Southeast Asia from Scott Circle: Sunnylands Summit Provides Opportunity to Bolster U.S.-Southeast Asia Ties

Volume VII l Issue 1 l January 7, 2015

President Barack Obama will host leaders from the 10 ASEAN countries for a summit at the lush Sunnylands retreat in southern California on February 15 and 16 in a gesture aimed at deepening U.S. ties to this dynamic region. The president raised the idea of the meeting with Southeast Asian leaders at the U.S.-ASEAN Summit in Kuala Lumpur in November 2015, during which he and his ASEAN counterparts announced the upgrading of U.S.-ASEAN relations to a strategic partnership. The leaders will look to flesh out the ASEAN-U.S. Plan of Action 2016–2020 that they endorsed at the summit in Kuala Lumpur.

Southeast Asia has been a focal point of the U.S. rebalance to Asia, which was announced soon after Obama took office in 2009. The Sunnylands venue is intended to provide a more relaxed atmosphere than a formal summit in Washington would. Ironically, this is the same retreat center where Obama hosted Chinese president Xi Jinping in 2013; the upcoming summit is likely to keep China on its toes, as Beijing is vying with Washington for influence and hearts and minds in Southeast Asia.

U.S. officials say the president is looking to bolster economic, political, security, and people-to-people ties with the region when he meets the ASEAN leaders.

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Biweekly Update

  • U.S., Thailand hold first strategic dialogue since 2012
  • Aung San Suu Kyi calls securing peace with ethnic minorities her single most important priority
  • China lands test flights on new airfields in South China Sea
  • Grace Poe disqualified from Philippine presidential run, appeals to Supreme Court

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Looking Ahead

  • CSIS Asia Forecast 2016
  • The Economic and Strategic Benefits of the Trans-Pacific Partnership
  • Banyan Tree Leadership Forum with Malcolm Turnbull

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Sunnylands Summit Provides Opportunity to Bolster U.S.-Southeast Asia Ties

By Murray Hiebert (@MurrayHiebert1), Senior Fellow and Deputy Director, Chair for Southeast Asia Studies ( @SoutheastAsiaDC), CSIS

January 7, 2015

President Barack Obama will host leaders from the 10 ASEAN countries for a summit at the lush Sunnylands retreat in southern California on February 15 and 16 in a gesture aimed at deepening U.S. ties to this dynamic region. The president raised the idea of the meeting with Southeast Asian leaders at the U.S.-ASEAN Summit in Kuala Lumpur in November 2015, during which he and his ASEAN counterparts announced the upgrading of U.S.-ASEAN relations to a strategic partnership. The leaders will look to flesh out the ASEAN-U.S. Plan of Action 2016–2020 that they endorsed at the summit in Kuala Lumpur.

Southeast Asia has been a focal point of the U.S. rebalance to Asia, which was announced soon after Obama took office in 2009. The Sunnylands venue is intended to provide a more relaxed atmosphere than a formal summit in Washington would. Ironically, this is the same retreat center where Obama hosted Chinese president Xi Jinping in 2013; the upcoming summit is likely to keep China on its toes, as Beijing is vying with Washington for influence and hearts and minds in Southeast Asia.

U.S. officials say the president is looking to bolster economic, political, security, and people-to-people ties with the region when he meets the ASEAN leaders.

Washington often finds it difficult to cobble together projects that work for everyone in this eclectic grouping of countries. Economically, Singapore pursues free market principles while Indonesia is highly protectionist. Myanmar and Laos are among the poorest nations in Asia, while Singapore is one of the wealthiest on the planet. Cambodia and Laos are traditionally closer to China, while the Philippines and Vietnam have sought closer ties with the United States to hedge against China’s assertiveness in the South China Sea.

Economically, Southeast Asia is critical to U.S. companies. Two-way trade in goods and services reached $254 billion in 2014, making Southeast Asia the United States’ fourth-largest trading partner. The stock of U.S. foreign direct investment totaled $226 billion in 2014, making U.S. companies the single largest group of investors in the region.

The Southeast Asian nations launched the ASEAN Economic Community (AEC) on January 1, with the ultimate goal of moving toward a common economic market and production platform in the years ahead. Four of the countries—Brunei, Malaysia, Singapore, and Vietnam—are members of the just-completed Trans-Pacific Partnership (TPP) trade pact that also includes the United States. The Philippines, Indonesia, and Thailand have expressed interest in joining the trade arrangement in a future tranche.

In the words of a respected ASEAN ambassador, Washington can become the region’s leading economic partner by knowing how to combine the longer-term vision of the U.S. government with the strengths and short-term objectives of the U.S. private sector. Since the AEC is seen by regional governments as a turning point for ASEAN, U.S. government agencies should pursue capacity-building projects for less developed countries such as Cambodia, Laos, and Myanmar to help them complete their commitments under the AEC. Areas could include customs and trade facilitation, harmonization of standards, the digital economy, and increased capacity by small- and medium-sized enterprises.

