Trade and Industry and the Monetary Authority of Singapore attributed the slight rise in prices from January, when the index stood at -0.4 percent, to an uptick in travel and food consumption due to the Chinese New Year.

Southeast Asia’s largest shipping line expected to return to profitability. Southeast Asia’s largest container line, Singapore-based Neptune Orient Lines, is expected to return to profitability in 2015 after four years of losses, according to a March 25 Bloomberg report. The company on February 17 agreed to sell its logistics unit, APL Logistics, to Japan’s Kintetsu World Express for $1.2 billion to trim its debt, which had ballooned to roughly $4 billion since 2011. Singapore’s state-owned investment company, Temasek Holdings, owns 67 percent of Neptune.


Prayuth lifts martial law. Prime Minister Prayuth Chan-ocha on April 1 announced the lifting of martial law, which had been in place since the May 2014 military coup that overthrew the previous civilian government. Prayuth said that in place of martial law, he would employ sweeping powers granted to the junta under Section 44 of the interim constitution it drafted. That section empowers the National Council for Peace and Order, which Prayuth heads, to take any action deemed necessary to prevent “any act detrimental to national order or security.”

Thailand to introduce death penalty and steep fines to combat human trafficking. Thailand’s junta-appointed legislature on March 26 approved harsher penalties to combat human trafficking, including life sentences or the death penalty for traffickers whose victims die while being trafficked, 20-year sentences and fines of over $12,000 for those whose victims suffer injury, and lesser fines for others involved in trafficking. Thailand hopes to avoid a second year on the lowest tier of the U.S. State Department’s annual Trafficking in Persons Report, but its cause was not helped by an Associated Press investigation published on March 25 that documented extensive slavery in Thailand’s fishing industry.

U.S., Thailand, Singapore hold annual Cope Tiger joint air force exercises. Planes and personnel from Singapore, Thailand, and the United States participated in the annual Cope Tiger joint air force exercises from March 9 to 20 at the Korat Royal Thai Air Force base. The exercises involved about 400 personnel from the United States, 1,000 from Singapore and Thailand, 84 aircraft, and 38 air defense assets. Cope Tiger is aimed at increasing readiness, cooperation, and interoperability, including for maritime security, counterterrorism, search and rescue, and humanitarian assistance and disaster relief.

Civic groups petition against bill restricting public gatherings. More than 38 civic groups in Thailand have lodged a complaint with the junta-appointed legislature over a bill they fear would restrict citizens’ rights to petition the government and engage in peaceful protest, according to a March 24 Bangkok Post article. The bill would ban protesters from blocking the entrances of state agencies, require demonstrators to notify authorities of their intention to rally 24 hours in advance, and ban nighttime use of loud speakers. Lawmakers are still debating the proposed legislation.

Thailand to develop industrial zone to link with Myanmar’s Dawei. The Thai government plans to revive a stalled project to link Myanmar's Dawei special economic zone to a new industrial zone in Prachuap Khiri Khan Province, according to a March 26 Bangkok Post article. Industry Minister Chakramon Phasukvanich said the project will be submitted for cabinet approval within two weeks. The government plans to develop coastal areas in six neighboring provinces into the new industrial zone, which will focus mainly on the steel sector. Bangkok-based Italian-Thai Development and Rojana Industrial Park, a Japanese-Thai joint venture, are expected to soon launch the first phase of construction on the Dawei project.

Thai navy likely to purchase submarines. Defense Minister Prawit Wongsuwon said March 24 said that the Thai navy is considering a plan to purchase its first submarines as part of an effort to modernize the armed forces. The budget for the submarines could be around $1.1 billion. The Thai navy in July 2014 opened an ultramodern $16.5 million submarine base and training center despite not owning a single sub.

Supreme Court orders trial for former PM Yingluck for negligence over rice program. The Supreme Court on March 24 ordered former prime minister Yingluck Shinawatra to stand trial for alleged criminal negligence in failing to stop corruption and mismanagement of her government’s rice-pledging program. Yingluck faces up to 10 years in prison. Her first hearing is scheduled for May 19. The court will decide on the terms of her temporary release and whether she may leave the country.


Murder trial of U.S. Marine begins. A Philippine court on March 23 began proceedings in the murder trial of U.S. Marine Joseph Pemberton, who stands accused of killing transgender Filipina Jennifer Laude in October 2014. The victim’s family, prosecutors, and Pemberton’s lawyers failed to agree on a plea deal, forcing a trial. Pemberton faces a maximum of 40 years in prison. He is being held in U.S. custody at a Philippine military camp in Manila.

