MAKING THE CASE TO AMERICANS: ASEAN = JOBS

This coming Friday at the Waldorf Astoria Hotel in New York, President Barack Obama will host his counterparts from 8 of the 10 ASEAN nations for the second U.S.- ASEAN Summit. The luncheon is important because it institutionalizes American engagement in ASEAN on equal footing with other major partners such as China, India, Japan, and others. The 10 (ASEAN comprises 10 countries) + 1 (USA) formula is an important part of the structure the United States needs to have in place to pursue its strategic and economic interests in the region and in all of Asia over the long term.

The absence of President H. Susilo Bambang Yudhoyono of Indonesia from the summit, however,  underlines the indisputable fact that U.S. engagement in Southeast Asia remains well intended but imperfect.  It is a work in progress characterized by the fact that the administration’s Asia team knows what it needs to do and to a large extent is taking the necessary steps to strengthen its foundation in ASEAN as it moves to reshape regional security and trade architecture. The gap is at the political level with the White House and, more existentially, with the distance between the American policy elite’s understanding of ASEAN’s core importance to the United States and the garnering of political support for that reality among the American public.

Closing the gap is a necessary condition for sustained and serious U.S. engagement in Southeast Asia. The casualties caused by its existence represent real challenges to extending U.S. influence in Asia. President Yudhoyono of Indonesia is not attending the summit, at least in part, because it is politically difficult for him to do so after President Obama tried and failed to follow through on three planned visits to Indonesia.  Indonesia is important. It is the largest country in Southeast Asia by over two times, and its economy at approximately $700 billion is by far the region’s largest. Each planned presidential trip was postponed for different U.S. domestic political reasons. Each died on the political cutting floor of the White House due to the fact that the administration’s political advisers trump its Asia policy team when push comes to shove.

If the link was made, the political gurus could translate engagement with ASEAN as a clear winner for the United States. President Obama is a world-class communicator. Given his wonk-like understanding of the importance to the United States of a strong foundation in Southeast Asia, he could bring the message of the benefits of engagement home to Americans who want jobs and security.

The issue that would gain traction in the United States now is clearly economic growth and jobs. The political link to Southeast Asia is therefore trade. Southeast Asia is America’s fourth-largest overseas market and among the fastest growing of the major markets, with combined gross domestic product forecast at more than 6 percent this year and prospects for even higher growth in 2011 and beyond.

Trade will sell with Southeast Asia too. The region is the most trade-dependent grouping of countries on the planet, with trade accounting for nearly 100 percent of aggregate gross domestic product. ASEAN’s leaders should encourage a proactive U.S. stance on trade.  To date, ASEAN negotiators have not seriously considered sustained efforts from the Office of the U.S. Trade Representative to explore the possibility of accelerating the current Trade and Investment Framework Agreement (TIFA), a forum for outlining the challenges that need to be addressed ahead of serious discussions regarding a U.S.-ASEAN Free Trade Agreement (FTA).  

The best outcomes of the second U.S.-ASEAN Summit would be for President Obama to tell America why he is investing his time and energy in the meeting.  The security agenda is compelling in its own right. Politically, setting a vision for a U.S.-ASEAN Free Trade Agreement would be the strongest signal that could come out of New York on Friday.

In this Issue

The Week that Was
- U.S.-Indonesia Comprehensive Partnership talk
- CSIS launches U.S.-New Zealand Pacific Partners Study
- Foreign Minister Kevin Rudd visits the United States

The Week Ahead
- United Nations General Assembly General Debate
- 2nd US-ASEAN Leaders Meeting
- CSIS-Schieffer Series Dialogue on the South China Sea

THE WEEK THAT WAS

ASEAN
White House formalized 2nd U.S.-ASEAN Leaders Meeting Invitation. The White House formalized President Obama’s invitation to ASEAN leaders to join him for the second U.S.-ASEAN Leaders Meeting in New York on September 24, 2010. The meeting institutionalizes the annual meeting.  President Yudhoyono of Indonesia will be represented by Vice President Boediono, and Burma will be represented by Foreign Minister Nyan Win. Yudhoyono’s absence will sting, particularly because Indonesia is the incoming chair of ASEAN for 2011. Focal points for the discussion are likely to be regional security and economic growth/trade. The security agenda is timely particularly following U.S. secretary of state Hillary Clinton’s comments on multilateralizing dispute settlement in the South China Sea and newly developing regional architecture, including U.S. membership in the East Asia Summit (EAS) and ASEAN Defense Ministers Meeting + 8 (ADMM+8). ASEAN’s leaders will be seeking an update on the health and recovery of the U.S. economy and some reassurance from President Obama that the United States will return to a proactive stance on trade. The United States and ASEAN will renew and update a detailed five-year work plan that focuses on strengthening ASEAN’s institutions and helps build capacity in a number of key areas of common interest.  See CSIS expert Ernie Bower’s note about the importance of Indonesian leadership in ASEAN and the U.S.-ASEAN Summit on CSIS’s Asia Policy Blog - CogitAsia: http://cogitasia.com/2010/09/08/us-asean-summit-in-new-york-gut-check-time.