The United States in late 2014 proposed hammering out a nonbinding set of investment principles with ASEAN, a project that quickly withered because Indonesia opposed the proposal. This idea might be resurrected at Sunnylands because these principles could form the basis of a TPP investment chapter down the road. And if some countries are not ready to join these talks, Washington might want to discuss charging ahead with a “coalition of the willing” within ASEAN, which would be open to the remaining countries when they are ready.

Maritime security will be another important focus in Sunnylands. Four ASEAN countries—Brunei, Malaysia, the Philippines, and Vietnam—are in a dispute with China in the South China Sea, where Beijing has built several artificial islands, three of which boast airstrips capable of accommodating military planes. This recent construction, coupled with concerns about possible militarization of the reclaimed features in the Spratly Islands, will likely feature high on the summit agenda.

With the Permanent Court of Arbitration in The Hague expected to issue a verdict on Manila’s case against Beijing in the South China Sea around mid-year, Obama will want to use the summit to discuss the need for a united front within ASEAN after the tribunal makes its ruling. It is unrealistic to expect a full-throated endorsement by all ASEAN members, but it will be crucial that the grouping issue a statement (or at least include language in the chairman’s statement at a subsequent summit) acknowledging the ruling, supporting the right of ASEAN members to resort to arbitration, and calling on all parties to pursue legal and peaceful means in their search for a resolution.

At the same time, Obama will need to strike a balance between providing much needed U.S. leadership on the South China Sea issue and showing support for the role of ASEAN and ASEAN-driven mechanisms, including talks between ASEAN and China toward a Code of Conduct on the South China Sea.

Obama will want to provide more clarity about the $250 million Southeast Asia Maritime Security Initiative, which Defense Secretary Ashton Carter first announced at the Shangri-La Dialogue in Singapore in May 2015, to bolster the naval and coast guard capabilities of Indonesia, Malaysia, the Philippines, and Vietnam. He should also clarify the role of the South China Sea Initiative outlined in the 2015 National Defense Authorization Act, which authorizes the United States to assist Brunei, Indonesia, Malaysia, the Philippines, Singapore, Taiwan, and Vietnam to boost their maritime security and maritime domain awareness in the South China Sea. The president could also try to build support for more formal intelligence sharing within Southeast Asia to further boost maritime domain awareness and regional maritime security cooperation.

Washington could reiterate Kuala Lumpur’s call for more regional navies to use the Code for Unplanned Encounters at Sea, which the United States signed with 24 other Asia-Pacific countries in Qingdao, China, in 2014. Obama could also use the summit to encourage more Southeast Asian countries to participate in the Japanese Maritime Self Defense Force’s ship rider exchange program—of which Malaysia is already a member and to which the Chinese navy also contributes—in order to boost mutual trust and build confidence among regional navies. Washington stands to benefit from a more consolidated security role played by Tokyo, a crucial regional U.S. ally, in Southeast Asia.

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Biweekly Update


U.S., Thailand hold first strategic dialogue since 2012. Senior U.S and Thai officials on December 16 held the fifth Thailand-U.S. strategic dialogue in Bangkok, the first strategic talks the two sides have held since 2012. Assistant Secretary of State for East Asian and Pacific Affairs Daniel Russel, who led the U.S. delegation, said the two governments should cooperate “within the bounds of what is possible under current circumstances,” but that the United States will continue to stand by universal values such as free speech, a veiled reference to the military government’s ongoing crackdown on lèse-majesté offenders in Thailand since a military coup in 2014. The two sides agreed to strengthen bilateral cooperation in public health, law enforcement, trade and investment, and combatting trafficking in persons and forced labor.

Thaksin warns of worsening domestic economy in New Year’s message. Former prime minister Thaksin Shinawatra said in his New Year’s message on December 25 that Thais will need the “strength to pass obstacles” as Thailand’s economy will likely face headwinds in the year ahead. Thaksin, who was ousted in a 2006 coup, has officially kept a low public profile since the May 2014 coup, urging his supporters to be patient until the next elections. Thaksin currently lives abroad to avoid serving a jail sentence for graft dating back to 2008.

Government launches railway project with China, signs two railway contracts in eastern and northeastern Thailand. Thai deputy prime minister Prajin Juntong and Chinese state councilor Wang Yong on December 19 launched a $15 billion railway project connecting the northeastern city of Nong Khai to the capital Bangkok, after differences between the two governments on financing terms earlier this year put the project on hold. Construction is scheduled to start in May. The government on December 28 signed two dual-track railway deals worth $933 million in eastern and northeastern Thailand, as part of some 20 planned infrastructure projects.

Defense ministry inquiry found “irregularities” in monarchy park scandal. Deputy Permanent Secretary of Defense Chaicharn Changmongkon said a Defense Ministry inquiry into allegations of corruption in the construction of Rajabhakti Park—which features giant statues of seven Thai kings—has found “irregularities,” according to a December 30 Reuters report. Chaicharn said more than $1.8 million in the nearly $24 million budget for the park’s construction came from state coffers, in contrast to the military’s previous claims that no government funds were used. The scandal surrounding the park has engulfed the government of Prime Minister Prayuth Chan-ocha in recent weeks.

