Special Edition – 2010 Year In Review
February 2, 2011
The CSIS Southeast Asia Program is pleased to name U.S. secretary of state Hillary Rodham Clinton as our inaugural Southeast Asia person of the year for 2010. The award recognizes the individual who had the greatest impact and influence on strengthening U.S.–Southeast Asia ties over the course of the year.
In 2010, the choice of Secretary Clinton was clear. Since assuming her role as secretary of state, Mrs. Clinton has had a vision for strengthening U.S. ties in Southeast Asia, and in 2010 she followed through on that vision with commitment, consistency, and determination.
Under her leadership and guidance, the United States has built on a strong foundation of security and business engagement in the region by bringing strategic and political focus to ASEAN. Secretary Clinton provided leadership for signing the Treaty of Amity and Cooperation (TAC), revising U.S. policy toward Burma to prevent that country from keeping the United States away from the table with ASEAN, initiating the U.S.-ASEAN Leaders’ Meeting, confirming U.S. membership in an ASEAN-centered East Asia Summit (EAS), and confidently asserting American interests in the region through her perfect attendance and statesman-like interventions at the ASEAN Regional Forum (ARF) and Post Ministerial Conference (PMC). In particular, her comments on the South China Sea at the ARF in Hanoi in July last year helped reassure Southeast Asia friends that the United States was focused, engaged, and committed to promoting peace and prosperity in the Asia-Pacific.
In addition, the State Department, under Mrs. Clinton’s leadership and with the able support and limitless energy of Assistant Secretary of State for East Asia and the Pacific Kurt M. Campbell, has injected new energy and developed new partnership frameworks with key ASEAN countries, notably Indonesia, Vietnam, and Malaysia. Secretary Clinton’s team has strengthened ties with stalwart partners such as Singapore and is developing plans to deepen traditionally strong linkages with treaty allies the Philippines and Thailand. Mrs. Clinton has also been a policy innovator in the region. A good example is the Lower Mekong Initiative that seeks to support sustainable development and infrastructure across mainland Southeast Asia.
While more clearly needs to be done, Mrs. Clinton has created a legacy focus on this important region, and CSIS is honored to recognize her leadership and present her with this award.
CSIS Southeast Asia has invited Mrs. Clinton to receive her award at a gala dinner in Washington, D.C. Dates are being coordinated and will be announced shortly.
CSIS SOUTHEAST ASIA PROGRAM LAUNCHED – SUMMARY OF 2010
The CSIS Southeast Asia program celebrated its launch year with a strong start toward the goal of creating a high-level policy focus on Southeast Asia in Washington, D.C.
Highlights of 2010 included the launching of the U.S.-ASEAN Strategy Commission cochaired by Mr. Maurice R. Greenberg of the C.V. Starr Company and The Hon. William S. Cohen, former U.S. secretary of defense and U.S. senator. The Commission is working closely with governments and experts to develop a set of recommendations designed to be the pillars of a long-term comprehensive U.S. strategy for engagement in Southeast Asia.
Our extensive research has looked at the anatomy of Chinese aid in Southeast Asia, the South China Sea and regional maritime security, the role of India in Southeast Asia and Asian regionalism, ASEAN economic integration, regional architecture and the impact on climate change, the U.S.-Indonesia partnership, U.S.-Vietnam military-to-military ties, and many other critical areas.
CSIS Southeast Asia also created a new speakers series—the Banyan Tree Leadership Forum, attracting leaders including Foreign Secretary Alberto Romulo of the Philippines, Prime Minister Najib Razak of Malaysia, Secretary of Commerce Gary Locke, Deputy USTR Demetrios Marantis, and Foreign Minister Marty Natalegawa of Indonesia. A strong and substantive multimedia presence has been established through the SEA of Discussion project, which includes digital interviews with more than two dozen ministers and ambassadors.
The CSIS Southeast Asia program also covers Australia and New Zealand at CSIS and provided extensive coverage of the change of government in Australia as well as reporting on the strong positive developments in the bilateral political and security relationship. In New Zealand, the program developed a groundbreaking study called “Pacific Partners: The Future of U.S.– New Zealand Relations,” which will be featured at the Partnership Forum, the premier bilateral event, in Christchurch in February 2011.