India-ASEAN Free Trade Agreement. As ASEAN’s seventh-largest trading partner, India is pushing to conclude investment and services agreements to augment its FTA with ASEAN signed last year.  The focal point for finalizing these pacts is the India-ASEAN Summit set for late October in Hanoi. The India-ASEAN agreement has been implemented by four ASEAN members: Singapore, Thailand, Malaysia, and Vietnam. During the India-ASEAN Economic Ministers Meeting in late August in Vietnam, Indonesia and Cambodia announced that they are now ready to implement the FTA with India, while the remaining members have indicated they need more time.

INDONESIA

Foreign Minister Marty Natalegawa at CSIS Banyan Tree Forum. Speaking at the prestigious CSIS Banyan Tree Leadership Forum, Indonesian foreign minister Marty Natalegawa discussed Indonesia's perspective on global trends and regional developments. For video or audio of the minister’s Banyan Tree Leadership Forum speech, click here http://csis.org/multimedia/audio-indonesian-perspective-he-foreign-minister-marty-natalegawa.

Clinton and Natalegawa lead U.S.-Indonesia Comprehensive Partnership talks. Foreign Minister Marty Natagelawa traveled to Washington to join Secretary of State Hillary Clinton to lead the U.S.-Indonesia Comprehensive Partnership discussion. The two were accompanied by their new respective ambassadors, Scot Marciel (visiting from his new post in Jakarta) and Dino Djalal, who just received his credentials from President Obama on September 16. Secretary Clinton and Minister Natalegawa pledged to deepen relations between their two countries by affirming a Plan of Action for the U.S.-Indonesia Comprehensive Partnership covering political and security cooperation; economic and development cooperation; and cooperation in sociocultural, educational, science, and technology matters.

Boediono to represent Indonesia at UN and U.S.-ASEAN Summit. Vice President Boediono of Indonesia will represent President Yudhoyono at the United Nations and at the U.S.-ASEAN Summit in New York on September 24. President Yudhoyono declined President Obama’s invitation to attend the second U.S.-ASEAN Leaders Meeting in New York due to tight schedules and previous plans to travel to Europe the week after for the Asia-Europe Summit. Insiders indicate that President Yudhoyono found it difficult to come to New York on short notice due to President Obama’s repeated postponed trips to Jakarta. Vice President Boediono will be joined by Foreign Minister Marty Natagelawa; BKPM chairman Gita Wirjawan; head of the President’s Delivery Unit (UKP4) Dr. Kuntoro Mangkusubroto; and Indonesia’s ambassadors to the United States and the United Nations.

Yudhoyono sends protest letter on Koran burning to Obama. In response to radical Florida pastor Terry Jones’ plan to set the Koran on fire on the anniversary of 9/11, President Yudhoyono of Indonesia sent a protest letter to President Barack Obama. The Indonesian president warned that such actions could threaten global peace as they would incite religious conflict. He was not alone in protest, as Secretary Clinton, Pope Benedict XVI, Sarah Palin, and General David Petraeus unequivocally condemned burning the holy book. Jones decided against going through with the provocative rally.

Indonesia and the Muslim world celebrate Eid ul-Fitr. More commonly known as Idul Fitri or Lebaran in Indonesia, this is the most festive national holiday in the country. Millions of workers leave major cities via trains, ferries, and cars to return home to their families to celebrate the holy month of Islam. About 30 million travelers are expected to move through the archipelago for the celebration.

Indonesia to purchase new jets. Indonesia will buy six new Russian-made airplanes. The new planes will form a squadron with the 10 Sukhois currently deployed by the Air Force. Indonesia’s air force capacity is lower than those of its neighbors Malaysia and Singapore. President Yudhoyono has approved the procurement but has not indicated a clear timeframe for signing the contract.
IMF warns Indonesia on the woes of corruption. The International Monetary Fund (IMF) acknowledged Indonesia’s progress on democratization but warned of the impact of corruption on economic growth. The IMF said the country should strive to improve market perceptions by developing a stable financial sector, and a stable legal and governance framework to improve confidence.