Thai military accused of operating “black site.” Activists and human right groups have called on the government to shut down a facility at the 11th army base in Bangkok’s old city used to hold those deemed major threats to national security, after allegations of torture and lack of due process at the facility mounted last month. Sunai Phasuk, researcher for New York-based Human Rights Watch, called the facility a “black site” operated by the Thai military. A Thai corrections official said the prison, which serves the military court, allows investigators easier and longer access to detainees.

Myanmar to appeal death sentence handed down to Myanmar migrant workers in murder of British tourists on Koh Tao Island. Myanmar’s ambassador to Thailand, Win Maung, on December 30 said the Myanmar government will appeal the death sentence that a Thai provincial court handed down to two Myanmar migrant workers, Zaw Lin and Win Zaw Htun, on December 24 for the murder of two British tourists on Koh Tao Island in September 2014. The verdict prompted five-day-long protests on the Thai-Myanmar border as well as across Myanmar. Myanmar’s commander in chief, Min Aung Hlaing, on December 28 called on Thai authorities to review the evidence in the case.


Aung San Suu Kyi calls peace with ethnic minorities her most important priority. Opposition leader Aung San Suu Kyi on January 4 said in a speech commemorating the 68th anniversary of Myanmar’s Independence Day that ending longstanding armed conflicts with ethnic minorities will be the single most important goal of the future National League for Democracy government. She made no reference to the cease-fire agreement that the government of President Thein Sein signed with eight armed ethnic groups last October, but called for a “just peace” and “all-inclusive” talks with ethnic stakeholders.

Outgoing parliament passes new investment law; government circulates bill that would curtail next president’s powers in National Defense and Security Council. Parliament on December 17 approved a new investment law that combines the 2012 Foreign Investment Law and the 2013 Myanmar Citizens Investment Law. Under the new law, the Myanmar Investment Commission will be able to delegate investment decisions to state and regional authorities. The new law also includes human rights protection provisions in an effort to address concerns by potential foreign investors. The government in late 2015 distributed to lawmakers a draft bill that, if passed, would strip the president’s voting powers in the supreme decision-making National Defense and Security Council on most matters.

Central bank to start electronic settlement system in January. The central bank this month will introduce an electronic settlement system as part of the government’s financial modernization drive to allow for better implementation of monetary policy, according to a December 26 Nikkei Asian Review report. The new, Japanese-built system will be able to handle accounts and fund transfers using foreign currencies, including yen, dollars, and euros, allowing transactions by foreign companies operating in Myanmar to be handled in the country in the future.

Military, Arakan Army clash in northern Rakhine State. Fighting broke out between government troops and the Arakan Army on December 27 near the Sittwe-Yangon highway in Kyauktaw Township in northern Rakhine State, and has since recurred on more than two dozen occasions. The two sides clashed again most recently on January 3. The Arakan Army, which is allied with the powerful Kachin Independence Army and has been based in Kachin State in northern Myanmar, has gradually returned to Rakhine State in the west, clashing with the military several times since last March.

Activist jailed for Facebook post “ridiculing” army. A court in the central Ayeyawady Region on December 28 sentenced activist and National League for Democracy member Chaw Sandi Tun to six months in jail for “ridiculing” the military in a Facebook post. She had compared the color of the new army uniform to that of a longyi—a traditional Myanmar skirt—worn by opposition leader Aung San Suu Kyi. Chaw Sandi Tun was arrested last October and charged under Myanmar’s telecommunications law, which broadly prohibits the use of telecommunications networks to defame or obstruct individuals.


Party central committee approves list of personnel for next Politburo. The ruling Communist Party’s central committee conducted a final meeting December 13–21 to prepare for the upcoming party congress, slated to take place from January 20–28. General-Secretary of the Communist Party Nguyen Phu Trong said in his concluding speech that the committee discussed and approved the list of personnel for the next Politburo and party secretariat during the plenum, and agreed on socioeconomic development goals for the 2016–2020 period. Vietnam holds party congresses every five years to appoint its top leaders and set party policy.

Central bank replaces fixed exchange rate against U.S. dollar with daily reference rate. The central bank on January 4 replaced the fixed exchange rate of the dong against the U.S. dollar with a daily reference rate, a decision central bank governor Nguyen Van Binh said will allow the government to better respond to the demand and supply of foreign currencies. Vietnam adjusted its exchange rate occasionally in the past—it devalued the dong three times in 2015. The central bank is also expected to slash interest rates on deposits in U.S. dollars this year to prevent hoarding of the U.S. currency.

FDI increases 12.5 percent in 2015; Samsung expands investment in Ho Chi Minh City. Total foreign direct investment in Vietnam reached $22.8 billion as of December 15, an increase of 12.5 percent from 2014, according to the General Statistics Office. Investment in processing and manufacturing accounted for $15.2 billion of the total. South Korea remains Vietnam’s largest foreign investor. South Korea’s Samsung Electronics last month announced it will raise its investment in an electronics plant outside Ho Chi Minh City to $2 billion from a previous $1.4 billion, with the additional funds going into production of smart televisions.