CSIS Southeast Asia has been an innovator in developing creative multimedia content to build involvement and challenge experts and interested parties to participate and think about U.S. and Southeast Asia relations and policies. Products include this biweekly newsletter, “Southeast Asia from the Corner of 18th & K Street,” the new web-based interview series “SEA of Discussion” at CSIS Southeast Asia Program (http://csis.org/program/southeast-asia-program), and world-class Facebook (CSIS Southeast Asia Program) and Twitter (@SoutheastAsiaDC and @BowerCSIS) channels. In addition, the program has established a blog for the CSIS Asia team called “cogitASIA” (www.cogitASIA.com).
Here are some of the numbers from 2010:
- “35”... issues of the newsletter “Southeast Asia From the Corner of 18th and K Street” published
- “6,366” …. fans on “CSIS Southeast Asia Program” Facebook page as of January 1, 2011, with nearly 1 million post views
- “873” … followers of @SoutheastAsiaDC and @BowerCSIS twitter accounts as of January 1, 2011
- “3” … dozen podcast interviews
- “98” … expert posts on CSIS Asia Blog – cogitAsia – viewed over 25,000 times
- “4” … Banyan Tree Leadership Forums
- “16” … SEA of Discussion multimedia interviews
- “17” … commissioners on the U.S. ASEAN Strategy Commission
- “168” … television, radio, and news interviews for our director, Ernie Bower
- “1” … Congressional testimony by Bower on Chinese development assistance in Southeast Asia
- “35” … CSIS Commentaries and Critical Questions on key developments in Southeast Asia published
2010: THE YEAR IN REVIEW
Last year saw the world refocus on the important role Southeast Asia will play as Asia develops over the next half-century. The region plays a key strategic role in fast-paced Asian economic growth and provides balance as China and India emerge as new global powers. ASEAN will be at the center of new Asia-Pacific regional security and trade architecture. The United States elevated its focus on the region this year and is likely to continue to build on that strength in the years ahead.
In Australia and New Zealand, strong ties were reinforced. In the case of Australia, those linkages remained strong as leadership changed in Canberra, and in New Zealand a new paradigm for partnership was underlined in the Wellington Declaration.
For its part, the United States began to see the light at the end of the tunnel for its financial crisis and stepped forward on trade with the U.S.-Korea Free Trade Agreement (KORUS) and the Trans-Pacific Partnership (TPP).
We review several of the key trends from 2010 below:
ENHANCED U.S. ENGAGEMENT IN SOUTHEAST ASIA
Building on its earlier moves to take its seat at the ASEAN table in joining the Treaty of Amity and Cooperation (TAC) and pursuing a policy of limited engagement in Burma (Myanmar), the Obama administration focused on strengthening ties with ASEAN and its member countries. The region welcomed U.S. engagement as concerns about China’s intentions in the South China Sea and north Asia raised atavistic anxieties.
2nd U.S.-ASEAN Leaders Meeting in New York. Institutionalizing U.S. engagement in ASEAN is important because the region is not convinced that the United States will sustain its focus over time. Though increasingly confident, ASEAN’s conviction regarding U.S. intentions is a fundamental condition for advancing critical decisions and making progress on a range of issues from security to trade. The question is whether foundational American interests in regional security and private sector investment will combine with a new geostrategic paradigm and make the region a long-term priority for the United States. That trend was promoted by the Second U.S.-ASEAN Leaders Meeting, cochaired by the United States and Vietnam on September 24 in New York. The recurrence of the summit signaled the formalization of the U.S.-ASEAN partnership, but continuous questions were asked when Indonesia’s president could not join his colleagues for the meeting. Both the United States and ASEAN have significant work to do to strengthen the dialogue and convert confidence into enduring institutions. By adopting a goal-oriented approach, U.S. engagement in Southeast Asia in 2011 will be more effective as both sides strive to build trust, appreciate the mutuality of efforts, and ultimately build a solid foundation for U.S. interest in the “Asian Century.”
Obama Visits Indonesia. President Obama’s determination to renew and reinforce ties with Indonesia weathered several rain checks caused by domestic political demands and manifested itself in his visit in November to the country where he spent years as a young boy. Indonesia is the incoming chair of ASEAN and the East Asia Summit and will chair APEC in 2013. It is a key member of the Group of Twenty (G20) and a very important partner for the United States. Obama’s address at the University of Indonesia on November 10 emphasized the need for a sustained effort in search of common ground that transcends the misguided belief that America is opposed to Islam - “I said then, and I will repeat now, that no single speech can eradicate years of mistrust.”