Military declares end to offensive against rebels. Philippine armed forces chief General Gregorio Catapang on March 30 declared an end to a five-week offensive against the separatist Bangsamoro Islamic Freedom Fighters (BIFF). Catapang said the military had “achieved [its] objectives” despite failing to kill or capture Malaysian terrorist Abdul Basit Usman or BIFF leader Umbra Kato. The armed forces chief said the offensive left 139 rebels and at least 10 Philippine troops dead. The army launched the operation after the botched Mamasapano raid on a BIFF camp that left 44 police commandos dead.

Poe calls for Moro fighters to be charged in commandos’ killings. Senator Grace Poe on March 25 insisted that members of the Moro Islamic Liberation Front (MILF) should be held criminally responsible for the deaths of 44 police commandos during the botched January 25 raid in Mamasapano, southern Philippines. Poe’s call came a day after the MILF submitted the results of its own investigation to the Senate. That investigation found that MILF fighters were “justified in fighting back” against a perceived attack since government forces failed to coordinate with the rebel group as required by a 2012 cease-fire.

Confusion in Makati as Binay, Peña both claim to be mayor. Jejomar Erwin Binay Jr. and Romulo Peña held competing flag-raising ceremonies on March 23 as both insisted they were the legal mayor of Makati. The confusion began on March 16 when the Philippine Court of Appeals issued a temporary restraining order against a six-month suspension handed out to Mayor Binay due to a pending graft case. The Philippine ombudsman, which ordered Binay’s suspension, has insisted the court’s decision was null and void because Vice Mayor Peña had already been sworn in as mayor the morning of the ruling.

Economy expected to grow 6.5 percent in 2015. UK-based Barclays on March 30 said it expects the Philippine economy to grow 6.5 percent in 2015 despite growing political risks ahead of the 2016 presidential election. The Asian Development Bank has predicted 6.4 percent growth. The Philippine economy grew 6.1 percent in 2014, down from 7.2 percent in 2013. Central bank governor Amando Tetangco said March 24 that the government still believes its target of 7-8 percent growth in 2015 is reachable.


Vietnam’s public security minister visits the United States. Vietnam’s public security minister, Tran Dai Quang, on March 15–16 held high-level meetings with U.S. government agencies to discuss deepening security and law enforcement cooperation between Vietnam and the United States. The Federal Bureau of Investigation transferred its DNA testing software to the Vietnamese police during Quang’s visit, and the two governments began negotiations on an extradition treaty. Quang was preparing for a visit to Washington by Communist Party general secretary Nguyen Phu Trong, expected later this year.

LG Electronics to move TV manufacturing from Thailand to Vietnam. An LG Electronics executive on March 17 announced that the company will shift its TV production line in Thailand to Vietnam for logistical ease and efficiency beginning in April. LG also plans to relocate an Indonesian plant to Vietnam. The company wants to develop Vietnam into its regional base for the assembly and production of electronic goods. LG received approval from the Vietnamese government in October 2013 to invest $1.5 billion in a production facility in Vietnam.

Hanoi suspends officials after tree felling causes public outcry. Hanoi’s mayor on March 22 ordered the suspension of scores of officials who were deemed responsible for a massive tree-cutting plan, which was cancelled due to public outrage. The program would have cost $3.4 million and was to cut down 6,700 trees lining the city’s streets. Hundreds of Hanoi’s residents took to the streets to protest what they called an environmental crime. The city plans to set up a task force to look into the project.

U.S. expected to tighten rules for major Vietnamese fish export. The shifting of regulatory responsibility for certain fish imports from the U.S. Food and Drug Administration to the U.S. Department of Agriculture (USDA) is expected to cause a disruption to Vietnam’s sizable catfish exports to the U.S. market, according to a March 23 Wall Street Journal report. Vietnam, which called the measure protectionist, would find it difficult to comply with new food safety standards issued by the USDA and may take the case to the World Trade Organization.

Rally in Vietnamese bank stocks signals recovery from bad-debt crisis. Vietnam’s bank stocks are rallying at the fastest pace in Asia, signaling a recovery from a bad-debt crisis that weighed down the nation’s economy, according to a March 25 Bloomberg report. Vietnam’s five largest banks have increased in value by an average of 23 percent in the last three months. Non-performing debt at the country’s banks dropped to around 3.25 percent at the end of 2014, down from 17 percent in 2012.