Thailand’s Singha Group to acquire $1 billion stake in Masan Group; Thai developer to invest $2 billion to build industrial zones. Thai beverage maker Singha Group on December 25 signed a $1.1 billion deal with Vietnamese conglomerate Masan Group to acquire stakes in two of the company’s unlisted units. The deal is expected to help Singha expand its foothold in Vietnam, the third-largest beer consumer in Asia after Japan and China. Separately, Thai industrial zone developer Amata announced last month plans to invest $2.2 billion to build two new industrial zones—one in northern Quang Ninh Province and the other in southern Dong Nai Province—within the next two years. Amata currently owns and operates a large industrial park outside Ho Chi Minh City.

Vietnam unveils large indigenous drone for South China Sea patrol missions; first Kilo-class submarines start patrolling the South China Sea. Vietnam last month unveiled its largest indigenous high-altitude long-endurance drone, which will be used for civilian and military patrol missions in the South China Sea, according to a December 23 IHS Jane’s Defence Weekly report. The unmanned aerial vehicle is expected to conduct flight tests over the South China Sea in the first quarter of 2016. Meanwhile, the Vietnamese navy’s first Kilo-class submarines in recent months started patrolling the South China Sea, according to a December 18 Reuters report. Vietnam will operate six Kilo-class submarines by 2017.


Indonesian police arrest 11 suspects in counterterror sweeps. Indonesian police arrested nine suspects in counterterror operations across Java on December 19-20 and two more on December 24. Those arrested included four men with links to the Southeast Asian extremist group Jemaah Islamiyah and seven connected to the Islamic State, including an ethnic Uighur from China who police say was planning a suicide bombing. Indonesia deployed 150,000 security personnel to protect churches, airports, and other public places over the Christmas and New Year holidays after receiving credible threats of planned attacks.

Police, military wrapping up offensive to capture terrorist group leader. Police on December 31 announced that a year-long joint operation with the military to hunt down the East Indonesia Mujahidin (MIT) terrorist group’s leader, Abu Wardah, also known as Santoso, in the jungle around Poso, Central Sulawesi Province, will end on January 9. The announcement followed the capture of seven people suspected of working with the MIT. Police have captured 31 suspected MIT members in recent months and believe that Santoso’s force has dwindled to around 30 followers.

Freeport-McMoRan chairman’s resignation threatens contract renegotiation. James Moffett resigned as executive chairman of U.S.-based mining giant Freeport-McMoRan on December 28, raising concerns about the company’s ongoing negotiations with the Indonesian government. Freeport runs the Grasberg gold and copper mine—one of the world’s largest—in Indonesia’s Papua Province and hopes to secure an early renewal of its contract, which expires in 2021. Freeport is also in negotiations to sell a 10 percent stake in its Indonesian unit to the government by mid-January.

Dozens killed in boat sinking. Indonesian officials on December 29 called off the search for victims of a ferry sinking 10 days earlier, confirming that 66 people had di ed and 12 remained missing. Rescuers managed to save 40 passengers and crew from the ship, which sank in a storm off the coast of Southeast Sulawesi Province on December 19. More than 20 ships, including from the Indonesian Navy, the Search and Rescue Agency, and local fishermen, took part in the search operation, along with a helicopter and a CN-235 aircraft.

Transportation chief resigns due to holiday traffic jams. Director General of Land Transport Djoko Sasono resigned on December 26 following unanticipated traffic jams around Jakarta before Christmas that affected millions trying to leave the capital for the holiday and provoked a media backlash. Some drivers spent 16 hours to travel the 99 miles from Jakarta to Bandung. Djoko’s departure came just weeks after Director General of Taxation Sigit Priadi Pramudito resigned his post on December 1 after it became clear that the government would fall short of its $93.4 billion revenue collection target for the year.


Presidential candidate Poe disqualified by election commission, appeals to Supreme Court. The Commission on Elections on December 23 disqualified Senator Grace Poe from running for the Philippine presidency in 2016. Meeting in full after two separate committees had voted against her, the commission upheld the disqualification based on legal requirements that presidential candidates have a minimum of 10 years’ residency in the country and are natural-born Philippine citizens. The Supreme Court on December 28 issued a temporary restraining order against the disqualification, allowing Poe to stay on the ballot as she appeals to the Supreme Court. Oral arguments are scheduled for January 19.

Filipino students camp out on disputed island in protest, angering China. A group of nearly 50 Filipino protesters, predominantly students, on December 26 landed on Thitu Island to demonstrate against China’s aggressive claims in the South China Sea. The students spent a week camping on the island, which is controlled by the Philippines and is part of the disputed Spratly Islands grouping. The Chinese foreign ministry angrily protested the demonstration, while the Philippine government praised the students’ patriotism after initially urging them not to make the trip.