Leadership by Clinton and Gates. Secretary of State Hillary Clinton and Secretary of Defense Robert Gates provided outstanding leadership for strengthening U.S. ties with ASEAN in 2010. Both visited the region on multiple occasions and focused on key issues underpinning the United States’ commitment and intentions to build on its very strong presence in the region. Secretary Clinton’s forthright and statesman-like intervention at the ASEAN Regional Forum (ARF) in Hanoi was a highlight of this initiative, as was Secretary Gates’ position as the first defense minister to accept Vietnam’s invitation to attend the newly minted ASEAN Defense Ministers’ Meeting Plus (ADMM+).
Return to a Proactive Posture on Trade. A forward-deployed U.S. posture on trade is a keystone for a balanced and engaged foreign policy in Asia. Credit to United States Trade Representative Ron Kirk and his Asia team for their undeterred efforts to advance the U.S.-Korea Free Trade Agreement (KORUS) and advance the Trans-Pacific Partnership (TPP) negotiations. The test of U.S. credibility on trade in Asia now rests with the White House and Capitol Hill. For President Obama, making the case that expanding trade with Asia is an investment in long-term economic growth and prosperity for Americans has not been a talking point cleared by political advisers until very recently. Hitting that theme early and often in 2011 will resonate with Asian partners and the U.S. private sector. Early approval of KORUS is vital and will provide needed momentum to the TPP negotiations as well as give President Obama a strong hand when he hosts APEC in Honolulu this November. ASEAN members make up four of the nine countries currently negotiating the TPP.
Tactical Reinforcement in Indonesia, Vietnam—and Malaysia. The U.S. government wisely focused on strengthening ties with two of ASEAN’s more proactive leaders in Vietnam and Indonesia. Vietnam chaired ASEAN in 2010 with an intensity driven by its national security convictions that a strong ASEAN is fundamentally important to promoting peace, prosperity, and balance in Asia. The United States also made a commitment and a bet on strengthening ASEAN when it decided to join the East Asia Summit, a regional architecture with ASEAN as its core. The United States also moved to create a strategic partnership with Indonesia, including resumption of military ties. This was a key step toward anchoring ties with ASEAN by elevating relations with the region’s largest member and moving toward alignment on security-related issues. Finally, the greatest advance in bilateral relations in the region in 2010 was the U.S.-Malaysia relationship. This is discussed in more detail below, but by building on already-rock-solid ties with Singapore, the Washington-Kuala Lumpur linkage provides many new opportunities for regional cooperation.
Vietnam Shines as ASEAN Chair. As ASEAN chair, Vietnam hosted the East Asia Summit (EAS) and the ASEAN Regional Forum (ARF), initiated the ASEAN Defense Ministers Meeting Plus (ADMM+), and promoted ASEAN’s central role at international forums such as the Asia-Pacific Economic Forum (APEC), the Asia-Europe Meeting (ASEM), and the G20. By all accounts, Vietnam’s leadership was visionary, focused, and results-oriented. Vietnam set a new pace for ASEAN in 2010, one that Indonesia will hopefully build on and accelerate. ASEAN has a lot to do between now and 2015 if it hopes to credibly meet the goals its leaders have set for economic, political, and social integration. Indonesia’s leadership will be critical for ASEAN, as two smaller members, Brunei Darussalam and Cambodia, will take on the responsibilities of the chair in 2012 and 2013 respectively. On December 15, Vietnam’s ambassador to ASEAN, Vu Dang Dung, handed over the chairmanship of ASEAN’s Committee of Permanent Representatives (CPR) to the Indonesian ambassador.
China-ASEAN Free Trade Area Starts Operation. Marking a milestone in the development of China-ASEAN relations, China and ASEAN initiated their free trade area (CAFTA) on January 1, 2010. With a population of 1.9 billion, CAFTA is the world's largest FTA among developing countries, with an estimated trade volume of $4.5 trillion in 2010 and a combined gross domestic product (GDP) of $6 trillion. CAFTA enables and promotes China’s fast-growing role as the dominant trading partner for most of the Southeast Asian countries. Many of ASEAN exports to China end up in the United States as finished products, so China’s near-term role as a market is understood by economists to be overstated, but its economic contribution to ASEAN will be an important trend for years to come.