Malaysia’s government backs bond sales by troubled state-owned investment company. Prime Minister Najib Razak on March 17 issued a statement saying the government supported a $3 billion bond issued by the troubled state-owned investment fund 1Malaysia Development Bhd (1MDB), whose advisory council is chaired by the prime minister. The government’s backing of the bond sale raises further concerns about Malaysia’s sovereign risk rating, given that 1MDB has struggled to repay its $11 billion debt. Najib’s political opponents have exploited the growing 1MDB controversy to try to undermine him.

Malaysia cracks down on sedition, pro-Anwar rallies. Malaysian police on March 30 raided the office of the news portal The Malaysian Insider and arrested three of its editors under the Sedition Act. The arrests were the latest in the government’s increasing crackdown on political opponents, especially since the sentencing of opposition leader Anwar Ibrahim on sodomy charges in February. A number of pro-opposition rallies calling for Anwar’s release have since taken place. More than 150 lawyers, academics, activists, and lawmakers have been arrested or held for sedition or violating the Peaceful Assembly Act since Anwar’s conviction.

Malaysian opposition grapples with division over Islamic penal code. The decision on March 19 by the northeastern state of Kelantan, governed by the opposition Pan-Malaysian Islamic Party (PAS), to introduce hudud, an Islamic penal code, has sparked division within Malaysia’s three-party opposition coalition. The majority-Chinese Democratic Action Party (DAP) on March 23 severed ties with PAS president Abdul Hadi Awang after accusing him of breaking his promise not to pursue hudud. PAS will remain in the national coalition, but it was ejected from the state coalition in Sabah on March 30, three days after DAP left the coalition in neighboring Sarawak.

Proposal for cabinet ministers to declare assets sparks debate. Malaysian lawmaker Razaleigh Hamzah said in a March 17 parliamentary speech that current and former cabinet members should declare their assets to an independent body to ensure there are no conflicts of interest. Razaleigh cited the example of politically connected companies receiving loans from public pension funds. The speech sparked a debate about transparency, as cabinet ministers currently need only declare their assets to the prime minister and Malaysia’s anti-corruption agency.


First Lady Michelle Obama visits Cambodia. First Lady Michelle Obama arrived in Siem Reap on March 21 to promote the “Let Girls Learn” initiative. Obama told students at a local high school to complete their education and use their voices to press for changes they wished to see in society. Her comment drew ire from Prime Minister Hun Sen, who said that the United States should foot the bill if it wants to see Cambodian students finish their education.

Nancy Pelosi heads congressional visit to Cambodia, Vietnam, Myanmar. U.S. House of Representatives minority leader Nancy Pelosi led a bipartisan congressional delegation to Cambodia, Vietnam, and Myanmar from March 28 to April 1 to discuss U.S. trade and security relations, as well as human rights issues. The delegation observed demining work in Cambodia and met with civil society representatives. It discussed the U.S.-Vietnam comprehensive partnership and the Trans-Pacific Partnership with top Vietnamese leaders. Lawmakers focused on security issues, including the rights of workers, women, and religious minorities, during the Myanmar leg of the trip.

UN Office of Project Services to open office in Phnom Penh. The Ministry of Foreign Affairs on March 24 announced that the United Nations Office of Project Services (UNOPS), an operational arm of the United Nations that supports peacebuilding and humanitarian projects around the world, will open an office in Phnom Penh. The announcement was made after a meeting on March 23 between Foreign Minister Hor Namhong and Grete Faremo, deputy secretary general and executive director of UNOPS. The organization has previously assisted Cambodia in developing infrastructure, fighting diseases, and raising awareness about climate change and deforestation.

Prime Minister Hun Sen threatens legal action against CNRP vice president. Prime Minister Hun Sen on March 19 called for the arrest of Cambodia National Rescue Party (CNRP) vice president Kem Sokha over comments the opposition leader made during a speech in the United States five days earlier. Sokha had apologized for the CNRP’s inability to topple the government during 2013 street protests and called the continued detention of CNRP official Meach Sovannara unacceptable. Hun Sen called the remarks proof that Sokha and the CNRP had intended to commit treason during their protests.