Vice President Binay tops recent presidential poll. A Pulse Asia poll released on December 22 showed a dramatic increase for Vice President Jejomar Binay in the 2016 Philippine presidential race. Binay, who faces multiple corruption allegations stemming from his tenure as mayor of Makati, jumped 14 points in the poll to 33 percent. Davao City mayor Rodrigo Duterte and Senator Grace Poe trailed him by about 10 points. In a Social Weather Station poll released on the same day, Binay and Poe were tied for first at 26 percent.

Islamic separatist attacks in Mindanao kill 14. A series of coordinated attacks in the southern island of Mindanao by the Bangsamoro Islamic Freedom Fighters (BIFF) on December 24 and 25 killed at least 14 people. Eight attacks involving about 200 rebels across three provinces on Mindanao were launched primarily against Christian villages, leaving nine civilians dead. The government counterattack killed five rebels. The BIFF broke away from the Moro Islamic Liberation Front in 2011 over disagreements on peace negotiations with the Philippine government.

Philippine army kills eight Abu Sayyaf fighters in failed hostage rescue. The Philippine army on December 30 killed eight Abu Sayyaf fighters and lost one soldier in an unsuccessful attempt to rescue four hostages held by the terrorist group. The battle took place on Jolo Island, deep in the archipelago where Abu Sayyaf is based. The hostages, two Canadians, a Norwegian, and a Filipino, were taken from a resort on Samal Island in September 2015, and videos demanding their ransom have been released on the Internet.

President Aquino vows to leave behind stronger military. At a ceremony on December 21 commemorating the 80th anniversary of the Philippine armed forces, President Benigno Aquino vowed to leave a stronger military when his term ends in June. The Philippine military is in the midst of a modernization plan to reach a “minimum credible defense” to protect its national interests, which many have linked to Chinese expansionism in the South China Sea. In November 2015, Manila received its first shipment of fighter jets purchased from South Korea as part of the modernization program.


Opposition parliamentarian Khairul Nazim detained under Sedition Act. Parti Sosialis Malaysia (PSM) central committee member Khairul Nizam Abd Ghani was detained on December 28 after reporting to the Dang Wangi police station for questioning. Though no specific offense was spelled out by authorities, police officials said Khairul Nizam was under investigation for actions pertaining to the Sedition Act and the Communications and Multimedia Act. He is the third PSM member to be charged under the Sedition Act since October. Malaysian human rights organization SUARAM condemned the detention of Khairul Nizam and others under the Sedition Act, which the government of Prime Minister Najib Razak had promised to abolish in 2013.

Bauxite mining moratorium urged following red river water in Kuantan. The waters of Sungai Balok in the eastern state of Kuantan ran red the week before New Year, with officials blaming excess waste water from nearby bauxite mines. Cabinet sources say a temporary halt is being considered until appropriate regulations, licensing, and environmental protection are established. Malaysian bauxite exports were up 1,100 percent in 2014 following Indonesia’s export ban to protect its local aluminum industry. Malaysia is now the number one supplier of bauxite to China.

1MDB sells real estate, energy assets to reduce $11 billion debt. With $11 billion in debt accumulated since its launch in 2009, state investment fund 1Malaysia Development Bhd (1MDB) ended the year with two high-profile debt-reduction sales to Chinese firms. 1MDB announced on December 31 the sale of a majority stake in a Kuala Lumpur real estate project for $1.72 billion to a consortium that includes state-owned China Railway Engineering Corporation. This followed the November sale of energy assets worth $2.3 billion to the China General Nuclear Power Corporation.

World Bank report cites benefit of more foreign workers while home minister argues for fewer. The World Bank’s annual report “Malaysia Economic Monitor: Immigrant Labour,” launched on December 18, described the role of foreign workers in bolstering demand for skilled Malaysian employees while also contributing to the country’s economic growth. The report’s findings about the positive impact of migrant labor come at a time when the government is trying to curtail Malaysia’s reliance on foreign workers, according to remarks by Deputy Prime Minister and Home Minister Ahmad Zahid Hamidi.

Malaysian palm oil futures open weaker. Declining from an 18-month high, palm oil futures in Malaysia fell 2.1 percent on January 4 to open the new year. Slowing overall exports and weak demand from China have contributed to record high inventories for Malaysia’s palm oil industry, but an expected decrease in production in the coming months should cushion falling prices. The end of the year is typically a low-growth period, as rains increase throughout Southeast Asia, curbing production. Malaysia has anticipated lower fruit yields due to the dry El Niño.


Singapore identifies new growth industries, including space/satellites. The Singaporean government’s Economic Development Board (EDB), which is charged with maintaining the city-state’s position as a leading hub for business and investment, has identified space and satellite technologies as growth industries in 2016. The announcement follows the December 16 launch of six made-in-Singapore satellites into space from India and comes four years after the launch of Singapore’s first home-grown microsatellite. The EDB said that 300 new professional positions would need to be filled in the next five years in the space/satellite sector in Singapore, adding to the 1,000 professionals currently employed.