ASEAN as the “Fulcrum” for Regional Architecture. ASEAN is positioned to play a core role as new regional security and trade architecture is developed in the Asia-Pacific. A strong and cohesive ASEAN is therefore necessary for these structures to endure and produce results. In July, during the 43rd ASEAN Ministerial Meeting (AMM) in Hanoi, ASEAN leaders decided to invite the United States and Russia to join the East Asia Summit. The original configuration of the EAS includes ASEAN members, China, Japan, the Republic of Korea, India, Australia, and New Zealand. Secretary Clinton and her Russian counterpart, Sergey Lavrov, attended the EAS as special guests of the chair and were invited to join formally after the 5th EAS in Hanoi in October. President Obama will participate in his first EAS in Indonesia this fall.
On the trade front, ASEAN has signed FTAs with most of its Asia-Pacific neighbors, including Australia, China, India, Japan, Korea, and New Zealand. In addition, four ASEAN countries are party to the nine-country Trans-Pacific Partnership negotiations. In November, during the lead-up to its National Party Congress, Vietnam became a full member of the TPP. In August, the Malaysian cabinet gave the green light to join the TPP. Presently, the TPP consists of Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, the United States, and Vietnam. Japan and Korea are interested in joining and are engaged in discussions with TPP countries to that end.
Trends to Watch—Inflation. Southeast Asian economies are facing high inflation driven by heavy foreign capital inflows and strong economic growth. As prices of basic commodities like food, energy, and consumer goods increase rapidly, regional governments are struggling to manage their macroeconomic levers. Price increases could have political ramifications if they are sustained over time.
South China Sea. ASEAN and Chinese negotiators held meetings in late December in China to develop a Code of Conduct for resolving disputes in the South China Sea. The fundamental area of disagreement is whether ASEAN countries should be allowed to consult and coordinate as a group ahead of dispute resolution discussions. China asserts that such talks must be bilateral. ASEAN members, however, hold that they have the right to consult. In 2010, China’s perceived aggressive assertion of its “indisputable sovereignty” in the South China Sea raised engendered Southeast Asian antibodies and, coupled with China’s actions in maritime disputes in Northeast Asia and its response to North Korean aggression, have raised concerns around the world.
ASEAN Campaigns to Host the World Cup in 2030 . The brainchild of Fuadi Pitsuwan, the creative and charismatic son of ASEAN Secretary General Surin Pitsuwan, this concept has gone viral and provided tangible evidence that there can be a future for an ASEAN identity. The idea has caught the imagination of the region’s legions of football fans and is now being embraced by officials and politicians. The bid itself would be a major step forward for ASEAN’s goal of social and cultural integration.
Australia has first woman PM. Julia Gillard replaced Kevin Rudd in an intra-party power shift at mid-year. A leadership vote in the ruling Labor Party ousted Kevin Rudd. Gillard, who was deputy prime minister before the surprise challenge to Rudd, stood unopposed at a vote of the Labor Party's 112 members of parliament and was sworn in on June 24. Rudd agreed to remain in the government as foreign minister.
U.S.-Australia ties strengthened. Demonstrating the depth and importance of bilateral ties, the U.S.-Australia alliance went from strength to strength in 2010, despite the change in leadership in Canberra. The U.S. Senate finally passed the U.S.-Australia Defense Trade Cooperation Treaty on September 29. The treaty allows for elevated levels of defense cooperation and interoperability.
Australia’s worst flood in 50 years. Queensland State Treasurer Andrew Fraser described the floods as a “disaster of biblical proportions” and said the ultimate cost would exceed $1 billion.
Brunei Monetary Authority to be established. Brunei moved to strengthen key institutions of its government and established a central bank, the Brunei Monetary Authority. The Sultan announced the authority would be responsible for monetary policy, supervision of financial institutions, and currency management.