NEW ZEALAND

CSIS launches U.S.-New Zealand Pacific Partners Study. On September 9, CSIS launched a new research-based study on the U.S.-New Zealand partnership. The study will develop recommendations for enhancing ties between the two nations in areas such as trade and investment, security and political issues, sociocultural and people-to-people ties, science and technology, and transnational issues. U.S. Assistant Secretary of State Kurt Campbell and New Zealand ambassador Mike Moore shared remarks strongly supporting the initiative. To listen to an audio recording of the event, visit http://csis.org/event/pacific-partners-future-us-new-zealand-relations

Christchurch Area Recovers from earthquake. There were no deaths in the massive 7.1 magnitude earthquake that struck Christchurch on September 4. The government estimated that the quake resulted in more than $2 billion in damages. Roads, infrastructure, homes, rail, power lines, and pipes in the vicinity were heavily damaged. Christchurch mayor Bob Parker attributed the lack of fatalities to adherence to building codes that require construction engineering and architecture to withstand earthquakes. New Zealand lies on two tectonic plates that collide, causing more than 14,000 earthquakes annually, but only 150 can be felt.

AUSTRALIA

Australia’s minority government. For the first time in 70 years, Australia will have a minority government headed by the Labor party. Prime Minister Julia Gillard managed to retain her place in office by one seat in parliament when her Labor party received support from one member of the Green party and two independents. There are many domestic challenges ahead, such as the mining tax and asylum seekers.  Australian ambassador the Hon. Kim Beazley will be interviewed by CSIS senior adviser and Southeast Asia Program director Ernie Bower on September 24 and will share his views on the new government and its impact on foreign policy and bilateral relations.

The Price of Green support – Gillard to set a price for carbon. Green Party leader Bob Brown was quoted on September 18 as saying that Prime Minister Gillard would soon set a price for carbon—a key step toward a cutting-edge and effective climate change regime. Gillard made significant promises to the Green Party in order to get them on board so she could establish a government. According to Bloomberg, Brown said, “The point of a carbon price is to have polluters pay for creating dangerous climate change, and therefore a huge threat, second to none, for Australia’s future economy.”

Foreign Minister Kevin Rudd visits the United States. Australia’s new foreign minister, Kevin Rudd, met U.S. secretary of state Clinton on September 16. The two discussed various bilateral issues including the humanitarian effort in Pakistan, war in Afghanistan, the prospects of an Asia-Pacific community, and the agenda at the East Asia Summit. The full transcript of Secretary Clinton’s and Foreign Minister Rudd’s joint press release can be found here:http://www.state.gov/secretary/rm/2010/09/147303.htm. Secretary Clinton and Defense Secretary Robert Gates will be heading to Australia on November 8 for the annual Australian-U.S. Ministerial (AUSMIN) strategic and security talks.

BURMA

Beijing urges support for Burma’s elections. China is continuing its support for two neighboring regimes with two of the world’s most autocratic governments—Burma and North Korea. Burmese General Than Shwe visited China for a five-day state visit September 7–11, 2010. Chinese Foreign Ministry spokesman Jiang Yu urged the international community to support Burma’s general elections on November 7. He said that the elections are an “internal matter” for Burma and hopes that the world will provide “constructive help” in advancing democracy in the country. In return, General Than Shwe, during a meeting with Chinese premier Wen Jiabao, thanked China for its “aid and support” over the years. However, Chinese praise for the Burmese regime met with criticism. Win Tim, a leader of the National League for Democracy (NLD), said that China must take a responsive role in Burma on issues related to stability, democratization, and ethnic minority rights, or else Beijing will fail to “win the hearts of the people and this could affect China’s long-term interests in the country.” The Chinese position could weaken confidence that China will become a responsible stakeholder in regional and international affairs. Read more about this issue on CogitAsia: http://cogitasia.com/2010/09/09/myanmar-election-an-outrage-or-an-opportunity-2/

U.S. Treasury updates sanctions on Burma. The U.S. Office of Foreign Assets Control, under the Department of the Treasury, updated its report on Burmese sanctions. It modified the Specially Designated Nationals and Blocked Persons List (SDN List), which is a list of people whose property and interests in property are blocked. The full report can be found here: http://www.treas.gov/offices/enforcement/ofac/programs/burma/burma.pdf Read more about this issue on CogitAsia: http://cogitasia.com/2010/09/10/us-tightens-sanctions-on-burma/