Singapore calls for resumption of trade talks between EU, ASEAN. Singapore’s Trade and Industry Minister, Lim Ng Kiang, on December 30 said he favored continuing trade talks between the EU and ASEAN. Negotiations between the two groupings began in 2007 but were abandoned in 2009, with the EU pursuing direct bilateral agreements instead. The EU currently has accords with Singapore and Vietnam and has agreed to start talks with the Philippines this year. With the January 1 official establishment of the ASEAN Economic Community in mind, Lim suggested that ASEAN look to the EU for lessons in economic integration but be wary of too much centralization and bureaucracy.

Alzheimer drug developer eyes U.S. IPO in 2017. TauRx Pharmaceuticals Ltd, a Singaporean company that is developing treatment for Alzheimer’s, is looking to list on the Nasdaq Stock Market as early as 2017 and could see a company valuation of $15 billion. TauRx has raised $350 million from investors so far, with Genting, the Malaysian conglomerate, the largest shareholder, investing $120 million. Other investors include Temasek, the Development Bank of Singapore, and the Dundee Corporation of Canada. Proceeds from the listing would be used to fund additional tau protein-focused Alzheimer’s research.

Singapore’s fourth quarter growth outpaces forecasts. Construction and services energized Singapore’s economy in the final three months of 2015, blowing past median forecasts of 1.7 percent growth to 5.7 percent over the previous quarter, according to a January 3 Wall Street Journal report. For the full year, Singapore saw 2.1 percent growth, with services and construction at 3.2 percent and 2.2 percent growth, respectively. Manufacturing, however, lagged, falling 6 percent from the previous year’s fourth quarter.

Social media seen as tool to track infectious disease outbreaks. Researchers in Singapore tasked with improving responses to the spread of infectious disease are looking to harness the data provided by social media in times of crisis. A taskforce examining the 2014 bird flu outbreak in China analyzed the microblogging site Weibo and compared it with traditional information hubs like the World Health Organization, news sites, and Chinese health authorities. The taskforce found that social media was effective for tracking the flu’s spread and was ahead of traditional sites in reporting new cases.

Trans-Pacific Partnership

TPP congressional future uncertain in 2016. President Barack Obama, in his year-end press conference, listed the Trans-Pacific Partnership (TPP) as one of his top legislative priorities before he leaves office, but the 12-nation agreement’s path through Congress is uncertain. On the House side, Speaker Paul Ryan has said he favors a quick vote, providing the TPP lives up to congressionally mandated Trade Promotion Authority standards. On the Senate side, however, Majority Leader Mitch McConnell has said there should not be a vote before the November 2016 elections.

National Association of Manufacturers, U.S. Chamber of Commerce endorse TPP . The National Association of Manufacturers (NAM) on January 4 released its official endorsement of the Trans-Pacific Partnership (TPP). Representing 11,000 small and large manufacturing companies, NAM is the largest industrial manufacturing trade association in the United States. Admitting the agreement is “not perfect” and that “principled objections” exist, NAM president Jay Timmons nonetheless urged Congress to quickly approve the deal. Timmons also encouraged the Obama administration to continue working with industry, Congress, and TPP member governments to “address remaining barriers, to raise standards, to promote the rule of law, and to further level the playing field for all.” The U.S. Chamber of Commerce, the most influential business group, on January 6 also publicly endorsed passing the TPP.

TPP signing ceremony planned for February. The 12 nations that negotiated the Trans-Pacific Partnership agreement are still planning a signing ceremony, likely in New Zealand, in February. New Zealand is in charge of compiling the accord’s final text. The ceremony will verify the wording of the agreement and allow signatories to continue with individual domestic procedures for ratification. Japan is reportedly seeking to fast-track its ratification.

South China Sea

U.S. bomber accidentally flies within two miles of Chinese-occupied island. A U.S. B-52 bomber flying over the South China Sea on December 10 accidentally crossed into the 12-nautical mile territorial airspace over Cuarteron Reef, an island controlled by China in the Spratly Islands. Chinese officials immediately protested the action as a serious military provocation. Pentagon officials said that the incursion was not part of previously announced freedom-of-navigation operations and that an investigation into why the plane overflew the island is ongoing.

China conducts war games in South China Sea. Chinese military forces on December 16 carried out a series of interservice war games in the South China Sea, according to a December 17 Reuters report. The drill, which took place across a large area of the South China Sea, tested personnel from China’s North, East, and South Sea fleets on their ability to defend against missile strikes and coordinate operations with submarines and aircraft. It was the second such exercise by the Chinese navy in less than a month.

China lands test flights on new airfield in Spratly Islands. China announced on January 2 that construction of an airfield on Fiery Cross Reef was complete and that it had landed a civil aviation flight on the airstrip. Two additional civilian planes landed at the facility on January 6. Fiery Cross Reef is one of several features in the Spratly Islands that China has built up into artificial islands despite protests from its Southeast Asian neighbors and the United States. Both Vietnamese and Philippine officials lodged protests slamming China’s landing of the plane on the disputed island.