Leadership on Regional Trade Opening. Brunei hosted the third round of Trans-Pacific Partnership (TPP) negotiations from October 4 to October 9 in Bandar Seri Begawan. The talks included 300 negotiators from TPP member countries, with 24 separate negotiating groups discussing industrial goods, agriculture, textiles, standards, services, investment protections, intellectual property, government procurement, competition, labor, and environmental standards. Malaysia was granted membership as the TPP’s ninth member.
First elections in 20 years. On November 7, Burma held its first national elections in 20 years. The pro-junta Union Solidarity and Development Party (USDP) won after gaining 76.5 percent of the 1,142 seats in the parliament. The National Unity Party (NUP), also holding close ties to the ruling junta, was runner-up and won 5.7 percent of the seats. While many countries, such as the United States, Australia, and the Philippines, criticized the elections for widespread fraud, ASEAN praised them as an important step on the path toward democracy. CSIS is looking at the levers for change in Burma and assessing related policy options.
Pro-democracy activist Aung San Suu Kyi (ASSK) released. Released on November 13, 2010, Aung San Suu Kyi was first put under house arrest in 1989, then again in 2000 and 2002. The last time the junta extended the length of her detention was in August 2009, claiming that she broke terms of her house arrest when U.S. citizen John Yettaw swam across the lake adjacent to her house. Although she is now actively reengaging with and giving hope to the Burmese people, she seems to be more cautious in her approach to the junta and urged the United States not to be “too optimistic” about the situation.
Alleged nuclear program. A Democratic Voice of Burma (DVB) report was released in June claiming that Burma had begun a nuclear weapons program. The International Atomic Energy Agency (IAEA) sought clarifications from the Burmese government, but Burma’s foreign ministry dismissed the allegations and said that the reports were “baseless accusations that are politically motivated.” However, recent cables disclose a series of suspicious events in Burma that indicate a clandestine joint military program exists between Burma and North Korea.
Economic dynamism. As one of ASEAN’s less-developed and new members, Cambodia’s economic development lagged behind that of many of its neighbors. That trend has turned around and Cambodia has enjoyed historically high levels of economic growth and foreign direct investment. Investors report political stability and efficient cost structures as reasons for looking at opportunities.
Easing of Preah Vihear temple tensions. The border standoff between Cambodia and Thailand over the Preah Vihear temple, which started in July 2008, was substantially eased on December 6, 2010. The resolution resulted from four subsequent bilateral meetings between the two kingdoms’ premiers. Pending the possibility of new concerns over recent allegations regarding the actions of Thai officials and the Cambodian border emanating from Bangkok, the two nations will continue working on demarcation, demining, and opening of additional border gates to facilitate exchange of goods along the borders.
First Khmer Rouge tribunal verdict. After four years, the first verdict was handed out to Kaing Guek Eav aka Duch for committing crimes against humanity. The Duch trial was the first test for a unique variant of international criminal tribunal. The court sentenced Duch to 19 years in prison.
Stepping onto the world stage. In 2010, Indonesia prepared to step onto the world stage. Now a member of the G20 and the incoming chair of ASEAN and the East Asia Summit, the world’s fourth-largest country is developing a foreign policy platform with global scope. Espousing messages of democracy, sustainable development, transparency, and good governance, Indonesia could have a very positive affect on global trends. However, strengthening its own institutions in these areas will be critical as will leadership in Southeast Asia. Failure to tend to those priorities could undercut the potentially powerful positive impact of Indonesia’s wider influence.
U.S.-Indonesia Comprehensive Partnership ratified on November 9, 2010. The strategic partnership represents a long-term commitment by presidents Obama and Yudhoyono to broaden, deepen, and elevate bilateral relations between the United States and Indonesia. Core cooperation areas include science and technology, entrepreneurship, education and student exchanges, regional democracy promotion, and interfaith dialogue. Part of this broader engagement included a fundamental and politically courageous move by the Obama administration to normalize military ties with Indonesia. This decision included resuming assistance to Kopassus, Indonesia’s Special Forces. While human rights activists have expressed concern about the decision and touted the 1997 Leahy Law, the Obama administration, led by Secretaries Gates and Clinton, has remained focused and forthright in its commitment to support human rights through more active engagement.