U.S. Policy toward Burma – “disappointed” but not disengaged. U.S. assistant secretary of state Kurt Campbell said that the United States is “disappointed” in “almost every arena” regarding Burma. Campbell said that the best policy option for the United States right now is to continue engagement with Burma, even if the elections occur without international legitimacy. The United States hopes that continued dialogue with the junta, combined with the threat of new pressure through targeted sanctions, will encourage change by supporting new players and relationships that will trigger development in the country.

Burma imposes restrictions on November election. Burma’s military government announced that it will not open polling stations in several townships in the eastern states of Kachin, Kayin, Mon, and Shan, as well as the Wa self-administered region. Participation in the elections is already difficult for the 37 contesting parties, as they cannot begin campaigning on television and radio until later this month. In addition, the military junta announced that the elections will be based on townships, not on population.

VIETNAM

Vietnam’s monetary policies may damage market confidence. Vietnam tightened its monetary policy last November, terminating some loan subsidies and liberalizing policy on lending rates. The government also announced its goals for achieving 6.5 percent economic growth, 7 percent inflation, 25 percent credit growth, and 20 percent expansion in money supply this year. The International Monetary Fund (IMF) responded to Vietnam’s monetary policies with “marked skepticism.” A chief economist explained that, with so many targets, Vietnam could end up with contradictory policies and eventually damage market confidence.

Vietnam increases cooperation with Europe. Vietnam increased its cooperation with Finland, Germany, and the United Kingdom after meeting with those countries’  respective officials last week. Vietnamese and Finnish officials agreed to boost cooperation in employment, vocational training, and migration labor. Vietnam and Germany agreed to focus on cooperation in defense industries as well as military technology and training. Lastly, under a Joint Declaration signed by Vietnamese foreign minister Pham Gia Khiem and UK secretary of state William Hague, Vietnam and the United Kingdom now consider one another as “strategic partners.” The two countries have agreed to work toward the common goal of increasing sustainable cooperation.

Vietnam and Indonesia sign defense MOU. On September 15, Vietnam and Indonesia agreed to sign a Memorandum of Understanding (MOU) on defense cooperation. Vietnamese deputy defense minister Nguyen Chi Vinh and Indonesian deputy defense minister General Sjafrie Sjamsoeddin agreed to further cooperation on humanitarian relief, sea security, army medicine, and antiterrorism issues.

Vietnam achieves hunger MDG. According to Oxfam, Vietnam has met the UN Millennium Development Goal (MDG) of halving hunger and reducing poverty five years ahead of the 2015 target. Vietnam reduced poverty from 58 percent of the population in 1993 to 18 percent today. This means that since 1993, approximately 6,000 people per day have been pulled out of hunger and poverty. Vietnam has accomplished this goal by making land distribution more equitable, investing heavily in agricultural technology, and maintaining restrictions on rice exports.

THAILAND

Red letter day. Sunday, September 19,  marked the fourth anniversary of the coup that ousted former prime minister Thaksin Shinawatra. The antigovernment group, or Red Shirts, gathered throughout Bangkok’s Ratchaprasong district, clogging up the city’s traffic. Northern provinces also reported a reassembly of the United Front for Democracy against Dictatorship (UDD). The demonstration on “Red Sunday” attracted several thousand supporters and was the largest since the military crackdown in May. Despite Bangkok being under emergency decree, no arrests have been made. The protests ended peacefully by the evening. One of the leaders, Sombat Boonngamanong, noted that the event was a success and was meant to be symbolic.

Thai-Saudi Arabian relations sour after new police promotion. Thailand’s relationship with Saudi Arabia has been frosty since 1989 when a Thai worker in a Saudi palace allegedly stole $2 million worth of family gems. A year later, a Saudi businessman and four diplomatic staff disappeared; eventually five Thai policemen were indicted in February 2010. One of them was Provincial Police Lt. General Somkid Boonthanom. When Boonthanom was recently promoted to assistant national police chief, Saudi diplomats expressed outrage, saying the development would impair progress toward normalcy in Saudi-Thai relations.