ASEAN heads of state accept invitation to February Sunnylands summit. The White House on December 30 confirmed that President Barack Obama and the leaders of the 10 ASEAN nations will meet at Sunnylands in Rancho Mirage, California, for a summit on February 15-16. Obama invited his Southeast Asian counterparts to the gathering during the November 2015 ASEAN and East Asia Summit leaders’ meetings in Kuala Lumpur. The gathering will be the first standalone U.S.-ASEAN leaders’ summit in the United States (previous meetings have taken place on the sidelines of other summits).

ASEAN Community formally established on December 31. The ASEAN Community officially came into existence on December 31, though it was formally announced at the ASEAN Summit in Kuala Lumpur a month earlier. The ASEAN Community consists of three distinct “pillars”—the political-security, sociocultural, and economic communities—but most attention is focused on the latter. Southeast Asian leaders have acknowledged that the ASEAN Economic Community has so far fallen short of its goals to establish a free flow of goods and services and reduce barriers to the movement of capital and labor.

Indonesia, Philippines fail to ratify ASEAN Open Skies agreement. ASEAN failed to implement its Open Skies policy, also called the ASEAN Single Aviation Market, by a self-imposed December 31 deadline due to the failure of Indonesia and the Philippines to ratify the agreement. The policy would allow any ASEAN carrier to fly from its home country to any city within the 10-nation bloc. Indonesia has so far opened up air travel only to Jakarta, while the Philippines has opened up all cities except Manila.


Government sets socioeconomic goals for graduating from LDC status. Minister of Planning and Investment Somdy Duangdy on December 23 said in the draft five-year plan on socioeconomic goals presented to the National Assembly that Laos will need to achieve annual gross domestic product growth of at least 7.5 percent during 2016-2020 to graduate from least-developed-country status. According to the draft plan, the Lao government aims to reduce the poverty rate to 15 percent by 2020 from more than 23 percent currently.

Laos, Vietnam step up judicial, military, and public security cooperation. Lao deputy prime minister Somsavat Lengsavat and Vietnamese deputy prime minister Nguyen Xuan Phuc on December 27 conducted the 38th session of the Laos-Vietnam Intergovernmental Committee in Vientiane. The Vietnamese side pledged to fund a human resources training project at Laos’s Judicial Academy and presented the Lao Ministry of Public Security with nearly $220,000 worth of security equipment, including high-speed canoes and explosive detectors. Vietnamese officials also pledged to support Laos in fulfilling its role as ASEAN chair in 2016.

Laos issues first dollar-denominated notes in Thailand. The Lao Finance Ministry last month issued its first tranche of U.S. dollar-denominated government bonds, worth $182 million, through the Thai Securities and Exchanges Commission, according to a December 18 The Nation report. The notes were rated BBB+ by Thailand’s TRIS rating agency. This marks the first time the Lao government raised funds in U.S. dollars from an offshore debt market—previous bond issuances in Thailand were denominated in Thai baht. The bonds were made available only to institutional investors.


New ministry aims to strengthen tourism sector. Brunei’s Ministry of Primary Resources and Tourism, created in October 2015, has been tasked with devising new ways to attract visitors. The number of visitors to Brunei dropped to just over 78,000 in 2014, down from nearly 86,000 the previous year. Tourism, which made up 1.5 percent of Brunei’s gross domestic product in 2014, is seen as a potential growth area that could help diversify Brunei’s oil-dependent economy. The sector and related fields accounts for 7.6 percent of total employment, or some 15,500 jobs. A $150 million revamp of Brunei’s airport was scheduled for completion at the end of 2015 to support the tourism push.

Brunei bans public celebrations of Christmas. Sultan Hassanal Bolkiah, who last year announced the country would introduce Islamic sharia law, moved in December to suppress the public celebration of Christmas in the Muslim country. Religious leaders in the sultanate warned that “religious symbols like crosses, lighting candles, putting up Christmas trees, singing religious songs, sending Christmas greetings” could lead Muslims astray. Punishment for violating the ban could mean up to five years in prison, and while Christians may celebrate Christmas, they must not do so “excessively and openly.”


Protest by thousands of garment workers in Svay Rieng Province turns violent. A massive strike by garment workers in the Bavet special economic zone on December 22 erupted into violence. Demonstrators launched the largest worker protest of 2015, after 30,000 workers walked off the job on December 16 to protest an unsatisfactory wage increase. The strike grew increasingly violent as the number of demonstrators swelled to over 5,000 and protesters attacked the factory and police with rocks. Cambodian garment workers have been at the heart of numerous protests in recent years demanding higher wages.

Civil society organizations meet to plan climate policies. Cambodian civil society organizations (CSOs) met with their government counterparts on December 24 in Phnom Penh to discuss a strategy for implementing Cambodia’s climate change obligations following the Paris climate agreement. CSO delegates presented a set of guidelines to involve local communities in addressing climate change, while government representatives outlined a focus on economic development, environmental preservation, social well-being, and preservation of culture. Delegates hoped the meeting would build trust between government and CSO actors.