Natural disasters strike: devastating floods, a tsunami, volcanic eruptions. The eruptions on Mount Merapi in Central Java, which began spewing hot ash and deadly superheated gas clouds peaked on November 5. At least 320 people were killed and tens of thousands had to be evacuated to shelters outside the 20-kilometer exclusion zone. On October 25, a 7.7-magnitude earthquake hit the Mentawai Islands off West Sumatra, triggering a tsunami that claimed more than 500 lives. On October 4, flash floods and landslides in the West Papua town of Wasior killed at least 150 people, with hundreds more missing, and rendered thousands homeless. Located on the Pacific Ring of Fire, Indonesia sits on 150 active volcanoes. The country faces a major challenge in disaster management for 2011 and could help lead regional humanitarian assistance and disaster relief (HADR) cooperation efforts.
New premier named on December 27, 2010. Following the surprise resignation of Prime Minister Bouasone Bouphavanh, the Laotian parliament unanimously endorsed Thonging Thammavong, former president of the national assembly, as new premier on December 27. Although Bouasone attributed his departure to “family issues,” it is likely that those issues, including a complicated divorce, are symptomatic of deeper internal factional conflicts within the Lao People’s Revolutionary Party. These internal alignments are significant, as Vietnam and China each seek to build dominant influence in Laos for their own geostrategic advantage. The Thonging Thammavong leadership is not likely to indicate any major change in policy, but instead is a signal that the country is trying to manage exogenous efforts to build influence.
Nam Theun 2 starts construction. On December 9, Laos inaugurated its biggest hydropower plant, the Nam Theun 2, after five years of construction and development costs of more than $1.4 billion. With a generating capacity of 1,070 megawatts, the plant diverts water from the Nam Theun, a tributary of the Mekong River, to the Xe Bang Fai River in Laos. While supporters said that the project promotes growth, development, and poverty reduction, environmentalists argue that tens of thousands of people will be adversely affected.
Paradigm shift in U.S.-Malaysia relations. Assistant Secretary of State Kurt Campbell describes Malaysia as the country in which U.S. relations improved the most in Asia in 2010. Prime Minister Najib Razak made a strategic decision to “Look West” and strengthen ties with the United States to promote Malaysia’s security and economic growth. The focus delivered results of interest to both Malaysians and Americans, including Malaysia’s joining the Trans-Pacific Partnership negotiations, Malaysia’s sending non-combat military personnel to Afghanistan to support international efforts, and tightening of the nuclear nonproliferation regime through passage of the May 6, 2010, Strategic Trade Act 2010 (STA). It is likely that Prime Minister Najib and President Obama will exchange visits in 2011. Obama’s visit to Malaysia would be the first by a U.S. president since Lyndon Johnson.
Reform and the New Economic Model. Prime Minister Najib Razak unveiled the New Economic Model on March 30, 2010, replacing the New Economic Policy (NEP) that had guided Malaysia’s economy for the past 40 years. The aim of the model is to double Malaysia’s per capita income by 2020 and to transform the economy into an advanced industrialized and white-collar economy. The model empowers the private sector, stimulates worker productivity, and targets inclusiveness, fostering a “1Malaysia” with an eye on becoming a competitive leader on a regional and global scale. After the significant political wake-up call in the 2008 elections in which the incumbent ruling party and coalition received less than two-thirds of the national votes for the first time in the country’s history, Prime Minister Najib committed to extensive political reforms he deems necessary to strengthen his ruling United Malays Nasional Organisation (UMNO) party and the Barisan Nasional (BN) coalition. The extent of that effort and its effectiveness will be tested in general elections, likely to take place in late 2011 or early 2012.
“Global Movement of Moderates.” In his statement to the United Nations General Assembly, Prime Minister Najib Razak urged a “Global Movement of Moderates.” The purpose of this movement will be a commitment by moderate nations to combat and marginalize extremists who have painted unfavorable portraits of Islam and fueled misperceptions of the principal tenets of the religion.
Wellington Declaration. U.S. secretary of state Hillary Clinton and New Zealand prime minister John Key announced their mutual commitment to build on strong shared values and common interests and extend the bilateral partnership in the historic Wellington Declaration on November 4. The Declaration focuses on promoting greater cooperation on security, developing clean energy, responding to natural disasters, and emphasizing the need to seek ideas from women, minorities, and young leaders.