Bank of Thailand to fight appreciation. Prime Minister Abhisit Vejajjiva has given the green light for the Bank of Thailand, the country’s central bank, to pursue measures that would devalue the baht. The prime minister suggested that capital controls may be employed to maintain a steady flow of investment to prevent exchange rate fluctuations. Some members of parliament said that, if left unchecked, currency appreciation could severely hurt exports in the fourth quarter. Thailand’s industry sentiment index fell from 108.6 points to 102.4 points following the consistent strengthening of the baht since July. The Federation of Thai Industries (FTI) predicts a three-month decline in the index due to high interest rates and lower sales and profits. The Bank of Thailand and Ministry of Finance are moving to fight appreciation, including talk of a ceiling for foreign purchases on the baht and encouraging Thai firms to invest overseas. Assistance from Thailand’s Export-Import Bank will be given to small and medium-sized companies (SMEs).

MALAYSIA

PM Najib outlines new initiatives to drive New Economic Model. On September 6, Prime Minister Datuk Seri Najib Tun Razak announced eight new initiatives, commonly known as Strategic Reform Initiatives, to advance his New Economic Model (NEM) agenda. The initiatives, which range from concrete actions like reform of the energy sector and development of a reliable national workforce to more long-term goals like ensuring sustainable economic growth, are meant to assist Malaysia in reaching developed-country status by 2020. Prime Minister Najib emphasized that creation and innovation were the pillars of economic growth, but highlighted the impediments in advancing these goals due to the current dependency on government allocations.

New U.S. ambassador to Malaysia takes up duties. Paul W. Jones assumed full responsibilities as the U.S. ambassador to Malaysia on September 14. He was sworn in by U.S. secretary of state Hillary Clinton on September 9, after having been nominated by U.S. president Barack Obama on July 12 and confirmed by the U.S. Senate on August 5. Ambassador Jones is a career Foreign Service officer and has served in various capacities, most recently concurrently serving as Deputy Special Representative for Afghanistan and Pakistan and Deputy Assistant Secretary of State.

Malaysia seeks to ease tensions with Indonesia.  On September 3, the Indonesia-based Benteng Demokrasi Rakyat (Bendera) movement staged a one-hour-long protest, shouting “Ganyang (crush) Malaysia” slogans, and some protestors climbed the walls of the Malaysian embassy in Jakarta and waved the Indonesian flag. The current anti-Malaysia movement followed the arrest of three Indonesian Maritime and Fisheries officers on August 13 for encroaching on Malaysian waters. The Bendera incident sparked a national outcry in Malaysia, with Malaysian UMNO Youth Party chief Khairy Jamaluddin calling for the recall of Malaysia’s ambassador to Indonesia. Foreign Affairs Minister Datuk Aman dismissed the demand, citing the need to preserve ties between the two governments.

SINGAPORE

Singapore remains the world's third-most-competitive economy. Switzerland tops the overall ranking in the Global Competitiveness Report 2010-2011 released by the World Economic Forum on September 3. The United States falls two places to fourth position, overtaken by Sweden (second) and Singapore (third). Singapore was overtaken by Sweden, which has jumped to second place from fourth; while the United States, the former Number 1 which dropped to second spot last year, is down to fourth place this year. Full report is available here: http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2010-11.pdf

Singapore-China partnership in Central China. In his week-long tour of central China September 6 to 13, Prime Minister Lee Hsien Loong announced that he would seek deeper cooperation with the region. Prime Minister Lee toured Changsha, the capital city of Hunan Province, and met with Hunan Party Secretary Zhou Qiang. Qiang’s and Prime Minister Lee’s discussions moved beyond economic and financial matters to encompass such new areas of cooperation as culture, education, and tourism.

Singapore to surpass Japan as largest FX center in Asia. Analysts predict that after ASEAN becomes fully integrated in 2015, Singapore will overtake Japan as the largest foreign exchange (FX) trading center in the region. Singapore’s reliable financial system provides it with great opportunity to increase its market share of FX volumes and benefit from increased interest and relaxation of FX rules in Asia.