Tribunal charges another Khmer Rouge official as Cambodian authorities flounder on enforcement. The UN-backed Khmer Rouge tribunal on March 26 charged former Khmer Rouge member Ao An with crimes against humanity and premeditated murder, despite the government’s opposition. The charges come after the charging in absentia earlier this month of two other former Khmer Rouge officials whom Cambodian authorities refused to bring to trial. Human Rights Watch on March 23 called on the UN and donors to halt funding of the tribunal unless Cambodia acts on charges issued by the tribunal.

South China Sea

Jokowi says nine-dash line has no legal basis. Indonesian president Joko “Jokowi” Widodo said March 23 during a visit to Tokyo that China’s nine-dash line claim in the South China Sea has no basis in international law. The comments marked the first time Jokowi has taken a stance on the competing claims in the South China Sea. His advisers were quick to clarify that the president was referring narrowly only to the nine-dash line, not to all of China’s claims. Jokowi also said that Indonesia is committed to the negotiation of a binding code of conduct between ASEAN and China and wants to remain an “honest broker” in the disputes.

U.S. Navy commander suggests ASEAN organize patrols of South China Sea. U.S. Seventh Fleet commander Vice Admiral Robert Thomas on March 17 suggested that Southeast Asian nations form a combined maritime force to patrol areas of the South China Sea. He made the call during remarks at the Langkawi International Maritime and Aerospace Exhibition in Malaysia. Thomas also said that the Seventh Fleet would support any such ASEAN-led effort. China’s foreign ministry called the remarks “irresponsible.”

Philippines to resume reconstruction work in Spratlys. Foreign Affairs secretary Albert Del Rosario said March 26 that the Philippines will resume repair and reconstruction work on an airstrip and other facilities on Thitu Island, called Pagasa in the Philippines. Manila halted work on the disputed feature in 2014 after calling on all claimants in the South China Sea to halt construction and other escalatory activities. The reversal appears to have been driven by continued reclamation and construction by Taiwan, Vietnam, and especially China. Del Rosario insisted that the work at Thitu will not violate the 2002 Declaration on the Conduct of Parties in the South China Sea, but China has accused Manila of hypocrisy.

Hun Sen says South China Sea claimants, China must negotiate to resolve dispute. Cambodian prime minister Hun Sen said March 25 that ultimately the South China Sea disputes cannot be solved by ASEAN, but are an “issue between claimant countries and China.” China’s state-owned Xinhua news agency seized on the comments as support for Beijing’s insistence that the disputes be negotiated bilaterally. Hun Sen also angrily defended Cambodia’s handling of the issue during its turn as ASEAN chair in 2012, during which Phnom Penh was widely seen as blocking discussion of the disputes at China’s behest.


ASEAN defense ministers sign joint declaration on regional security. Defense ministers from the 10 ASEAN member states on March 16 signed a Joint Declaration on Maintaining Regional Security and Stability for and by the People. The declaration, made during the annual ASEAN Defense Ministers’ Meeting in Malaysia, promises cooperation on humanitarian assistance and disaster relief, voices a common desire to contain the threat posed by the Islamic State and other terrorist organizations, and recognizes the need to maintain freedom of navigation in and overflight above the South China Sea.

Malaysia proposes joint ASEAN peacekeeping force. Malaysian Defense Minister Hishammuddin Hussein said March 18 that Malaysia would make the creation of a joint peacekeeping force a priority during its chairmanship of ASEAN in 2015. Hishammuddin, speaking at the ASEAN Defense Ministers’ Meeting in Malaysia, said such a force would help build trust between ASEAN members on security matters and could help the organization move beyond disagreements over how to handle the South China Sea disputes. He suggested that the force could be deployed to the Thai-Cambodian border, among other areas.

ASEAN finance ministers sign banking integration agreement. ASEAN finance ministers on March 21 signed an ASEAN Banking Integration Framework, which states that ASEAN countries may sign reciprocal contracts permitting domestic banks holding certain qualifications to operate as domestic banks within fellow members’ borders. Foreign banking activity is currently severely restricted in many Southeast Asian nations. The new framework, which was under negotiation for five years, is seen as preparation for the inauguration of the ASEAN Economic Community on December 31, 2015.

Southeast Asia significantly modernizing its combat aircraft. Several ASEAN countries significantly modernized their combat air fleets with purchases of new fighter jets from 2010 to 2014, according to a March 16 Trends in International Arms Transfers report by the Stockholm Peace Research Institute. Singapore received 32 F-15E jets from the United States, Vietnam took delivery of 24 Su-30 craft from Russia and will get 8 more, and the Philippines ordered 12 FA-50 jets from South Korea and plans to order another 24. The Asia and Oceania region accounted for 48 percent of global arms imports during the period.