Trans-Pacific Partnership. New Zealand focused a significant share of its economic policy energy on advancing the Trans-Pacific Partnership negotiations in 2010. As one of the original parties to the TPP agreement, New Zealand perceives substantial value in a high-quality foundational agreement that could eventually be expanded across the Asia-Pacific.
Pike River coal mine tragedy. Twenty-nine miners were declared dead after a second explosion in the shafts on November 24. A memorial service was held in the town of Greymouth, and Prime Minister John Key said it was a "national tragedy.”
Aquino elected president. Son of democracy icons Benigno Aquino Jr. and Corazon “Cory” Aquino, Benigno “Noynoy” Aquino III was elected president of the Philippines in national elections in May, winning by a significant margin over former president Joseph Estrada and Senate colleague Manuel Villar. As president, Aquino vowed to crack down on corruption, alleviate poverty, and promote investment through private-public partnerships (PPP). He secured a $2.5 billion investment package from the Millennium Development Corporation early on in his tenure. Though Aquino’s early plans have been slowed down by courts whose judges were political appointees of his predecessor, Gloria Macapagal-Arroyo, his popularity ratings remain relatively high and he says he is committed to see reforms through during his six-year term.
First automated elections. Filipinos witnessed a new page in the Philippines' and Southeast Asian history following the successful completion of the country's first automated election in May 2010. About 50 million Filipinos cast ballots that were counted by the Precinct Count Optical Scanner machine instead of by the traditional manual tally method. The change is thought to bring a new level of fairness and transparency into Philippine elections, which historically have been plagued by corruption.
Hong Kong hostage crisis. The August 23 hostage crisis that claimed the lives of eight Hong Kong tourists in Manila cast uncertainty over the effectiveness of the Philippine police and rescue and assault forces. It led to a palace investigation of the incident that resulted in the dismissal of several officials and police officers. The investigation included an 800-page report detailing the incident and admitted to inadequate training and resources as the reason behind the botched rescue. The incident tested President Aquino’s leadership early in his term.
Singapore and Malaysia complete historic land swap agreement. Prime Minister Lee Hsien Loong completed a historic land swap agreement with Malaysian prime minister Najib Razak, putting an end to a 20-year outstanding issue and signaling the commitment of both countries to cooperate practically for mutual benefit. After meeting in May 2010, both prime ministers agreed to new terms regarding issues in the 1990 Points of Agreement (POA). The Malayan Railway (KTM) station in Tanjong Pagar will be moved to the Woodlands Train Checkpoint to make way for development of the cleared land. Singapore agreed to swap four plots in downtown Marina South and two in the Ophir-Rochor arts district for the Malaysian-owned Tanjong Pagar, Woodlands, and Bukit Timah. The agreement also encompasses a Rapid Transit Rail System that will run between Malaysia and Singapore and be served by a single co-located customs, immigration, and quarantine facility.
Fastest-growing economy in Asia, 2nd in the world. Singapore's economy grew 12.5 percent in the fourth quarter of 2010, capping a record year in which the city state was Asia's strongest economic performer. Singapore grew 14.7 percent for the year as a whole, bouncing back from a 1.3 percent contraction in 2009. Globally, only Qatar is thought to have grown faster, with growth in the energy-rich Gulf economy projected at 16 percent for 2010, according to the International Monetary Fund.
Humanitarian and sports hub. Singapore advanced its role as hub for humanitarian and sports leadership in Asia last year in hosting the 2010 Summer Youth Olympics. Singapore hosted a total of 3,531 athletes between 14 and 18 years of age from 204 National Olympic Committees (NOCs) who competed in 201 events in 26 sports. In a related benchmark, the Special Olympics opened its new regional headquarters in Singapore in 2010, working closely with the Singapore government on policy changes that allowed the global humanitarian organization to raise and spend funds regionally.
Political unrest: Red shirts protests. From March to May 2010, tens of thousands of protesters calling themselves the Red Shirts descended on Bangkok demanding that Prime Minister Abhisit resign and calling for new elections. Eventually, the military moved in and dispersed the protesters, who burned more than 30 buildings in Bangkok as they retreated on May 19. During two months of demonstrations, a total of 91 people were killed, including 11 soldiers, more than 1,400 were wounded, and parts of Bangkok were shut down. Deep divisions in Thai society were uncovered by the protests, and parties continue to seek resolution and reconciliation. The result is that political stability in Thailand remains a major concern.