Interview with Dr. Ng Eng Hen, Singapore’s Minister for Education and Second Minister for Defense. CSIS senior adviser and director for Southeast Asian studies Ernie Bower conducted an online interview with Minister Ng on September 9 at CSIS. The minister, visiting the United States for a week, shared his thoughts on Singapore's education policy, regional education initiatives in ASEAN, and how the United States could enhance its education cooperation with the region. He also shared innovative models for Singapore-U.S.-China cooperation on education. Switching hats, the minister also talked about Singapore's perspective on developing regional security architecture including the ASEAN Defense Ministers Meeting + 8 (ADMM + 8), the ASEAN Regional Forum (ARF), and the East Asia Summit (EAS), as well as bilateral defense cooperation initiatives between the United States and Singapore. Click here to see or listen to the interview: http://csis.org/multimedia/interview-ernest-bower-interviews-dr-ng-eng-hen

PHILIPPINES

New PNP chief installed September 14. Philippine national police chief Director General Jesus Verzosa gave his farewell address and retired on September 14. He urged his fellow policemen to continue to serve with conviction despite the mistakes that were made in the past. On the same day President Benigno Aquino III named Director General Raul M. Bacalzo to succeed Verzosa. Bacalzo was the number-three man of the PNP in charge of police operations and head of the PNP Anti-Illegal Drugs Special Task Force (AIDSTF). Verzosa, who was not due to retire until December, requested an early retirement, not because of the hostage crisis, but because of a pledge he made during his time at the Philippine Military Academy. He accepted full responsibility for the hostage tragedy and stood by his decisions, although he regretted not using the Special Action Force. Justice Secretary Lilia DeLima indicated criminal charges will be leveled against those involved in the tragic hostage debacle.

U.S. businesses optimistic but worry about corruption. The latest American Chamber of Commerce’s ASEAN Business Outlook Survey 2010 shows that 84 percent of those polled pointed at corruption in the Philippines as their main source of worry. The current tax structure and current infrastructure also qualified as “major concerns.” Despite these concerns, American companies in the Philippines emerged as the second-most-optimistic in terms of increased profits among ASEAN countries, second only to Singapore.

Philippines lines up $1 billion for mining projects. The government's target to achieve $13.5 billion in investments in the mining sector over the next two years is off to a strong start. The Board of Investment confirmed $1 billion in new investment already this year. The mining industry grew 36 percent in the second quarter of 2010, considerably above the 22 percent growth posted in 2009.

CAMBODIA

Cambodia to grow 5 percent. According to the IMF, Cambodia will grow 5 percent in 2010 due to a strong recovery in tourism and the key garment industry. Agricultural expansion is also contributing to growth. . However the construction sector, which helped the country gain double-digit growth before 2008, has not yet significantly recovered.

Khmer Rouge tribunal’s second trial? While the international community welcomed the conviction of the former Khmer Rouge prison chief Kaing Guek Eav (Duch), the UN-backed tribunal is now preparing its second trial against the other four Khmer Rouge leaders being detained—"Brother Number Two" Nuon Chea, former foreign minister Ieng Sary, former social affairs minister Ieng Thirith, and former head of state Khieu Samphan. The next hearing will reportedly start in early 2011. However, the court is again suffering financial constraints because it requires about $40 million to sustain its operations next year. While calling upon donor countries to contribute additional funds, Cambodian deputy prime minister Sok An underlined that the second case “is more complex and will test the will of the national and international community.”

Cambodia upgrades military capacity. Cambodia procured 50 T55 tanks and 44 armored vehicles from Eastern Europe to strengthen its capability to defend its territorial integrity In addition, it was reported that the Cambodian defense minister is visiting China where he will tour military hardware plants. 

Cambodia receives $15 million loan from India. President Pratibha Patil of India visited Cambodia September 13 to September 18 to strengthen ties between the two nations. She announced that India will provide a $15 million loan for a water development project and promised to help build the capacity of Cambodia’s national audit authority. The two nations are now working on the ratification process of a free trade deal on agricultural products, part of the move to realize the ASEAN-India Free Trade Agreement. The deal will allow 90 percent of agricultural commodities to enjoy removed tariffs by 2016.

LAOS

China constructs $142 million hydropower station in Laos. A 100-megawatt Chinese-built hydropower plant near Vientiane is ready to begin operations. The $142 million power station will be operated under the build-operate-transfer (BOT) model. Currently, 70 percent of Laotian households have electricity. The Laotian government aims to provide power to 90 percent of its people by 2020. 

India to fund hydropower projects. During her official visit to Laos from September 9 to 13, Indian president Pratibha Patil agreed to provide Laos with a credit of $72.55 million to upgrade hydroelectric infrastructures. With this new commitment, India’s investment in Laos reaches $142 million. In addition, the two countries renewed their 2011–2013 cultural exchange agreement aiming to promote cooperation in education, health, culture and arts, youth affairs and sports, and mass media. On trade issues, the Indian president urged her counterpart to expedite an internal approval process to bring the India-ASEAN Free Trade Agreement into force.  