Trans-Pacific Partnership

Lack of trade promotion authority bill stalls negotiations. The delay in introducing a final Trade Promotion Authority (TPA) bill to the U.S. Congress risks stalling negotiations on the Trans-Pacific Partnership (TPP) trade agreement, according to officials from six TPP member countries cited in a March 24 Reuters report. The lack of clarity over the conditions Congress might impose on U.S. negotiators through the TPA is causing other TPP members to refrain from reaching agreements on the most sensitive issues. Australia, Canada, and Japan have publicly called on President Barack Obama to obtain TPA before concluding negotiations.


ADB predicts strong growth for Laos over next two years. The Asian Development Bank (ADB) predicts in its 2015 Asian Development Outlook that Laos’s economy will grow at 7 percent in 2015 and 7.2 percent in 2016. According to the report, which was released in late March, expansion in the industrial sector supported by foreign direct investment, hydroelectric projects, real estate development, and transport and communications provide the foundation for Laos’s economic growth.

Vietnam’s president visits Laos. Vietnamese president Truong Tan Sang arrived in Vientiane on March 23 for meetings with senior Lao leaders, including Prime Minister Thongsing Thammavong. During Sang’s visit, the two sides reached agreements to solidify bilateral defense and security cooperation and improve border management, and they pledged to increase bilateral trade by 40 percent to $2 billion in 2015. Sang also talked with Lao officials about sustainable use of the Mekong River.

Workers protest after salaries withheld by Chinese-backed plant. Seventy Lao workers at a Chinese-backed potash plant staged a protest on March 18 alleging that plant managers had withheld two months of back pay. The workers expressed grievances over alleged preferential treatment of their Chinese coworkers, who received regular salary payments. The protesters returned to work after managers agreed to pay them one month of owed wages. One worker said that protests will resume if management fails to pay the remaining amount by April 5.

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Looking Ahead

Program on developments in Cambodia. The Asia Foundation will host a discussion on April 2 on current developments in Cambodia. Vannarith Chheang, lecturer in Asia-Pacific studies at the University of Leeds, will share his insights. The event will take place at the Asia Foundation, 1779 Massachusetts Ave., NW. For more information and to RSVP, contact Ellie Matthews.

“Climate Refugees” film screening. The Sigur Center for Asian Studies at George Washington University will host a screening on April 6 of “Climate Refugees” as part of the Partnerships for International Strategies in Asia Climate Initiative. Following the screening, George Washington’s Dinah Shelton will comment on the legal status of and rights issues for climate refugees. The screening will take place from 12:30 p.m. to 2:30 p.m. at the Elliott School of International Affairs, 1957 E St., NW, Room 505. To RSVP, click here.

Panel discussion on ASEAN economic integration. The Asia Foundation will host a panel discussion and book launch on April 8 on ASEAN economic integration. Edmund Sim, coauthor of Rules of Origin in ASEAN: A Way Forward, will discuss his book’s findings. Asia Foundation senior director for economic development and chief economist Véronique Salze-Lozac’h will moderate. The event will take place at the Asia Foundation, 1779 Massachusetts Ave., NW. For more information and to RSVP, contact Ellie Matthews.

Financing Growth in the Asia Pacific. The CSIS Sumitro Chair for Southeast Asia Studies will host a conference on April 10 entitled “Financing Growth in the Asia Pacific.” The all-day conference will include several keynote speeches and expert panel discussions on the “Impact of China’s and Japan’s Economic Slowdown on Asia’s Emerging Economies,” “Infrastructure Connectivity: Where Are Asia’s Big Gaps,” and “Financial Reforms: Opportunities and Risks.” The event will take place from 9:00 a.m. to 3:00 p.m. in the CSIS Second Floor Conference Center. To RSVP, click here or e-mail the Sumitro Chair.

Rising Tides: A Simulation of Geopolitical Conflict and Competition in the South China Sea. George Washington University will host a policymaking simulation on April 11 on the South China Sea. Participants will play the roles of policymakers from either the United States or China and will work with both state and non-state regional actors to respond to issues ranging from piracy, conflicts over natural resources, and state bargaining dilemmas, to humanitarian assistance and collective action problems. The simulation will take place from 11:15 a.m. to 6:00 p.m. at George Washington University’s Phillips Hall, 801 22nd St., NW. For more information or to RSVP, click here.

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