Judges dismissed cases against Democrat Party. The Democrats, Thailand's oldest party, were accused of misusing an election grant from the state Election Commission before a 2005 election. A panel of six judges dismissed the case, stating the Election Commission did not "follow legal procedure" because it failed to file the case within a required time frame. Similarly, the Constitutional Court also dismissed a second case of electoral misconduct against the governing Democrat party—the party was accused of failing to declare a political donation—and found fault in the way the case was prepared.
Bouncing back from global economic crisis. Despite the political crisis dominating headlines in Thailand, the country’s economic growth forecast is set to be between 7.3 and 8 percent for 2010. The Thai baht was up by 11.4 percent against the dollar, and despite a reliance on exports for 65 percent of gross domestic product, the economy performed well. Of the net USD $7.35 billion of foreign cash that has come into the Thai bond market, more than half, or USD $3.82 billion, arrived in the last three months of the year.
Timor Leste’s bid for ASEAN membership wins Indonesia’s support. In early December 2010, Indonesian president Susilo Bambang Yudhoyono expressed his full support for Timor Leste’s bid for membership in the Association of Southeast Asian Nations (ASEAN). Timor Leste is keen to gain membership during Indonesia’s chairmanship. Timor Leste’s prime minister, Xanana Gusmao, asserted that joining ASEAN will be good for his people and will support the region geopolitically and strategically. Significant oil and gas reserves have been identified in Timor Leste’s territorial waters.
Strong regional leadership in a highly political year. Hanoi celebrated its 1,000th anniversary in a year of unprecedented regional leadership by Vietnam. As chair of ASEAN in 2010, Vietnam, a relatively new member of the 10-country grouping, provided focused and determined leadership. A key deliverable was forging the ASEAN Defense Ministers’ Meeting Plus—a considerable achievement given the historical sensitivities surrounding coordination among regional defense ministers. Vietnam also led on trade and asserted it full membership in the Trans-Pacific Partnership (TPP) negotiations in November, just two months ahead of its most important political event, the every-five-year National Party Congress for the Communist Party of Vietnam.
Record GDP growth, but suffering from inflation. Despite the global economic crisis, Vietnam experienced a 6.8 percent GDP growth rate, higher than the target of 6.5 percent. The General Statistics Office said the strong growth should be attributed to a rise in exports, industrial output, services, and investments. Meanwhile, the inflation rate was 11.8 percent, blowing through the target rate of 8 percent. Vietnam’s economy faces real challenges as it works to support a heavily devalued dong and address its current account deficit.
State-owned enterprises show weakness. In a high-profile case demonstrating the weakness of Vietnam’s state-owned enterprise sector, Vietnam’s state-owned shipbuilding company, Vinashin, failed to accurately report its deficit of $81.6 million incurred from the global financial crisis. As a result, it had to default on its first payment of $60 million to its creditors in December. Prime Minister Nguyen Tan Dung attributed the situation to “managerial weakness, a lapse in responsibility, [and] deliberate violations and the falsification of financial reports.” To help the corporation recover from its losses, Dung recently signed a plan designed to stabilize its operations, settle debts, and restore its position. The high profile of the case suggests that the new government to be installed in 2011 after the Party Congress will be empowered to move aggressively on reforms for the state sector and accelerate privatization.
MEKONG DELTA REGION
The United States to spend $187 million in the Mekong region. During the ASEAN Regional Forum in July, the United States agreed to spend approximately $187 million on projects to help four nations of the Lower Mekong River basin: Cambodia, Laos, Thailand, and Vietnam. Known as the Lower Mekong Initiative, the spending plan aims to mitigate the impact of climate change on water resources, food security, and the health and livelihoods of nearly 60 million people.
Six-nation Mekong railway system approved. A plan to construct a railway system connecting six nations—Cambodia, China, Laos, Myanmar, Thailand, and Vietnam—and the 300 million people who inhabit the greater Mekong region was approved in August. The national railway systems for the six countries do not link up except for a line that connects China and Vietnam. The plan, which will make all systems interoperable, identified four possible ways of connecting the railways but asserted that the most viable route would run from Bangkok to Phnom Penh, to Ho Chi Minh City and Hanoi, and finally to Nanning and Kunming.