Laos’s premier visits Vietnam. On September 15, Laos’s premier Bouasone Bouphavanh visited Hanoi to elevate comprehensive collaboration between the two Southeast Asian nations. While reaffirming their determination to implement their 2011–2020 bilateral cooperation agreement, the two prime ministers vowed to increase their bilateral trade to $2 billion by 2015. Additionally, they aimed to finalize border demarcation by 2014 and to promote investments in border areas.

BRUNEI DARUSSALAM

Brunei supports Mindanao peace talks. Brunei’s deputy defense minister Dato Paduka Haji Mustappa Bin Haji Abd Wahab visited the Brunei International Monitoring Team site in Cotabato City, Philippines for a meeting with local government and the Moro Islamic Liberation Front (MILF) leadership. The minister supported reconciliation between the central government and the MILF. Bruneian political and military officials accompanied Minister Wahab during his meeting with senior military commanders of the MILF Central Committee.

TIMOR LESTE

Vice premier resigns. Deputy Prime Minister Mario Carrascalao, who is in charge of good governance, decided to resign this week after being called “stupid” in an argument with his prime minister over alleged corruption in the finance ministry. In response, the government dismissed the deputy prime minister’s accusation, saying that he was incompetent.  

SOUTH CHINA SEA

Japan voices concern over China’s naval activities. In a defense paper released on September 10, Japan voiced its concern over China’s growing military power. Tokyo pointed to increased Chinese naval activities near its shores, claiming that the lack of transparency of China’s national defense policies is a “matter of concern” for Japan and the region as a whole. Japan is alerted by China’s growing assertiveness in claiming maritime territories, including the South China Sea. The full report is available here:  http://www.mod.go.jp/e/publ/w_paper/2010.html. Section on China is available here: http://www.mod.go.jp/e/publ/w_paper/pdf/2010/Part1_Capter2.pdf

MEKONG RIVER

Construction of the first wind power plant begins. The construction of the first wind power plant in the Mekong River Delta began in Vietnam’s Bac Lieu province on September 9. The plant, worth $237 million, is expected to generate 310 million KWh of electricity per year. It will be completed by 2013. The Vietnamese government believes that the project will help reduce the shortage of electricity and promote the use of clean renewable energy in the Delta.

Vietnam increases investment in Mekong Delta. At a conference on development of the Mekong Delta region on September 6, Vietnamese prime minister Nguyen Tan Dung announced Vietnam’s decision to increase investment in technical facilities to speed up regional development. He also encouraged foreign organizations and individuals to conduct business in the region. The Mekong Delta region has a population of 18 million and includes13 provinces and cities, but remains slow in matching its potential due to the poor quality and low efficiency of its products and human resources.

China shares information about dams in the Mekong. In recent months China has started to share information about its Mekong River dams with Cambodia, Laos, Thailand, and Vietnam. China invited the four countries to Yunan province to look at two of four dams, during which time the Chinese are reported to have shared detailed information about the operations and effects of the dams. China currently owns four dams on the upper Mekong.

LOOKING AHEAD

65th session of the United Nations General Assembly (UNGA) General Debate opens September 23. Eight of the 10 ASEAN countries’ heads of state are attending the UNGA. New Zealand will be represented by Foreign Minister Murray McCully and Australia will be represented by Foreign Minister Kevin Rudd. The provisional agenda of the meeting is available here: http://www.un.org/ga/search/view_doc.asp?symbol=A/65/150

U.S.-ASEAN Summit Strategic Dialogue hosted by American University. CSIS Southeast Asia Program senior adviser and director Ernie Bower will chair and moderate the session on trade and investments at the American University School of International Service’s U.S.-ASEAN Summit Strategic Dialogue on September 21.

31st ASEAN Inter-Parliamentary Assembly (AIPA) will open in Hanoi city on September 20 with the theme of "solidarity for sustainable development of the ASEAN community."
CSIS Southeast Asia Program will host Professor Simon Tay, chair of the Singapore Institute of International Affairs, for a presentation and book launch on Wednesday, September 22. In his new book, Asia Alone: The Dangerous Post-Crisis Divide from America, Simon Tay argues that in the wake of the 2007–2008 financial crisis, trends have emerged that point to Asia increasingly forging its own path, without America. He argues that for the benefit of both, the United States and Asia should continue to engage one another in the post-crisis world. For interested parties, the event will be take place 2:00 p.m.–3:30 p.m. at CSIS, 1800 K St, NW, B1 Conference Room. RSVP to the SoutheastAsiaProgram@csis.org.