Hun Sen pledges “no pardon” for Rainsy, will pass law against dual nationals. Prime Minister Hun Sen on December 28 declared that he would sooner “cut off [his] right arm” than request a royal pardon for exiled opposition leader Sam Rainsy. Rainsy fled to France in November 2015, following an arrest warrant on defamation charges from 2011. In the same speech in Phnom Penh, the prime minister vowed to pass laws preventing dual nationals from holding political office, a move targeting Rainsy for his French citizenship.

Opposition party quietly ends parliamentary boycott. The opposition Cambodia National Rescue Party (CNRP) on December 16 ended a two-month boycott of parliament, citing the “culture of dialogue” and a need to review legislation for garment trade unions. The boycott began after the brutal beatings of two CNRP lawmakers at a pro-ruling party rally in October and the subsequent ouster of CNRP vice president Kem Sokha from his position as first vice president of the National Assembly.


Philippines supports Timor-Leste’s ASEAN bid. The Philippines expressed its support for Timor-Leste’s bid to join ASEAN during a meeting in Manila between Philippine foreign secretary Albert del Rosario and Timorese foreign minister Hernani Coelho da Silva. The two officials also agreed to boost cooperation on defense, education, health, and especially economics through a bilateral Policy Consultation mechanism instituted in 2014. Timor-Leste officially applied to become ASEAN’s 11th member in 2011.

Indonesia’s state-owned bank to reopen in Timor-Leste in 2016. Asmawi Syam, president director of Bank Rakyat Indonesia (BRI), announced on December 27 that the Indonesian state-owned lender will reopen a branch office in Timor-Leste in 2016. BRI closed its Timorese offices following the country’s independence from Indonesia in 1999. Asmawi said that BRI will focus on microloans and lending to small and medium-sized enterprises in Timor-Leste, and expects to secure all permits to reopen in the country by the second quarter of the year.

Vietnam, Timor-Leste reach agreement on rice trade. Vietnam’s minister of industry and trade, Vu Huy Hoang, and Timor-Leste’s minister of commerce, industry, and environment, Constancio da Condeicao Pinto, signed an agreement in Hanoi on December 21 to allow Vietnam to export rice to Timor-Leste in the future. Pinto also said that Timor-Leste would soon complete procedures to approve a bilateral free trade agreement between the two countries. Vietnam was the sixth-largest exporter to Timor-Leste in 2015, sending $34 million worth of goods to the country.

Mekong River

Thai court dismisses suit against EGAT, other Thai state agencies over support for Xayaburi Dam. The Administrative Court of Thailand on December 25 dismissed a case against the Electricity Generation Authority of Thailand (EGAT) and four other state agencies for their support of the Xayaburi mega-dam in Laos. The 37 plaintiffs in the case—all villagers from eight of Thailand’s Mekong provinces—vowed to appeal the ruling. EGAT has agreed to purchase most of the electricity generated by the dam, which is situated on the mainstream of the Mekong and critics say will devastate the environment and livelihoods downstream.

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Looking Ahead

Asia Forecast 2016. The Center for Strategic and International Studies on January 12 will host a half-day-long event to preview the most important political, security, and economic developments across Asia in 2016 and their implications for U.S. foreign policy. The event will take place from 8:00 a.m. to 12:00 p.m., 1616 Rhode Island Avenue, NW. E-mail the CSIS Asia Programs to RSVP.

The Economic and Strategic Benefits of the Trans-Pacific Partnership. The Wilson Center on January 13 will host Ambassador Michael Froman, United States Trade Representative, to discuss his perspectives on the benefits of the Trans-Pacific Partnership trade agreement to the U.S. economy and to the U.S. goals of deepening ties with Asia-Pacific countries. The event will take place from 11:00 a.m. to 12:00 p.m., 6th floor, Woodrow Wilson Center, 1300 Pennsylvania Ave, NW. Click here to RSVP.

A Conversation with Secretary of the Air Force Deborah Lee James. The Smart Women, Smart Power Initiative at CSIS on January 14 will host Secretary of the Air Force Deborah Lee James. James has 30 years of senior homeland and national security experience in the federal government and private sector. The event will take place from 5:00 p.m. to 6:30 p.m., 1616 Rhode Island Avenue, NW. Click here to RSVP.

Banyan Tree Leadership Forum with Malcolm Turnbull. The CSIS Pacific Partners Initiative on January 18 will host a Banyan Tree Leadership Forum with Malcolm Turnbull, prime minister of Australia. Turnbull will discuss Australia’s foreign policy priorities globally and in the Asia-Pacific region in particular, and opportunities and challenges facing the U.S.-Australia alliance in the coming years. The event will take place from 3:00 p.m. to 4:00 p.m., 1616 Rhode Island Avenue, NW. E-mail the Pacific Partners Initiative to RSVP.

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

Murray Hiebert
Senior Associate (Non-resident), Southeast Asia Program