CSIS Southeast Asia Program with Dr. Pavin Chachavalpongpun, Fellow and lead researcher for Political and Strategic Affairs at the ASEAN Studies Centre at the Institute for Southeast Asian Studies (ISEAS) in Singapore. Dr. Chachavalpongpun will share his perspectives and provide updates on developments in Thailand and how they may affect the Kingdom's role in ASEAN, Asia, and globally. He will speak on September 22 from 9:00 a.m. to10:00 a.m. Interested parties, please email SoutheastAsiaProgram@csis.org.

Interview with the Honorable Kim Beazley, Australia’s ambassador to the United States. On September 24, CSIS’s Ernie Bower will interview Ambassador Beazley on the new government in Australia and the outlook for foreign policy and bilateral relations.

Interview with His Excellency Datuk Seri Mustapa bin Mohammad, Minister of International Trade & Investment (MITI) of Malaysia. This week, CSIS Senior Adviser & Director for Southeast Asia Ernie Bower will interview Malaysia's Minister for International Trade & Investment, His Excellency Mustapa Mohamed during his visit to Washington, DC.

Interview with the Honorable Tim Groser, Minister of Foreign Affairs and Trade, New Zealand. On September 23, CSIS’s Southeast Asia Program senior adviser and director Ernie Bower will interview Minister Tim Groser on New Zealand and the outlook for the Trans-Pacific Partnership (TPP) and bilateral trade and investment relations.

President Obama to host 2nd U.S.-ASEAN Leaders meeting in New York on September 24. President Obama has invited the leaders of the 10 ASEAN member states as well as ASEAN’s secretary general to join him for the second-ever U.S.-ASEAN leaders’ meeting on September 24. At the first such meeting, held in Singapore in November 2009, the president and the ASEAN leaders pledged to deepen cooperation in a number of areas of common concern, including trade and investment, regional security, disaster management, food and energy security, and climate change.

Dr. Kuntoro Mangkusubroto, head of Indonesia’s President’s Delivery Unit for Development Monitoring and Oversight (UKP4), will visit CSIS and meet with Southeast Asia and climate change experts on September 24. He will also be interviewed by CSIS Southeast Asia Program senior adviser and director Ernie Bower.

APEC Japan 2010 Senior Officials’ Meeting 3. The APEC Senior Officials’ Meeting 3 (SOM 3) will be held on September 25 and 26 in Sendai City.

CSIS will cohost a discussion with His Excellency Vo Hong Phuc, Minister of Planning and Investment of Vietnam. The CSIS Southeast Asia Program will cohost a discussion with the prime minister’s Advisory Council for Competitiveness (PMAC) in Washington, D.C., on September 28. The meeting is private and by invitation only. Interested parties may contact Mary Beth Jordan (mjordan@csis.org) for more information.

CSIS-Schieffer Series Dialogue on the South China Sea. On September 28, CSIS will host a panel discussion entitled “South China Sea: A Key Indicator for Asian Security Cooperation for the 21st Century.” Panelists include Assistant Secretary of State Kurt Campbell; Stapleton Roy, director of the Kissinger Institute on China and the United States; chief Washington correspondent for the New York Times David Sanger; and director and senior adviser of the CSIS Southeast Asia Program Ernest Bower. The session will be held 5:30 p.m.–6:30 p.m. at CSIS, 1800 K St, NW, B1 Conference Room. Seating is limited; RSVP to schiefferseries@csis.org.

Deputy Assistant Secretary of Defense Robert Scher will visit the Philippines. DASD Robert Scher will visit the Philippines in mid-September for discussions with senior defense officials of the U.S. treaty ally. Issues include capacity building, coordination on maritime security and on various initiatives including humanitarian assistance and disaster relief (HADR), and discussions about U.S. support for the Armed Forces of the Philippines (AFP) generally and in Mindanao specifically. The officials will also discuss the Visiting Forces Agreement (VFA).

Looking Further Ahead – In October, Secretary of Defense Robert Gates will visit Hanoi for the ASEAN Defense Ministers Meeting +8, Secretary of State Hillary Clinton will travel to Hanoi to attend the East Asia Summit (EAS) and both will visit Australia in November for the AUSMIN dialogue. In November, President Obama will visit India, and possibly Indonesia, and attend the G-20 Summit in Seoul, South Korea, and the APEC Leaders Summit in Yokohama, Japan.

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